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

Ending Net Position. The Department’s net position, comprised of Unexpended Appropriations and the Cumulative Results of Operations, increased $135 million (.02 percent) between 2019 and 2020. Cumulative Results of Operations decreased $159 million and Unexpended Appropriations were up $294 million due in part to the budgetary financing sources used to purchase property and equipment. S tatement of N et C ost : Y early R esults of O perations The Statement of Net Cost presents the Department’s net cost of operations by strategic goal. Net cost is the total program cost incurred less any exchange (i.e., earned) revenue. The presentation of program results is based on the Department’s major goals established pursuant to the Government Performance and Results Act (GPRA) of 1993 and the GPRA Modernization Act of 2010. The total net cost of operations in 2020 equaled $32.6 billion, an increase of $2.9 billion (10 percent) from 2019. This increase of net costs was mainly due to decreases in fee and surcharge collections from consular operations, such as machine readable visa fees, passport fees and security surcharges, and other surcharges as a direct result of the global coronavirus pandemic. In addition, spending increased for humanitarian assistance. The six-year trend in the Department’s net cost of operations is presented in the “Trend in Net Cost of Operations” bar chart. There is an increase from 2015 to 2020 of $7.0 billion. Increases from 2015 generally reflect costs associated with new program areas related to countering security threats and sustaining stable states, as well as the higher cost of day-to-day operations such as inflation and increased global presence. deemed that the allocation of historical cost through depreciation of a national treasure or other priceless item intended to be preserved forever as part of our American heritage would not contribute to performance cost measurement. Thus the acquisition cost of heritage assets is expensed not capitalized. The maintenance costs of these heritage assets are expensed as incurred, since it is part of the government’s role to maintain them in good condition. All of the embassies and other properties on the Secretary of State’s Register of Culturally Significant Property, however, do appear as assets on the Balance Sheet, since they are used in the day-to-day operations of the Department. Liabilities. The Department’s total liabilities were $33.0 billion at September 30, 2020, an increase of $631 million (2 percent) between 2019 and 2020. After-Employment Benefit Liability comprises 78 percent of total liabilities and increased $1.7 billion (7 percent) from 2019. International Organizations Liability decreased $1.3 billion (34 percent) and Accounts Payable increased $278 million (12 percent). The six-year trend in the Department’s total liabilities is presented in the “Trend in Total Liabilities” bar chart. Over this period, total liabilities increased by $7.6 billion (30 percent). This change is principally due to the increase in the After-Employment Benefit Liability, a $5.9 billion increase. The increase is due to a higher number of Foreign Service employees enrolled in the plan and changes in the key economic indicators underlying the actuarial computation over time. 24 | U ni ted S tates D epartment of S tate 2020 A gency F inanci al R eport MANAGEMENT’S DISCUSSION AND ANALYSIS | FINANCIAL SUMMARY AND HIGHLIGHTS