United States

Department of State

MISSION 

Create a more secure, democratic, and prosperous world for the 

benefit of the American people and the international community.

VALUES 

LOYALTY 

Commitment to the United States and the American people.

CHARACTER

Maintenance of high ethical standards and integrity.

SERVICE

Excellence in the formulation of policy and management practices with room for creative

dissent. Implementation of policy and management practices, regardless of personal views.

ACCOUNTABILITY

Responsibility for achieving United States foreign 

policy goals while meeting the highest performance standards.

COMMUNITY

Dedication to teamwork, professionalism, and the customer perspective.

Mission and values
2 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Message from the Secretary

I am pleased to present the Department of State’s Performance and Accountability Highlights for Fiscal Year 2004.

Along with our audited financial statements, this report highlights the continued improvement and effectiveness

of our efforts to advance President Bush’s foreign policy agenda and achieve the institutional objectives I set for the

Department of State.

The Department of State’s mission is to help President Bush shape a world of peace, freedom

and hope where tyrants and terrorists cannot thrive.

To help build a secure world, the dedicated men and women of the State Department are

working to strengthen our alliances and build partnerships across the globe to meet the

challenges of the 21st century. American diplomacy remains essential to America’s continued

leadership of the worldwide campaign against terrorism, and our diplomatic efforts are crucial

to the success of international reconstruction and democracy-building efforts in Afghanistan and

Iraq. We also are working with friends and former foes to stem the proliferation of weapons of

mass destruction and bring peaceful ends to regional conflicts.

The State Department is at the forefront of U.S. efforts worldwide to promote respect for human

rights, the rule of law and democratic government and to stop trafficking in persons. We have

made dramatic early progress towards meeting the ambitious five-year goals of the President’s

Emergency Plan for AIDS Relief: to support lifesaving drug treatment for 2 million people, prevent 7 million new

infections, and support care for 10 million men, women and children infected and affected by HIV/AIDS.

We are working closely with international financial institutions, businesses and non-governmental groups to build a

vigorous world economic system. We have been instrumental in getting President Bush’s innovative Millennium

Challenge Corporation initiative up and running – a major incentive for poor countries to pursue pro-growth policies

that can lift their people out of poverty.

To convey America’s message to the world, we continue to develop a wide array of public diplomacy programs that

engage younger and broader foreign audiences and acquaint them with our policies and with democratic and free

market principles.

Every day, the men and women of the State Department assist and protect our fellow citizens. Our embassies and

consulates aid Americans abroad who are victims of crime or are in need of help. We also are increasing the capacity

of foreign governments to prevent drug traffickers and other criminals from harming Americans and others. And as

the first line of defense of our homeland’s security, we are improving the process for identifying suspected terrorists to

keep them from obtaining visas to enter the United States.

In performing these vital duties and more, we have been effective and accountable stewards of the taxpayer’s money.

For the eighth year in a row, independent auditors have issued an unqualified (“clean”) opinion on our financial

statements. I am proud to provide an unqualified statement of assurance as required under the Federal Managers’

Financial Integrity Act (FMFIA) that the Department’s management controls and financial systems meet the objectives

of FMFIA. The financial and performance data presented herein are complete and reliable in keeping with guidance

from the Office of Management and Budget and the Reports Consolidation Act. In the few instances where

information is not provided, we have included specific reasons why.

With the support of President Bush and broad bipartisan backing from the U.S. Congress, the State Department has

continued to focus on building institutional capacity in three key areas: human resources, information technology, and

embassy construction and security. We must maintain this focus in the years ahead, so that the men and women of

American diplomacy have the training, tools and infrastructure they need to serve our country safely and successfully

across the globe.

Colin L. Powell

Secretary of State
FY 2004 Performance and Accountability Highlights 3

UNITED STATES DEPARTMENT OF STATE

The Department of State operates in approximately 260 locations in 172 countries. One hundred and eighty

missions abroad submit business plans each year to the Bureau of Resource Management, while thousands of

financial professionals around the globe allocate, obligate, disburse, and account for billions of

dollars in annual appropriations. We deal in over 150 currencies and even more languages and

cultures. In short, no corporation has the depth and variety of challenges that the men and

women of the Department face daily as we work to create a more secure, democratic, and

prosperous world, for the benefit of the American people and the international community.

Despite these many challenges, the Department pursues a commitment to integrity,

transparency, and accountability that is the equal of any multi-national corporation and exceeds

most. The quality of our past Performance and Accountability Reports has been recognized by

the Association of Government Accountants (AGA) and the Mercatus Center at George Mason

University.

Four years ago, the President of the United States challenged his administration to meet new

rigorous standards for the issuance of financial statements. Promulgating these months after

the close of the fiscal year was no longer acceptable. All agencies were required to do so just 45 days after the end

of the fiscal year. Timeliness alone, however, was not enough. President Bush also set the goal for the elimination of

all material weaknesses, full compliance with the Federal Managers’ Financial Integrity Act (FMFIA) and Federal

Financial Management Improvement Act (FFMIA), and attestation, by agency heads, to the integrity of the financial

statements. Finally, the President established his five-point President’s Management Agenda (PMA) that measured

progress on these and other goals with a stop light grading system.

For the eighth year in a row, the Department has earned an unqualified opinion from our independent auditors. For

the third year in a row, the Department has won the most prestigious award in federal financial and performance

reporting — AGA’s Certificate of Excellence in Accountability Reporting. For the second year in a row, the Department

has no material weaknesses, and also for the second year, Secretary of State Powell has been able to issue an

unqualified Statement of Assurance under FMFIA on both the Department’s management controls and its financial

systems. In addition, the Department has made enormous strides in meeting the goals of the PMA, particularly in

budget and performance integration, management of human capital, and E-Government initiatives, recognized by

“double green” on the OMB scorecard for each of these critical Presidential initiatives. Finally, the Department has

met the accelerated reporting date of November 15, which is months earlier than previous years.

All of the above, as well as the performance results and information presented along with the financial statements,

could not have been accomplished without the superb efforts of the the men and women of the Department. Whether

laboring to bring good health and prosperity to a West African village, negotiating confidence-building measures in a

regional conflict, or aiding American citizens as they seek a safe and honest environment in which to travel, work, or

conduct business, the Department also provides to the American people the confidence that their government is

investing their taxpayer dollars with total commitment to stewardship and fiduciary responsibility.

Christopher B. Burnham

Assistant Secretary for Resource Management and Chief Financial Officer 

November 15, 2004 

Message from the Assistant secretary 

and CHIEF FINANCIAL OFFICER
4 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

DEPARTMENT OF STATE HISTORY

Why is it called the Department of State? 

On September 15, 1789, Congress passed “An Act to provide for the safekeeping of the Acts,

Records, and Seal of the United States, and for other purposes.” This law changed the name of

the Department of Foreign Affairs to the Department of State because certain domestic duties

were assigned to the agency.

These included:

Receipt, publication, distribution, and preservation of the laws of the United States;

Preparation, sealing, and recording of the commissions of Presidential appointees;

Preparation and authentication of copies of records and authentication of copies under the 

Department’s seal;

Custody of the Great Seal of the United States;

Custody of the records of the former Secretary of the Continental Congress, except for those 

of the Treasury and War Departments.

Other domestic duties that the Department was responsible for at various times included issuance of patents

on inventions, publication of the census returns, management of the mint, control of copyrights, and regulation

of immigration. Most domestic functions have been transferred to other agencies. Those that remain in the

Department are: preparation and authentication of copies of records and authentication of copies under the

Department’s seal, storage and use of the Great Seal, performance of protocol functions for the White House,

drafting of certain Presidential proclamations, and replies to public inquiries.

Who was the first U.S. Diplomat? 

Benjamin Franklin was the first U.S. diplomat. He was appointed on September 26, 1776 as part of a

commission charged with gaining French support for American independence. He was appointed Minister to

France on September 14, 1778 and presented his credentials on March 23, 1779, becoming the first American

diplomat to be received by a foreign government. Franklin was one of three Commissioners who negotiated

the peace treaty with Great Britain, and continued to serve in France until May 17, 1785.

ABOUT THIS REPORT

This Performance and Accountability Highlights provides an overview of the “most important” performance

and financial information published in the Department of State’s Performance and Accountability Report for

Fiscal Year 2004. The Performance and Accountability Highlights and Performance and Accountability

Report for Fiscal Year 2004 provide information that enables the public, Congress, and the President the ability to

assess the performance of the Department relative to its mission and for stewardship of the resources entrusted to it.

The Performance and Accountability Report for Fiscal Year 2004 is provided in its entirety on the CD-ROM enclosed at

the back cover of this Highlights document.
FY 2004 Performance and Accountability Highlights 5

UNITED STATES DEPARTMENT OF STATE

Mission and organization

MISSION

Create a more secure, democratic, and prosperous world for the benefit

of the American people and the international community.

American diplomacy in the 21st century is based on fundamental beliefs: our freedom is best protected by ensuring

that others are free; our prosperity depends on the prosperity of others; and our security relies on a global effort to

secure the rights of all. The history of the American people is the chronicle of our efforts to live up to our ideals. In

this moment in history, we recognize that the United States has an immense responsibility to use its power

constructively to advance security, democracy, and prosperity around the globe.

Diplomacy is an instrument of power. It is essential for maintaining effective international relationships, and a

principal means by which the United States defends its interests, responds to crises, and achieves its foreign policy

goals. The Department of State is the lead institution for the conduct of American diplomacy; its mission is based on

the Secretary of State’s role as the President’s principal foreign policy advisor.

Organizational Structure in Washington, DC

At its headquarters in Washington, DC, the Department’s mission is carried out through six regional bureaus, each

of which is responsible for a specific geographic region of the world, the Bureau of International Organization Affairs,

and numerous functional and management bureaus. These bureaus provide policy guidance, program management,

administrative support, and in-depth expertise in matters such as law enforcement, economics, the environment,

intelligence, arms control, human rights, counternarcotics, counterterrorism, public diplomacy, humanitarian assistance,

security, nonproliferation, consular services, and other areas.

Organizational Structure at Embassies

In each Embassy, the Chief of Mission (usually an Ambassador) is responsible for executing U.S. foreign policy goals

and coordinating and managing all U.S. Government functions in the host country. The President appoints each

Ambassador, whom the Senate confirms. Chiefs of Mission report directly to the President through the Secretary. The

Diplomatic Mission is also the primary U.S. Government contact for Americans overseas and foreign nationals of the

host country. The Mission serves the needs of Americans traveling and working abroad, and supports Presidential and

Congressional delegations visiting the country. The Department operates approximately 260 embassies, consulates,

and other posts worldwide.

Other Key Locations and Offices

The Department also operates national passport centers in Portsmouth, New Hampshire and Charleston, South

Carolina; a national visa center in Portsmouth, New Hampshire, and a consular center in Williamsburg, Kentucky; two

foreign press centers; one reception center; 13 passport agencies; five offices that provide logistics support for overseas

operations; 20 security offices; and two financial service centers.

OUR ORGANIZATION
OUR PEOPLE

The Department of State’s greatest asset is its

people. The Department is a multi-faceted team with

embassies, consulates, and other posts in over 260

locations, committed to carrying out the President’s

foreign policy agenda and to sharing American

values with the world. The Department’s workforce

consists of employees in the Civil Service, Foreign

Service, and Foreign Service Nationals. Freedom,

democracy, prosperity, and peace have a place in

every nation. The Department of State represents

these values and the American people. We carry out

our mission through our people and a whole host of

activities, from international peace treaties and

formal trade agreements to cultural exchanges that

capture the American spirit in action.

I negotiated for more than a year with fifteen governments to wrap up the post-war Tripartitite Gold Commission,

which had been restoring bank gold looted by the Nazis, and convert its remaining holdings into a $60 million

international relief fund for aging Holocaust survivors.”

“I helped negotiate an ‘Open Skies’ civil aviation treaty with

Italy that brought millions of dollars of new business to U.S.

airlines every week, lowered prices for passengers, and

brought more flights to choose from.”

“In Africa, I overcame logistical challenges arranging a

Presidential visit, managed human resources, developed

budgets, served as a contracting officer, flew observer

missions over the Sinai, tracked human rights abuses, and

determined citizenship of children born to U.S. citizens

overseas.”

President Bush swears in a new class of diplomats.

WHAT WE DO — IN THE WORDS OF OUR PEOPLE

“

The Department of State trains its employees in more than

60 different languages in Washington, D.C. and at four

overseas schools for Arabic, Chinese, Korean, and Japanese.

27 Fulbright Program alumni (a Department of State

administered program) from 7 countries are recipients of

the Nobel Prize for their contributions to humanity in the

fields of chemistry, economics, medicine, and physics.

Six Secretaries of State became President of the United States: Thomas Jefferson, James Madison, James

Monroe, John Q. Adams, Martin van Buren, and James Buchanan.

OUR PEOPLE — FAST FACTS

State Department Spokesperson Richard Boucher

at the podium.

6 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE
FY 2004 Performance and Accountability Highlights 7

UNITED STATES DEPARTMENT OF STATE

As shown in the Appendix, the Department’s embassies, consulates, and passport/visa centers are located throughout

the world in support of America’s foreign policy goals and to assist Americans traveling abroad.

The pie charts below show the distribution of the Department’s workforce by employment category, as well as what

proportion of the workforce is located overseas.

WHERE WE ARE LOCATED

EMPLOYEE COMPOSITION AND NUMBERS

Since FY 1997, the total number of employees at the Department has increased by 32% with the greatest increase

manifested in the Department’s Civil Service staff, which has increased by 57%. The Foreign Service staff follows with

a 42% increase, while the Foreign Service National staff increased by 7%. The overall increases in staff reflect the

Department’s increased emphasis in the areas of security, public diplomacy, counterterrorism, and management

reforms.

FULL-TIME PERMANENT EMPLOYEES AS OF SEPTEMBER 30, 2004

Foreign

Service

40%

Foreign

Service

National

31%

Civil

Service

29%

Workforce Composition Workforce Location

Domestic

43%

Overseas

57%

SUMMARY OF FULL-TIME PERMANENT EMPLOYEES1

25,000

20,000

15,000

10,000

0

Foreign

Service

Nationals

Foreign

Service

Civil

Service

30,000

5,000

2 Reflects integration of employees of the United States Information Agency (USIA) and the Arms Control and Disarmament Agency (ACDA) .

FY 1997

7,872

7,724

4,977

20,573

FY 1998

7,637

7,769

5,165

20,571

FY 1999

7,192

8,169

5,498

20,859

FY 20002

9,730

9,023

6,486

25,239

FY 2001

9,852

9,162

6,590

25,604

FY 2002

9,526

9,931

6,999

26,456

FY 2003

9,897

10,579

7,731

28,207

FY 2004

8,419

10,988

7,831

27,238

1 These numbers do not include FSNs employed under personal service agreements or as personal service contractors.
8 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

performance summary and highlights

KEY FOREIGN POLICY ACHIEVEMENTS

The security of our world is found in the 

advancing rights of mankind."

President Bush

UN General Assembly, New York, New York

September 21, 2004

“

I

n FY 2004, the U.S. Department of State made significant

progress in fulfilling the President’s objectives outlined in the

National Security Strategy. The Department’s efforts enhanced

the security of the American people by promoting human dignity,

democracy, and economic prosperity throughout the world.

The United States led vigorous and successful efforts to counter the

threats of terrorism and WMD proliferation. With the Department’s

assistance, more than sixty nations endorsed the President’s

Proliferation Security Initiative (PSI). With the passage of UN

Resolution 1540, the international community as a whole affirmed

the President’s call to criminalize WMD trafficking. Steady American

and British diplomacy led Libya to renounce and verifiably eliminate

its WMD programs. The United States rolled up the A.Q. Khan

proliferation network, which was responsible for the spread of

nuclear technology from Pakistan to Iran, Libya, and North Korea.

With our partners and allies, the Department confronted Iran and

North Korea on their nuclear programs.

The Department efforts promoted fundamental political, economic and educational reforms in the Middle East,

producing some landmark achievements. In June, Iraqi sovereignty was transferred to the Iraqi people, and in August

the National Conference paved the way for elections in early 2005 as part of our steadfast committment to Iraq’s

democratic transition. American efforts to resolve the Arab-Israeli conflict continued, with the Department pressing

the performance-based Road Map, which would lead to two states, Israel and Palestine, living side-by-side in peace and

security. Building on the momentum generated by the Middle East Partnership Initiative (MEPI) and its efforts to

expand economic, political and educational opportunities in the region, the United States led the G-8 in adopting the

Broader Middle East and North Africa Initiative (BMENA). With its centerpiece the Forum for the Future, this innovative,

multilateral initiative will advance freedom, democracy, education and economic reform.

In South Asia, the United States continued its operations against the remnants of the Taliban and al Qaeda. The United

States has spent significant funds on the reconstruction of Afghanistan, while ensuring that women participate in the

country’s democratization. Over the course of the year the United States supported the rapprochement between India

and Pakistan, improving American bilateral relations with each country. U.S.-India relations were transformed by the

Next Steps in Strategic Partnership (NSSP). America’s partnership with Pakistan deepened as a result of the recent

designation of Pakistan as a Major Non-NATO Ally.

President Bush addresses the Veterans of Foreign

Wars Convention at the Cinergy Center in

Cincinatti, Ohio. © AP/Wide World Photos
FY 2004 Performance and Accountability Highlights 9

UNITED STATES DEPARTMENT OF STATE

In East Asia, the United States continued to enhance relations with its five alliance partners—Japan, South Korea,

Australia, Thailand, and the Philippines—as well as its robust security partnership with Singapore. We expanded

coordination and joint action with China, most notably on regional and global issues such as North Korea, Afghanistan,

South Asia, and in common efforts against terrorism, narcotics, and other transnational threats. Indicative of its

commitment to regional dialogue and multilateral engagement in East Asia, three rounds were held in 2003-2004 of

the six-party framework talks to bring about the total, verifiable, and irreversible disarmament of North Korea’s nuclear

programs. The shared threat of terrorism produced closer cooperation between the United States and the nations of

Southeast Asia.

In Europe, the Bush Administration oversaw the most robust enlargement in the history of NATO. Seven new members

joined the Alliance, bringing membership to twenty-six and continuing the process of adapting NATO to the challenges

of the 21st century. NATO continued its vital role in the reconstruction of Afghanistan. The Alliance also agreed to a

training mission in Iraq. When the EU expanded by ten states, the Department led American efforts to broaden our

relationship with the enlarged EU. The partnership between the United States and Russia produced cooperation on

issues such as the global war on terror. With Russia’s support for the Proliferation Security Initiative, announced earlier

this year, U.S.-Russia cooperation and intelligence sharing will extend to WMD trafficking as well. United States

assistance and support to the new government in Georgia helped quickly stabilize this key Caucasus country.

The United States remains committed to peace and stability in Africa. In working to end the bloody twenty-year civil

war in Sudan, the Department galvanized the international community against genocide in Darfur. In helping Liberia

recover from years of civil war, the Department focused on humanitarian assistance, security sector reform, good

governance and financial sector support, as well as disarmament, demobilization, reintegration and rehabilitation

programs. The Trans-Sahara Counter Terrorism Initiative (TSCTI) is evidence the United States is working closely with

African partner states to address mutual security concerns.

Economic development and democracy promotion remained key priorities for the United States in Latin America. This

year the Department helped conclude the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA).

Negotiations on a U.S.-Andean Free Trade Agreement (FTA) were launched with Peru, Ecuador, and Colombia, and

bilateral FTA negotiations began with Panama. The United States advanced global economic growth by securing a

framework agreement to conclude the World Trade Organization (WTO) Doha Development Round. FTAs were also

concluded with Australia, Bahrain, and Morocco, and FTA negotiations were launched with Thailand.

Realizing the President's pledge to provide greater resources to countries taking greater responsibility for their own

development, the Department played a key role in supporting the establishment of the new Millennium Challenge

Corporation (MCC), which promotes good policy environments, economic growth, and poverty reduction in some of the

world's poorest countries. With the Secretary in his role as chairman, the MCC Board designated sixteen countries

eligible for Millennium Challenge Account (MCA) assistance and established a Threshold program to help additional

countries adopt reforms and become eligible.

Demonstrating its multilateral leadership in humanitarian issues, the United States remains the largest contributor to

the World Food Program and to the international fight against HIV/AIDs. The President’s Emergency Plan for AIDS Relief

(PEPFAR) picked up speed with the creation of the new Office of the Global AIDS Coordinator.

The United States bolstered its commitment to peacekeeping, with the adoption of the Action Plan on Expanding Global

Capability for Peace Support and by joining the G-8 in promising to train 75,000 peace support troops by 2010.

The Department established the Office of the Coordinator for Reconstruction and Stabilization to help societies

transition from conflict to peace, laying the foundation for lasting peace, good governance, and sustainable

development.
Department of

State and USAID

Performance

Plan

Bureau

Performance

Plan and

PART

Mission

Performance

Plan

Department of

State and USAID

Strategic Plan

Department

Performance and

Accountability

Report

10 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

PERFORMANCE MANAGEMENT - A LEADERSHIP PRIORITY

The Department uses strategic and performance planning to ensure the organization achieves its objectives and

goals, and is committed to utilizing the funds it receives from the American people through the Congress to produce

successful results. Under the strong leadership of the Secretary and Deputy Secretary, the Department continues to

implement organizational innovations. The State Department and USAID have issued a joint Strategic Plan that

governs the planning efforts for both agencies for fiscal years 2004-2009. This historic Strategic Plan utilizes a strategic

goal framework that better captures and articulates the Department's high priority goals and objectives. Guided by

the Strategic Plan, the planning and resource allocation process receives the personal attention of the Deputy Secretary

on an ongoing basis as he leads senior level Policy, Performance, and Resource Reviews of all bureau performance and

resource plans. Another significant organizational improvement has been the creation of joint State/USAID policy and

management councils as recommended in the Strategic Plan. The Secretary's leadership in establishing these councils

is ensuring the alignment of foreign policy and development assistance, and is improving the necessary management

and organizational coordination and collaboration between the two agencies.

The Department's ongoing performance management process is driven by senior leadership direction and

coordination. Each year, the Department's diplomatic missions and Washington-based bureaus submit Mission

Performance Plans (MPPs) and Bureau Performance Plans (BPPs) respectively that describe their policy and program

goals, priorities and resource requirements, and evaluate performance. In FY 2004, the Department expanded the

functionality of the MPP and BPP process, providing missions, bureaus, and senior officials the benefit of software

applications that better support decision-making. During FY 2004, the Department fully integrated and

institutionalized OMB’s Program Assessment Rating Tool (PART) into the Department’s

budget and planning processes. The integration enables State to

systematically track PART Findings and Recommendations and has

resulted in a number of management actions that address

program/performance deficiencies.

For the first time, State and USAID developed a Joint

Performance Plan for FY 2006, which further promotes the

alignment of U.S. foreign policy and development

assistance. The annual Performance and Accountability

Report demonstrates how well the Department

performed in meeting the goals and targets described in

the Joint Performance Plan component of the Budget.

The graphic at right shows the relationship between the

key components of the performance landscape.

The Department's planning documents available to the public 

can be found on the State Department website as follows:

FY 2004 Performance and Accountability Report:

http://www.state.gov/m/rm/rls/perfrpt/

FY 2004-2009 State/USAID Strategic Plan: http://www.state.gov/m/rm/rls/dosstrat/2004/

FY 2004 Performance Plan: http://www.state.gov/m/rm/rls/perfplan/2004/

FY 2005 Performance Summary: http://www.state.gov/m/rm/rls/perfplan/2005/

The Department welcomes public comments on this report. Comments should be sent to U.S. Department of State,

Office of Strategic and Performance Planning, 2201 C Street, NW, Washington, DC 20520. Telephone: (202) 647-0300.
FY 2004 Performance and Accountability Highlights 11

UNITED STATES DEPARTMENT OF STATE

HOW WE ASSESS PERFORMANCE

Six-Tiered Performance Measurement Methodology

The Department is committed to utilizing the funds it receives from taxpayers through the Congress to produce

successful results. To assess performance, the Department employs a performance management methodology

depicted in the pyramid below. Each of the components of the pyramid is defined below:

High-level, broad categories of action through which the Department carries out

its strategic and performance goals.

The Department’s twelve long-term goals as detailed in the Strategic Plan.

The desired outcomes the Department is planning to achieve in order to attain its

strategic goals. The Department has thirty-eight performance goals.

Specific functional and/or policy areas, including programs as defined by the OMB

Program Assessment Rating Tool (PART), which contribute to the achievement of

performance and strategic goals, and to which the Department devotes significant

attention. Initiatives/Programs (I/Ps) provide greater clarity and better linkage in

terms of how specific performance indicators and targets relate to given policies

or functions.

Values or characteristics that the Department utilizes to measure progress

achieved towards stated annual performance goals. The indicators are drawn from

bureau and mission performance plans.

Expressions of desired performance levels or specific desired results targeted for a

given fiscal year. Achievement of targets defines success. Where possible, targets

are expressed in quantifiable terms. The FY 2004 Performance and Accountability

Report reports on how well the Department achieved its FY 2004 targets.

Performance Management Model

INITIATIVES/PROGRAMS

(includes PART)

PERFORMANCE GOALS

STRATEGIC GOALS

PERFORMANCE TARGETS

PERFORMANCE INDICATORS

STRATEGIC

OBJECTIVES

EXECUTION

PLANNING

MISSION

Strategic Objectives

Strategic Goals

Performance Goals

Initiatives/Programs

Performance Indicators

Performance Targets
12 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Strategic Objectives and Strategic Goals

Within the parameters of the performance management methodology shown on the previous page, the Department

focuses its work around twelve strategic goals that capture both the breadth of its mission and its specific

responsibilities. As depicted below, the Department’s twelve strategic goals are centered around four core strategic

objectives.

Promote

International

Understanding

Public

Diplomacy and

Public Affairs

Strengthen Diplomatic

and Program

Capabilities

Management and

Organizational

Excellence

Achieve Peace

and Security

Regional Stability

Counterterrorism

Homeland Security

Weapons of Mass

Destruction

International Crime

and Drugs

American Citizens

Advance Sustainable

Development and

Global Interests

Democracy and

Human Rights

Economic Prosperity

and Security

Social and

Environmental Issues

Humanitarian

Response

Mission

Create a More Secure, Democratic, and Prosperous

World for the Benefit of the American People

and the International Community

Strategic Goals

Legend

Strategic Objectives

STRATEGIC PLANNING FRAMEWORK
FY 2004 Performance and Accountability Highlights 13

UNITED STATES DEPARTMENT OF STATE

DEPARTMENT OF STATE STRATEGIC OBJECTIVES

AND STRATEGIC GOALS
14 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

REGIONAL STABILITY

COUNTERTERRORISM

HOMELAND SECURITY

MOST IMPORTANT RESULTS AND CONTINUING CHALLENGES

During FY 2004, the Department responded on many levels to the many challenges the United States is facing. Highlights

of the most important results and continuing challenges are shown below by Strategic Goal.
FY 2004 Performance and Accountability Highlights 15

UNITED STATES DEPARTMENT OF STATE

WEAPONS OF MASS DESTRUCTION

INTERNATIONAL CRIME AND DRUGS
16 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

AMERICAN CITIZENS

DEMOCRACY AND HUMAN RIGHTS

ECONOMIC PROSPERITY AND SECURITY
FY 2004 Performance and Accountability Highlights 17

UNITED STATES DEPARTMENT OF STATE

SOCIAL AND ENVIRONMENTAL ISSUES

HUMANITARIAN RESPONSE
18 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

PUBLIC DIPLOMACY AND PUBLIC AFFAIRS

MANAGEMENT AND ORGANIZATIONAL EXCELLENCE
19 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Summary of All Results

The following pie chart shows the ratings distribution for all performance results reported in FY 2004. As shown

below, 79% of the results were "On Target" or above, meaning performance results met or exceeded performance

targets. This represents a slight improvement over FY 2003, when 77% of results met or exceeded performance

targets.

Summary of FY 2004 Performance Results

Significantly Above Target

Above Target

On Target

Below Target

Significantly Below Target

Total Number of Results

11

43

112

37

6

209

Significantly

Above Target

5%

Significantly

Below Target

3%

Below Target

18%

On Target

54%

Above Target

20%

Summary of Strategic Goal Results 

This table compares the FY 2004 average with the FY 2003 average of the performance ratings for all reported results

for each strategic goal.

SUMMARY OF FY 2004 PERFORMANCE RESULTS

Average Performance Rating1

Change From Last Year

Regional Stability

Counterterrorism

Homeland Security

Weapons of Mass Destruction

International Crime and Drugs

American Citizens

Democracy and Human Rights

Economic Prosperity and Security

Social and Environmental Issues

Humanitarian Response

Public Diplomacy and Public Affairs

Management and Organizational Excellence

FY 2003

Below Target

On Target

On Target

On Target

On Target

Below Target

Below Target

On Target

On Target

On Target

On Target

On Target

FY 2004

Below Target

On Target

On Target

Below Target

On Target

On Target

On Target

On Target

On Target

On Target

On Target

On Target

 1 Based on the average of all performance result ratings within a strategic goal.

Strategic Goal

1

2

3

4

5

6

7

8

9

10

11

12
20 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

1 Department of State and USAID share the same goal framework.

Strategic Goal

Close, strong, and effective U.S. ties with

allies, friends, partners and regional

organizations.

7 Results

Existing and emergent regional conflicts

are contained or resolved.

10 Results

Coalition partners identify, deter,

apprehend, and prosecute terrorists.

3 Results

U.S. and foreign governments actively

combat terrorist financing.

5 Results

Coordinated international prevention

and response to terrorism, including

bioterrorism.

2 Results

Stable political and economic conditions

that prevent terrorism from flourishing

in fragile or failing states.

Denial of visas to foreign citizens who

would abuse or threaten the U.S. while

facilitating entry of legitimate applicants.

4 Results

Implemented international agreements

to stop the entry of goods that could

harm the U.S., while ensuring the

transfer of bona fide materials.

4 Results

Protection of critical physical and cyber

infrastructure networks through

agreements and enhanced cooperation.

1 Result

Average Performance Rating and Number of Reported Results

Significantly

Above Target

Significantly

Below Target

Below

Target On Target

Above

Target

1 1

6

3

4

2

3 1

2

1

1

5

USAID addresses this performance goal.1

Performance Goal

(Total Number of Reported Results)

1

3

2

with

Resources Invested

Homeland

Security

Budget Authority:

$237 Million

Human Resources:

562 Positions

Counterterrorism

Budget Authority:

$1,160 Million

Human Resources:

898 Positions

Regional Stability

Budget Authority:

$6,641 Million

Human Resources:

1,160 Positions

Summary Performance Goal Results

The table below provides performance results for each of the Department’s FY 2004 annual performance goals.

The inverted black triangle represents the average of all performance ratings assigned to results associated with the

Performance Goal. The numbers below the rating scale show how the ratings were distributed among the reported 

FY 2004 results. In addition, for comparison purposes, the FY 2003 performance rating average is represented by the

inverted gray triangle. Also represented in the table below is the amount of “Budget Authority” and “Human Resources”

applied to each Strategic Goal for FY 2004.
FY 2004 Performance and Accountability Highlights 21

UNITED STATES DEPARTMENT OF STATE

Strategic Goal

Bilateral measures, including the

promotion of new technologies, combat

the proliferation of WMD and reduce

stockpiles.

15 Results

Strengthened multilateral WMD

agreements and nuclear energy

cooperation under appropriate

conditions.

11 Results

Verification integrated throughout the

negotiation and implementation of

nonproliferation and arms control

agreements and commitments, and

rigorous enforcement of compliance

with implementation and inspection

regimes.

10 Results

International trafficking in drugs,

persons, and other illicit goods disrupted

and criminal organizations dismantled.

7 Results

States cooperate internationally to set

and implement anti-drug and anti-crime

standards, share financial and political

burdens, and close off safe-havens

through justice systems and related

institution building.

6 Results

U.S. citizens have the consular

information, services, and protection

they need to reside, conduct business,

or travel abroad.

3 Results

Effective and timely passport issuance,

with document integrity assured.

2 Results

Measures adopted to develop

transparent and accountable democratic

institutions, laws, and economic and

political processes and practices.

2 Results

Universal standards protect human

rights, including the rights of women

and ethnic minorities, religious freedom,

worker rights, and the reduction of child

labor.

12 Results

Average Performance Rating and Number of Reported Results

Significantly

Above Target

Significantly

Below Target

Below

Target On Target

Above

Target

8

6

2 7

2 3 2

2 3

3

1

2

2

2

6

Performance Goal

(Total Number of Reported Results)

6 1

1

1

1

6

1

Weapons of Mass

Destruction

Budget Authority:

$431 Million

Human Resources:

514 Positions

International

Crime and Drugs

Budget Authority:

$1,482 Million

Human Resources:

695 Positions

American Citizens

Budget Authority:

$60 Million

Human Resources:

551 Positions

Democracy and

Human Rights

Budget Authority:

$1,100 Million

Human Resources:

822 Positions

with

Resources Invested
22 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Institutions, laws, and policies foster

private sector growth, macroeconomic

stability, and poverty reduction.

2 Results

Increased trade and investment achieved

through market-opening international

agreements and further integration of

developing countries into the trading

system.

10 Results

Secure and stable financial and energy

markets.

2 Results

Enhanced food security and agricultural

development.

Improved global health, including child,

maternal, and reproductive health, and

the reduction of abortion and disease,

especially HIV/AIDS, malaria, and

tuberculosis.

8 Results

Partnerships, initiatives, and implemented

international treaties and agreements

that protect the environment and promote

efficient energy use and resource

management.

15 Results

Broader access to quality education with

emphasis on primary school completion.

Effective and humane international

migration policies and systems.2

1 Result

Effective protection, assistance, and

durable solutions for refugees, internally

displaced persons, and conflict victims.

8 Results

Improved capacity of host countries and

the international community to reduce

vulnerabilities to disasters and anticipate

and respond to humanitarian

emergencies.

Average Performance Rating and Number of Reported Results

Significantly

Above Target

Significantly

Below Target

Below

Target On Target

Above

Target

5 2

1 1

10 4

1 4

7

1

USAID addresses this performance goal 1

1

USAID addresses this performance goal 1

1

Performance Goal

(Total Number of Reported Results)

1

1 2

1

1

2

USAID addresses this performance goal 1

Economic

Prosperity and

Security

Budget Authority:

$3,270 Million

Human Resources:

1,539 Positions

Social and

Environmental

Issues

Budget Authority:

$2,367 Million

Human Resources:

281 Positions

Humanitarian

Response

Budget Authority:

$1,126 Million

Human Resources:

547 Positions

Strategic Goal

with

Resources Invested

1 Department of State and USAID share the same goal framework.

2 No gray triangle is shown for this performance goal because this goal was new for FY 2004.
FY 2004 Performance and Accountability Highlights 23

UNITED STATES DEPARTMENT OF STATE

Public diplomacy influences global

public opinion and decision-making

consistent with U.S national interests.

2 Results

International exchanges increase

mutual understanding and build trust

between Americans and people and

institutions around the world.

4 Results

Basic human values embraced by

Americans are respected and

understood by global publics and

institutions.

2 Results

American understanding and support

for U.S. foreign policy, development

programs, the Department of State,

and USAID.

4 Results

A high performing, well-trained, and

diverse workforce aligned with mission

requirements.

15 Results

Modernized, secure, and high quality

information technology management

and infrastructure that meets critical

business requirements.

7 Results

Personnel are safe from physical harm

and national security information is

safe from compromise.

6 Results

Secure, safe, and functional facilities

serving domestic and overseas staff.

9 Results

Integrated budgeting, planning, and

performance management; effective

financial management; and

demonstrated financial accountability.

5 Results

Customer-oriented, innovative delivery

of administrative and information

services, acquisitions, and assistance.

5 Results

Average Performance Rating and Number of Reported Results

Significantly

Above Target

Significantly

Below Target

Below

Target On Target

Above

Target

2

1

1

3

6 3

2

6

1

1

2

2 2

1 2

5 1

4 3

2

1 2

1

Performance Goal

(Total Number of Reported Results)

1

1

1

1

1

Public Diplomacy

and Public Affairs

Budget Authority:

$538 Million

Human Resources:

2,230 Positions

Management and

Organizational

Excellence

Budget Authority:

$4,861 Million

Human Resources:

9,585 Positions

Strategic Goal

with

Resources Invested
24 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Peacekeeping Participation

Many peace support operation (PSO) recipient

countries have supported coalition operations led by

the U.S., such as those in Afghanistan and Iraq. For

example, assistance was provided to Mongolia in FY 2000,

2001 and 2003. Prior to 2000, Mongolia did not have a

national policy to deploy forces beyond its borders, yet this

was the first country to offer an infantry battalion to the

coalition in Iraq.

ILLUSTRATIVE EXAMPLES OF SIGNIFICANT ACHIEVEMENTS

Terrorist Interdiction Program

During FY 2004, the number of countries cooperating with the United States in conducting effective

terrorist watch-listing at key ports of entry continued to expand beyond the 12 that were partners in

FY 2003, with six additional countries indicating their interest in, and willingness to participate in the

program. Initial or expanded deployments of the Personal Identification Secure Comparison and Evaluation

System (PISCES) watch-listing system were carried out in five countries in FY 2004. In some countries, the

Terrorist Interdiction Program (TIP)/PISCES program has served as the cornerstone of the U.S. mission’s

counterterrorism relationship with the host government and, as a result, has fostered increased

counterterrorism cooperation

and action on the part of that

government.

Iraqi interim Prime Minister Iyad Allawi,

second from right, asks questions about

the PISCES computer system used by Iraqi

border agents as he tours the Muntheria

border crossing on the Iran-Iraq border.

Also joining the tour are National Security

Advisor Muwfak al-Rubai, left, Minister Of

Defense Hazem Sha-alam, second from

left, and Interior Minister Falah al-Nakib,

right. © AP/Wide World Photos/Maya

Alleruzzo/POOL

STRATEGIC GOAL #1: REGIONAL STABILITY

STRATEGIC GOAL #2: COUNTERTERRORISM

Soldiers of New York State Army National Guard stand during the

closing ceremony of a multinational platoon exercise for U.N.

peacekeepers at Peace Support Operation Training Institute in

Kukuleganga, Sri Lanka. © AP/Wide World Photos
25 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

STRATEGIC GOAL #3: HOMELAND SECURITY

STRATEGIC GOAL #4: WEAPONS OF MASS DESTRUCTION

Container Security Initiative

The Department spearheaded global efforts to protect transportation networks through stronger

shipping and aviation security rules. Nineteen of the 20 largest world ports committed to participate

in the Container Security Initiative

(CSI). In addition, the program

expanded to other strategic ports

including Malaysia and South

Africa. CSI is now operational in

twenty-six ports and at least two

countries, Canada and Japan, have

utilized the reciprocal aspects of the

program to have their customs

officials present at U.S. ports to

observe cargo bound for their

countries.

A boat patrols near a ship that unloads containers in the port of Balboa in Panama City. © AP/Wide World Photos/Arnulfo Franco

Libya

I

n December 2003, Libya made a commitment to dismantle or eliminate its nuclear/chemical weapons

and Missile Technology Control Regime class missile programs. Libya has since signed/ ratified IAEA

additional Protocol, and is

cooperating with the U.S./UK to

remove equipment from its nuclear

weapons program. Libya has

acceded to the Chemical Weapons

Convention (CWC), destroyed CW

munitions, and facilitated the

removal of its entire SCUD C missile

inventory.

President Bush talks with Jon Kreykes, manager of National Security Advanced Technology

as they look over vacuum cases for centrifuges

collected from Libya at the Oak Ridge National

Laboratory in Oak Ridge, Tennessee. 

© AP/Wide World Photos/Susan Walsh
26 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

STRATEGIC GOAL #5: INTERNATIONAL CRIME AND DRUGS

STRATEGIC GOAL #6: AMERICAN CITIZENS

Andean Counterdrug Initiative

The Andean Counterdrug Initiative has begun paying high dividends in the fight against illegal cocaine

and heroin from the Andean region of South America. In 2003, the Andean coca crop dropped to its

lowest levels since the USG estimates began back in 1986. Total cultivation was down 16 percent in 2003.

The U.S.-backed aerial eradication program in Colombia, the primary source of cocaine coming to the

United States, was particularly effective, reducing coca cultivation by 21 percent in 2003 and by 33 percent

over the past two years. Opium poppy

cultivation in Colombia, which, along with

Mexico, provides 90 percent of the illegal

heroin consumed in the United States, also

declined by 10 percent. For 2004, the

aerial eradication operation is on a glide

path for a third straight year of reduced

coca and opium poppy cultivation. During

this same period, the U.S.-helped

Colombia establish a security presence in

158 municipalities formerly left to narcoterrorists, leading to a dramatic fall in

violent crime and displaced people.

International Child Adoption

The Department’s Adoption Unit in the Office of Children’s Issues protects and promotes the option of

intercountry adoption as a way to provide a permanent family placement for a child who cannot find

one in his or her home country. The Department coordinates policies on intercountry adoption with other

countries and the international community, and promotes Convention-compliant national adoption

legislation and policies. The Department firmly

supports intercountry adoption within the context

of strong safeguards for the interests of children,

birth parents and adoptive parents, as embodied in

the Hague Convention on Protection of Children and

Cooperation in Respect of Intercountry Adoption. 

Anti-narcotics police officers disembark at a coca field in the rural area of Sotomayor in the southern Narino state. The police

destroyed two labs as part of their counternarcotics effort in that area of the country. According to a United Nations report, land

under cultivation for coca in Colombia has declined 16 percent last year. © AP/Wide World Photos/Javier Galeano

The Department's Bureau of Consular Affairs assisted this

American couple with the intercountry adoption of their infant

daughter. Department of State Photo
FY 2004 Performance and Accountability Highlights 27

UNITED STATES DEPARTMENT OF STATE

STRATEGIC GOAL #7: DEMOCRACY AND HUMAN RIGHTS

STRATEGIC GOAL #8: ECONOMIC PROSPERITY

Equality in Iraq

I

raqi women occupy numerous positions in the new government. The Iraqi cabinet, announced in May

2004, includes six women ministers of a total of 33 individuals. In addition, seven women were

appointed to hold deputy minister

positions, women occupy six of the 37

seats on the Baghdad City Council, 81

serve on neighborhood and district

councils around the capital, and many

women have also been elected to

district, local, and municipal councils 

in most other regions of Iraq. The

Department also backed the successful

efforts to persuade the Iraqi Governing

Council to repeal Resolution 137, which

would have imposed Shari’ah family law

on Iraqi women.

Iraqi Governing Concil member Younadem Kana raises the newly-signed Iraqi interim constitution as other members

applaud in the background during signing ceremony on March 8, 2004 in Baghdad, Iraq. 

© AP/Wide World Photos/Peter Andrews

Recovering Iraqi Assets

The Department worked with Treasury to recover from

non-U.S. sources more than $800 million in assets of

Saddam Hussein and the former Government of Iraq, which

will be used to fund Iraq's reconstruction. The successful

effort built on the unique asset recovery provisions of UN

Security Council Resolution 1483 previously negotiated by

the Department, which required all UN Member States to

freeze and transfer these assets to the Development Fund

for Iraq (DFI). Iraqi ministries used DFI funds for purposes

that directly benefited the people of Iraq, such as Iraqi

government operations, including salaries for teachers,

health workers, security, etc. The DFI also funded the repair

of electrical infrastructure and the refurbishing of water

plants, as well as for Iraqi defense and police forces that are

today taking on more of the fight against insurgents.

U.S. Ambassador to Iraq John Negroponte, left, shakes hands with National

Security Advisor Condoleezza Rice during a ceremony at the State

Department in Washington. © AP/Wide World Photo/Ron Edmonds
28 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

STRATEGIC GOAL #9: SOCIAL AND ENVIRONMENTAL ISSUES

STRATEGIC GOAL #10: HUMANITARIAN RESPONSE

The President’s Emergency Plan for AIDS Relief

The President’s Emergency Plan for AIDS Relief is the largest commitment ever by a single nation toward

an international health initiative. It is a five-year, $15 billion effort to combat HIV/AIDS in more than

100 countries around the world. In 15 of the hardest-hit

countries, the Emergency Plan will prevent seven million new HIV

infections, provide antiretroviral treatment to two million HIVinfected individuals, and provide care for ten million individuals

infected and affected by HIV/AIDS, including orphans and

vulnerable children. In July 2004, just six months after the

Emergency Plan received its first appropriation from Congress,

preliminary reports from nine of the fifteen focus countries

indicated that the Emergency Plan was supporting antiretroviral

therapy for at minimum, 24,900 HIV-infected men, women and

children. With this early success and continued work to rapidly

expand capacity, the President's Emergency Plan is on track to

have over 200,000 people on treatment by June 2005 - a number

that will be approximately double the number of persons receiving

treatment in sub-Saharan Africa.

U.S. Global AIDS Coordinator, Ambassador Randall Tobias, looks on at his results

after taking an HIV test during his visit to a provincial hospital in Xai Xai northeast

of Maputo, Mozambique. Tobias underwent a public HIV test to help fight the

stigma associated with AIDS. © AP/Wide World Photos/Themba Hadebe

Response to Humanitarian Crisis in Chad and Darfur

The USG has led the international response to the humanitarian

emergency resulting from the ongoing conflict in Darfur,

Sudan. Working closely together, the Department and USAID have

provided over $200 million in FY 2004 to meet the urgent

humanitarian needs of 200,000 Sudanese refugees in Chad and 1.2

million internally displaced persons in Darfur. The Department and

USAID are actively engaged with multilateral and nongovernmental organizations to ensure strong management of

assistance programs under challenging conditions. The USG is also

a leading advocate for the protection of civilians affected by the

conflict.

Constance Berry Newman, Assistant Secretary of State for African affairs,

listens to a USAID official as she visits Abu Shouk camp, in North Darfur,

Sudan, where more than 40,000 displaced Sudanese receive food and shelter

from international aid agencies. © AP/Wide World Photos/Amr Nabil
FY 2004 Performance and Accountability Highlights 29

UNITED STATES DEPARTMENT OF STATE

STRATEGIC GOAL #11: PUBLIC DIPLOMACY AND PUBLIC AFFAIRS

STRATEGIC GOAL #12: MANAGEMENT AND ORGANIZATIONAL EXCELLENCE

Former Exchange Participants Lead “Revolution of Roses” in Georgia

Ten years of individual and institutional exchange programming in Georgia reached a critical mass as

exchange alumni led the opposition in democratic ferment. The backbone of a new Georgian era is

a network of participants in U.S. visits for students and young government officials, professionals, and

experts in a variety of fields, who were introduced to U.S. counterparts in carefully designed programs on

themes ranging from “Human Rights Protection”

to “U.S. Democratic Principles.” In the new

Georgian government, exchange alumni include:

The President (FSA Muskie 2-year graduate

program, International Visitor), the Prime Minister

(International Visitor), Head of National Security

(International Visitor), Minister of Foreign Affairs

(Voluntary Visitor), Minister of Defense (Muskie

Fellowship), Minister of Infrastructure and

Development (Fulbright), and members of

parliament and leaders of major political parties

and voluntary associations. 

Georgian President Mikhail Saakashvili, right, and the U.S. Secretary of State Colin Powell seen during their meeting in Tbilisi, Georgia

in early 2004. © AP/Wide World Photos/Giorgi Abdaladze

An U.S.-Swiss airship flies behind the Parthenon temple on the ancient

Acropolis hill in Athens to help provide security at the Olympic Games.

© AP/Wide World Photos/Petros Karadjias

Protecting the American Public 

Diplomatic Security was on the front lines supporting

the Department in the Global War on Terrorism,

particularly in the overseas environment, and protecting

the American public. Agent deployment to highly nonpermissive environments continued at an increased rate.

The Regional Security Office in Baghdad remains fully

engaged in security operations throughout Iraq while

transition planning proceeds full force. Dignitary

protection was provided for Afghan President Karzai and

the interim President and Prime Minister of Haiti.

Diplomatic Security was also a part of a massive USGwide effort to assist the Greek security authorities in

preparation for the 2004 Summer Olympics. 
30 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

The Office of Management and Budget (OMB) uses the Program Assessment Rating Tool (PART) to assess federal

programs. The PART is a series of diagnostic questions used to assess and evaluate programs across a set of

performance-related criteria, including program design and purpose, strategic planning, program management, and

results. PART results are then used to inform the budget process and improve program management to ensure the

most effective and efficient use of taxpayer dollars.

To date, the Department of State and OMB have conducted 27 PART reviews for State’s programs. PART reviews

conducted this year include both new assessments (11) and reassessments from previous years. For CY 2004 (FY 2006

budget process), some of the programs that were newly evaluated include the Andean Counterdrug Initiative, Global

Educational and Cultural Exchange programs, and the Human Rights and Democracy Fund. All of State’s programs

assessed to date fall within the “Adequate” to “Effective” categories. State has no programs rated as ”Results Not

Demonstrated” or “Ineffective.” (See table below.)

One of the Department’s programs, Educational and Cultural Exchange programs in Near East Asia and South Asia,

ranked as the highest scored PART program in the Federal Government. Three of the Department’s programs, Global

Educational and Cultural Exchanges, Capital Security Construction Program, and Security Assistance Programs to SubSaharan Africa, tied with two other Federal Government programs in having the second highest PART scores

government-wide this year.

Based on the analysis of this year’s assessment, the Department shows strength in its program purpose and design,

program management, and strategic planning efforts. The results are summarized on the following pages by strategic

goal, including major findings and recommendations, and actions taken or planned to address the findings and

recommendations.

The results from the PART reviews are summarized below by strategic goal. On the following pages, information also

is provided describing how bureaus have addressed and implemented findings and recommendations for FY 2004

PARTs (see Table 1), and FY 2005 PARTs (see Table 2).

program assessment rating tool (PART) status

Results of the PART Assessments1

RESULTS by PART

Assessment Categories

Effective 19

Moderately Effective 4

Adequate 4

Ineffective 0

Results Not Demonstrated 0

Total Number of Assessments 27

Adequate

15%

Moderately

Effective

15%

Effective

70%

1

 Includes all PART Programs assessed to date.
FY 2004 Performance and Accountability Highlights 31

UNITED STATES DEPARTMENT OF STATE

TABLE 1

FY 2004 PROGRAM ASSESSMENT RATING TOOL (PART) SUMMARIES 

BY STRATEGIC GOAL
32 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Secretary of State Colin Powell, right,

leads employees and relatives of U.S.

Foreign Service officers in a moment of

silence, at the lobby of the State

Department during the American

Foreign Service Association's Memorial

Plaque ceremony, to honor the fallen

foreign service employees on Foreign

Affairs Day 2004. 

© AP/ Wide World Photos
FY 2004 Performance and Accountability Highlights 33

UNITED STATES DEPARTMENT OF STATE
34 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

TABLE 2

FY 2005 PROGRAM ASSESSMENT REVIEW TOOL (PART) SUMMARIES 

BY STRATEGIC GOAL
FY 2004 Performance and Accountability Highlights 35

UNITED STATES DEPARTMENT OF STATE
36 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE
FY 2004 Performance and Accountability Highlights 37

UNITED STATES DEPARTMENT OF STATE

The President’s Management agenda 

and management challenges

THE PRESIDENT’S MANAGEMENT AGENDA

The Department has made substantial progress on all five of President’s Management Agenda (PMA) initiatives. Each

quarter, the Office of Management and Budget (OMB) releases an executive scorecard that rates progress and overall

status in each of the President’s Management Agenda initiatives. The progress and status ratings use a color-coded

“stop-light” system that is based on OMB standard criteria used to assess all agencies. As of September 2004, the

Department achieved five “green” scores for progress on implementation. With respect to overall status, the

Department has made significant improvements in several areas, with the status scores for Strategic Management of

Human Capital, Budget and Performance Integration, and Expanded Electronic Government now at “green.”

The following is a brief overview of the Department’s overall PMA progress:
38 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE
FY 2004 Performance and Accountability Highlights 39

UNITED STATES DEPARTMENT OF STATE

MANAGEMENT CHALLENGES

The Government Accountability Office and the Department’s Office of Inspector General have identified several management

challenges that represent areas where the Department must improve operations. The tables below list, by Strategic Goal, the

major challenges and corresponding actions that the Department is taking in response to them.
40 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Continued
FY 2004 Performance and Accountability Highlights 41

UNITED STATES DEPARTMENT OF STATE
42 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

AT THE STATE DEPARTMENT

Renovation of the War Department Wing of the Main State Building

and the Restoration of the George C. Marshall Office

The New War Building was erected under provisions of an act of Congress from 1939-1941 for the

War Department. The Department of State moved into the New War Building, renamed New State

Building, in 1947, when General George C. Marshall entered as Secretary of State. In the new

building, the Secretary’s office was a large two-story room, with a private elevator on the fifth floor

overlooking the main entrance on 21st street. The entire New State section of the building was renamed the

George C. Marshall Wing in 2001.

The Marshall Wing is currently being completely renovated to reverse the deteriorating condition of the

building by replacing the antiquated building systems, upgrading the building to comply with current

building standards and integrating state of the art building technology improvements to last well into the

21st century. Office space is being improved to provide a better quality of work life, while the significant

original spaces and materials are retained and rehabilitated to preserve the historic qualities of the building.

Restoration of the original two-story office occupied by Secretary Marshall and construction of a new

Conference Center, Auditorium and Computer Center highlight the renovation and rehabilitation project.

National Museum of American Diplomacy

The Department has also dedicated space in the renovated wing for a museum of American diplomacy, a

place for learning and inspiration, dedicated to exploring the history, practice, and challenges of American

diplomacy. It will engage visitors in learning how American diplomacy builds bridges among nations and

people, in exploring the vital role it has played in the shaping of our nation, and understanding its

importance to every person every day. The Museum will bring to life the dramatic and moving stories of the

people who have dedicated their lives to American diplomacy.

Supported by Secretary Powell and all the living former Secretaries, the Department of State Visitor

Center and National Museum of American Diplomacy will invite visitors to explore the history,

practices, and challenges of American diplomacy. It will convey the message that diplomacy,

which seems so abstract and remote to many, affects every person every day.
Financial

Section

FISCAL YEAR 2004 PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS
44 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

financial highlights

The Department’s financial statements received for the eighth straight year an unqualified opinion issued by the

independent accounting firm of Leonard G. Birnbaum and Company, LLP. Preparing these statements is part of the

Department’s goal to improve financial management and to provide accurate and reliable information for assessing

performance and allocating resources. Department management is responsible for the integrity and objectivity of the financial

information presented in the financial statements.
FY 2004 Performance and Accountability Highlights 45

UNITED STATES DEPARTMENT OF STATE

OVERVIEW OF FINANCIAL POSITION

Assets. The Department had total assets of $31.9 billion at the end of 2004. This represents an increase of $3.0 billion

(10.4%) over the previous year’s total assets of $28.9 billion. The increase is primarily the result of increases of $2.0 billion

in Fund Balances with Treasury, $327.4 million in property and equipment, and $544.9 million in investments in the Foreign

Service Retirement and Disability Fund (FSRDF). The increase in Fund Balances with Treasury primarily resulted from a $1.7

billion increase in unexpended

appropriations.

Investments, Fund Balances

with Treasury and Property and

Equipment comprise approximately 97% of total assets for

2004, 2003, and 2002.

Investments consist almost

entirely of U.S. Government

Securities held in the FSRDF.

Liabilities. The Department

had total liabilities of $16.4

billion at the end of 2004. The

Foreign Service Retirement

Actuarial (FSRA) Liability of

$13.3 billion and the Liability

to International Organizations

of $897.4 million comprise

87% of the Department’s total

liabilities at the end of 2004.

Of the total liabilities, $1.80

billion were unfunded, i.e.,

budgetary resources were not

available to cover these liabilities. The $1.80 billion is primarily comprised of the $897.4 million Liability to International

Organizations, and the unfunded portion of the FSRA Liability of $345.8 million, which represents the amount by which

the $13.3 billion FSRA Liability exceeds the FSRDF’s net assets available to pay the liability. The $345.8 million unfunded

portion of the FSRA Liability is $308.0 million less than the $653.8 million unfunded FSRA Liability at the end of 2003.

The $897.4 million Liability to International Organizations consists of $837.4 million in calendar year 2004 annual

assessments, and $60.0 million in accumulated arrears assessed by the UN, its affiliated agencies and other international

organizations. These financial commitments mature into obligations only when funds are authorized and appropriated

by Congress.

As of September 30, 2004, a total of $926 million had been appropriated by Congress for payment of U.S. arrearages.

These amounts, however, were made available subject to certifications by the Secretary of State that certain legislative

requirements were met. A payment of $100 million in arrearages was made in FY 2000; a payment of $475 million and a

credit of $107 million were made in FY 2002; and payments totaling $242 million were made in FY 2003.

Assets by Type

0.4% 37.4%

40.2%

19.8%

2.2%

Investments

Fund Balances with Treasury

Property and Equipment

Receivables

Other Assets

Liabilities by Type

5.3%

81.4%

7.8%

5.5%

FSRA Liability

Liability to International

Organizations

Accounts Payable

Other Liabilities
46 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Ending Net Position. The Department’s Net Position at the end of 2004 on the Consolidated Balance Sheet and

the Consolidated Statement of Changes in Net Position is $15.6 billion, a $2.5 billion (18.7%) increase from the previous

fiscal year. Net Position is the sum of the Unexpended Appropriations and Cumulative Results of Operations.

The growth in Unexpended Appropriations is due principally to the continued increase in budget authority received to

provide funding for Iraq and the Global HIV/AIDS initiative. The increase in Cumulative Results of Operations resulted

mainly from the $327 million increase in property and equipment. The Cumulative Results of Operations also increased

as a result of the reduction in the FSRDF unfunded pension liability of $308 million.

The Department’s total net cost of operations for 2004, after intra-departmental eliminations, was $10.6 billion.

The strategic objective to “Achieve Peace and Security” represents the largest investment for the Department at 46.5%

of the Department’s net cost of operations. The net cost of operations for the remaining strategic objectives varies from

13.2% to 23.3%.

RESULTS OF OPERATIONS

The Combined Statement of Budgetary Resources provides information on how budgetary resources were made available

to the Department for the year and their status at fiscal year-end. For the fiscal year, the Department had total

budgetary resources of $21.3 billion, an increase of 21% from 2003 levels. Budget Authority of $14.8 billion – which

consists of $13.6 billion for appropriations (direct, related, and supplemental) and transfers, and $1.2 billion financed

from trust funds – comprise 70% of the total budgetary resources. The Department incurred obligations of $17.9 billion

for the year, a 20% increase over the $14.9 billion of obligations incurred during 2003. Outlays reflect the actual cash

disbursed against the Department’s obligations.

Where Funds Go - Net Program Costs (Dollars in Thousands)

$ 1,763,059

$ 2,510,429

$ 4,946,016

Achieve Peace and Security

Advance Sustainable

Development and Global Interests

Promote International

Understanding

Executive Direction and other

Costs not Assigned

$ 1,421,063

$ 10,640,567

Total Net Cost

Where Funds Come From (Dollars in Thousands)

$ 3,112,542

$ 1,187,038

$ 3,462,993

$ 13,569,648

Appropriations and

Transfers

Reimbursements Earned

Trust Funds

Other

$ 21,332,221

Total Budget Resoures
FY 2004 Performance and Accountability Highlights 47

UNITED STATES DEPARTMENT OF STATE

BUDGETARY POSITION 

The FY 2004 budget for the Department of State totaled $9.164 billion, including appropriations for the

administration of foreign affairs ($7.334 billion), contributions to international organizations and peacekeeping

activities ($1.695 billion), international commissions ($57 million), and related programs ($78 million). Appropriations

for the administration of foreign affairs support the people and programs required to conduct American diplomacy at

more than 260 posts worldwide. They also build, maintain, and secure the infrastructure of the diplomatic platform

from which most U.S. Government agencies overseas operate.

In addition to regular funding from the Consolidated Appropriations Act, 2004, the Department’s budget included

supplemental funding received through the Emergency Supplemental Appropriations Act for Defense and for the

Reconstruction of Iraq and Afghanistan, 2004, and the Department of Defense Appropriations Act, 2005.

The Department also continues to rely on Machine Readable Visa (MRV), Expedited Passport, and other user fee

collections to enhance the nation’s border security and help meet consular workload demands, as well as to invest in

modern information technology systems. All of these resources are essential to accomplish two overriding objectives

of the President’s foreign policy: winning the war on terrorism and protecting Americans at home and abroad.

For FY 2004, the Department’s principal operating appropriation – Diplomatic and Consular Programs (D&CP) – was

funded at $5.197 billion. This funding met new requirements for missions in Afghanistan and Iraq. It also supported

the third year of the Diplomatic Readiness Initiative (DRI) to recruit, hire, train, and deploy additional professionals

around the world. The appropriation and transfers, along with MRV fees, made it possible to hire a total of 556 new

employees (above anticipated attrition), including 310 for DRI positions, 68 Foreign Service officers to enhance the

security of U.S. borders through visa adjudication at posts overseas, 93 consular hires to address workload increases in

the Border Security Program, and 85 security professionals.

The Federal Government Dollar

7%

19% 14%

21%

1%

38%

America’s Best Guesses

Public Estimates on Foreign Policy Issues

Topic U.S. Perception Reality

Percentage of U.S. 20 percent

Budget going to

foreign aid

Reproduced with permission from FOREIGN POLICY # 126 (September/October 2001).

Copyright 2001 by the Carnegie Endowment for International Peace.

Less than

1 percent

Medicaid, Medicare, Other

Entitlements & Mandatory

Programs

International Affairs

Social Security

Non-Defense Discretionary

National Defense

Net Interest

Source: Mid-Session Review, Budget of the United States Government, Fiscal Year 2005.
48 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Within the D&CP appropriation, the Department received $640 million for the Worldwide Security Upgrades program.

This funding continued security enhancements begun with the FY 1999 Emergency Supplemental, including guard

protection, physical security equipment and technical support, information and systems security, and personnel and

training.

The Embassy Security, Construction, and Maintenance appropriation was funded at $1.441 billion to manage the

Department's real estate portfolio, which exceeds $12 billion and includes over 15,000 properties, and to provide U.S.

diplomatic and consular missions with secure, safe, and functional facilities. This funding included $852 million for

capital security construction and compound security projects, $64 million for other high-priority construction projects,

and $524 million for ongoing operations.

The Department's funding for information technology ($79 million in the Capital Investment Fund and $40 million in

D&CP for Worldwide IT Infrastructure) helped provide modern information technology to every Department employee.

This funding supported completion of OpenNet Plus, a modernized unclassified system with Internet access to over

43,000 desktops, and the deployment of a modernized classified computing capability at more than 220 eligible posts

worldwide.

For FY 2005, the Department's budget request (at this date still pending before Congress) includes resources to

continue to meet the priorities of supporting the war on terrorism and sustaining diplomatic readiness. The request

includes $1.571 billion for enhanced security and the war on terrorism, including $912 million for design and/or

construction of secure facilities, additional site acquisitions, and compound security projects; and $659 million to

strengthen the security of diplomatic personnel and facilities in the face of terrorism, including upgrades of security

equipment and technical support, information and systems security, perimeter security, and security training.

The request also includes funds to hire 377 additional Americans, including 183 staff to answer needs beyond those

anticipated by DRI (such as staffing for embassies in Kabul and Baghdad), 71 security professionals, 63 Foreign Service

officers to replace consular associates, and 60 consular officers funded by fees. The Department's request of 

$155 million for the Capital Investment Fund allows for continued investment in state-of-the-art IT systems worldwide,

including the State Messaging and Archive Retrieval Toolset (SMART) initiative, which will replace outdated systems for

cables and messages with a unified and more secure system to serve inter-agency information needs.

Secretary of the German Foreign

Office Klaus Scharioth, German

Minister of the Interior Otto

Schilly, U.S. Ambassador to

Germany Daniel Coats, Director

of Overseas Buildings Operations

Charles Williams, and Berlin

Mayor Klaus Wowereit, from left,

during the groundbreaking

ceremony of the new U.S.

Embassy at Paris Square.

© AP/ Wide World Photos
FY 2004 Performance and Accountability Highlights 49

UNITED STATES DEPARTMENT OF STATE

Management controls, Financial Management systems

and compliance with laws and regulations

FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT 

The Federal Managers’ Financial Integrity Act (FMFIA) requires agencies to establish management control and

financial systems that provide reasonable assurance that the integrity of federal programs and operations are

protected. It also requires that the head of the agency, based on an evaluation, provide an annual Statement of

Assurance on whether the agency has met this requirement.

The Secretary of State’s unqualified Statement of Assurance for FY 2004 is included in the Message from the Secretary

located at the beginning of this Report. The Department evaluated its management control systems and financial

management systems for the fiscal year ended September 30, 2004. This evaluation provided reasonable assurance that the

objectives of the FMFIA were achieved in FY 2004, and formed the basis for the Secretary’s Statement of Assurance.

Management Control Program

The Management Control Steering Committee

(MCSC) oversees the Department’s management

control program. The MCSC is chaired by the Chief

Financial Officer, and is composed of nine other

Assistant Secretaries [including the Chief

Information Officer and the Inspector General (nonvoting)], the Deputy Chief Financial Officer, and the

Deputy Legal Advisor. Individual assurance

statements from Ambassadors assigned overseas

and Assistant Secretaries in Washington, D.C. serve

as the primary basis for the Department’s assurance

that management controls are adequate. The

assurance statements are based on information

gathered from various sources including the

managers’ personal knowledge of day-to-day

operations and existing controls, management

program reviews, and other management-initiated

evaluations. In addition, the Office of Inspector

General and the Government Accountability Office

conduct reviews, audits, inspections, and

investigations.

To be considered a material weakness in

management control systems for FMFIA reporting

purposes, the problem should be significant enough

that it meets one or more of the FMFIA material

weakness criteria. The chart describes the criteria

that the Department uses for the FMFIA review.
50 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Status of Management Controls 

During the last five years, the Department made significant progress by correcting all outstanding material weaknesses.

In addition, there are no items specific to the Department on the Government Accountability Office’s High Risk List, and there

have not been any since 1995. The following table shows the Department’s progress during the past five years with correcting

and closing material weaknesses.

2000

2001

2002

2003

2004

NUMBER OF MATERIAL WEAKNESSES BY FISCAL YEAR

Fiscal

Year

Number at Beginning

of Fiscal Year

3

3

3

0

0

Number

Added

2

0

0

0

0

Number Remaining

at End of Fiscal Year

3

3

0

0

0

Number

Corrected

2

0

3

0

0

* Reported by the Department of State as a result of the merger with the United States Information Agency.

*

Status of Financial Management Systems

For financial systems, the MCSC voted to close in FY 2003 the Department’s one remaining material nonconformance -

Financial and Accounting Systems. This was the first time since the inception of the FMFIA that the Department had no open

material nonconformances – a significant accomplishment. No new material nonconformances were identified by the MCSC

during FY 2004. As a result, the Secretary has provided an unqualified Statement of Assurance for the second year in a row

regarding the Department's financial management systems. A summary of actions taken to correct and close the one previously

reported material nonconformance is provided in the Performance and Accountability Report for FY 2004.

FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT ACT

The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that agencies’ financial management systems

provide reliable financial data in accordance with generally accepted accounting principles and standards. Under FFMIA,

financial management systems must substantially comply with three requirements — Federal financial management system

requirements, applicable Federal accounting standards, and the U.S. Government Standard General Ledger (SGL). In addition,

agencies must determine annually whether their systems meet these requirements. This determination is to be made no later

than 120 days after the earlier of (a) the date of receipt of the agencywide audited financial statement, or (b) the last day of

the fiscal year following the year covered by such statement.

To assess conformance with FFMIA, the Department uses OMB Circular A-127 survey results, FFMIA implementation guidance

issued by OMB, results of OIG and GAO audit reports, annual financial statement audits, the Department’s annual Federal

Information Security Management Act (FISMA) Report, and other relevant information. The Department’s assessment also relies

a great deal upon evaluations and assurances under the FMFIA, with particular importance attached to any reported material

weaknesses and material noncomformances.

The Department has made it a priority to meet the objectives of the FFMIA. In December 2003, the Department determined that

its financial systems comply substantially with the requirements of the FFMIA. This determination was made after considering

(1) the audited financial statement results as of September 30, 2003, whereby the material weakness on Information Systems

Security was reduced to a reportable condition, (2) the approval of the Management Control Steering Committee to close the

longstanding FMFIA material noncomformance for our Financial and Accounting Systems, and (3) systems efforts completed in

FY 2003 along with additional improvements to our financial systems in the first quarter of FY 2004.
FY 2004 Performance and Accountability Highlights 51

UNITED STATES DEPARTMENT OF STATE

The Department will make its FY 2004 FFMIA determination no later than March 2005 based upon receipt of the FY 2004

Independent Auditor’s Report in November 2004.

FEDERAL INFORMATION SECURITY MANAGEMENT ACT

The Federal Information Security Management Act of 2002 (FISMA) directs federal agencies to conduct annual evaluations of

information security programs and practices. It provides a comprehensive framework for establishing and ensuring the

effectiveness of security controls for information and information systems that support federal assets and operations. OMB

provides annual guidance for agencies to report on the status of their respective programs. In accordance with FISMA, the CIO

is responsible for the vision, implementation and status reporting of the information security program for the Department, while

the Inspector General provides an independent evaluation. The Department of State also has substantial information security

responsibilities under the Omnibus Diplomatic Security and Counterterrorism Act of 1986.

Under the direction of the Under Secretary for Management, the bureaus of Information Resource Management (IRM) and

Diplomatic Security (DS) implement information security responsibilities jointly. In compliance with FISMA, the senior agency

information security official, reporting to the CIO, manages the enterprise-wide information security program while operational

program elements are dispersed between the two bureaus and across the Department.

The Department’s FISMA Report for FY 2004, dated October 6, 2004, highlights significant accomplishments and also identifies

areas of focus for program maturity. The Department’s senior management remains committed to performance measures that

illustrate continued and consistent improvement in all cyber security program elements. Significant accomplishments for 

FY 2004 include increased risk management by fully authorizing over 90% of major operational systems, enhanced performance

measures, effective information security management procedures, improved security awareness, online security training,

increased participation in security role-based training, acknowledgement of security professionals in incentive programs and

upgrades in technology deployment, public key infrastructure and biometrics.

The area of focus for FY 2005 is the comprehensive coordination of cyber security program management plan.

The Department’s strategic goals require managing operational and technical cyber security program elements across its

worldwide infrastructure. These elements include, enhancing the inventory of technology assets and developing meaningful

policies and training for their usage, budgeting for security, balancing dynamic technology risk with business requirements,

planning and providing for secure continuity of operations and designing security architecture based on complexities of 

the future.

IMPROPER PAYMENTS INFORMATION ACT

The Improper Payments Information Act of 2002 (IPIA), Public Law No.107-300, requires agencies to annually review their

programs and activities to identify those susceptible to significant improper payments. Significant improper payments are

defined as annual improper payments in a program that exceed both 2.5% of program annual payments and $10 million. Once

those highly susceptible programs and activities are identified, agencies are required to estimate and report the annual amount

of improper payments. Generally, an improper payment is any payment that should not have been made or that was made in

an incorrect amount under statutory, contractual, and administrative or other legally applicable requirement.

OMB Memorandum M-03-13, Improper Payments Information Act, requires agencies to report annually the estimated amount

of improper payments and progress toward reducing them in their Performance and Accountability Reports beginning in 

FY 2004. This marks the first year for which the Department is reporting on our IPIA implementation efforts. In fulfilling this

reporting responsibility, the Department followed OMB Memorandum M-04-20, FY 2004 Performance and Accountability

Reports and Reporting Requirements for the Financial Report of the United States Government.
52 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Our identification and determination of significant improper payments focused on the $15.3 billion expended by the

Department during FY 2004, which is less than 1 percent of the projected $2.2 trillion expenditures for the entire federal

government for the same time period. The Department’s $15 billion is paid to thousands of employees, vendors and

recipients of federal financial assistance to support the programs and activities of the Department.

As a result of our risk assessments, three programs were considered high-risk for FY 2004. We performed statistical

sampling of payments made from each of these programs. The actual error rate was low for these programs with the

exception of one program for which the estimated amount of improper payments is not significant.

In future years, the Department will expand the IPIA program to include programs assessed as having a moderate and

low susceptibility to significant improper payments. We do not expect to find significant improper payments in these

programs; however, we will seek to identify opportunities to strengthen internal control.

GOVERNMENT MANAGEMENT REFORM ACT - 

AUDITED FINANCIAL STATEMENTS

The Government Management Reform Act (GMRA) of 1994 amended the requirements of the Chief Financial Officers

(CFO) Act of 1990 by requiring an annual preparation and audit of agency-wide financial statements from the 24 major

executive departments and agencies. The statements are to be audited by the Inspector General (IG), or an independent

auditor at the direction of the IG. An audit report on the principal financial statements, internal controls, and

compliance with laws and regulations is prepared after the audit is completed.

The Department’s 2004 financial statements received an unqualified opinion – the best possible result of the audit

process. This year marks the eighth consecutive year that the Department’s financial statements have achieved such

an opinion. The Department significantly accelerated the preparation and audit of its 2004 financial statements and

met OMB’s November 15 due date – 45 days after the close of the fiscal year. This marks significant progress towards

our goal of providing more timely, accurate, and useful financial information.

In relation to internal control, the Independent Auditor’s Report cites four reportable conditions: (1) information systems

security for networks in domestic operations, (2) inadequacy of the Department’s financial management systems, (3)

management of unliquidated obligations, and (4) implementation of Managerial Cost Accounting Standards.

Reportable conditions are significant deficiencies, though not material, in the design or operation of internal control

that could adversely affect the Department’s ability to record, process, summarize and report financial data consistent

with the assertions of management in the financial statements. For each year since 1997, the Independent Auditor’s

Report cited the first matter above relating to information systems security as a material weakness in internal control.

The FY 2003 Independent Auditor’s Report acknowledged that the Department’s work towards correcting this

deficiency was sufficiently advanced to reduce this weakness to a reportable condition. However, the Independent

Auditor’s Report states that the Department’s financial management systems are not in substantial compliance with

FFMIA.

The following table summarizes the weaknesses in internal control and compliance with laws and regulations cited in

the FY 2004 Independent Auditor’s Report, as well as the actions taken to resolve the problems. Each reported

weakness relates to the Management and Organizational Excellence strategic goal and the target correction date for

each is 2005.
FY 2004 Performance and Accountability Highlights 53

UNITED STATES DEPARTMENT OF STATE
54 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE
Appendices

FISCAL YEAR 2004 PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS
56 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

Colin L. Powell – Secretary of State

Richard L. Armitage – Deputy Secretary of State

John C. Danforth – United States Permanent Representative to the United Nations

Arms Control and International Security Affairs

John R. Bolton - Under Secretary

Bureau of Arms Control – Stephen G. Rademaker

Bureau of Political-Military Affairs – Lincoln P. Bloomfield, Jr.

Bureau of Nonproliferation – Susan F. Burk, Acting

Bureau of Verification and Compliance – Paula A. DeSutter

Economic, Business and Agricultural Affairs

Alan P. Larson - Under Secretary

Bureau of Economic and Business Affairs – E. Anthony Wayne

Global Affairs

Paula J. Dobriansky - Under Secretary

Bureau of Democracy, Human Rights and Labor – 

Michael G. Kozak, Acting

Bureau of International Narcotics and Law Enforcement – 

Robert B. Charles 

Bureau of Oceans and International Environmental and 

Scientific Affairs – John F. Turner

Bureau of Population, Refugees and Migration – 

Arthur E. Dewey

Management

Grant S. Green - Under Secretary

Director General of Foreign Service and Director of Personnel – 

W. Robert Pearson 

Bureau of Administration – William A. Eaton

Bureau of Consular Affairs – Maura Harty

Bureau of Diplomatic Security – Francis X. Taylor

Overseas Buildings Operations – Charles E. Williams

Bureau of Information Resource Management, Chief 

Information Officer – Bruce Morrison

Foreign Service Institute – Katherine H. Peterson

Political Affairs

Marc Grossman - Under Secretary

Bureau of African Affairs – Constance B. Newman 

Bureau of East Asian and Pacific Affairs – James A. Kelly

Bureau of European and Eurasian Affairs – A. Elizabeth Jones

Bureau of Near Eastern Affairs – William J. Burns

Bureau of South Asian Affairs – Christina B. Rocca

Bureau of Western Hemisphere Affairs – Roger F. Noriega

Bureau of International Organizational Affairs – 

Kim R. Holmes

Public Diplomacy and Public Affairs

Patricia S. Harrison - Acting Under Secretary

Bureau of Public Affairs – Richard A. Boucher

Bureau of Educational and Cultural Affairs – 

Patricia De Stacy Harrison

Bureau of International Information Programs – 

Alexander C. Feldman

Other Senior Officials

Chief of Staff – Larry Wilkerson

Executive Secretariat – Karl W. Hofmann

Office of Policy Planning – Mitchell B. Reiss

Chief Financial Officer – Christopher B. Burnham

Legal Adviser – William H. Taft, IV

Inspector General – Cameron R. Hume, Acting

Office of Civil Rights – Barbara S. Pope

Bureau of Legislative Affairs – Paul V. Kelly 

Bureau of Intelligence and Research – Thomas Fingar

Office of Protocol – Donald B. Ensenat 

Coordinator for Counterterrorism – J. Cofer Black

Office of War Crimes Issues – Pierre R. Prosper 

Counselor – Vacant

DIRECTORY OF KEY OFFICIALS AND SENIOR MANAGEMENT
FY 2004 Performance and Accountability Highlights 57

UNITED STATES DEPARTMENT OF STATE

UNITED STATESDEPARTMENTOF STATE

Inspector

General

(OIG)

Population, Refugees

and Migration

(PRM)

Assistant Secretary

Oceans & International

Environmental &

Scientific Affairs

(OES)

Assistant Secretary

International Narcotics

and Law Enforcement

(INL)

Assistant Secretary

Democracy, Human

Rights & Labor

(DRL)

Assistant Secretary

Under Secretary

for

Global Affairs

(G)

Information Resource

Management

(IRM)

Chief Information Officer

Foreign Service

Institute

(FSI)

Director

Overseas Buildings

Operations

(OBO)

Director

Human Resources

(HR)

Director General of

the Foreign Service

and Director of

Human Resources

Consular Affairs

(CA)

Assistant Secretary

Administration

(A)

Assistant Secretary

Diplomatic Security

(DS)

Assistant Secretary

Under Secretary

for

Management

(M)

International

Information

Programs (IIP)

Coordinator

Public Affairs

(PA)

Educational and

Assistant Secretary

Cultural Affairs

(ECA)

Assistant Secretary

Under Secretary for

Public Diplomacy

and Public Affairs

(R)

Executive

Secretariat

(S/ES)

Executive Secretary

Chief of Staff

(S/COS)

Deputy

Secretary of State

(D)

United States

Representative

to the United Nations

(USUN)

Secretary of State

(S)

United States

Agency for International

Development

(USAID)

Administrator

Medical Services

(M/MED)

Under Secretary for

 Arms Control and

International Security Affairs

(T)

Nonproliferation

(NP)

Assistant Secretary

Political/Military

Affairs

(PM)

Assistant Secretary

Verification and

Compliance

(VC)

Assistant Secretary

Arms Control

(AC)

Assistant Secretary

Under Secretary

for

Political Affairs

(P)

Economic and

Business Affairs

(EB)

Assistant Secretary

East Asian

and Pacific Affairs

(EAP)

Assistant Secretary

African Affairs

(AF)

Assistant Secretary

European and

Eurasian Affairs

(EUR)

Assistant Secretary

South Asian

Affairs

(SA)

Assistant Secretary

International

Organizations

(IO)

Assistant Secretary

Near Eastern

Affairs

(NEA)

Assistant Secretary

Western

Hemisphere Affairs

(WHA)

Assistant Secretary

The Offices of

Rightsizing (M/R),

Management

Policy (M/P)

Director

Counterterrorism

(S/CT)

Coordinator and

Ambassador at Large

Chief of Protocol

(S/CPR)

Ambassador

Resource

Management

(RM)

Assistant Secretary &

Chief Financial Officer

Intelligence

and Research

(INR)

Assistant Secretary

Legislative

Affairs

(H)

Assistant Secretary

Legal

Adviser

(L)

Office of

Civil Rights

(S/OCR)

Assistant Secretary

Policy Planning

Staff

(S/P)

Director

Ambassador at

Large for War

Crimes Issues

(S/WCI)

Global AIDS

Coordinator

(S/GAC)

Coordinator for

Reconstruction

and Stabilization

(S/CRS)

Counselor

(C)

Office of White

House Liaison

(M/WHL)

Director

Under Secretary for

Economic, Business and

Agricultural Affairs

(E)

11/15/04
58 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE
FY 2004 Performance and Accountability Highlights 59

UNITED STATES DEPARTMENT OF STATE

MILESTONES OF AMERICAN DIPLOMACY

1778: Treaty of Alliance with France, engineered by Benjamin Franklin,

enabled the fledgling republic to continue its struggle for

independence.

1783: Treaty of Paris-Great Britain recognized American independence

and control over western lands as far as the Mississippi.

1795: Jay’s Treaty required Great Britain to remove troops from

northwestern frontier; Pinckney’s Treaty with Spain opened mouth of

Mississippi River to U.S. navigation.

1803: Louisiana Purchase removed foreign control of Mississippi’s

mouth and doubled U.S. territory.

1819: Adams-Onis Treaty with Spain, transferring Florida, extended

the U.S. to present boundaries in southeast.

1823: Monroe Doctrine established U.S. policy of opposing European

intervention or new colonization in Western Hemisphere.

1842: Webster-Ashburton Treaty with Great Britain delimited

northeastern U.S. (Maine) boundary.

1846: Oregon Treaty with Great Britain extended U.S. sole dominion 

to the Pacific.

1848: Treaty of Guadalupe-Hidalgo, ending 1846-48 war with Mexico,

confirmed U.S. claim to Texas and completed U.S. expansion to Pacific.

1867: Alaska purchase ended Russian territorial presence and 

completed U.S. expansion on North American mainland.

1898: Treaty of Paris, at end of Spanish-American War, transferred to

the United States Puerto Rico, Guam, and the Philippines, expanding

U.S. power into the Pacific.

1918: Allies and Germany accepted Wilson’s 14 points as basis for just

and lasting peace ending World War I.

1945: U.S. and 50 other countries founded the United Nations.

1947: Truman Doctrine asserted U.S. policy of containing Soviet 

expansion through economic and military aid to threatened countries.

1947: Marshall plan of aid to Europe set foundation for economic

cooperation among industrial democracies.

1948: Ninth International Conference of American States created the

Organization of American States (OAS) to intensify U.S. and Latin

American collaboration in all fields.

1948: NATO, first U.S. alliance concluded in peacetime, provided

integrated force for defense of Western Europe and North America.

1963: Limited Nuclear Test Ban Treaty, first major-power agreement

regulating atomic weapons testing, banned explosions in the

atmosphere, in outer space and under water.

1967: Nonproliferation Treaty, now signed by 110 governments,

banned the spread of atomic weapons.

1972: Strategic Arms Limitation Talks (SALT) agreements with U.S.S.R.

prescribed mutual limitations on defensive and offensive weapons and

established SALT as a continuing process.

1972: President Nixon’s February visit to China followed Secretary

Kissinger’s earlier negotiations in Peking, marking first important step

in the process of normalizing relations with the People’s Republic of

China.

1979: U.S. established diplomatic relations with the People’s Republic

of China ending 30 years of nonrecognition.

1979: Israel-Egypt Peace Treaty (Camp David Accords) ended 30 years

of conflict between the two countries and provided possible

framework for comprehensive peace in the Middle East.

1986: The U.S. Congress implemented strong economic sanctions

against South Africa, which helped to bring an end to apartheid in

1991.

1989-1991: As President George H.W. Bush stated a desire to

integrate the Soviet Union into the community of nations, the Cold War

ended when communist regimes collapsed across Eastern Europe and

the Soviet Union disintegrated.

1990-1991: In response to the Iraqi invasion of Kuwait, the United

States built an international coalition to defend Saudi Arabia and, after

United Nations approval, to eject Iraq from Kuwait through Operation

Desert Storm.

1992: Representatives of more than 175 nations, including the

United States, met at the Earth Summit in Rio de Janeiro, which

produced a treaty on climate change and was the largest

international meeting on the environment ever convened.

1994: The North American Free Trade Agreement (NAFTA) between the

United States, Canada, and Mexico took effect and the United States

joined another structure that promoted global free trade, the World

Trade Organization.

1995: The General Framework Agreement for Peace in Bosnia and

Herzegovina ended the Bosnian civil war by providing for NATO troops

to serve as peacekeepers.

2001: The United States led a global coalition that fought a war

against terrorism in the wake of the September 11 terrorist attacks in

New York and Washington D.C.

2003: After Iraq’s repeated refusals to comply with UN resolutions, the

United States led a coalition to depose the regime of Saddam Hussein.
60 FY 2004 Performance and Accountability Highlights

UNITED STATES DEPARTMENT OF STATE

PHOTO CAPTIONS

Inside Cover (top): President Bush and Mexican President Vincente Fox shake hands prior to their bilateral meeting

during the Special Summit of the Americas in Monterrey, Mexico. © AP/ Wide World Photos

Inside Cover (second from top): Secretary Powell celebrates Political Affairs Under Secretary Marc Grossman's 2004

Selection as a Career Ambassador at the State Department in Washington. Department of State Photo.

Inside Cover (third from top): President Bush celebrates NATO expansion with Prime Ministers from Latvia, Slovenia,

Lithuania, Slovakia, Romania, Bulgaria, and Estonia during a ceremony on the South Lawn of the White House. © AP/ Wide

World Photos

Inside Cover (fourth from top): Deputy Secretary of State Richard Armitage holds up a copy of the State Department's

report on human rights and democracy. The report highlights the Department's worldwide efforts in the past year to promote

human rights and democracy. © AP/ Wide World Photos

Inside Cover (bottom): Secretary of State Colin Powell welcomes Russia's Defense Minister Sergei Ivanov, right, during

their meeting at the State Department in Washington. © AP/ Wide World Photos/J. Scott Applewhite

PAGE 16: The European Union's external affairs commissioner, Chris Patten, left, shares a light moment with U.S.

Secretary of State, Colin Powell, during the International Donor's Conference for the reconstruction of Iraq in Madrid, Spain.

© AP Wide World Photos/Paul White

PAGE 17: Fishing boats docked in Guangzhou, China. Multilateral cooperation, including through regional fishery

management organizations, is essential to balance global demand for fish and fish products with a biologically sustainable

harvest of wild fish. Department of State Photo

PAGE 18: Secretary of State Colin Powell greets one of the first Iraqi Fulbright Scholars at the State Department. The

Fulbright program is sponsored by the State Department, Bureau of Educational and Cultural Affairs. © AP/Wide World Photos

The Performance and Accountability Highlights for Fiscal Year 2004 is published by the

U.S. Department of State

Bureau of Resource Management 

Office of Financial Policy, Reporting and Analysis

Office of Strategic and Performance Planning

An electronic version is available on the World Wide Web at

http://www.state.gov/m/rm/rls/perfrpt/

For additional copies please call (202) 261-8620 or (202) 647-0300

U.S. Department of State Publication 11200

Bureau of Public Affairs

November 2004