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

training and in advanced fraud prevention training throughout their careers. CA adjudicators have access to online databases that assist with verification of genuine identity and travel documents and to detect counterfeit and altered documents. CA’s Counterfeit Deterrence Laboratory contributes to the design and development of secure U.S. travel documents by sharing analysis and expertise with the interagency group. Property: Embassy Vienna implemented new internal controls for all personnel using vehicle fuel cards that increased its capacity to prevent the unauthorized use of vehicles and fuel theft. Beneficiary Payments: The Department identified an individ- ual who committed bank fraud to steal annuity payments from 20 retired annuitants. The individual exploited the Annuity Express (companion to OPM’s Employee Express) system and changed email addresses and bank account information to redirect beneficiary payments. The Department remedied this vulnerability by requiring new procedures involving two-factor identification to change banking information. OPM and Treasury were fully briefed and improved controls at their agencies to help deter elder fraud. Progress in Implementing the Fraud Risk Principle in the Green Book The Department conducts an annual entity-level control assessment to comply with the GAO’s Green Book. The assessment includes Principle #8, which requires management to consider the potential for fraud when identifying, analyzing, and responding to risks. Overall, the Department’s assessment of fraud included tests of operating effectiveness and utilized other existing fraud programs conducted within our bureaus. Other programs that identified fraud were considered including the Statement of Assurance process, as well as work performed by external auditors such as the OIG, GAO, and the Special Inspector General for Afghanistan Reconstruction. Progress in Implementing Best Practices for Managing Fraud Risk In 2020, CGFS invested significant resources to develop Department-wide fraud risk identification programs, as well as various data analytic techniques to identify and prevent fraud. The Department engaged industry experts to provide guidance required to report on their progress to implement financial and administrative controls in compliance with the OMB guidelines, GAO’s Standards for Internal Control in the Federal Government (Green Book), and the OMB Circular A-123. To help managers combat fraud and preserve integrity in government agencies and programs, GAO identified leading practices for managing fraud risks and organized them into the Framework for Managing Fraud Risk in Federal Programs . This framework, and other leading practice materials, provided a foundation for the Department’s fraud risk program. Progress in Implementing Financial and Administrative Controls The Department has a strong management controls program in place, and performs extensive work to provide value beyond complying with the myriad of laws and regulations applicable to the Department. Below are examples and highlights from a few of our accomplishments in 2020. Consular: The Department’s Bureau of Consular Affairs (CA) has historically analyzed financial and adjudicatory data pertaining to specific visa categories and passport applica- tions to determine possible fraud trends or detect internal malfeasance. CA operates an advanced fraud analytics program to identify, combat, and prevent potential fraud through fraud prevention units (FPUs) located at 220 embassies and consulates abroad, as well as 29 domestic passport agencies and centers. FPUs use the results of this analysis in combination with their knowledge of local conditions to train consular adjudicators to identify potentially fraudulent applicants. Visa and passport adjudicators are trained to identify counterfeit and fraudulently issued documents, as well as impostors, during their adjudicatory training and in advanced fraud prevention training at technologically equipped facili- ties. Additionally, CA’s Office of the Comptroller trains Fees Accountable Consular Officers and consular managers on how to spot the signs of potential financial fraud. Other factors that serve to deter fraud include the requirement of applicants for consular services to pay a fee prior to receipt of service and undergo biometric verification of identity, whether facial recognition (visas and passports) and/or fingerprinting (visas). To proactively prevent fraud, CA provides external training to consular personnel on fraud trends, techniques and counter measures during adjudicative 2020 A gency F inanci al R eport U ni ted S tates D epartment of S tate | 141 PAYMENT INTEGRITY AND OTHER LAWS AND REGULATIONS | OTHER INFORMATION