Transforming the World through Diplomacy and Development

United States 

Department of State

Performance and Accountability Highlights 

Fiscal Year 2006
The U.S. Department of State presents The Performance 

and Accountability Report for Fiscal Year 2006

in four products: 

The Performance and Accountability Report 

(PAR): the full report of the Department’s annual 

performance results and financial statements, 

available on the internet and the PAR CD; 

The PAR Highlights: a summary version of the 

PAR, available on the internet and printed for 

worldwide distribution;

The PAR Brochure: an eight-page, high-level 

overview of the PAR, printed for worldwide 

distribution; 

The PAR CD: an interactive CD featuring the 

full PAR, Department publications and relevant 

reports, maps, a photo gallery and more.

For copies or to comment on the PAR, please visit 

www.state.gov or contact the U.S. Department of 

State’s Bureau of Resource Management at 

PAR@state.gov or 202-647-0300. The mailing 

address is: 2201 C Street, NW Room 3800, 

Washington, D.C. 20520.
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UNITED STATES DEPARTMENT OF STATE

 Message from the Secretary 2

 Message from the Acting Assistant Secretary for 

 Resource Management and Chief Financial Officer 3

 Mission and Organization 4

 Summary of FY 2006 Performance 7

 Program Assessment Rating Tool (PART) Status 8

 The President’s Management Agenda 10

PERFORMANCE SECTION 11

Strategic Goal 1: Regional Stability 12

Strategic Goal 2: Counterterrorism 16

Strategic Goal 3: Homeland Security 20

Strategic Goal 4: Weapons of Mass Destruction 24

Strategic Goal 5: International Crime and Drugs 28

Strategic Goal 6: American Citizens 32

Strategic Goal 7: Democracy and Human Rights 36

Strategic Goal 8: Economic Prosperity and Security 40 

Strategic Goal 9: Social and Environmental Issues 44

Strategic Goal 10: Humanitarian Response 48

Strategic Goal 11: Public Diplomacy and Public Affairs 52

Strategic Goal 12: Management and 

 Organizational Excellence 56

FINANCIAL SECTION 61

Internal Controls, Financial Management 

 Systems and Compliance with Laws and Regulations 62

Financial Highlights 67

Resource Highlights 71

U.S. Department of State FY 2006 Significant Results 72

TABLE OF CONTENTS

ABOUT THIS REPORT

The United States Department of State 

Performance and Accountability Highlights 

for Fiscal Year 2006 offers a high-level, 

comprehensive summary of financial information and 

performance results reported in the Department’s 

FY 2006 Performance and Accountability Report (PAR).

The Highlights is designed for use by a wide variety 

of audiences and stakeholders within and outside 

government. The Highlights, and the FY 2006 PAR 

enclosed on CD, help readers assess the Department’s 

performance relative to our mission and stewardship 

of resources entrusted to us. The report also provides 

readers a sense of the Department’s highest priorities 

in the conduct of U.S. foreign policy, and our strengths 

and challenges in implementing programs that pursue 

the President’s foreign policy agenda.
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UNITED STATES DEPARTMENT OF STATE

Message from the Secretary

I

am I am pleased to present the U.S. Department of State’s Performance and Accountability 

Highlights for Fiscal Year 2006. The FY 2006 Performance and Accountability Report (PAR) and 

the PAR Highlights provide the financial and performance information Americans deserve as 

investors in U.S. diplomacy and overseas development.

The Department of State’s mission is to create a more secure, democratic, and prosperous world for 

the benefit of the American people and the international community. President Bush and I have called 

on America’s diplomats to pursue this mission with a bold approach, one that answers the President’s 

charge to support the growth of democratic movements and institutions in every nation and culture 

with the ultimate goal of ending tyranny in the world. Early on in my tenure as Secretary of State, I 

called this approach “transformational diplomacy.” I am proud to share through this report the innovative, skillful and courageous 

ways the men and women of the Department of State are bringing this practice to life. 

Transformational diplomacy means working with our partners around the world to build and sustain democratic, well-governed 

states that will respond to the needs of their people and conduct themselves responsibly in the international system. It is about 

using America’s diplomatic power and resources to help people across the globe better their own futures, build their own nations, 

and thrive under an umbrella of security and peace.

The successes we achieved in FY 2006 are strides toward a future of expanded freedom, greater security, sustainable development, 

and increased diplomatic strength. To realize the President’s vision of freedom across the world, the Department is transforming 

itself and its practices through a series of transformational diplomacy initiatives. For example, we are forward-deploying our people 

to the cities, countries, and regions where they are needed most. Through the first two phases of Global Diplomatic Repositioning, 

we have successfully redirected 200 positions to work directly on transformational priorities in strategic countries like China, India, 

Nigeria, and Indonesia to name a few. We are giving our diplomats more comprehensive training, including in critical language skills, 

to engage more effectively with local populations and better communicate America’s message overseas.

With the creation of the Office of the Director of U.S. Foreign Assistance, we have fundamentally reorganized the way we plan, 

budget and manage foreign assistance to increase transparency, accountability, integration, and focus. Our new process establishes 

clear strategic direction and priorities for foreign assistance. This reform will transform our capability to use foreign assistance more 

efficiently and more effectively to further our foreign policy goals, bolster our national security, reduce poverty, and improve people’s 

lives around the world. Our effort to improve how foreign assistance dollars are managed and spent reflects the Department’s longstanding commitment to being effective and accountable stewards of taxpayer dollars. 

The Department of State and USAID work together to meet the global diplomatic and development challenges of the twenty first 

century. In this critical moment in history, the men and women of the Department and USAID are engaged in an extraordinary 

partnership to transform our world for the better through diplomacy and development. Americans have every reason to be proud, 

as I am, of their service to secure a future of freedom for all people.

 Condoleezza Rice

 Secretary of State
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UNITED STATES DEPARTMENT OF STATE

The Performance and Accountability Report for Fiscal Year 2006 (Report) provides meaningful 

stewardship, program and financial information about the Department of State. Publication 

of the Report is an integral part of our efforts to improve our accountability to our customers, 

constituents, and the public. As you read the Report, you will learn of the exceptional accomplishments 

of the Department’s highly dedicated staff as they seek to meet to the Department’s mission to “create a 

more secure, democratic and prosperous world for the benefit of the American people and the international 

community”. 

For the past six years, the President has challenged us to meet rigorous performance standards through 

the President’s Management Agenda (PMA). The Department of State is committed to achieving the goals 

of the PMA, as evidenced by “green” status scores on the scorecard for all five USG-wide Presidential 

initiatives at the end of FY 2006. This is a significant accomplishment considering the challenging nature of conducting business in our 

global, foreign affairs environment. 

Very few agencies or corporations have the level of complexity and variety of challenges that the men and women of the Department 

face daily. The Department operates in over 260 locations in 188 countries, frequently in hostile environments, while conducting 

business in 150 currencies and an even larger number of languages. Thousands of financial professionals around the globe plan, 

budget, allocate, obligate, disburse, and account for billions of dollars in annual resources. 

Our strong commitment to corporate governance is evidenced by the priority we place on improving our internal controls. 

To that end, we made considerable progress in 2006, working closely with the Independent Auditor to address the material 

weaknesses in accounting for personal property and information systems security reported in their FY 2005 Independent 

Auditor’s Report. As a result, the Independent Auditor downgraded these items to a reportable condition, and reported 

no material weaknesses in internal controls in their FY 2006 Independent Auditor’s Report. In addition, the Department 

committed to, and fully implemented, the requirements of Appendix A, Internal Control over Financial Reporting, of OMB 

Circular A-123. During the implementation of Appendix A, we identified a material weakness related to accounting for real property, 

and took actions to resolve the deficiencies by September 30, 2006. 

Unfortunately, due to the complexity of the matters involved in addressing the real property deficiencies, the accelerated financial 

reporting requirements, and our commitment and focus to successfully resolve the material weaknesses noted above, we were unable to 

provide timely financial statements or documentation on the appropriateness of the associated restatement to satisfy the Independent 

Auditor with regard to the presentation of real property in time to meet the November 15, 2006 deadline required by OMB. As a result 

and as more fully explained in the Independent Auditor’s Report in the FY 2006 PAR, the Independent Auditor issued a disclaimer of 

opinion on our FY 2006 and restated FY 2005 financial statements. Since then, with the cooperation of the Independent Auditor and 

OIG, our efforts continued, and the Department satisfied the Independent Auditor about the amounts presented and have therefore 

received an unqualified (“clean”) opinion thereon, dated December 12, 2006.

The scale and complexity of the Department’s missions that demand effective financial management and control have grown 

exponentially since 9/11, making the need for more effective financial management even more pronounced. The hallmark of top 

financial operations is their ability to provide accurate and timely financial data to use that data and expertise to provide high-value 

financial advice to the decision-makers. The Bureau of Resource Management has built the foundation of solid budgeting and reporting; 

our mission going forward will be to combine this strong financial information base with a high level of financial advisory expertise as 

a strategic partner to the Secretary and the Bureaus, to ensure that the Department obtains maximum results from its funding. 

 

Bradford R. Higgins 

Assistant Secretary for Resource Management and Chief Financial Officer

Message from the CHIEF FINANCIAL Officer
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UNITED STATES DEPARTMENT OF STATE

MISSION AND ORGANIZATION

O U R M i s s i o n

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

benefit of the American people and the international community.

OUR Values

L O Y A L T Y

Commitment to the United States and the American people.

C H A R A C T E R 

Maintenance of high ethical standards and integrity.

S E R V I C E 

Excellence in the formulation of policy and management practices 

with room for creative dissent. Implementation of policy and 

management practices, regardless of personal views.

A C C O U N T A B I L I T Y 

Responsibility for achieving United States foreign 

policy goals while meeting the highest performance standards.

C O M M U N I T Y 

Dedication to teamwork, professionalism, and the customer perspective.

OUR ORGANIZATION

A merican diplomacy is based on the fundamental beliefs that our freedom is best protected when others are free; 

our prosperity depends on the prosperity of others; and our security relies on a global effort to defend the rights of all. 

In this extraordinary moment in history, when the rise of freedom is transforming societies around the world, the United 

States has an immense responsibility to use its diplomatic influence constructively to advance security, democracy, and prosperity 

around the globe.
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UNITED STATES DEPARTMENT OF STATE

At our headquarters in Washington, D.C., 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.

The Department operates more than 260 embassies, consulates, and 

other posts worldwide. 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 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 people

I

n the business of diplomacy, people are critical. The Department’s success 

in achieving its mission is directly tied to the creativity, knowledge, 

skills and integrity of our dedicated team of employees. The Department’s 

Foreign Service, Civil Service and Foreign Service National employees serve 

at Headquarters, embassies, consulates, and other posts around the world. 

Our employees are committed to carrying out the President’s foreign policy 

agenda and to sharing American values with the world. 

The Foreign Service and the Civil Service in the Department of State and 

U.S. missions abroad represent the American people. They work together to 

achieve the goals and implement the initiatives of American foreign policy. 

The Foreign Service is a corps of over 11,000 employees. Foreign Service 

Officers are dedicated to representing America and to responding to the 

needs of American citizens living and traveling around the world. They are also America’s first line of defense in a complex and often 

dangerous world. A Foreign Service career is a way of life that requires uncommon commitment. It offers unique rewards, opportunities, 

and sometimes hardships. Members of the Foreign Service can be sent to any embassy, consulate, or other diplomatic mission anywhere in 

the world, at any time, to serve the diplomatic needs of the United States. 

State Department/Ann Thomas

Secretary Rice announces a new direction for U.S. Foreign 

Assistance, January 2006 State Department photo
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UNITED STATES DEPARTMENT OF STATE

Employee Composition and Numbers

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

of the workforce is located overseas.

FY 2006 Strategic Planning Framework

I

n FY 2006, the Department and USAID structured their work around twelve strategic goals that centered on four core strategic 

objectives, as shown in the diagram below.

Public

Diplomacy and

Public Affairs

Promote

International

Understanding

Management and

Organizational

Excellence

Strengthen Diplomatic

and Program

Capabilities

Regional Stability

Counterterrorism

Homeland Security

Weapons of Mass

Destruction

International Crime

and Drugs

American Citizens

Achieve Peace

and Security

Democracy and

Human Rights

Economic Prosperity

and Security

Social and

Environmental Issues

Humanitarian

Response

Advance Sustainable

Development and

Global Interests

Mission

Create a More Secure, Democratic, and Prosperous

World for the Benefit of the American People

and the International Community

Strategic Goals

L e g e n d

Strategic Objectives
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UNITED STATES DEPARTMENT OF STATE

Summary of FY 2006 Performance

The pie chart below shows the ratings distribution for Department and USAID performance indicators reported in the Joint Performance Section. As shown, 78% of the ratings were “On Target” or above, meaning that these initiatives or programs met 

or exceeded performance targets. 

The table below shows allocated resources and the average of performance ratings under each strategic goal. 

Positions are U.S. direct hire only. 

Summary Budget Authority and Human Resources by Strategic Goal

FY 2005 FY 2006 Change

Positions

Dollars in 

Millions 

Performance 

Rating Positions

Dollars in 

Millions 

Performance 

Rating

Performance 

Rating

1 Regional Stability 1,282 $ 7,092 On Target 1,295 $ 6,761 On Target

2 Counterterrorism 906 1,768 On Target 916 1,659 On Target

3 Homeland Security 567 262 On Target 573 163 On Target

4 Weapons of Mass Destruction 519 422 On Target 525 433 On Target

5 International Crime and Drugs 702 1,918 On Target 709 1,659 On Target

6 American Citizens 556 66 On Target 562 73 On Target

7 Democracy and Human Rights 830 1,500 On Target 839 1,871 On Target

8 Economic Prosperity and Security 1,553 2,654 On Target 1,570 3,000 On Target

9 Social and Environmental Issues 284 2,306 On Target 287 3,542 On Target

10 Humanitarian Response 552 1,179 On Target 558 1,163 On Target

11 Public Diplomacy and Public Affairs 2,251 597 On Target 2,275 868 On Target

12 Management and Organizational Excellence 9,675 5,415 On Target 9,778 5,225 On Target

Total 19,677 $ 25,179 19,887 $ 26,417 No Change
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UNITED STATES DEPARTMENT OF STATE

program assessment rating tool (PART) status

The Office of Management and Budget (OMB) uses the Program Assessment Rating Tool (PART) to evaluate programs across a set of performance-related criteria, including program design, strategic planning, program management, and results. Programs are 

assessed and assigned numeric scores, which correspond to qualitative ratings of Effective, Moderately Effective, Adequate, Ineffective, 

and Results Not Demonstrated. PART scores and findings are used to inform the budget process and drive improvements.

As shown below, the Department and OMB have used the PART to review 47 programs since 2002, covering nearly 80% of the 

Department’s appropriations. For more information on PART, please visit www.omb.gov/part.

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OMB PART Ratings

Effective 26

Moderately Effective 8

Adequate 13

Total Number of Programs Assessed 47

Adequate

13

Moderately

Effective

8

Effective

26

Program Name Scores and Ratings as of November 15, 2006

Contributions to the International Atomic Energy Agency 98%–Effective

Educational and Cultural Exchange Programs, Near East and South Asia 97%–Effective

Global Educational and Cultural Exchanges 97%–Effective

Capital Security Construction 97%–Effective

Migration and Refugee Assistance- Protection 96%–Effective

United Nations High Commissioner for Refugees 96%–Effective

South Asia Military Assistance 93%–Effective

Humanitarian Demining 93%–Effective

Migration and Refugee Assistance – Other PRM Programs 93%–Effective

International Boundary and Water Commission 92%–Effective

Visa and Consular Services 92%–Effective

Worldwide Security Upgrades 92%–Effective

PART Assessment Ratings and Scores (2002-2006)

(continued)
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UNITED STATES DEPARTMENT OF STATE

Program Name Scores and Ratings as of November 15, 2006

Humanitarian Migrants to Israel 91%–Effective

Contribution to United Nations Development Program 91%–Effective

Contribution to United Nations Children’s Fund and Other Programs 91%–Effective

Security Assistance for Western Hemisphere 90%–Effective

Export Control Assistance 90%–Effective

Nonproliferation and Disarmament Fund 89%–Effective

Foreign Service Institute 88%–Effective

Support for East European Democracy/ Freedom Support Act 88%–Effective

U.S. Embassy Compound Security 87%–Effective

Contributions for International Peacekeeping Activities 86%–Effective

Refugee Admissions to the U.S. 86%–Effective

Non-Security Embassy Construction 86%–Effective

Terrorist Interdiction Program 85%–Effective

Anti-Terrorism Assistance 85%–Effective

Peacekeeping Operations – OSCE 83%–Moderately Effective

Contributions to International Organizations 82%–Moderately Effective

Military Assistance to new NATO and NATO Aspirant Nations 82%–Moderately Effective

Security Assistance to Sub-Saharan Africa 77%–Moderately Effective

Nonproliferation of Weapons of Mass Destruction Expertise 76%–Moderately Effective

President’s Emergency Plan for AIDS Relief (PEPFAR) Focus Countries 73%–Moderately Effective

Protection of Foreign Missions and Officials 72%–Moderately Effective

Economic Support Fund – Western Hemisphere 71%–Moderately Effective

Security Assistance for Near East Asia 69%–Adequate

Economic Support Fund – Africa 67%–Adequate

Economic Support Fund – Human Rights and Democracy Fund 66%–Adequate

PEPFAR – Global Fund 65%–Adequate

Interagency Cooperative Administrative Support Services 65%–Adequate

Contributions to International Fisheries Commissions 59%–Adequate

Public Diplomacy 59%–Adequate

PEPFAR – Other Bilateral Programs 58%–Adequate

International Narcotics Control and Law Enforcement Programs, Africa/Asia 53%–Adequate

International Narcotics and Law Enforcement Programs, South Asia 53%–Adequate

International Narcotics and Law Enforcement Programs, Western Hemisphere 53%–Adequate

Andean Counterdrug Initiative 52%–Adequate

International Information Programs 50%–Adequate

Programs in bold type were assessed in 2006.
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UNITED STATES DEPARTMENT OF STATE

The President’s Management agenda

The President’s Management Agenda (PMA) is the President’s strategy for improving the management and performance of the federal government, with a focus on results. Each quarter, the Office of Management and Budget (OMB) releases an executive 

scorecard that rates agencies’ progress and overall status on PMA initiatives. The scorecard employs a color-coded grading scale 

of red, yellow, and green commonly used by businesses today: Green for success; Yellow for mixed results; and Red for 

Unsatisfactory.

A summary of the Department’s FY 2006 Fourth Quarter Scorecard is provided below. For more information on the PMA and the 

executive scorecard, please visit www.whitehouse.gov/results/.

Progress STRATEGIC MANAGEMENT OF HUMAN CAPITAL Status

Build, sustain, and deploy effectively a skilled, knowledgeable, diverse, and high-performing workforce 

aligned with mission objectives and goals.

Progress IMPROVED FINANCIAL PERFORMANCE Status

World-class financial services that support strategic decision-making, mission performance, and improved 

accountability to the American people.

Progress COMPETITIVE SOURCING Status

Achieve efficient, effective competition between public and private sources and establish infrastructure to 

support competitions.

Progress BUDGET AND PERFORMANCE INTEGRATION Status

Improve the performance and management of the federal government by linking performance to budget 

decisions and improve performance tracking and management. The ultimate goal is better control of 

resources and greater accountability over results.

Progress EXPANDED ELECTRONIC GOVERNMENT Status

Expand the federal government’s use of electronic technologies (such as e-procurements, e-grants, and eregulation) so that Americans can receive high-quality government service.

Progress Federal Real Property Asset Management Initiative Status

To promote the efficient and economical use of America’s real property assets.

Progress RIGHT-SIZED OVERSEAS PRESENCE (OMB LEAD) Status

Reconfigure U.S. Government overseas staff allocation to the minimum necessary to meet U.S. foreign 

policy goals. 

Have a government-wide comprehensive accounting of total overseas personnel costs and accurate 

mission, budget, and staffing information.

Ensure that accurate projected staffing patterns determine embassy construction needs.
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11

UNITED STATES DEPARTMENT OF STATE

Performance Section
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Performance Section Strategic Goal ONE: REGIONAL STABILITY

Strategic Goal 1: REGIONAL STABILITY

Avert and Resolve Local and Regional Conflicts to Preserve Peace and Minimize 

Harm to the National Interests of the United States

I . P u b l i c B e n e f i t

The United States Government seeks to provide security for American citizens and their interests through international treaties, 

alliances, and the active promotion of freedom, democracy, and prosperity around the world. Employing diplomacy and development 

assistance, the U.S. builds and strengthens relations with neighbors and allies worldwide to promote shared values and prevent, 

manage, and mitigate conflicts and human suffering. The Department of State and USAID work with international partners to alleviate 

regional instability by: promoting good governance and sustainable civil institutions; fighting terrorism and the proliferation of 

dangerous weapons; targeting criminal activities that undermine legitimate governments; and by developing professional, responsible, 

and accountable police and military forces. Engagement of like-minded foreign partners contributes to and enhances the legitimacy 

of U.S. stabilization and reconstruction efforts. Success can be seen in 

the expansion of NATO missions into Afghanistan, strong and growing 

security relationships with Japan, South Korea, India and Australia, and 

steady improvements in the capability of the African Union to respond 

to crises on the African continent. These and related efforts reduce 

threats created by regional instability and thereby protect the security 

of Americans and our interests at home and abroad. 

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department of State and USAID performance ratings for the Regional Stability strategic goal. 

Secretary Rice gestures while speaking during a media conference 

after a NATO foreign ministers meeting at the National Palace of 

Culture in Sofia, April 2006. AP/Wide World

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

Below Target

45%

Significantly

Above Target

9%

Significantly

Below Target

9%

On Target

36%

RATINGS DISTRIBUTION

Significantly Above Target 1

Above Target 0

On Target 4

Below Target 5

Significantly Below Target 1

Total Number of Ratings 11
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Performance Section Strategic Goal ONE: REGIONAL STABILITY

I I I . R e s o u r c e s I n v e s t e d

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. There have been a number of significant trends under the Regional Stability goal. One trend is the steady 

increase since FY 2003 in the percentage of U.S. trained African units deployed to peace support/humanitarian response operations. 

Another trend is the decrease in the number of foreign military officers participating in International Military Education and Training (IMET) 

programs from FY 2003 to FY 2006, attributable in part to fewer training opportunities available for foreign military officers due to military 

operations in Iraq and Afghanistan. A final notable trend is USAID’s positive results in supporting local peace-building initiatives, conflict 

sensitivity training and conflict mitigation-focused media campaigns. USAID’s grassroots approach has advanced USG efforts toward peace 

and regional stability.

Key Initiatives and Programs. For FY 2006, Congress appropriated $86.7 million to the Department of State for international 

military education and training, $4.5 billion for foreign military financing, and more than $1.2 billion to fund international peacekeeping 

operations. 

Meeting the Challenges of the 21st Century

NATO’s role in building security in Afghanistan, far outside the traditional NATO area of operations, is a clear indication 

of NATO’s commitment to combat increasingly global threats in the 

21st century. NATO has over 19,000 soldiers from 36 countries under 

its command in Afghanistan, demonstrating the enhanced security 

posture and international commitment to continue fighting the war 

on terrorism. Since 2005, NATO has trained over 2,000 Iraqi officers 

and has provided airlift and other logistical and training support to the 

African Union’s Darfur mission. NATO has also played a key role in 

maintaining peace and stability in the Balkans.

A German ISAF patrols in northern Afghanistan, October 2005. AP/Wide World
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Performance Section Strategic Goal ONE: REGIONAL STABILITY

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Status of Chinese Cooperation on Regional Stability

Outcome

JUSTIFICATION: China is capable of playing a significant role in reducing tension in the East Asia and Pacific region. FY 2006 PERFORMANCE

Target China continues to host and participate in Six-Party settlement of the North Korea nuclear issue.

Results

China continues to prioritize the Six-Party Talks as the best venue to resolve the North Korea nuclear issue, and urges further 

participation in the talks by all parties. A fifth round of the talks took place in Beijing in November, but North Korea has 

refused to participate in subsequent sessions. 

Rating On Target

Impact Chinese assistance in limiting North Korea’s WMD proliferation is critical to our greater nonproliferation objectives.

INDICATOR: Free, Democratic, and Whole Iraq at Peace with Itself and Its Neighbors

Outcome

JUSTIFICATION: A free and democratic Iraq would contribute to economic and political stability in the region. FY 2006 PERFORMANCE

Target

Draft permanent constitution successfully adopted in October 2005 referendum.

Law enforcement institutions begin to enforce and the judiciary begins to uphold civil liberties protections in the new 

constitution. 

Political parties announce coalitions and register for December elections, offering voters real choices. Parties and 

coalitions campaign peacefully. December 2005 elections successfully held. Results of elections receive broad public 

support.

Newly elected government takes power peacefully in early 2006 with broad domestic and international legitimacy and 

support.

Iraq assumes primary responsibility for its own security, able to defend itself without being a threat to its neighbors.

=

=

=

=

=

Results

Recognizing progress in establishing a democratic society, international donors have increased assistance for Iraq, 

announcing $900 million in new pledges since the Madrid conferences. International recognition of and exchanges with 

Iraq have increased, including through opening of Embassies.

Rating Below Target

Impact Success will contribute to security, economic and social development, and political reform in the region.

Reason 

for 

Shortfall

Governance capacity shortfalls have resulted from inadequate training resources, and the Iraqi failure to obligate and 

spend a large majority of ministerial budgets. 

Development of civil society institutions has been inhibited due to a perilous security environment, and a lack of devoted 

Iraqi resources and attention.

 Security forces are failing to achieve levels of quality and quantity required to allow Government of Iraq to assume 

primary responsibility in the current security environment.

High attrition retards the rate of Iraqi Security Forces growth while corruption and infiltration by militias and others loyal 

to parties instead of the Government of Iraq is resulting in the Iraqi Security Forces, especially police, being part of the 

problem in many areas instead of a solution; the Minister of Interior recently stated that 2/3 of MOI forces should be 

fired.

=

=

=

=

Steps to 

Improve

Accelerate National Capacity Development Program across central ministries, and focus enhanced Mission field resources 

to develop provincial ministry capacity.

Put in place defined processes and requirements to obligate and execute 2007 Iraqi budget.

Support programs to promote Iraqi national reconciliation efforts, which will reduce politically driven violence and 

intimidation.

Significantly enhanced focus is required on present-for-duty strength of Iraqi Security Forces units, versus numbers 

initially trained and equipped, and upon developing true capability and readiness.

=

=

=

=
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

15

Performance Section Strategic Goal ONE: REGIONAL STABILITY

INDICATOR: Progress of Implementation of Sudan Peace Process

Outcome

JUSTIFICATION: A peaceful Sudan with an inclusive government based on the rule of law could be a hedge against regional instability and an 

important partner in the global war on terrorism. Ending the conflict would also alleviate one of the world’s worst humanitarian situations and 

stimulate regional economic prospects. FY 2006 PERFORMANCE

Target

Regional democratic elections are planned; non-violent transitions to appropriate new government in Sudan or at 

minimum, preparation activities toward a program of democratic elections are put in place.

Military reform continues with additional assistance provided to the southern Army.

Disarmament, Demobilization, and Reintegration (DDR) on both sides results in force reduction of 40% globally.

40% of refugees and internally displaced persons (IDPs) return home. Darfur IDPs and refugees return home.

UN authorizes extension of UN Mission in Sudan (UNMIS) in Darfur.

=

=

=

=

=

Results

Comprehensive Peace Agreement (CPA) implementation showed progress in security arrangements; less progress on 

power- and wealth-sharing protocols.

Darfur Peace Agreement signed in Abuja, Nigeria and Eastern Sudan Peace Agreement completed. Both agreements 

complement framework of CPA.

Planning for elections barely in preliminary phase; however, technical preparations for a national census, a precursor to 

elections, are on schedule.

Military transformation and U.S. support for Security Sector Transformation have slowly begun in the South.

UNMIS verified redeployment on schedule with 63% Sudanese Armed Forces redeployed and 65% Sudan People’s 

Liberation Army (SPLA) forces redeployed.

The National Disarmament, Demobilization, Reintegration (DDR) Commission has not met since it was established in 

February 2006. The Northern Sudan DDR Commission started preliminary assessment work in Darfur.

Internally Displaced Persons (IDP) are returning in the South, but displacements are increasing in Darfur.

UNSCR 1706 authorizes the extension of UNMIS to Darfur and expansion by up to 17,300 troops, 3,300 UN Police, and 

16 Formed Police Units.

=

=

=

=

=

=

=

=

Rating Below Target

Impact

The crisis in Darfur and Sudanese military offensive in Darfur have hindered progress on the implementation of the 

Comprehensive Peace Agreement. Implementation of the Darfur Peace Agreement and Comprehensive Peace Agreements 

are closely linked, and resolving the Darfur crisis is key not only to those affected by the crisis directly, but for all Sudanese 

whose future depends on the full and sustainable implementation of the Comprehensive Peace Agreement.

Reason 

for 

Shortfall

Non-signatories to the Darfur Peace Agreement as well as the Sudanese Government continue to escalate violence and 

further embroil the Darfur region in conflict. Additionally, both the Sudan People’s Liberation Movement (SPLM) and 

particularly the National Congress Party have been slow to act on key aspects of the CPA which require direct cooperation 

among members of the Government of National Unity.

Steps to 

Improve

Resolving the Darfur crisis through a two-tracked diplomatic and security strategy will be crucial to progress on CPA 

implementation. This includes broadening support for the Darfur Peace Agreement among non-signatories, full and 

expeditious implementation of the agreement, and deployment of a UN peacekeeping force to Darfur respectively.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

16

Strategic Goal 2: Counterterrorism

Prevent Attacks Against the United States, our Allies, and our Friends, and Strengthen 

Alliances and International Arrangements to Defeat Global Terrorism

I . P u b l i c B e n e f i t

The tragic events of September 11, 2001, demonstrated the gravity of the threat international terrorists pose to the United States 

and its citizens, at home and abroad. The Global War on Terrorism remains the U.S. Government’s top priority. The Department of State 

and USAID, in partnership with other U.S. Government agencies, international organizations, and countries around the world, work to 

combat terrorist networks wherever they exist and prevent attacks against Americans and our friends. This includes support for extending 

protection of the homeland beyond America’s borders, through programs such as the Container Security Initiative, Immigration Security 

Initiative, Proliferation Security Initiative, Customs-Trade Partnership Against Terrorism, and sharing of terrorist watch list information. 

To date, the Department has mobilized some 180 countries and territories in the war on terrorism to identify, disrupt and destroy 

international terrorist organizations. Key to the ability to mobilize 

effective action by our foreign partners is the provision of training to 

those who want to help but lack the means. Since 9/11, programs such as 

anti-terrorist assistance, terrorist interdiction, and antiterrorist finance, 

combined with long term efforts to increase stability, have significantly 

improved U.S. global partners’ counterterrorism.

A theater troupe member reads stories of 9/11 victims in front of ground 

zero in New York to commemorate the anniversary of the attacks. 

AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department of State and USAID performance ratings for the Counterterrorism strategic goal.

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 2

On Target 3

Below Target 3

Significantly Below Target 0

Total Number of Ratings 8 Below Target

37%

On Target

37%

Above Target

25%

Performance Section Strategic Goal TWO: Counterterrorism
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

17

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES

0

200

400

600

800

1,000

(Direct Funded Positions)

($ in Millions)

L E G E N D

P e r f o r m a n c e G o a l s

Active Anti-Terrorist Coalitions

Frozen Terrorist Financing

Prevention and Response to

Terrorism

Stable Conditions in

Fragile/Failing States

(USAID resources not shown in

Department of State PAR)

FY 2006

916

TOTAL

649

51

216

0

BUDGET AUTHORITY

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,700

$2,000

794

312

1,659

TOTAL

0

FY 2005 FY 2006

906

TOTAL

642

50

214

0

1,595

158

1,768

TOTAL

0

15

FY 2005

553

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. One noteworthy trend under the Counterterrorism Strategic Goal is the steady increase in the percentage 

of travelers screened around the world using the Terrorist Interdiction Program’s watch listing system. The number of sites at which 

the system is installed has increased from 58% in FY 2003 to 80% in FY 2006. The number of foreign man portable air defense 

systems (MANPADS) destroyed or secured by foreign governments trended downward in FY 2006. The Department continues to press 

implementing partners to honor commitments and schedules to destroy MANPADS.

KEY INITIATIVES AND PROGRAMS. In FY 2006, of the $410 million appropriated for nonproliferation, anti-terrorism, demining 

and related programs, $136 million was allocated to anti-terrorism assistance, the terrorist interdiction program, counterterrorism 

financing, and engagement with allies.

U.S. Anti-Terrorism Assistance to Indonesia

The Department provided assistance in FY 2006 to train and equip a special Indonesian counterterrorism police 

unit called Special Detachment 88. SD-88 was launched 

in 2003 in response to the October 2005 bombings in Bali. 

In November 2005, SD 88 located Indonesia’s most wanted 

terrorist, Azahari bin Husin, who was linked to the Bali 

bombings and to bombings in Jakarta. SD 88 planned and 

executed a successful assault on Azahari’s stronghold, killing 

him and securing valuable intelligence to help prevent other 

attacks.

A bomb squad member removes a mock explosive device from a hijacked passenger plane during a September 2006 anti-terror drill at Juanda 

airport in Surabaya, East Java, Indonesia. AP/Wide World

Performance Section Strategic Goal TWO: Counterterrorism
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

18

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Number of Participant Countries That Achieve and Sustain a Capability to Effectively 

Deter, Detect, and Counter Terrorist Organizations and Threats

PART Output

JUSTIFICATION: Anti-Terrorism Assistance (ATA) not only provides quality training to priority counterterrorism countries but enables each country to 

achieve sustainment by providing them with the capability to incorporate anti-terrorism curriculum into their own training methods over a set course 

of time, thereby optimizing USG cost efficiency of each nation’s participation in the ATA program. FY 2006 PERFORMANCE

Target Two new countries (6 total) ascend from basic through advanced training and have attained competence in countering 

terrorist activities.

Results The Department conducted counterterrorism training for 77 partner nations and performed 269 training events. Two new 

countries ascended from basic through advanced training and attained competence in countering terrorist activities.

Rating On Target

Impact

The ATA program continues to serve as the U.S. Government’s primary provider of anti-terrorism training to partner nations 

by delivering a wide range of courses to strengthen critical counterterrorism capacities. ATA alumni have served as the 

lead investigators of a number of recent terrorist attacks and have utilized their training in tracking down and arresting 

perpetrators. 

INDICATOR: Capacity of the Afghan National Army to Defend the Afghan Government and 

Its Territory from External and Internal Threats

Outcome

JUSTIFICATION: The training and deployment of, and expansion of influence by, the Afghan National Army (ANA) indicates progress toward 

establishing sustainable security in Afghanistan, without which the war on terrorism will not succeed. FY 2006 PERFORMANCE

Target

Afghan National Army (ANA) units conduct routine operational deployments throughout Afghanistan as needed; 

continued fielding of regional corps with at least one brigade at each location.

Ministry of Defense and General Staff assumes, with limited international community support, policy, planning, budget 

and operational responsibilities; institutional training base completed; functional commands provide increasing 

support for regional commands. Ministry of defense personnel reform process complete; includes ethnically balanced 

and increasingly professional staff.

Afghan National Police, Highway Patrol and Border Police are increasingly capable of enforcing law and securing 

transportation routes and borders. All Border Police brigades have undergone training and been provided with 

individual and basic unit equipment.

=

=

=

Results

30,400 Afghan National Army forces trained and equipped and partially capable of conducting counterinsurgency 

operations in conjunction with Coalition units.

Minor improvements to Ministry of Defense and General Staff action process are being initiated despite the delay 

in assigning personnel to key leadership positions. Assistant Minister for Defense for Personnel and Education office 

beginning to take on a more active role in policy development. Operational Planning Guidance complete; staff 

beginning to develop the seven operational plans based on this guidance. 

48,100 Afghan National Police trained and equipped. 

=

=

=

Rating Below Target

Impact The training and deployment of the ANA to defend the credibly elected Afghan government from internal and external 

threats contributes to the fight against the global war on terror.

Reason 

for 

Shortfall

The international community has had to remain engaged in developing the capacity of the Afghan National Police more 

than expected and the reconstituted enemy is more lethal than expected.

=

Steps to 

Improve

The Department will continue to develop and expand the capacity of the Afghan National Army and Afghan National 

Police, with a focus on strengthening the policy, planning, and budget operations of those institutions. 

=

Performance Section Strategic Goal TWO: Counterterrorism
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

19

INDICATOR: Number and Effectiveness of U.S. Training and Assistance Programs and Assessments 

Delivered to Priority States to Help Combat the Financing of Terrorists

Output

JUSTIFICATION: Counterterrorism finance capacity building is one mechanism for the U.S. to engage its allies to provide early warning, detection 

and interdiction of terrorist financing. FY 2006 PERFORMANCE

Target

Three countries assessed by financial systems assessment teams and three training and technical assistance plans 

developed.

Six countries at least partially implement technical assistance and training plans (training received in at least three of 

the five functional areas).

Eight countries fully implement technical assistance and training plans (training received in at least all five of the 

functional areas).

At least five countries undergo comprehensive review of the effectiveness of technical assistance and training.

=

=

=

=

Results

One country assessed by financial systems assessment teams and one training and technical assistance plans 

developed.

Five countries at least partially implemented technical assistance and training plans (training received in at least three 

of the five functional areas).

Three countries fully implemented technical assistance and training plans (training received in at least all five of the 

functional areas).

No countries have undergone comprehensive review of the effectiveness of technical assistance and training.

=

=

=

=

Rating Below Target

Impact

Even though the results for the indicator are below target, continued yet slow progress has been made in the establishment 

and improvement of counterterrorist financing regimes, particularly with respect to the passage of new laws, regulations 

and reporting requirements. 

Reason 

for 

Shortfall

Two countries were not assessed due to serious security considerations.

Three countries that received training were unable to partially implement technical assistance and training plans.

Five countries did not fully implement technical assistance and training plans.

The interagency task force is in the process of developing criteria and a database to conduct comprehensive reviews for 

effectiveness of training.

=

=

=

=

Steps to 

Improve

The Department will reinforce the necessity for countries to demonstrate political will and live up to their international 

commitments.

On a tactical level, depending on host nation sensitivity, the Department will encourage Resident Legal Advisors to engage 

with legislative drafting committees and experts and other stakeholders to explain international legal obligations and 

legal strategies for compliance with UN Security Council Resolutions, conventions, treaties, Financial Action Task Force 

(FATF) recommendations and other obligations.

=

=

Performance Section Strategic Goal TWO: Counterterrorism
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

20

Strategic Goal 3: Homeland security

Secure the Homeland by Strengthening Arrangements that Govern the Flows of People, Goods, 

and Services Between the United States and the Rest of the World

I . P u b l i c B e n e f i t

The Department is committed to protecting America’s homeland. Together with the Department 

of Homeland Security (DHS) and other government agencies, the Department is addressing U.S. 

vulnerabilities to terrorist attacks and other transnational threats. In 2006, the Department and DHS 

announced a joint vision for protecting U.S. borders and expanding the use of technology to ensure 

that strategies strike the most effective balance between stronger security and facilitating travel and 

exchange for the many legitimate visitors that contribute to America’s social and economic wellbeing. This shared vision includes: improved technology and efficiency at ports of entry and in visa 

processing; more secure travel documents for the 21st century; and smarter screening technology 

for government officials to use at home and abroad. Along with our international allies, the U.S. 

Government is bolstering the security of U.S. physical and cyber infrastructures, which are critical to 

the reliable functioning of global networks of commerce, travel, and communications upon which 

the free flow of travelers, goods, and information depends. With these programs, the Department 

is reducing risk to U.S. national security by combating the ability of terrorists to travel, plan and 

finance their activities, conduct attacks and train new recruits.

Secretary Rice and Homeland Security Secretary Michael Chertoff announce the Secure Borders and Open Doors in the Information Age Initiative, 

January 2006. Department of State photograph

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department performance ratings for the Homeland Security strategic goal. 

S T R AT E G I C G O A L R E S U L T S A C H I E V E D F O R F Y 2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 0

On Target 4

Below Target 0

Significantly Below Target 0

Total Number of Ratings 4 On Target

100%

Performance Section Strategic Goal three: homeland security
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

21

I I I . R e s o u r c e s I n v e s t e d

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. There have been a number of significant trends under the Department’s Homeland Security goal. One trend 

has been the significant increase of 19 ports under the Container Security Initiative in FY 2003 to 50 under the program in FY 2006. 

Additionally, the Department has made great strides since FY 2003 in the development of systems to capture and share biometric data 

for U.S. visas. The program has added in FY 2006 a facial recognition component for high fraud and high risk applicants.

KEY INITIATIVES AND PROGRAMS. The Department of State’s key programs in this strategic goal include the biometrics collection 

program for U.S. visas, the Security and Prosperity Partnership with Canada and Mexico, and the Container Security Initiative, 

implemented jointly with the Department of Homeland Security. 

Performance Section Strategic Goal three: homeland security

Biometric Visa Program

Under the Biometric Visa Program, fingerprints are collected from visa applicants at U.S. Embassies and Consulates abroad. The fingerprints are then cleared against a watchlist containing fingerprints of known or suspected terrorists and 

criminals, and the biometric data is stored in the Department of Homeland Security’s IDENT fingerprint system. Upon arrival 

at a port of entry in the United States, travelers have their fingerprints 

matched with those stored in the IDENT database to prevent terrorists 

or other inadmissible aliens from entering the United States using false 

identities. In FY 2006, State developed and tested new software to capture 

all ten fingerprints from visa applicants.

A passenger arriving at John F. Kennedy International Airport uses a machine that 

takes inkless fingerprints, which will be checked instantly against the national digital 

database for criminal backgrounds and any terrorist lists. AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

22

Performance Section Strategic Goal three: homeland security

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Development of a Biometrics Collection Program for U.S. Visas

PART Outcome

JUSTIFICATION: This indicator tracks whether systems related to the biometrics collection program work as intended and are successfully 

incorporating biometric data into visas using agreed upon technology standards. FY 2006 PERFORMANCE

Target

Facial recognition checks expanded to include all visa applicants, including applicants who have had a fingerprint biometric 

collected. Effectiveness will be measured by an increase in the number of mala fide applicants identified through the 

program and by a reduction in the number of false positives.

Results

Phase II of facial recognition program launched in October 2005, expanding the program to high-fraud and high-risk 

applicants. Ad-hoc facial recognition checks deployed to posts. Photo quality and photo comparison training for posts 

developed in 2006. Facial recognition collaboration expanded to DHS and DoD.

Rating On Target

Impact The Biometric Visa Program is helping to prevent ineligible applicants from obtaining visas and ensure the integrity of the 

U.S. visa by verifying visa bearers at U.S. ports of entry through use of biometric data.

INDICATOR: Implementation of the Security and Prosperity Partnership with Canada and Mexico

Output

JUSTIFICATION: This indicator measures progress in implementing a key border security agreement with countries bordering the continental 

United States. FY 2006 PERFORMANCE

Target Complete pilot project of visa lookout information sharing with Canada by December 30, 2006.

Complete operational testing of visa lookout information sharing with Mexico by March 30, 2006.

=

=

Results

Canada: Targets largely achieved, with Phase One of the Western Hemisphere Travel Initiative on track, announcement 

of Rice-Chertoff initiative and movement toward development of a border crossing card. Transit time for Detroit-Windsor 

reduced by more than 25%. No terrorist incidents or exploitation; counterterrorism cooperation continues at a high level. 

To increase security, USG and the Government of Canada (GOC) completed joint exercises on St. Clair and Detroit Rivers 

during Super Bowl in February. Completed Cyber storm exercise in February to prepare for potential incidents affecting 

critical infrastructure. Meeting and discussion are preparing Mutual Assistance Agreements to prepare for cross-border 

public health emergencies. 

Mexico: USG and the Government of Mexico (GOM) aligned regulations to require manifest data be reported 24-hours in 

advance of loading ship. USG and GOM signed an Action Plan to Combat Violence and Improve Public Safety. 

Canada and Mexico (trilateral): Representatives of three governments completed training related to the protection of 

aircraft from terrorist threats, basic and advanced marksmanship skills, and emergency aircraft procedures. The USG, GOC 

and GOM cooperated to tighten and verify the security of key nuclear and radiological facilities. The governments established 

the Avian and Human Pandemic Influenza Coordinating Body to ensure governments act in a coordinated manner to meet 

a pandemic threat. Representatives of the three countries inaugurated the North American Aviation Trilateral to promote 

civil aviation security. 

Rating On Target

Impact Results as of the end of FY 2006 have furthered Strategic Partnerships Program (SPP) implementation with Canada and 

Mexico and advanced border security initiatives.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

23

Performance Section Strategic Goal three: homeland security

INDICATOR: Full Implementation and Expansion of Container Security Initiative (CSI)

Outcome

JUSTIFICATION: Security screening of containers at foreign ports before ships depart for the U.S. decreases both the appeal to terrorists 

and the vulnerability of the vital maritime transportation sector and, in the event of an incident, allows more expeditious resumption of 

maritime commerce. FY 2006 PERFORMANCE

Target

Reduce opportunities for terrorist exploitation of containers traffic by refining the targeting mechanisms and risk 

management techniques developed as part of CSI; 90% of U.S.-bound container traffic covered.

Best practices are promulgated through multilateral fora and other organizations. 

=

=

Results

Eleven ports in nine countries joined the CSI in FY 2006. CSI is now operational at 50 ports, accounting for approximately 

82% of all containerized merchandise imported into the United States.

Upon the initiative of the United States, the World Customs Organization has established a Framework of Standards to 

Secure and Facilitate Global Trade that establishes tested U.S. procedures as international standards, including advanced 

electronic cargo information, common risk management criteria, inspection of high-risk containers at the outgoing port 

and business incentives for secure supply chains. The U.S. Government is providing technical assistance through the WCO 

for developing countries to implement the framework. As the next step in the Container Security Initiative, DHS is working 

with selected foreign ports to set up pilot integrated scanning systems combining radiation detection, non-intrusive 

inspection and optical imaging of the container exterior, to test for general use.

=

=

Rating On Target

Impact Broader coverage of CSI has enhanced global port security and boosted industry and public confidence in the security of 

maritime container traffic.

A Look to History: Homeland Security

Prior to 1856, states, cities, and even notaries public in the U.S. could issue passports. However, an Act of Congress of August 18, 1856 gave the Secretary of State the exclusive authority to issue passports to U.S. citizens. Many countries, including the United 

States and those in Europe, did not require passports of all foreign travelers until the outbreak of World War I in 1914 when European governments began requiring U.S. nationals 

to bear passports. The spike in demands for passports during World War I compelled 

the U.S. government to tighten the rules governing passport applications. In December 

1914, Secretary of State William Jennings Bryan circulated new regulations that explicitly 

required U.S. passport applicants to present birth certificates or documentation of naturalization as proof of citizenship. In order to enforce security during wartime, the United 

States also began demanding proof of citizenship and documentation of entry privileges 

from all foreign visitors. AP/Wide World Photo
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

24

Strategic Goal 4: Weapons of mass destruction

Reduce the Threat of Weapons of Mass Destruction to the United States, Our Allies, and Our Friends

I . P u b l i c B e n e f i t

The proliferation of weapons of mass destruction, their means of delivery, and related 

materials, technologies, and expertise is the preeminent challenge to American national 

security. Combating this threat is one of the highest priorities of the Department of State. 

The Department has undertaken a number of efforts to reduce the threat of weapons 

of mass destruction including: preventing proliferators from gaining access to sensitive 

technologies and expertise that could provide a short cut to weapons of mass destruction; 

working with our international partners to eliminate in a verifiable manner WMD and 

missile programs in North Korea, and ending Iran’s nuclear enrichment and reprocessing 

activities; enhancing the ability of allied governments to detect, disrupt and respond to 

terrorist use of nuclear, radiological, chemical or biological weapons; and strengthening 

existing multilateral frameworks such as the Nuclear Non-Proliferation Treaty and the 

Chemical Weapons Convention. Supporting these efforts is a commitment to work with 

international partners to ensure that compliance is rigorous and enforced.

U.S Ambassador to the United Nations John Bolton votes on a UN Security Council resolution on the North Korea missile crisis, July 2006 in 

New York. AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department performance ratings for the Weapons of Mass Destruction strategic goal. 

S T R AT E G I C G O A L R E S U L T S A C H I E V E D F O R F Y 2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 1

Above Target 2

On Target 3

Below Target 3

Significantly Below Target 0

Total Number of Ratings 9 Below Target

33%

On Target

33%

Above Target

22%

Significantly

Above Target

11%

Performance Section Strategic Goal four: weapons of mass destruction
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

25

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

200

400

500

600

(Direct Funded Positions)

$0

$200

($ in Millions)

$300

$400

$500

L E G E N D

P e r f o r m a n c e G o a l s

Bilateral Measures

Multilateral Agreements and

Nuclear Safety

Verification and Compliance

$100

100

FY 2006

88

222

215

525

TOTAL

300

FY 2006

209

189

433

TOTAL

35

FY 2005

87

219

213

519

TOTAL

FY 2005

279

122

422

TOTAL

21

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. For the past several years, the Department of State has demonstrated greater multilateral cooperation in the 

area of non-proliferation standards and treaties, and in addressing specific proliferation challenges. However, the continued development 

of nuclear weapons programs in Iran and North Korea provided a counterpoint to these positive multilateral developments.

KEY INITIATIVES AND PROGRAMS. The Department invested $196 million in FY 2006 in the Nonproliferation and Disarmament Fund, 

export controls and border security assistance programs, the nonproliferation of WMD expertise, the U.S. voluntary contribution to the 

International Atomic Energy Agency, and an international monitoring system for the Comprehensive Nuclear Test Ban Treaty.

Bioterror Prepreparedness

The Department leads the U.S. Government’s engagement with the G-8 Bioterrorism Experts Group to protect against deliberate 

releases of infectious disease and enhance surveillance and response 

capabilities in the event of natural disease outbreaks. In the spring 

of 2006, the Department facilitated the participation of G-8 experts 

in a workshop led by the U.S. Environmental Protection Agency on 

decontamination issues, leading to the dissemination of U.S. expertise 

on the matter. The Department is also facilitating a workshop for G-8 

experts on forensic epidemiology – an emerging field that includes 

the coordination of public health and law enforcement expertise in 

responding to a real or potential threat of bioterrorism.

VaxGen lab technicians demonstrate the development of an anthrax vaccine, September 2006. AP/Wide World 

Performance Section Strategic Goal four: weapons of mass destruction
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

26

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Extent to Which Iran, Syria, DPRK and Other Countries of Concern Are Denied WMD/

Missiles and Related Technology, Materials, Equipment and Expertise From Other Countries

Input

JUSTIFICATION: The inability of target countries to acquire WMD is a direct measure of how well U.S nonproliferation policies and programs are 

working. FY 2006 PERFORMANCE

Target

International Atomic Energy Agency (IAEA) takes effective steps to redress Iranian safeguards concerns. Iran adopts and 

implements an Additional Protocol. No countries cooperate with Iran’s nuclear program. International consensus that 

Iran should not possess enrichment or reprocessing facilities.

Iraq completely and verifiably disarms.

China fully implements and effectively enforces its nuclear and missile commitments, and effectively enforces WMD/

missile-related export controls.

DPRK agrees to verifiably dismantle its nuclear weapons programs.

DPRK missile-related exports decrease.

10% increase in interdictions of specific shipments involving programs of concern.

Libya continues to cooperate in promoting international nonproliferation norms.

=

=

=

=

=

=

=

Results

IAEA reported Iran’s nuclear program to the UN Security Council (UNSC) February 2006. IAEA reported in August 2006 

that Iran failed to comply with UNSCR 1696, which mandated Iranian suspension of enrichment-related and reprocessing 

activities.

All concerns related to Iraq’s past possession of WMD have been resolved.

China’s nonproliferation record has shown improvement over the past several years, but some Chinese entities continue 

to assist programs of proliferation concern, including in Iran and the DPRK.

Since November 2005, the DPRK has refused to return to the Six-Party Talks to find peaceful resolution to security 

concerns raised by North Korea’s nuclear weapons program. In October 2006, the DPRK conducted nuclear tests. With 

U.S. leadership, the UN Security Council adopted UNSCR 1718 mandating sanctions on the DPRK in response.

DPRK continued to test ballistic missiles and export missile-related items.

U.S. worked successfully with Proliferation Security Initiative partners on two dozen separate occasions to prevent 

transfers of equipment and material to WMD and missile programs in countries of concern.

Libya continued its cooperation to promote nonproliferation norms.

=

=

=

=

=

=

=

Rating Below Target

Impact

Failing to meet our targets increases the possibility that countries or terrorists could acquire WMD. Failing to end Iranian 

and North Korean nuclear weapons programs threatens global stability and security. U.S policies and programs have shown 

success in expanding the Proliferation Security Initiative, and on Iraq and Libya.

Reason 

for 

Shortfall

Iran and North Korea continue to refuse to be constructive partners in multilateral negotiations about ending their nuclear 

weapons programs. China did not take adequate action to implement fully its nuclear and mission nonproliferation 

commitments.

Steps to 

Improve

The Department will continue to work with the international community to get Iran to suspend all enrichment- and 

reprocessing-related activity, and is working on a UN Security Council resolution imposing sanctions on Iran. The U.S. will 

work with international partners to ensure UNSCR 1718 is effectively implemented and continue to encourage the DPRK to 

return to the Six-Party Talks. The U.S. continues to urge China to strengthen its export control enforcement. 

Performance Section Strategic Goal four: weapons of mass destruction
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

27

Performance Section Strategic Goal four: weapons of mass destruction

INDICATOR: Number of Countries That Have Developed and Instituted Valid Export Control 

Systems Meeting International Standards

PART Output

JUSTIFICATION: A country’s export, border, and strategic trade controls are the first line of defense in preventing proliferation of WMD materials, 

yet many countries do not have controls that meet international standards. The U.S. assists priority countries to control proliferation and meet 

international standards. FY 2006 PERFORMANCE

Target Cumulatively, seven countries develop and institute export control system and practices that meet international standards.

Results The Export Control and Related Border Security (EXBS) program graduated from U.S. assistance six more countries (Malta, 

Cyprus, Estonia, Latvia, Lithuania, and Slovenia) for a total of 11 countries.

Rating Significantly Above Target

Impact Continued success in ‘graduating’ states from U.S. assistance means that the global nonproliferation effort is strengthened 

and resources are made available to assist other countries. 

A Look to History: Weapons of Mass Destruction

Negotiations between the United States and the Soviet Union in the 1970s resulted in agreements to limit strategic nuclear weapons. The Strategic Arms Limitation Talks, known as SALT I & II, took place in Helsinki, Vienna and Geneva. 

A delegation of officials from the Departments of State and Defense, the Intelligence Community, the Joint Chiefs of Staff, and 

the Arms Control and Disarmament Agency represented the United States. The 1972 Interim Agreement limited the number 

of offensive intercontinental missiles allowed 

in each super power’s arsenal. The 1972 AntiBallistic Missile Treaty sharply limited missile 

defense systems in each country. President 

Jimmy Carter signed the SALT II agreement 

in 1979, but Congress never ratified SALT II. 

The arms negotiations continued in President 

Ronald Reagan’s administration with the 

Strategic Arms Reduction Talks.

President Richard Nixon and Soviet Communist 

Party leader Leonid Brezhnev sign the Strategic Arms 

Limitation agreement at the Kremlin in May 1972. 

AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

28

Strategic Goal 5: INternational crime and drugs

Minimize the Impact of International Crime and Illegal Drugs on the United States and its Citizens

I . P u b l i c B e n e f i t

Americans and our global partners face growing security threats, both at home and abroad, from international terrorist networks 

and international criminal enterprises. International trafficking in persons or small arms, smuggling of migrants and contraband, 

money laundering, cyber crime, theft of intellectual property rights, and other offenses cost U.S. taxpayers and businesses billions of 

dollars each year and undermine rule of law in both developing and developed nations. The Department and USAID work with other 

U.S. Government agencies and foreign governments to break up drug trafficking and other international crime groups, disrupt their 

operations, and pursue legal prosecution of their leaders. On the diplomatic level, the Department works with international bodies 

such as the United Nations, the European Union, the Organization of American States and the Group of Eight Industrialized States to 

set international counter-drug, anti-crime and counter-terrorist standards, foster cross-border law enforcement cooperation, and deny 

safe havens to crime, drug and terrorist groups. Department and USAID efforts to strengthen judicial offices and create less corrupt 

and more transparent national and local government structures help strengthen law enforcement and establish political stability 

in countries struggling against narco-terrorists. Finally, the 

Department provides American civilian police and other police 

experts to UN, regional or other peacekeeping operations to 

establish or rebuild democratic and professional police forces 

and rule of law in those areas.

A female police officer chats about her experience as a member of 

the Afghan Police’s Family Response and Domestic Violence Unit with 

Assistant Secretary for International Narcotics and Law Enforcement 

Affairs Anne Patterson, August 2006. Photo courtesy of DynCorp

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the International Crime and 

Drugs strategic goal. 

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 1

Above Target 2

On Target 3

Below Target 1

Significantly Below Target 0

Total Number of Ratings 7

Below Target

14%

On Target

43%

Above Target

29%

Significantly

Above Target

14%

Performance Section Strategic Goal Five: International crime and drugs
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

29

Performance Section Strategic Goal Five: International crime and drugs

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

200

400

600

800

(Direct Funded Positions)

$0

$800

($ in Millions) $1,000

$1,200

$1,800

L E G E N D

P e r f o r m a n c e G o a l s

Disruption of Criminal

Organizations

Law Enforcement and Judicial

Systems

FY 2006

418

291

709

TOTAL

$600

$400

$200

$1,400

$1,600

FY 2006

1,304

355

1,659

TOTAL

$2,000

FY 2005

414

288

702

TOTAL

FY 2005

1,508

410

1,918

TOTAL

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. There were a number of positive trends under the Andean Counterdrug Initiative: hectares sprayed, 

shipments seized, and licit crop production increased. In addition, host government law enforcement partners have become stronger 

and more effective, capturing an increasing share of the cocaine produced in the Andean region. Unfortunately, the four-year trend in 

Afghanistan shows an increase in illicit opium poppy cultivation, despite U.S. Government efforts to discourage planting, eradicate the 

crop and promote alternative development.

KEY INITIATIVES AND PROGRAMS. In FY 2006, Congress appropriated $734.5 million to the Department of State to carry out 

the Andean Counterdrug Initiative, of which approximately $229 million was earmarked to USAID for alternative development 

and institution building, including $131 million for assistance to Colombia. An additional $477 million was appropriated in 

FY 2006 to fund international narcotics and law enforcement activities, including $16 million to fund International Law Enforcement 

Academies. 

U.S. Andean Counterdrug Initiative

The U.S. multi-year investment in the Andean Counterdrug Initiative to combat narco-terrorism in the Andean Region of South America is paying important political, security and economic dividends. This is particularly apparent in Colombia, 

which faced a frontal assault by major narco-terrorist organizations in the 1990s. Today, civil violence such as terrorist attacks, 

kidnappings, and homicides have dropped dramatically. Virtually all 30,000 members of a local terrorist organization have been 

demobilized with U.S. help. Drug seizures in 2006 reached a record high for the 

third consecutive year and the Colombian Government continues to extradite 

record numbers of traffickers to the United States. Despite these gains, the fight 

against narco-terrorism continues; Colombia continues to supply approximately 

90% percent of the cocaine and heroin entering the United States.

Police officers escort Eduardo Restrepo Victoria at the National Police headquarters in 

Bogota, Colombia, July 2006. Restrepo was arrested on charges of smuggling cocaine 

to the United States. AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

30

Performance Section Strategic Goal Five: International crime and drugs

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Ratio of Total Metric Tons Seized in Colombia, Peru, and Bolivia to 

Estimated Production of Cocaine

PART Outcome

JUSTIFICATION: Statistics on seizures complement estimates on cultivation and production. They are an indication of law enforcement effectiveness 

but much less reliable as a snapshot of drug trafficking. FY 2006 PERFORMANCE

Target Seizure Rate: at least 28% of total net production.

Results Although actual data for metric tons produced or actual metric tons seized is not expected to be distributed until April 2007, 

based on results for 2005 and past experience, it is reasonable to forecast that the seizure rate will remain on target.

Rating On Target

Impact

The seizure rate measures the effectiveness of U.S. Government assistance to law enforcement capacity building in Colombia, 

Peru, and Bolivia. The upward trend from 2003 to 2005 indicates that the host government law enforcement, working 

together with the U.S. Government, continue to capture an increasing share of the cocaine produced in the Andean region.

INDICATOR: Number of Countries Strengthening and Enforcing New or Existing Anti-Trafficking 

Laws to Come Into Compliance with International Standards

Outcome

JUSTIFICATION: Strengthened laws requiring strong penalties for traffickers and comprehensive assistance for victims indicate concrete efforts to 

prosecute and convict traffickers and to protect victims. FY 2006 PERFORMANCE

Target Ten countries move up a tier or off the Tier 2 Watch List classification based on fulfillment of country strategies.

Two additional countries receiving USG assistance successfully adopt comprehensive anti-trafficking law(s).

=

=

Results

In the past year, 16 countries moved up a tier or off the Tier 2 Watch List. Of these 16 countries, eight moved up from Tier 

3 to Tier 2 Watch List or Tier 2. Eight additional countries moved from the Tier 2 Watch List to Tier 2.

Forty-one countries adopted new legislation or amended existing legislation to combat trafficking in persons.

=

=

Rating Significantly Above Target

Impact Concrete actions taken by governments to fight trafficking result in more prosecutions, convictions, and prison sentences for 

traffickers and comprehensive assistance for victims.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

31

Performance Section Strategic Goal Five: International crime and drugs

INDICATOR: Viability of Iraqi Justice and Law Enforcement Sectors

Outcome

JUSTIFICATION: Given the uncertain political and security environment, a measure of the capacity and professionalization of the police force is 

extremely relevant and useful to program planning and decision-making. FY 2006 PERFORMANCE

Target

Large-scale basic police training ramps down to accommodate normal personnel management.

New phase of training focuses on organizational development leadership.

Training increasingly emphasizes transparency, accountability, anti-corruption, and respect for human rights.

Specialized training intensifies.

Special anti-corruption units created within Justice Ministry and police internal accountability units (i.e., internal affairs) 

created.

Revision of criminal code completed and enacted by National Assembly.

Personal and operational equipment and infrastructure provided to supplement similar support provided by Coalition 

military forces.

=

=

=

=

=

=

=

Results

The Coalition Police Advisory Training Team plans to conclude large-scale basic police training by December 31, 2006. To 

date, 39,826 Iraqi students have graduated from the Jordan International Police Training Center.

Police Transition Teams that include over 600 International Police Liaison Officers are assessing and mentoring Iraqi 

police.

Advanced and specialized police training includes basic criminal investigations (3,400 total graduates to date), advanced 

criminal investigations (240 graduates), interviews and interrogation (1,313 graduates), violent crimes investigation 

(1,151 graduates), criminal intelligence (596 graduates).

An internal affairs unit has been established at the Ministry of Interior, over 285 internal affairs investigators have been 

trained, and the Ministry is providing mentoring. Internal controls training has been provided to 837 Iraqi Police Service 

graduates.

=

=

=

=

Rating On Target

Impact

Strengthening the law enforcement and justice sectors in Iraq is essential to restoring public confidence in the Iraqi 

government. Improvements in the accountability and transparency of the police, courts, and prisons systems are critical to 

the success of the U.S. mission in Iraq.

Combating Trafficking in Persons & Migrant Smuggling

Trafficking in persons is a crime that particularly targets the most vulnerable members of society, women and children, who are subjected to economic, sexual and other forms of exploitation and abuse. Although trafficking in persons has increased 

in tandem with economic globalization, many governments have only 

recently begun to recognize it as a crime and to begin taking steps to 

prevent and break up trafficking operations and to punish those involved. 

The Department uses its annual Trafficking in Persons Report, which 

assesses the anti-trafficking efforts of nearly 150 countries, to spur 

governments to take action by threat of sanctions and through offers of 

anti-trafficking assistance.

An elementary school student reads a brochure about the dangers of trafficking. 

USAID Photo
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

32

Strategic Goal 6: American Citizens

Assist American Citizens to Travel, Conduct Business, and Live Abroad Securely

I . P u b l i c B e n e f i t

The Department of State has no more vital responsibility than the protection of U.S. citizens while they are overseas. Approximately 

four million Americans reside abroad, and Americans make about 60 million trips outside the United States each year. The Department 

continues to enhance the integrity of the U.S. passport, while maintaining the highest standards for excellence in customer service. 

Improvements such as the e-passport, which contains a chip on which biometric and biographic information is recorded, will help 

strengthen international border security by ensuring both the document is authentic and that the person carrying the e-passport is 

the American citizen to whom that document was issued. To alert Americans to conditions that may affect safety and travel abroad, 

the Department disseminates threat assessments to posts abroad and announcements to the public as quickly as possible using 

all available means. U.S. embassies and consulates offer a broad range of 

services to U.S. citizens abroad in cases of illness, death, and other crises 

such as falling victim to a crime, political unrest or natural disaster. The 

Department also works with other USG agencies, foreign governments 

and international organizations on transportation security initiatives and 

encourages countries to implement intercountry adoption system.

Performance Section Strategic Goal six: American Citizens

An American citizen with his luggage on top of his head waits with hundreds of 

fellow Americans to enter the processing center in order to be evacuated from a 

beach north of the capital Beirut, Lebanon, July 2006. AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department performance ratings for the American Citizens strategic goal. 

S T R AT E G I C G O A L R E S U L T S A C H I E V E D F O R F Y 2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 0

On Target 2

Below Target 1

Significantly Below Target 0

Total Number of Ratings 3 Below Target

33%

On Target

67%
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

33

Performance Section Strategic Goal six: American Citizens

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

200

400

600

700

(Direct Funded Positions)

$0

$30

($ in Millions)

$40

$50

$80

L E G E N D

P e r f o r m a n c e G o a l s

Assistance for U.S. Citizens Abroad

Passport Issuance and Integrity

$20

$10

$60

$70

500

100

300

FY 2006

56

17

73

TOTAL

FY 2006

88

474

562

TOTAL

FY 2005

55

11

66

TOTAL

FY 2005

87

469

556

TOTAL

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. The clear trend is toward a more sophisticated, automated system to support and protect Americans living 

and traveling abroad. For example, over the past four years, the Department has designed, developed, tested, and deployed an online 

database that contains the names of more than 500,000 U.S. citizens living abroad.

KEY INITIATIVES AND PROGRAMS. The Department of State appropriation act provides the critical operating resources and support 

necessary to fulfill the Department’s range of mandates. For example, FY 2006 appropriations includes funding for the repatriation loan 

program available to U.S. citizens abroad. This program – together with other initiatives such as machine readable visas, expedited 

passport issuance, enhanced border security and intercountry adoption systems that protect the interests of children, birth parents, and 

U.S. adoptive parents – support the people, platform, and processes required to achieve the objectives of transformational diplomacy. 
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

34

Performance Section Strategic Goal six: American Citizens

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Status of Hague Convention on Intercountry Adoption

Output

JUSTIFICATION: Demonstrates essential tasks that must be completed prior to U.S. ratification of the Convention in order for the United States to 

meet the Convention’s responsibilities. FY 2006 PERFORMANCE

Target

Authorize designated accrediting entities with signed agreements to accredit/approve all adoption service providers.

Draft, publish for comment, and promulgate regulations governing how the Hague Convention on Intercountry Adoption 

and the Intercountry Adoption Act of 2000 will be implemented.

U.S. instrument of ratification to be deposited at The Hague in 2007.

=

=

=

Results

Final regulations on accreditation of adoption service providers and preservation of Convention records were published 

in the Federal Register on February 15, 2006.

The proposed rule on issuance of Hague certificates and declarations in Convention adoption cases was published in the 

Federal Register on June 16, 2006.

The proposed rule on orphan visa processing was published in the Federal Register on June 22, 2006. Proposed rule 

jointly with the Department of Homeland Security on reporting requirements for both Convention and non-Convention 

emigrating adoption cases.

On June 29, 2006, the Department signed a Memorandum of Agreement (MOA) with the State of Colorado regarding 

performance of duties as an accrediting entity for adoption service providers seeking Hague Convention accreditation. 

The Department also signed a separate MOA with the Council on Accreditation.

=

=

=

=

Rating On Target

Impact

Performance directly supports and advances the Department’s ability to ratify the Hague Convention on Intercountry 

Adoption, with its stated goal “to establish safeguards to ensure that intercountry adoptions take place in the best interests 

of the child and with respect for his or her fundamental rights as recognized in international law.”

Children waiting for adoption play 

in Guatemala City, Guatemala, June 

2006. AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

35

Performance Section Strategic Goal six: American Citizens

INDICATOR: Development of a Biometrics Collection Program for U.S. Passports

Outcome

JUSTIFICATION: Introducing biometrics into passports and other travel documents represents a major advance in the international effort to prevent 

imposter fraud. The U.S. Enhanced Border Security and Visa Reform Act requires nations participating in the Visa Waiver Program to incorporate 

biometrics into their passports. The United States has incorporated biometrics collection into the development and production of the new 

e-passport. FY 2006 PERFORMANCE

Target All new passports issued domestically contain biometric data by end of fiscal year.

Results

The Department redesigned the U.S. passport and added electronic security features such as Public Key Infrastructure, 

anti-skimming material, as well as Basic Access Control, Random Unique Identifier and WORM (write once, read many) 

technologies. In the new U.S. e-passport, the digital image of the passport photograph is the biometric identifier that will be 

used with facial recognition technology to verify the identity of the passport bearer. The National Institute of Standards and 

Technology has conducted a series of tests analyzing the durability and electronic security of the e-passport. On August 15, 

2006, the Department began issuing to the general public full validity tourist e-passports at the Colorado Passport Agency, 

which has been fully converted to e-passport production.

Rating Below Target

Impact

Incorporating biometrics into the U.S. passport strengthens U.S. border security by ensuring that the person carrying the 

passport is the individual to whom that passport was issued. These measures make the U.S. passport less susceptible to 

manipulation and more difficult to counterfeit, making it one of the most valuable identity and citizenship documents in 

the world.

Reason 

for 

Shortfall

Various factors influenced the Department’s results in FY 2006 including a lengthy delay caused by a vendor protest and 

ensuing litigation in FY 2005, as well as continuing record demand for U.S. passports. As a result, the Department experienced 

insufficient supply of blank e-passport books from the GPO.

Steps to 

Improve

The Department has worked with our USG suppliers to ensure that adequate supply of e-passport books is available. We 

are distributing and installing equipment necessary for e-passport production on a schedule designed to minimize any 

potential for disruption to passport services for American citizens, particularly in light of the new passport requirement of 

the Western Hemisphere Travel Initiative . By November 2006, the Department will have the capability to issue e-passports 

at all 17 domestic passport facilities. All agencies are scheduled to convert to full e-passport production by the end of the 

first quarter of CY 2007.

E-Passport Features

New Features: The data page, now on page 

two, has thicker paper than other pages and 

a watermark; the Great Seal and flag design is 

new; and all pages now have random fibers 

that fluoresce under UV. 

The book inventory number, on inside back 

cover, will also be the passport number. In 

contrast to the 1998 version, the data 

descriptors (e.g., “Sex/Sexe/Sexo”) are not 

pre-printed, but rather printed at the same 

time as the personalized data when the book is 

issued. Therefore, this text will be black for all 

passports – diplomatic, official and tourist.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

36

Strategic Goal 7: Democracy and human rights

Advance the Growth of Democracy and Good Governance, Including Civil Society, 

the Rule of Law, Respect for Human Rights, and Religious Freedom

I . P u b l i c B e n e f i t

Protecting human rights and building democracy are cornerstones of a U.S. foreign policy focused on combating terrorism, championing 

human dignity and supporting nations that respect human rights and govern by the rule of law. Together with our partners in the 

international community, including human rights advocates and non-governmental organizations, the U.S. seeks opportunities to end 

tyranny and enhance homeland security through strategies, policies and programs that promote democracy and human rights. 

In order for democratization to be successful and sustainable, 

the process must be driven by the people. While the U.S. plays 

a leading role to promote democracy and human rights, the 

Department and USAID take a holistic approach to democracy 

promotion, engaging both governments and civil society to 

ensure that democratic reforms reflect a representative political 

process. This philosophy underscores the goal of transformational 

diplomacy, which is to promote democracy by helping foreign 

citizens better their own lives and build their own futures. 

Indian Foreign Secretary Shyam Saran greets Under Secretary Paula 

Dobriansky at the Indian Ministry of External Affairs before the opening 

session of the Global Issues Forum, February 2006. AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the Democracy and Human Rights 

strategic goal. 

Performance Section Strategic Goal seven: Democracy and human rights
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

37

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

400

600

800

1,000

(Direct Funded Positions)

$0

$800

($ in Millions) $1,200

$1,600

$2,400

L E G E N D

P e r f o r m a n c e G o a l s

Democratic Systems and Practices

Respect for Human Rights

200

FY 2006

519

1,352

1,871

TOTAL

$400

FY 2006

302

537

839

TOTAL

FY 2005

377

1,123

1,500

TOTAL

FY 2005

299

531

830

TOTAL

$2,000

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. The Department and USAID have been able to demonstrate progress in developing democratic institutions, 

supporting free and fair elections, upholding religious freedom, and increasing women’s participation in the economy and politics, 

particularly in Afghanistan and the countries of the Middle East.

KEY INITIATIVES AND PROGRAMS. The Department and USAID invested significant resources to promote democracy and human 

rights in FY 2006. For example, a new Human Rights and Democracy Fund was established with an appropriation of $94 million, of 

which $15 million was earmarked for the National Endowment for Democracy (NED) and $6.5 million was set aside for the advancement 

of democracy in Iran and Syria. Under a separate appropriation, an additional $74 million was earmarked to NED for democracy grants. 

Using Economic Support Funds, the Department invested $50 million for democracy, human rights and governance programs in Egypt; 

and $20 million for labor and environmental capacity building activities in support of the free trade agreement with the countries of 

Central America and the Dominican Republic. In FY 2006, USAID received $15 million for programs to improve women’s leadership 

capacity in developing countries and $40 million to support the transition to democracy and long-term development of countries 

in crisis.

Labor Rights in China

I

n southern China, many migrant workers facing poor workplace conditions and unjust compensation are unaware of their basic 

labor rights. As part of its overall efforts to improve labor conditions in China, the Department of State has funded information 

booklets and training seminars so that workers can learn how to defend their rights. In one instance, two workers directly applied 

what they learned in the trainings to take action against wage and hour 

violations affecting thousands of their co-workers. They successfully used 

their knowledge of the law to negotiate better working conditions with their 

employer, who was illegally allowing only one day off per month. The company 

agreed to the legal four days off per month and reduced work shifts from nine 

to eight hours, adjustments that were made without a reduction in pay.

Chinese female construction workers applaud as they attend the groundbreaking 

ceremony for the Beijing 2008 Olympics, December 2005. AP/Wide World

Performance Section Strategic Goal seven: Democracy and human rights
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

38

Performance Section Strategic Goal seven: Democracy and human rights

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Progress Toward Constitutional Democracy in Afghanistan

Outcome

JUSTIFICATION: Achieving progress towards meeting political objectives laid out in the Afghanistan Compact will effectively establish democratic 

rule in Afghanistan. FY 2006 PERFORMANCE

Target

Parliament produces constructive legislation, approves responsible budgets, and oversees appropriate government 

operations, such as combating corruption and narcotics activity.

Civil liberties provisions remain intact and receive strong support from legal and executive institutions.

Citizens throughout the country have access to the Afghan Independent Human Rights Commission for resolution of 

human rights complaints. Human rights education becomes part of primary school education curriculum. 

Courts in Kabul begin to hold trials in criminal cases.

Women are active political participants and hold public positions in Kabul and the central, regional and provincial 

government levels.

=

=

=

=

=

Results

 Parliament adopted a law on the duties and responsibilities of the Provincial Councils; adopted the budget; and confirmed 

the President’s cabinet and the members of the Supreme Court.

Provisions on civil liberties are intact and the Afghan Independent Human Rights Council remains active. Religious 

freedom became an issue due to an apostasy case that was eventually dismissed. Afghan Independent Human Rights 

Commission continues to expand to the provinces and is more accessible and active. In most schools human rights are a 

primary part of the curriculum, but the extent to which this is true varies by class.

There are 68 female members in the National Assembly, one female cabinet member and one female provincial governor. 

Approximately 35% students attending school are female. Approximately 60% of primary age girls are in school. For the 

lower secondary level (grades 7-9) it is about 9% and for the upper secondary level (10-12) approximately 3% of girls 

attend school.

=

=

=

Rating On Target

Impact A democratically elected president and government are essential to ensuring Afghanistan’s progress toward democracy.

A Look to History: Democracy and Human Rights 

I

n 1919, parties to the Paris Peace Conference established the International 

Labor Organization (ILO), and in 1946, it became part of the United Nations. 

Although the United States was an original ILO member, and Samuel Gompers 

of the American Federation of Labor its first chairman, the United States withdrew from the ILO in 1978 under protest that the organization’s agenda focused 

too heavily on labor issues pertaining to the Arab-Israeli conflict and not on 

labor issues in communist countries. The United States rejoined in 1980.

Two young boys work as drivers in a West Virginia underground coal mine in 1908. 

AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

39

Performance Section Strategic Goal seven: Democracy and human rights

INDICATOR: Status of Democracy in the Near East

Outcome

JUSTIFICATION: Successful elections (held as scheduled and free and fair) indicate fundamental movement toward democratic, representative 

government. A free and independent media is an imperative for democratic, transparent governance. It provides essential information to the people, 

both informing their voting decisions and acting as a means for the people to express dissent between elections. FY 2006 PERFORMANCE

Target

Municipal elections in Yemen are held as scheduled and are free and fair.

Elections in Bahrain held as scheduled and are free and fair.

Media Freedom: Two additional Near Eastern Affairs (NEA) countries move into the “Partly Free” category and no other 

states lower their rankings.

=

=

=

Results

Free, fair and competitive elections took place in Yemen (municipal and Presidential); Egypt (Parliamentary); Qatar 

(legislative); Bahrain (municipal council).

No countries saw a decline in their Media Freedom scores. No countries moved from “Not Free” to “Partly Free”.

In Iraq, a draft permanent Constitution was successfully adopted in October 2005. Political parties formed coalitions, 

registered and campaigned for December 2005 elections.

=

=

=

Rating On Target

Impact Holding free, fair, competitive elections and adopting a Constitution are first steps in achieving participatory democracy and 

open opportunities for increased democracy programming including political party and civil society strengthening.

INDICATOR: Status of Religious Freedom

Outcome

JUSTIFICATION: Congress established the broad policy goals and reporting requirements in the International Religious Freedom Act. The performance 

indicators chosen follow from the mandates of the law. Meetings, agreements and documented movement by countries toward greater religious 

freedom are concrete examples of progress toward International Religious Freedom goals. FY 2006 PERFORMANCE

Target

Undertake at least two additional bilateral or regional International Religious Freedom initiatives, laying the groundwork 

for significant policy changes in those countries or regions.

Establish a working coalition of allies focused on problem countries, working bilaterally and multilaterally to improve or 

establish religious freedom laws, practices and accountability in problem countries.

Revise and streamline the format of the Annual Country Reports and the International Religious Freedom Report, 

maintaining high standards and making the reports more user friendly.

=

=

=

Results

Focused intensive diplomatic efforts on consolidating religious freedom improvements in Saudi Arabia and Vietnam. As a 

result, Saudi Arabia confirmed policies to revise school textbooks to eliminate intolerant language, to protect the right to 

private worship and to import religious materials for private use, and to enforce controls over the actions of the religious 

police. Vietnam released all remaining religious prisoners, speeded registration of churches, and took action against 

officials who violated the right to worship.

Worked with international partners to successfully press for countries not to establish anti-conversion laws (e.g., India 

and Sri Lanka) and to release religious prisoners (e.g., Saudi Arabia, China, and Indonesia).

Began revising and streamlining the format of the International Religious Freedom Report.

=

=

=

Rating On Target

Impact Advanced Department’s objectives of promoting religious freedom and human rights, strengthening civil society.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

40

Strategic Goal 8: economic prosperity and security

Strengthen World Economic Growth, Development, and Stability, While Expanding Opportunities 

for U.S. Businesses and Ensuring Economic Security for the Nation

I . P u b l i c B e n e f i t

Continued economic prosperity for the U.S. depends on the expansion of prosperity, freedom, and economic opportunity worldwide. 

The Department and USAID have increased U.S. economic security by reducing terrorist financing, increasing energy security, improving 

the security of transportation and information networks, and building international coalitions to deny financial support to terrorists 

and their supporters. The U.S. promotes prosperity at home and abroad by opening markets through ambitious trade and investment 

agendas, strengthening development efforts through private sector participation and recipient country accountability, and supporting 

U.S. businesses through outreach and advocacy. Working with private and public sectors and labor, the Department and USAID 

contribute to a stronger, more dynamic international economic system that creates new opportunities for American business, workers, 

and farmers. In addition, the Department leads the U.S. representation 

at the International Atomic Energy Agency, the primary mechanism for 

maintaining oil market stability in times of crisis. The Department was 

able to secure the release of up to 60 million barrels of emergency 

petroleum stockpiles when prices increased due to Hurricane Katrina, 

saving American taxpayers hundreds of millions of dollars per day.

Under Secretary Josette Sheeran pumps a well during a March 2006 visit to 

Capotille, Haiti as part of a United Nation Development Programme sponsored 

project. AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the Economic Prosperity and 

Security strategic goal. 

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 1

Above Target 1

On Target 8

Below Target 2

Significantly Below Target 0

Total Number of Ratings 12

Below Target

17%

On Target

67%

Above Target

8%

Significantly

Above Target

8%

Performance Section Strategic Goal Eight: Economic prosperity and security
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

41

Performance Section Strategic Goal Eight: Economic prosperity and security

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

500

1,000

1,500

2,000

(Direct Funded Positions)

$0

$500

$1,500

$2,000

$2,500

($ in Millions)

$3,000

$3,500

$4,000

L E G E N D

P e r f o r m a n c e G o a l s

Economic Growth and

Development

Trade and Investment

Secure and Stable Markets

Food Security and Agricultural

Development

(USAID resources not shown in

Department of State PAR)

$1,000

FY 2006

492

427

651

1,570

TOTAL

0

FY 2006

344

2,248

408

3,000

TOTAL

0

FY 2005

487

422

644

1,553

TOTAL

0

FY 2005

302

2,038

314

2,654

TOTAL

0

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. There are a number of positive trends in this strategic goal area. For example, USAID extension assistance 

has reached more than one million farmers, a tenfold increase over the 2003 baseline, and USAID programs disbursed more than six 

million microfinance loans, a fivefold increase over the 2003 baseline.

KEY INITIATIVES AND PROGRAMS. The Department and USAID received more than $2.6 billion in Economic Support Funds. More 

than $200 million in FY 2006 funds was earmarked to USAID for trade capacity building and Congress also authorized USAID to spend 

up to $21 million for loan guarantees in support of micro and small enterprise programs. 

Business Advocacy and Commercial Diplomacy

The Department of State regularly advocates for U.S. companies to ensure fair play, assist with regulatory and investment problems, and maximize commercial opportunities. U.S. Diplomatic Missions are prepared and equipped to assist U.S. 

companies by partnering with the Commerce Department and managing 

the commercial diplomacy programs at 140 overseas posts without a 

Commerce Department presence. In FY 2006, the Department provided 

support for 300 commercial advocacy cases, including a recent $2 billion 

contract win for a U.S. company. Business outreach efforts also target 

opportunities tied to U.S. foreign policy.

Assistant Secretary for Economic, Energy and Business Affairs Daniel Sullivan, 

right, speaks to senior business executives and government officials during 

the 13th Annual U.S-APEC (Asia-Pacific Economic Cooperation) Roundtable in 

Washington, D.C, June 2006. State Department Photo
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

42

Performance Section Strategic Goal Eight: Economic prosperity and security

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Status of Negotiations on Open Markets for Services, Trade, and Investment

Outcome

JUSTIFICATION: These agreements expand the international framework to create a dynamic, free and open trade system, which contributes directly 

to the prosperity of the United States. FY 2006 PERFORMANCE

Target

World Trade Organization (WTO) Doha round and Free Trade of the Americas negotiations completed.

Andean Countries Free Trade Agreement (FTA) and South African Customs Union (SACU) implemented.

Two FTAs concluded.

Central American Free Trade Agreement (CAFTA), Dominican Republic, Morocco and Australia FTAs enter into force.

Three new Bilateral Investment Treaties (BITs) concluded.

=

=

=

=

=

Results

WTO and FTAA negotiations were not completed.

Implementation of Andean Countries Free Trade Agreement progressing; South African Customs Union postponed.

Two FTAs concluded. Oman FTA ratified. Korea and Malaysia FTAs launched. CAFTA, Bahrain and Morocco FTAs entered 

into force. The Australia FTA went into force in January 2005 (see below).

Three new BITs concluded.

=

=

=

=

Rating Below Target

Impact

Although the suspension of the Doha Round will hinder U.S. efforts to open markets, excellent progress was achieved on 

liberalizing trade and opening markets through free trade agreements and bilateral investment treaties. Trade Promotion 

Authority is scheduled to expire in mid-2007, so the Department will make every effort to restart the Doha Round in FY 

2007.

Reason 

for 

Shortfall

The WTO Doha Round was suspended due to lack of agreement on major issues. The United States prioritized expanded 

agricultural market access, the EU tried to link agricultural subsidy and tariff reductions to cross-sector reciprocal 

improvements in market access for manufactured goods and services, and developing countries sought the elimination of 

agricultural subsidies and industrial tariffs.

Steps to 

Improve

At the December 2005 WTO ministerial in Hong Kong, WTO members were able to set 2013 as the date to end agricultural 

export subsidies and agree to a number of important development initiatives. Expanded market access, particularly in 

agriculture, is key to a final agreement. In Hong Kong, the U.S. announced a doubling of annual trade-related assistance 

from $1.34 billion in 2005 to $2.7 billion by 2010. The U.S. is the largest single-country donor of trade capacity building 

assistance, which helps countries build the necessary legal, administrative, and physical infrastructure to participate fully in 

the market openings that will be created by a successful conclusion of the Doha Round.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

43

Performance Section Strategic Goal Eight: Economic prosperity and security

INDICATOR: World Emergency Oil Stocks

Output

JUSTIFICATION: Oil is the major energy import for the U.S. and an adequate supply is key for the U.S. and global economies. Increasing world oil 

stocks increases ability to withstand possible oil shocks. FY 2006 PERFORMANCE

Target International Energy Agency (IEA) and non-IEA Emergency oil stocks at or above FY 2005 stock levels equivalent to 114 

days of imports.

Results 115 days of import coverage.

Rating On Target

Impact Healthy oil stock allowed for a robust response to oil supply disruptions caused by Hurricane Katrina, calming markets 

ensuring continued supplies of oil.

INDICATOR: Percentage of Debt Crisis Countries on International Monetary Fund (IMF) 

Programs Successfully Reforming

Outcome

JUSTIFICATION: Successful completion of reform programs is key to nations achieving long-term financial stability. FY 2006 PERFORMANCE

Target 60% of countries facing financial crisis that have sought and received Paris Club sponsored debt relief are successfully 

implementing economic reforms that will promote long-term financial stability.

Results

A total of 84% of countries receiving help from the United States and the international community to overcome financial 

crises are successfully implementing economic reforms that promote long-term financial stability. 

As of September 30, 2006, 69 countries facing financial crises had active Paris Club agreements. Of these, 36 countries were 

successfully implementing an IMF-sponsored reform program and an additional 22 countries had completed their reform 

programs. A total of 11 countries had abandoned their IMF program and were not pursuing sound macroeconomic policies. 

This result can be explained, in part, by the benign global economic environment that has helped to improve macroeconomic 

performance, reducing the risk of financial crises and generally making it easier to comply with IMF program goals. 

Rating On Target

Impact U.S. Government debt relief program has provided effective leverage to encourage countries in financial crisis to adopt solid 

fiscal and monetary policies that have resulted in individual country and international financial stability.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

44

Strategic Goal 9: Social and Environmental Issues

Improve Health, Education, Environment, and Other Conditions for the Global Population

I . P u b l i c B e n e f i t

By supporting over ten Presidential Initiatives and numerous programs that integrate economic growth with social development 

and environmental stewardship, the Department and USAID are extending the basic values American citizens hold dear: prosperity, 

sustainable management of natural resources, good health, and knowledge-based society. U.S. investments have expanded access to 

skilled childbirth care, immunizations and effective prevention and treatment for diseases like HIV/AIDS, malaria, tuberculosis, polio 

and more recently Avian influenza. Through regional dialogues and protection and assistance to vulnerable migrants, the Department 

and USAID promote effective and humane international migration policies and systems. Investments in basic education are critical 

to promote a stable, skilled work force, economic growth, and an informed society that demands and participates constructively in 

democratic institutions. Finally, sound governance and conservation of 

biodiverse ecosystems provide income, sustainable livelihoods and a 

healthy foundation for human well-being. U.S. and foreign government 

agencies, international organizations and the private sector are 

building broad partnerships to ensure that all of these initiatives reduce 

the strains on society that lead to conflict and even terrorism, while 

inculcating democratic values of participatory decision-making, rule of 

law, and transparency. 

Chad Country Manager for Ambassadors Girls’ Scholarship Program, 

Alexandra Zekas, talks to girls in a school in Chad, February 2006. 

AP/Wide World

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the Social and Environmental 

Issues strategic goal. 

S T R AT E G I C G O A L R E S U L T S A C H I E V E D F O R F Y 2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 3

On Target 19

Below Target 4

Significantly Below Target 1

Total Number of Ratings 27 Below Target

15%

On Target

70%

Above Target

11%

Significantly

Below Target

4%

Performance Section Strategic Goal Nine: social and environmental issues
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

45

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

100

150

250

350

(Direct Funded Positions)

$0

$500

$1,000

($ in Millions) $1,500

$2,000

$3,000

L E G E N D

P e r f o r m a n c e G o a l s

Global Health

Environmental Protection

Access to Quality Education

(USAID resources not shown in

Department of State PAR)

Migration Policies and Systems

$2,500 300

200

50

FY 2006

110

159

18

287

TOTAL

0

FY 2006

3,099

306

3,542

TOTAL

137

FY 2005

109

157

18

284

TOTAL

0

FY 2005

1,803

378

2,306

TOTAL

125

0 0

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. Performance under the President’s Emergency Program for AIDS Relief (PEPFAR) continued the favorable 

trend to prevent the spread of AIDS in particularly vulnerable countries and treat those afflicted with the illness. The percentage of 

the world’s population with access to tuberculosis care and treatment continued its steady multiyear upward trend. There was also 

sustained progress toward more effective implementation of treaties and agreements on natural resources management. 

Key Initiatives and Programs. In FY 2006, the Department and USAID continued to demonstrate leadership and commitment 

to the U.S. Government’s social and environmental goals. For example, $1.58 billion was programmed for child survival and health 

initiatives, $2.5 billion was set aside for HIV/AIDS prevention and treatment programs, $365 million was allocated for basic education 

activities, and $200 million was made available for drinking water supply projects, including $50 million for programs in Africa.

Performance Section Strategic Goal Nine: social and environmental issues
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

46

Performance Section Strategic Goal Nine: social and environmental issues

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Implementation of Measures to Conserve and Protect Vulnerable Marine Species

Output

JUSTIFICATION: U.S. interest in promoting sound management of living marine resources requires the development and verifiable enforcement 

of agreed international standards. Oceans and fisheries are critical for global food security and for sustaining economic prosperity, particularly in 

developing countries. Effective conservation of living marine resources must be broader than single-stock management and reflect the complexity 

of the ecosystem as a whole. FY 2006 PERFORMANCE

Target

Western and Central Pacific Fisheries Commission adopts initial set of conservation and management measures.

With science-based input from the United Nations Food and Agriculture Organization, the Convention on International 

Trade in Endangered Species continues to list marine fish species that meet its criteria.

International Whaling Commission scientific committee reviews status of bowhead and gray whale stocks to set new 

catch limit recommendations.

=

=

=

Results

First conservation and management measures for Pacific tuna fisheries adopted in December 2005.

Proposals prepared to list additional marine species for the next Conference of the Parties in June 2007.

Strengthening current co-operation with other relevant organizations to ensure conservation and management of marine 

living resources in the Convention area in a manner consistent with international law.

The Scientific Committee work on status review for bowhead and gray whales will deliver catch limit recommendations 

in 2007.

=

=

=

=

Rating On Target

Impact

Measures adopted form a basis for management of valuable Pacific yellowfin and bigeye tuna fisheries and slow the 

decline of these stocks. 

Controls allow better tracking of non-commercially traded marine species, particularly vulnerable sharks. 

Global implementation of simple changes to fishing gear or fishing patterns, largely developed in the United States, result 

in significant reductions in the number of endangered sea turtles killed in longline fisheries. 

Estimated illegal taking of toothfish decreased and seabird bycatch within the convention area also continued to 

decrease. 

The scientific integrity and diligence in bowhead and gray whale stock assessments should eliminate any credible 

scientific arguments against approving the 2008-2012 aboriginal subsistence quotas in 2007.

=

=

=

=

=

Coral in the Aleutions Gardens 

in Alaska’s Aleution Islands. 

AP/Wide World
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

47

Performance Section Strategic Goal Nine: social and environmental issues

INDICATOR: Multilateral Climate Change Science and Clean Energy 

Technology Partnerships and Initiatives

Outcome

JUSTIFICATION: Project execution and cooperation will help reduce the costs of low-carbon technologies, improve understanding of global climate 

change, and encourage adaptation, thus moving the international community toward greenhouse gas concentration stabilization at a level that 

would prevent dangerous interference with the climate system. FY 2006 PERFORMANCE

Target

Implement the Ten-Year Plan for the Global Earth Observation System of Systems, designed to enhance and sustain 

environmental observation capabilities.

Advance multilateral climate change science and technology partnership project-based activities through the Methaneto-Markets Partnership, the International Partnership for the Hydrogen Economy, the Earth Observation initiative, the 

Carbon Sequestration Leadership Forum, and development assistance programs, in cooperation with developed and 

developing countries.

=

=

Results

Ten-Year Plan established and under implementation. Global environmental observation capabilities strengthened. A 

number of innovative projects were launched in FY 2006, including those under the Methane-to-Markets Partnership and 

the International Partnership for the Hydrogen Economy.

Rating On Target

Impact Mitigation of greenhouse gas emissions, strengthened relations with key developing country partners, and advancement of 

climate change science and technology.

Tsunami Warning System

United States leadership in natural hazard detection is fostering regional collaboration 

in tsunami mitigation, building relationships 

among countries through science partnerships 

and contributing to the productivity and 

sustainable development of coastal nations. Since 

the devastating Indian Ocean tsunami in 2004, 

the Department of State has coordinated U.S. 

engagement to build capacity for natural hazard 

warning systems, building political momentum on 

a regional basis while addressing the unique needs 

of individual countries. As a result, countries in the 

Indian Ocean and the Caribbean are collaborating 

to create an enabling environment for long-term 

investment in regional warning infrastructure and community preparedness. While protecting people from disaster, these 

activities nurture goodwill toward the U.S. in the predominantly Muslim Indian Ocean region, and enhance government 

resilience and control in the wake of natural disasters.

An Indonesian man salvages wood among wreckage of homes destroyed by the Indian Ocean tsunami, July 2006. AP/Wide World Photo
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

48

Strategic Goal 10: Humanitarian Response

Minimize the Human Costs of Displacement, Conflicts, and Natural Disasters

I . P u b l i c B e n e f i t

The United States’ commitment to humanitarian response demonstrates America’s compassion for victims of armed conflict, natural 

disasters, landmines, forced migration, human rights violations, widespread health and food insecurity, and other threats. Humanitarian 

programs support the objectives of the U.S. National Security Strategy by addressing crises with potential regional or global implications, 

fostering peace and stability, and promoting sustainable development. Through the Department and USAID, the U.S. provides substantial 

resources and guidance to international and nongovernmental organizations for worldwide humanitarian programs, with objectives 

to increase access to protection, promote burden-sharing, and coordinate 

funding and implementation strategies. Further, the Department and USAID 

prioritize the regular monitoring and evaluation of humanitarian programs 

to ensure that the needs of refugees, internally displaced persons (IDPs), 

and victims of conflict and natural disasters are met. The Department’s 

management and support of overseas refugee admissions programs provide 

an important durable solution for refugees and serves as the leading model 

for other resettlement countries.

During an August 2006 visit to Thailand, refugee youth in Tham Him present Ellen 

Sauerbrey, Assistant Secretary for the Bureau of Population, Refugees and Migration, 

with their artwork. Approximately 10,000 Burmese refugees live in this camp. 

Department of State

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the Humanitarian Response 

strategic goal. 

S T R AT E G I C G O A L R E S U L T S A C H I E V E D F O R F Y 2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 3

On Target 3

Below Target 3

Significantly Below Target 0

Total Number of Ratings 9 Below Target

33%

On Target

33% Above Target

33%

Performance Section Strategic Goal Ten: Humanitarian response
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

49

Performance Section Strategic Goal Ten: Humanitarian response

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

300

400

500

600

700

(Direct Funded Positions)

$0

$500

$1,000

($ in Millions)$1,250

$1,500

$1,750

L E G E N D

P e r f o r m a n c e G o a l s

Assistance for Refugees and

Other Victims

Disaster Prevention and Response

Through Capacity Building

(USAID resources not shown in

Department of State PAR) 200

100

$750

$250

FY 2006

558

558

TOTAL

0

FY 2006

1,163

1,163

TOTAL

0

FY 2005

552

552

TOTAL

0

FY 2005

1,179

1,179

TOTAL

0

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. Three significant trends under the Humanitarian Response Strategic Goal are worthy of note. First, U.S. 

humanitarian assistance programs are achieving and sustaining progress on protecting the nutritional status and humanitarian needs 

of refugees, victims of conflict and Internally Displaced Persons, especially young children. Second, the international donor community 

is taking on a larger share of total contributions to the World Food Program as a result of USG efforts to promote burden sharing 

among our international partners. Third, U.S. mine action programs are providing the training and assistance countries need to become 

self-sufficient in carrying out demining activities that clear land of dangerous mines, alleviate suffering and restore confidence in public 

safety. 

Key Initiatives and Programs. Significant FY 2006 investments to address the human costs of displacement, conflict, 

and natural disasters include $791 million for migration and refugee protection and assistance programs, and $356 million for 

international disaster relief, rehabilitation, and reconstruction assistance. The core focus of refugee program resources is to provide 

protection, assistance and durable solutions, including refugee resettlement, and to promote sound migration management. 

International disaster and famine assistance provides support and relief to victims of natural and man-made disasters, as well as funds 

famine and prevention relief activities.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

50

Performance Section Strategic Goal Ten: Humanitarian response

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Nutritional Status of Children Under 5 Years of Age – Threshold

Outcome

JUSTIFICATION: Nutritional status is a basic indicator for assessing the severity of crisis, together with Crude Mortality Rate. In emergencies, weight 

loss among children 6-59 months is used as a proxy indicator for the general health and well-being of the entire community. This indicator is used to 

measure emergency assistance among controlled populations, such as refugee camps. FY 2006 PERFORMANCE

Target In targeted sites, less than 10% of children under five suffer from global acute malnutrition.

Results

Global Acute Malnutrition (GAM) is the term used to include all malnourished children whether they have moderate wasting, 

severe wasting or edema, or some combination of these conditions. It is defined as weight-for-height ratios that are less 

than or equal to two standard deviations below the mean (Z score of less than -2) or less than 80% median weight-forheight, and the presence of nutritional edema.

In 98% of refugee camps and settlements (221 of at least 225 worldwide), less than 10% of children under five suffered 

from global acute malnutrition. 

GAM rates exceeded 10% in two camps in Bangladesh (Nayapara, Kutupalong), one in Uganda (Kyaka II), and one in 

Nigeria (Oru). In two camps in Chad (Oure Cassoni, Am Nabak), GAM rates temporarily rose above acceptable levels, but 

were quickly reduced with appropriate interventions. 

Recognizing that refugee camps in Bangladesh do not meet international standards, PRM Assistant Secretary Sauerbrey 

traveled to Bangladesh in August 2006. Following her visit, the Government of Burma signed a long-delayed agreement 

with UNHCR on improve-ment of the camps. The Department also provided the World Food Program with an additional 

$250,000 in FY 2006 to provide much needed food assistance to refugees in Bangladesh. 

The Department is working with UNHCR and other international and nongovernmental organizations to ensure that less 

than 10% of children under age five suffer from global acute malnutrition in refugee camps in Nigeria and Uganda.

=

=

=

=

Rating On Target

Impact

Elevated rates of GAM directly contribute to increased rates of morbidity and mortality in children under five years of age. 

Malnutrition may also threaten refugee protection in terms of camp security, vulnerability to exploitation, and in extreme 

cases, involuntary return.

INDICATOR: Crude Mortality Rates (CMR) – Threshold

Outcome

JUSTIFICATION: The crude mortality rate is the mortality rate from all causes of death for a population. The CMR is an accepted indicator of the extent 

to which the international community is meeting minimum standards of care and the overall effectiveness and performance of the international relief 

system. This indicator is used to measure emergency assistance among controlled populations, such as refugee camps. FY 2006 PERFORMANCE

Target

In complex humanitarian crises, CMR does not exceed regional emergency thresholds in 95% of targeted sites.

Support efforts to improve data collection, e.g., expand pilot data collection effort to other countries and partner 

organizations, and to take other measures to address any problems of excess mortality.

=

=

Results

Criteria developed by Sphere established regional CMR thresholds for emergency response based on long-term CMR data 

in these areas. CMR did not exceed regional emergency thresholds in targeted refugee sites where data were available.

The online interface of the Complex Emergencies Database (CE-DAT) has been greatly improved and data on mortality, 

nutritional status, and vaccination coverage has been expanded, benefiting both the USG and the international 

humanitarian community. 

=

=

Rating Above Target

Impact The Department’s contributions to international humanitarian efforts save refugee lives.
2 0 0 6 P e r f o r m a n c e a n d A c c o u n t a b i l i t y H i g h l i g h t s

51

Performance Section Strategic Goal Ten: Humanitarian response

INDICATOR: Percentage of Non-USG Contributions to UN World Food Program

Output

JUSTIFICATION: The UN World Food Program (WFP) is a generally well-run organization, but its effectiveness can be compromised by over-reliance 

on USG contributions. More contributors and greater contributions from existing contributors are needed to keep WFP’s crisis response capacity at 

its current level. FY 2006 PERFORMANCE

Target WFP has sufficient funds to meet priority needs, with contributions from many donor countries and the private sector. 

Non-USG contributions are 55% of total contributions.

Results

WFP continues to actively solicit contributions from new donors including from the private sector. WFP works on a calendar 

year basis. As of September 15, 2006, WFP had received $1.9 billion in contributions for CY 2006, of which $793 million was 

from the United States. Non-U.S. Government contributions amounted to 59% of total contributions.

Rating Above Target

Impact Contributions to WFP enable it to provide both emergency and development food aid to people in need.

Multilateral Response to the Lebanon Crisis 

Nearly 975,000 Lebanese fled their homes at the peak of the July 2006 crisis and more than 394,000 

registered Palestinian refugees living in Lebanon were 

affected, including 20,000 internally displaced people who 

sought protection and assistance during the conflict. Both 

in Washington and overseas, the State Department’s Bureau 

of Population, Refugees, and Migration (PRM) facilitated 

close coordination between UN agencies, the International 

Committee of the Red Cross, and the International 

Organization for Migration with key USG partners such 

as USAID, DOD, and Non-Governmental Organizations 

responding to humanitarian needs. PRM staff participated 

in the USG Disaster Assistance Response Team (DART) which determined priorities for humanitarian assistance, as well as 

the USG Response Management Team that provided support to the DART from Washington. PRM provided $23 million 

for protection and assistance activities in Lebanon, Syria, and other countries of asylum in the region. USAID provided an 

additional $50 million for humanitarian relief through various international and non-governmental partners. 

State Department volunteers work the Lebanon Task Force, July 2006. State Department photo
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Strategic Goal 11: Public Diplomacy and Public Affairs

Increase Understanding For American Values, Policies, and Initiatives to Create a 

Receptive International Environment

I . P u b l i c B e n e f i t

The international exchange of information, persons, and ideas is fundamental to the security of the United States. Public Diplomacy 

and Public Affairs functions are premised on the knowledge that public opinion, the development of future leaders, and the benefits 

of education programs influence societies and affect official decision-making almost everywhere in the world. The need for public 

understanding continues to be critically important, both domestically and internationally. The Department’s public diplomacy 

activities seek to counter anti-American sentiment, promote better 

appreciation and understanding for the U.S. abroad and foster 

greater receptivity for U.S. policies among international publics, as 

well as greater knowledge among Americans around the world. 

Public diplomacy programs encourage and empower individuals 

with a positive vision of hope and isolate those who preach violence 

and extremism. Over the long term, public diplomacy programs 

foster a sense of common interests and common values between 

Americans and people of different countries, cultures and faiths. 

Under Secretary Karen Hughes speaks on religious issues facing the world 

at the International Prayer for Peace Summit in Washington, April 2006. 

AP/Wide World Photo

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes Department performance ratings for the Public Diplomacy and Public Affairs strategic goal. 

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 3

On Target 7

Below Target 0

Significantly Below Target 0

Total Number of Ratings 10

On Target

70%

Above Target

30%

Performance Section Strategic Goal eleven: Public diplomacy and public affairs
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Performance Section Strategic Goal eleven: Public diplomacy and public affairs

I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

0

500

1,500

2,000

2,500

(Direct Funded Positions)

$0

$400

($ in Millions)

$600

$800

$1,000

L E G E N D

P e r f o r m a n c e G o a l s

International Public Opinion

Mutual Understanding

American Values Respected

Abroad

$200

FY 2005

838

252

2,251

TOTAL

274

887

FY 2006

847

255

2,275

TOTAL

277

896

1,000

FY 2005

317

88

597

TOTAL

156

36

FY 2006

567

97

868

TOTAL

167

37

Domestic Understanding of

Foreign Policy

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. There have been a number of significant trends under the Department’s Public Diplomacy Strategic Goal. 

The Department has continued public diplomacy outreach to Arab and Muslim publics. There has been an increase in exchange 

students from the Middle East compared to FY 2005. Additionally, the Department is working to target younger segments of society 

around the world. Additionally, the Secretary of State and the Secretary of Education are working together to engage leaders of U.S. 

higher education in a renewed partnership to strengthen international education and emphasize its importance to the national interest. 

Moreover, President Bush has announced the National Security Language Initiative to increase the number of Americans learning 

critical need foreign languages such as Arabic, Chinese, Hindi, and Farsi, as well as others.

Key Initiativesand Programs. The Department invested approximately $334 million in public diplomacy international information 

programs and an additional $432 million in educational and cultural exchange programs, including the flagship Fulbright program. 
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Performance Section Strategic Goal eleven: Public diplomacy and public affairs

INDICATOR: Number of Foreign Youth Participants in Regions With Significant Muslim and Arab 

Populations Reached by the Youth Exchange Scholarship Program

Outcome

JUSTIFICATION: Quantitative measures based on increases in numbers of participants are reliable and help measure potential increased impact of 

Education Cultural Affairs activities. FY 2006 PERFORMANCE

Target

NEA: 270.

EAP: 150.

SA: 130.

AF: 50.

EUR: 40.

TOTAL: 640.

Results

NEA: 325.

EAP: 190.

SA: 115.

AF: 55.

EUR: 40.

TOTAL: 725.

Rating Above Target

Impact

By providing opportunities for foreign youth to participate in exchange programs, the USG’s Youth Scholarship Program is 

expanding public diplomacy outreach to anew sector of foreign societies and exposing more foreign youth to U.S. values 

and culture.

V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Percentage of Program Participants Who Espouse Democratic Principles at Least 

One Year After Their Program

PART Outcome

JUSTIFICATION: This indicator gauges the long-term impact of U.S. cultural exchange programs on shaping participants’ values and ideals related 

to democratic principles as a vehicle for social democratic change. FY 2006 PERFORMANCE

Target 70%.

Results 80.17%.

Rating Above Target

Impact Educational and cultural exchange participants begin or continue to espouse democratic values as a result of their exchange 

experience.
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Performance Section Strategic Goal eleven: Public diplomacy and public affairs

INDICATOR: Extent to Which Youth Programs/Products Reach Young People in Other Countries 

with Information About the U.S.

Output

JUSTIFICATION: This indicator helps track the Department’s effectiveness in reaching foreign youth through the American Corners program, a critical 

audience for U.S. public diplomacy. FY 2006 PERFORMANCE

Target Establish FY 2006 baseline.

Results Baseline: 53% of visitors surveyed indicate high increase in understanding of U.S. policy, society and values as a result of 

visiting American Corners.

Rating On Target

Impact In reaching a youth audience with information about the United States, the Department has increased the understanding of 

U.S. policy, society and values among the successor generation.

A Look to History: Public Diplomacy and Public Affairs

The U.S. Government launched its first major effort of what later would be called public diplomacy in April 

1917 during World War I when it created the Committee on 

Public Information. Though the Secretaries of War, State, 

and the Navy were members, the committee was led by 

George Creel and became known as the Creel Committee. 

The Committee’s goal was to engender support for American 

war aims and President Woodrow Wilson’s international, 

democratic ideals. Congress abolished the Creel Committee 

at the end of the war in June 1919. President Harry Truman 

established the Office of War Information to do similar work 

during World War II. In January 1948, Congress passed 

the Smith-Mundt Act which prohibited all future agencies 

charged with international public diplomacy efforts from 

operating domestically.

Elmer Davis, director of the U.S. Office of War Information, poses after 

conferring with the President at the White House in Washington, 

D.C., August 1943. AP/Wide World
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Strategic Goal 12: Management and Organizational Excellence

Ensure a High Quality Workforce Supported by Modern and 

Secure Infrastructure and Operational Capacities

I . P u b l i c B e n e f i t

The Department of State and USAID pursue human resource initiatives aimed at building, deploying, and sustaining a knowledgeable, 

diverse, and high-performing workforce. In support of the Secretary’s vision for Transformational Diplomacy, the Department has 

identified six priority crosscutting areas for which it has developed an action plan with measurable milestones and metrics for tracking 

progress: 1) Build on our success under the President’s Management Agenda by getting to green and staying there; 2) Remove some 

support functions from danger posts to regional and central support centers at medium and large posts; 3) Strengthen open yet secure 

U.S. borders by maximizing legitimate travel to the U.S. while denying entry to those who would do the United States harm; 4) Improve 

training opportunities and curricula for employees; 5) Improve the quality of life for employees whether domestic or abroad and 6) Use 

technology to produce accurate information that supports decision makers 

and make that information available anytime, anywhere. The Department 

and USAID continue to maintain and develop skills that can help achieve 

transformational diplomacy and development, such as advanced foreign 

language proficiency, public diplomacy, and leadership and management 

preparedness. 

Under Secretary Henrietta Fore visits the Salaam Baalak Trust outreach center and 

shelter in New Delhi, India, April 2006. USAID supports a comprehensive HIV/AIDS 

awareness and prevention project through the center to meet the special needs of 

street and vulnerable children. State Department Photo

I I . P e r f o r m a n c e S u m m a r y

The chart below summarizes the performance ratings for Department of State and USAID results for the Management and 

Organizational Excellence strategic goal. 

S T R AT E G I C   G O A L   R E S U L T S   A C H I E V E D   F O R   F Y   2 0 0 6

RATINGS DISTRIBUTION

Significantly Above Target 0

Above Target 5

On Target 12

Below Target 3

Significantly Below Target 0

Total Number of Ratings 20

Below Target

15%

On Target

60%

Above Target

25%

Performance Section Strategic Goal twelve: management and organization excellence
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I I I . R e s o u r c e s I n v e s t e d

HUMAN RESOURCES BUDGET AUTHORITY

Human Resources and Training

0

2,000

4,000

8,000

9,000

11,000

(Direct Funded Positions)

$0

$1,000

$2,000

$3,000

$4,000

($ in Millions)

$5,000

$6,000

L E G E N D

P e r f o r m a n c e G o a l s

Information Technology

Diplomatic Security

Overseas and Domestic Facilities

Resource Management

Administrative Services

FY 2006

762

268

2,087

1,240

340

528

5,225

TOTAL

FY 2006

1,316

1,226

2,151

907

1,507

2,671

9,778

TOTAL

6,000

10,000

7,000

5,000

3,000

1,000

FY 2005

472

571

2,344

770

663

595

5,415

TOTAL

FY 2005

1,302

1,213

2,128

897

1,492

2,643

9,675

TOTAL

I V . P e r f o r m a n c e A n a l y s i s

Performance Trends. Both agencies have made continuous improvements in human capital management, operational readiness, 

and information technology management. The Foreign Service Institute met or exceeded its goals for leadership training enrollment 

and the effectiveness of its language training programs and the Department continued to meet its goals for deploying Foreign Service 

generalists with the right language skills and slightly improved the diversity of new Foreign Service generalists hired in 2006. 

Key Initiatives and Programs. Major FY 2006 investments in the people who manage foreign affairs, the facilities in which 

they work, and the systems that support diplomacy worldwide included: $598 million to preserve, maintain, repair, and plan for 

buildings owned or directly leased by the Department of State; $910 million for security-related construction and physical security and 

rehabilitation of U.S. embassies and consulates; $9.4 million for the protection of foreign missions and officials; and $128 million for 

the capital investment fund and the modernization of information technology systems and networks.

Performance Section Strategic Goal twelve: management and organization excellence
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V . F Y 2 0 0 6 P e r f o r m a n c e R e s u l t s

INDICATOR: Percent of Language Students Attaining Skill Objectives From Training

Output

JUSTIFICATION: The data are screened and provide the most accurate measure for tracking performance: the time spent in language training and 

resulting end-of-training test results. FY 2006 PERFORMANCE

Target 75% or better.

Results 84%.

Rating On Target

Impact The Department will deploy staff with the right language skills and improve the effectiveness of programs and policies.

INDICATOR: Progress Toward Centralized, Secure, and Modern Global IT Infrastructure

Input

JUSTIFICATION: The indicator directly measures the reliability, accessibility, and security of the Department’s information technology infrastructure. FY 2006 PERFORMANCE

Target

Continue with the aggressive four-year life-cycle modernization program for OpenNet Plus and ClassNet. 

Improve network availability to 99.6% and add 40 additional virtual private networks at embassies for a total of 300. 

Develop implementation plan for consolidation initiative. 

Deploy 5,000 OpenNet Everywhere devices. 

=

=

=

=

Results

174 additional domestic and overseas local area networks are modernized (101 OpenNet and 73 ClassNet).

Network availability is at an average rate of 99.6% or better achieved as result of exceeding the target total of 300 virtual 

private networks installed for embassy circuits.

Implementation plan for consolidation initiative completed.

4,669 OpenNet Everywhere devices deployed for core and occasional teleworkers.

=

=

=

=

Rating On Target

Impact

The elements (GITM, consolidation, mobile computing, and maintaining the secure global network) are critical to the 

Department’s ability to provide a modernized, secure, and high quality infrastructure. Success of these elements will enable 

production of accurate information for decision makers and will make that information available anytime, anywhere in 

support of the foreign affairs mission.

Performance Section Strategic Goal twelve: management and organization excellence
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INDICATOR: Number of New Sites Acquired for Capital Security Construction Projects in 

Accordance With the Long-Range Overseas Building Plan Schedule

PART Output

JUSTIFICATION: The indicator was chosen as the most comprehensive in determining the actual acquisition of a building site that 

is essential before constructing a new embassy compound. FY 2006 PERFORMANCE

Target Acquire seven new sites for capital security construction projects.

Results Eight new embassy compound sites were acquired in the fiscal year.

Rating Above Target

Impact Capital security construction programs proceeding on schedule and as planned provide secure, safe, and functional facilities 

to U.S. Government employees overseas.

INDICATOR: Installation of Technical Security Upgrade Equipment

PART Output

JUSTIFICATION: Technical security upgrade projects provide critical security countermeasures for U.S. diplomatic missions abroad. These upgrades 

include facility power and conduit infrastructure, as well as technical security equipment. FY 2006 PERFORMANCE

Target Complete 35 upgrades as part of a cyclical replacement program.

Results 35 upgrades were completed in FY 2006.

Rating On Target

Impact Improving technical security at overseas posts through on-time completion of projects contributes directly to the Department’s 

goal of providing a safe and secure environment for U.S. personnel and property.

Performance Section Strategic Goal twelve: management and organization excellence

Mobile Computing

The Mobile Computing initiative, known as OpenNet Everywhere, allows an authorized user “anywhere/anytime remote access to the Department’s 

sensitive-but-unclassified network (OpenNet) from any Internet-connected computer 

that meets system specifications. The system provides a user with access to the 

Microsoft Office suite (including Outlook e-mail); Adobe Acrobat Reader; Internet 

Explorer; Windows Explorer; and WinZip. A user can also map to shared network 

drives, access the OpenNet Intranet home page and most of the linked websites 

from that page. Most importantly, access to the network is accomplished securely, 

and data are maintained centrally on servers, not on users’ personal computers, thus allowing the Department to avoid 

potential security violations and compromise of information. At the end of FY 2006, the Department had over 4,600 core 

and occasional teleworkers using this system against the goal of 5,000 users by the end of FY 2006. The core teleworkers 

fulfill the Congressionally mandated requirement for a Department telework program.

State Department Photo
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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.

2005: General elections held in Iraq to form a new government. Iraqis 

vote to elect a 275-member National Assembly, provincial councils and a 

Kurdish regional assembly. 
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61

UNITED STATES DEPARTMENT OF STATE

Financial Section
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62

UNITED STATES DEPARTMENT OF STATE

Internal Controls, Financial Management Systems 

 and compliance with laws and regulations

D epartmental G overnance

Management Control Program

The Federal Managers’ Financial Integrity Act (FMFIA) requires agencies to establish internal 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 provide an annual Statement of Assurance on whether the agency has met this requirement. 

The Department’s Management Control Steering Committee (MCSC) oversees the Department’s management (i.e., internal) controls 

program. The MCSC is chaired by the Chief Financial Officer, and is composed of eleven other Assistant Secretaries [including the Chief 

Information Officer and the Inspector General (non-voting)], the Deputy Chief Financial Officer, the Deputy Legal Adviser, the Deputy 

Assistant Secretary for Global Financial Services and the Director for the Office of Overseas Buildings Operations. Individual assurance 

statements from Ambassadors assigned overseas and Assistant Secretaries in Washington, D.C. serve as the primary basis for the 

Department’s FMFIA 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.

It is the Department’s policy that any 

organization with a material weakness or 

reportable condition is required to submit a 

plan to correct the weakness to the MCSC or 

the senior assessment team (SAT) for review 

and approval (see description of the SAT’s 

role in the Internal Control Over Financial 

Reporting section). The plan, combined with 

the individual assurance statements, provide 

the framework for monitoring and improving 

the Department’s management controls on a 

continuous basis. 
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63

UNITED STATES DEPARTMENT OF STATE

The Department evaluated its management controls and financial management systems for the fiscal year ending September 30, 2006. 

This evaluation provided reasonable assurance that as of September 30, 2006, the objectives of the FMFIA were achieved. As a result, 

the Secretary has provided an unqualified Statement of Assurance. 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. 

Management Assurances

F ederal M anagers ’ F inancial I ntegrity A ct

The Department of State’s management is responsible for establishing and maintaining effective internal control 

and financial management systems that meet the objectives of the Federal Managers’ Financial Integrity Act 

(FMFIA). The Department conducted its assessment of the effectiveness of internal control over the efficiency 

and effectiveness of operation and compliance with applicable laws and regulations in accordance with OMB Circular 

A-123, Management’s Responsibility for Internal Control. Based on the results of this evaluation, the Department 

can provide reasonable assurance that its internal control over the effectiveness and efficiency of operations and 

compliance with applicable laws and regulations and financial management systems meet the objectives of FMFIA as of 

September 30, 2006. 

In addition, the Department of State’s management is also responsible for establishing and maintaining effective internal 

control over financial reporting, which includes safeguarding of assets and compliance with applicable laws and regulations. 

The Department of State conducted its assessment of the effectiveness of the Department’s internal control over financial 

reporting in accordance with Appendix A of OMB Circular A-123. Based on the results of this assessment, the Department 

of State is reporting material weaknesses concerning the accounting for personal property and real property in its internal 

control over financial reporting as of June 30, 2006. Deficiencies existed in the controls over accounting for contractor-held 

property, aircraft and vehicles and controls over accounting for real property – specifically Construction-in-Progress. However, 

corrective actions were taken, and the material weaknesses have been resolved as of September 30, 2006. Other than the 

exceptions noted, the internal controls were operating effectively and no other material weaknesses were found in the design 

or operation of the internal control over financial reporting.

Because of its inherent limitation, internal control over financial reporting, no matter how well designed, cannot provide 

absolute assurance of achieving financial reporting objectives and may not prevent or detect misstatements. Therefore, 

even if the internal control over financial reporting is determined to be effective, it can provide only reasonable assurance 

with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future 

periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of 

compliance with the policies or procedures may deteriorate.

 Condoleezza Rice 

Secretary of State

November 15, 2006
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UNITED STATES DEPARTMENT OF STATE

Internal Control Over Financial Reporting 

In December 2004, OMB Circular A-123, Management’s Responsibility for Internal Control, was revised in light of the internal control 

requirements for publicly-traded companies contained in the Sarbanes-Oxley Act of 2002. The Department’s management control 

program expanded during 2006 to implement the new requirement for management’s assessment of the effectiveness of internal 

control over financial reporting, contained in Appendix A of the revised OMB Circular A-123. A senior assessment team (SAT) was 

established in FY 2006 to oversee the implementation of Appendix A, as recommended in the revised Circular. The SAT reports to the 

Management Control Steering Committee and is comprised of 11 senior executives from bureaus that have significant responsibility 

over the Department’s financial resources. 

The Department performed the Appendix A implementation in three phases: planning, assessment and testing, and conclusion and 

reporting. The Department defined the scope of financial reporting as the Department-wide financial statements, identified thirteen 

significant financial processes, and determined the materiality threshold. The Department documented the key financial processes and 

controls as well as evaluated and tested the controls. The principal results from the Appendix A implementation are provided in the 

table below.

Appendix A Material Weaknesses Resolved as of September 30, 2006*

Material Weaknesses Resolved as of September 30, 2006 Corrective Actions Taken

Accounting for Personal Property

As of June 30, 2006, deficiencies existed in the controls over accounting for personal 

property. Specifically, the Department did not have a system to identify and record 

property in the hands of contractors. The controls over accounting for aircraft, 

vehicles, and other personal property were not fully effective.

The Department implemented procedures to provide 

for the reporting of contractor-held property. It also 

tightened controls over the existing processes for 

accounting for aircraft, vehicles and other personal 

property. 

Accounting for Real Property – Construction-in-Progress 

As of June 30, 2006, controls over accounting for real property – construction in 

progress were ineffective. Not all projects that should have been capitalized were 

capitalized, and there was a failure to report project completions on a timely basis. 

Controls were implemented and/or strengthened to 

ensure the proper identification of capitalized projects 

in the accounting system and timely reporting of 

project completion. 

* The material weaknesses were downgraded to reportable conditions as of September 30, 2006. In accordance with Appendix A to OMB Circular 

A-123, a material weakness in internal control over financial reporting, is a reportable condition, or combination of reportable conditions, that results 

in a reasonable possibility that a material misstatement of the financial statements, or other significant financial reports, will not be prevented or 

detected. A reportable condition for financial reporting is a control deficiency, or combination of control deficiencies, that adversely affects the 

entity’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with Generally Accepted Accounting 

Principles such that there is a reasonable possibility that a misstatement of the entity’s financial statements, or other significant financial reports, that 

is more than inconsequential will not be prevented or detected. 

F inancial S ystems C ompliance

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) at the transaction level. 
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UNITED STATES DEPARTMENT OF STATE

The Department has made it a priority to meet the objectives of the FFMIA. In November 2004, the Department conducted a 

comprehensive OMB Circular A-127 assessment. The assessment included (among other things) a collection of the various background 

materials, reference documents, and supporting details that document how the Department meets the applicable A-127 requirements 

and OMB FFMIA implementation guidance. Based on the results of this assessment, along with information contained in the 

Department’s FY 2005 FISMA Report and evaluations and assurances provided under FMFIA, the Department affirmed its determination 

of substantial compliance with FFMIA in its FY 2005 Management Representation Letter provided to the Independent Auditor. Further 

reinforcing FFMIA substantial compliance, the Department’s Management Control Steering Committee voted in September 2006 to 

classify the Department’s Financial and Accounting Systems as a financial system deficiency (versus reportable condition or material 

non-conformance). Since the financial management systems substantially comply with the requirements of the FFMIA, the Department 

has provided an unqualified assurance with regard to Section 4 of the Federal Manager’s Financial Integrity Act.

I nformation assurance program

The Department of State 2006 Federal Information Security Management Act (FISMA) and Privacy Management Report presented 

continued improvement in IT security, as well as a road map for 2007 initiatives. The Department is dedicated to protecting information 

and information systems with a comprehensive Information Security Program that continues to integrate operational security and 

information assurance programs monitored by performance metrics that are continually improving. 

Over the past year, the Department streamlined processes, eliminated duplicative initiatives, focusing on its Agency-wide Information 

Security Program, Configuration Management, Risk Management, and Plans of Actions & Milestones (POA&Ms). To further accelerate 

the integration of IT security within the Department, the Under Secretary of Management officially established the Information Systems 

Security Committee (ISSC). This past year, the CIO reassigned governance of the Department’s IT systems and applications inventory 

(Information Technology Asset Baseline - ITAB) to the Enterprise Architecture and Planning office that is charged with responsibility for 

eGovernment and Capital Planning, thus strengthening the connections between these essential business processes. 

The recategorization of the unclassified systems in the Department’s inventory was completed bringing the Department into full 

compliance with the FIPS 199 / NIST SP 800-60 standard. Furthermore, a comprehensive strategy to establish a methodology for 

compliance with FIPS Pub 200 by March 2007 will be instituted to ensure sustained compliance. 

The Department, issued “The Plan to Capture Contractor Systems in the Department of State’s Inventory of Information Systems” to 

the OIG and OMB with an implementation plan for ensuring the appropriate level of security of all contractor connections, extensions 

and systems. A Procurement Information Bulletin (PIB) concerning information security imposed upon contractor services and products 

was also finalized and issued.

There are no significant deficiencies under FISMA. In the 2006 audit of the Department’s financial statements the Independent 

Auditor concluded that the information system security material weakness identified in the FY 2005 audit was considered resolved and 

downgraded to a reportable condition.
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66

UNITED STATES DEPARTMENT OF STATE

I M P R O P E R P A Y M E N T S

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. OMB Circular A-123, Appendix C, defines significant 

improper payments as annual improper payments in a program that exceed both 2.5 percent 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.

In early FY 2005, based on the results of prior reviews, the Department performed a reassessment of programs and determined that 

the only category of payments considered susceptible to significant improper payments was payments for Federal Financial Assistance. 

Accordingly, the Department sampled and tested three of its largest Federal Financial Assistance Programs (the Fullbright, Contributions 

to International Organizations and Peacekeeping, and Refugee Assistance Programs). In FY 2005, these programs had outlays of 

$2.7 billion out of the Department’s total outlays of $4.9 billion for all Federal Financial Assistance programs. No improper payments 

were identified in these programs. 

In FY 2006, a random sample of the detailed payment transaction data was selected for Federal Financial Assistance related to the 

International Narcotics and Law Enforcement (INL) - Law Enforcement, Eradication, Aviation and Support to the Military, and the 

International Information Program-U.S. Speaker and Specialist Program (IIP). In the table below, the FY 2006 test results found improper 

payments in both programs. In both cases, the projected values of improper payments fall well below the threshold described above.

Number of 

Transactions Total Dollars Projected

Program Population Sample Population Sample Error 

Rate

Improper 

Payments

International Narcotics and Law Enforcement 4,315 126 $313,078,592 $2,366,056 3.97% $180,340

International Information Program- U.S. 

Speaker and Specialist Program 

741 126 $28,822,489 $288,548 23.81% $348,567

Calculation of error rate and payment amounts based on sample results.

Future plans

Future plans provide for expanding the IPIA program to include programs assessed as having a 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. 
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67

UNITED STATES DEPARTMENT OF STATE

(Dollars in Thousands)

% Change 2006 2005

2006 over 2005 Restated Restated

At End of Year:

Condensed Balance Sheet Data:

Fund Balances With Treasury +15% $ 16,170,761 $ 14,023,542

Investments, Net +5% $ 14,101,765 $ 13,389,090

Property and Equipment, Net +17% 9,175,917 7,862,612

Other -53% 509,511 1,079,749

Total Assets +10% $ 39,957,954 $ 36,354,993

Foreign Service Retirement Actuarial1 +6% $ 14,215,300 $ 13,429,300

Liability to International Organizations -2% 1,155,344 1,178,130

Other +2% 2,522,403 2,472,568

Total Liabilities +5% 17,893,047 17,079,998

Unexpended Appropriations +15% 13,095,268 11,430,639

Cumulative Results of Operations +14% 8,969,639 7,844,356

Total Net Position +15% 22,064,907 19,274,995

Total Liabilities and Net Position +10% $ 39,957,954 $ 36,354,993

Full-time Personnel:

Civil Service +2% 8,270 8,092

Foreign Service +1% 11,397 11,238

Foreign Service National -9% 8,189 8,964

Total Full-time Personnel -2% 27,856 28,294

Foreign Service Annuitants1 +6% 15,759 14,842

For the Year:

Total Cost +7% $ 17,082,939 $ 15,953,921

Total Earned Revenue +11% (4,590,276) (4,131,816)

Total Net Cost of Operations +6% $ 12,492,663 $ 11,822,105

On-Time Payments (%) -2% 94% 96%

Electronic Funds Transfer Payments (%) +2% 87% 85%

1

 The Department administers the operations of the Foreign Service Retirement and Disability Fund. This Fund provides 

annuities to retired members of the Foreign Service (or their survivors).

Financial Highlights

The Department’s financial statements, which appear in the Financial Section of the FY 2006 Performance and Accountability 

Report (PAR), are audited by an independent accounting firm. Preparing these statements is part of the Department’s goal to 

improve financial management and to provide accurate and reliable information that is useful for assessing performance and 

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

in the financial statements.

The financial statements and financial data presented in the FY 2006 PAR have been prepared from the accounting records of the 

Department of State which, as a Federal entity, must be in conformity with generally accepted accounting principles (GAAP). For 

Federal entities, GAAP are the standards prescribed by the Federal Accounting Standards Advisory Board (FASAB).
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68

UNITED STATES DEPARTMENT OF STATE

The Department’s total budgetary resources of $26.4 

billion represents an increase of 5.9% from FY 2005 levels. 

Budget authority of $21.8 billion, consisting of $16.1 billion 

for appropriations and transfers and $1.3 billion from the 

trust funds, comprise 65.9% of total budgetary resources. 

The Department incurred obligations of $21.1 billion for 

the year, a 1.9% increase over FY 2005 obligations of 

$20.7 billion.

Total assets were $40.0 billion at the end of FY 2006, 

an increase of $3.6 billion (10%) over the previous 

year’s total assets of $36.4 billion. Investments, 

Funds Balance with Treasury, and Property, Plant and 

Equipment comprise 98% of total assets for both 

FY 2006 and FY 2005. Investments consist almost entirely 

of U.S. Government Securities.

Total liabilities were $17.9 billion at the end of FY 2006. 

The Foreign Service Retirement Actuarial Liability and the 

Liability to International Organizations comprise 86% of 

the Department’s total liabilities. Of the total liabilities of 

$17.9 billion, $2.1 billion were unfunded, of which $1.2 

billion was the liability to International Organizations.

O V E R V I E W O F F I N A N C I A L P O S I T I O N 

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

$ 2,254,063

$ 3,747,810

$ 5,017,593

Liabilities by Type

7.1%

79.4% 7.1%

6.4%

FSRA Liability

Liability to International

Organizations

Accounts Payable

Other Liabilities

Achieve Peace and Security

Advance Sustainable

Development and Global Interests

Promote International

Understanding

Executive Direction and other

Costs not Assigned

$ 1,473,197

Assets by Type

0.6% 40.4%

35.2%

22.9%

0.9%

Investments

Fund Balances with Treasury

Property and Equipment

Receivables

Other Assets

$ 12,492,663

Total Net Cost

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

$ 2,254,063

$ 3,747,810

$ 5,017,593

Liabilities by Type

7.1%

79.4% 7.1%

6.4%

FSRA Liability

Liability to International

Organizations

Accounts Payable

Other Liabilities

Achieve Peace and Security

Advance Sustainable

Development and Global Interests

Promote International

Understanding

Executive Direction and other

Costs not Assigned

$ 1,473,197

Assets by Type

0.6% 40.4%

35.2%

22.9%

0.9%

Investments

Fund Balances with Treasury

Property and Equipment

Receivables

Other Assets

$ 12,492,663

Total Net Cost

Where Funds Come From (Dollars in Thousands)

$ 4,618,778

$ 1,246,621

$ 4,434,957

$ 16,132,605

Appropriations and

Transfers

Reimbursements Earned

Trust Funds

Other

$ 26,432,961

Total Budget Resources

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

$ 2,254,063

$ 3,747,810

$ 5,017,593

Liabilities by Type

7.1%

79.4% 7.1%

6.4%

FSRA Liability

Liability to International

Organizations

Accounts Payable

Other Liabilities

Achieve Peace and Security

Advance Sustainable

Development and Global Interests

Promote International

Understanding

Executive Direction and other

Costs not Assigned

$ 1,473,197

Assets by Type

0.6% 40.4%

35.2%

22.9%

0.9%

Investments

Fund Balances with Treasury

Property and Equipment

Receivables

Other Assets

$ 12,492,663

Total Net Cost

(Restated)

The total net cost of operations for, FY 2006, after 

intradepartmental eliminations, was $12.5 billion. The 

strategic objective to “Achieve Peace and Security” 

represents the Department’s largest investment at 40.2% 

of the Net Cost of Operations. The remaining strategic 

objectives varies from 11.7% to 30.0%. 
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69

UNITED STATES DEPARTMENT OF STATE

A u d i t R e s u lt s

The Department has a proud tradition of unqualified opinions on our annual financial statements from our independent auditors for 

the better part of a decade. In our efforts to further strengthen internal controls in 2006, the Department committed to resolving the 

material weaknesses reported by the Independent Auditors in the FY 2005 Independent Auditor’s Report, and fully implement 

the requirements of Appendix A, Internal Control Over Financial Reporting, of OMB Circular A-123. During implementation of 

Appendix A, Department management identified a material weakness related to accounting for real property construction-in-progress. 

As a result of corrective actions taken during FY 2006, including the development of more detailed procedural guidance, this 

material weakness was resolved. However, due to the complexity of the matters discussed above, and the accelerated financial 

reporting requirements established by OMB, the Department was unable to provide timely financial statements or documentation on 

the appropriateness of the restatement for real property to satisfy our independent auditors by OMB’s November 15, 2006 

submission date. 

As a result, and as more fully explained in the Independent Auditor’s Report included in the FY 2006 PAR, the independent auditors 

issued a disclaimer opinion on our FY 2006 and FY 2005 financial statements released on November 15, 2006. Since then, the 

independent auditors satisfied themselves about the amounts presented as real property and related depreciation expense and 

accumulated depreciation in the Department’s FY 2006 and FY 2005 financial statements, and issued an unqualified opinion thereon, 

dated December 12, 2006, which has cleared the way for updating the FY 2006 PAR. The auditor’s opinion and agency comments are 

contained in the FY 2006 PAR’s Financial Section. 

In relation to internal control, the Independent Auditor’s Report cites as reportable conditions the recording and related depreciation 

of personal property and Department’s security of information systems networks, an improvement over what was previously reported 

in the FY 2005 PAR as material weaknesses. The report also cites as reportable conditions: (1) the inadequacy of the Department’s 

financial management systems, (2) the management of unliquidated obligations, (3) the implementation of Managerial Cost Accounting 

Standards, and (4) the recording and related depreciation for real property. The Department’s financial management systems are also 

reported as noncompliant with laws and regulations, including the Federal Financial Management Improvement Act of 1996 (FFMIA). 

The Department is committed to resolving these reportable conditions and has corrective action plans underway to resolve many of 

these reportable conditions in 2007. During FY 2007, the MCSC and Senior Assessment Team will continue to monitor these issues and 

test the controls to ensure they are operating effectively. 
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70

UNITED STATES DEPARTMENT OF STATE

R estatements

The FY 2006 and FY 2005 financial statements, included in the FY 2006 PAR, have been restated as follows: 

The Department was notified of changes to amounts previously reported by agencies who are recipients of portions of the 

Department’s budget authority to conduct activities in support of the Department’s mission after the financial statements were 

issued on November 15, 2006. The FY 2006 financial statements were restated accordingly.

The FY 2005 financial statements have been restated to correct errors with respect to the accounting for certain real property 

transactions. 

The effect of these restatements on the Department’s financial statements is provided in the FY 2006 PAR.

B udgetary P osition

The FY 2006 budget for the Department of State totaled $10.468 billion. It included appropriations for the Administration of 

Foreign Affairs ($7.985 billion), contributions to international organizations and international peacekeeping activities ($2.303 billion), 

international commissions ($67 million), and related programs ($113 million). These amounts do not include foreign assistance 

funding.

In addition to appropriated funds, the Department continued to rely on revenue from user fees – Machine Readable Visa fees, Enhanced 

Border Security Program fees, the Western Hemisphere Travel Surcharge, and other fees – for the Border Security Program. The fee 

revenue supported program requirements to protect American citizens and safeguard the nation’s borders. These requirements included 

increased consular workloads and the national security mandate to collect biometric data for U.S. passports and visas.

Appropriations under Administration of Foreign Affairs provide the Department’s core funding. They support the people and programs 

required to carry out foreign policy and advance U.S. national security, political, and economic interests at more than 260 posts around 

the world. They also build, maintain, and secure the infrastructure of the diplomatic platform from which most U.S. Government 

agencies operate overseas.

For FY 2007, the Department’s budget request (at this date still pending before Congress) totals $9.504 billion. It includes resources to 

address ongoing foreign policy priorities, particularly to support the global war on terror and advance transformational diplomacy. 

The request for Diplomatic and Consular Programs is $4.652 billion, including $795 million for upgrades of physical security equipment 

and technical support, information and systems security, perimeter security, and security training.
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71

UNITED STATES DEPARTMENT OF STATE

F I S C A L Y E A R 2 0 0 6 ( $ I N T H O U S A N D S )

S T R AT E G I C G OA L S TAT E A P P R O P R I AT I O N S F O R E I G N O P E R AT I O N S

Regional Stability $ 2,277,365 $ 4,483,749 

Counterterrorism $ 441,717 $ 1,217,315 

Homeland Security $ 143,225 $ 19,894 

Weapons of Mass Destruction $ 168,006 $ 264,380 

International Crime and Drugs $ 94,030 $ 1,565,195 

American Citizens $ 73,107 $ — 

Democracy & Human Rights $ 272,600 $ 1,598,825 

Economic Prosperity and Security $ 467,634 $ 2,532,330 

Social & Environmental Issues $ 210,054 $ 3,331,894 

Humanitarian Response $ 37,573 $ 1,125,464 

Public Diplomacy and Public Affairs $ 853,213 $ 15,190 

Management and Organizational 

Excellence

 $ 5,200,268 $ 23,813 

Strategic Goal Sub Total $ 10,238,792 $ 16,178,049 

FY 2006 State Appropriations: $10.2 billion

Appropriations for the Department of State fund the key components of the Department’s operations and infrastructure, as well as U.S. 

engagement abroad through public diplomacy and international organizations.

FY 2006 Foreign Operations: $16.2 billion

Foreign Operations programs promote U.S. foreign policy interests that advance the global fight against terrorism; provide economic, 

military, and democracy assistance to key foreign partners and allies; promote international peace and prosperity; curb the spread of 

weapons of mass destruction; interdict drugs; and provide health and humanitarian assistance. Some Foreign Operations resources are 

administered by the Department and others by other agencies. In addition, the Department provides foreign policy guidance to certain 

other agencies whose resources are part of international affairs resources (Function 150).

FY 00 Funding Total Allocated to Strategic Goals: $. Billion

State

Appropriations

$10.2 Billion

Foreign

Operations

$16.2 Billion

RESOURCE HIGHLIGHTS
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UNITED STATES DEPARTMENT OF STATE U.S. Department of State FY 2006 Significant Results
AcknowledgmentS

In memory of our friend and colleague Rob Gabriel (1965-2006), who inspired us with his lifelong passion to make this world a better place.

This Performance and Accountability Report was produced with 

the energies and talents of Department of State and USAID staff in 

Washington, D.C., and our offices and posts around the world. To these 

dedicated individuals we offer our sincerest thanks and acknowledgment. 

In particular, we recognize the following individuals and organizations for 

their contributions:

The PAR Core Team: Stephanie Cabell, Jim Core, Kevin Covert, Alethea 

Gordon, Linda Howey, Shelby Hunt, Catherine Rodriguez, Frank Sullivan, 

and Nick Vivio.

Staff from the Office of the Deputy Chief Financial Officer: Tom Allwein, 

Eileen Angle, Melinda DeCorte, Latonia Baptiste, Anthony Belliotti, Susan 

Crowder, Spring George, Carol Gower, Bill French, Jason Hall, Shelly 

Harvey, Stephanie Holmes, Don Hunter, Sherril Hyson, Ayana Jackson, 

Matthew Johnson, Rick Keller, Jeffrey Long, Brian Lyons, Irwin Mazin, Lisa 

Myffels, Marshelle Richardson, April Russo, Troy Scaptura, Sanjay Shah, 

Jerry Sharp, Merredith Shears, Catherine Smith, Richard Thompson, Dan 

Tonzi, Peter Vieira.

USAID Colleagues: Patricia Adams, Nan Dearborn, Joanne Giordano, 

Beverly McDonald, Connie Turner, Gloria White.

Bureau Planning Coordinators: Sara Allinder, Kim Archea, John 

Bargeron, Marlene Baxter, DeAnne Bryant, Jody Buckneberg, Amy 

Carlon, Deryck Chase, Leon Coates, Suzanne Dalch, Lauren Deacon, 

Kurt Donnelly, John Dudley, Deborah Emmert, Joel Fischman, Lauren 

Frese, David Freudenwald, Ron Gain, Nicole Green, Jean Hartung, Tom 

M. Hill, Emily Hillenbrand, Donna Hopkins, Seema Matin, Janet Mayland, 

Tony Mazzoccoli, Cherreka Montgomery, Victor Munoz, Cynthia Nelson, 

Wayne Oshima, John Osthaus, Catherine Pierce, Elissa Pitterle, Tammy 

Pomerleau, Susan Poulin, Robinson Ramirez, Rick Ruth, Cindy Saboe, Olive 

Sampson, Bryan Schaaf, Melissa Schumi, Daniel Shea, Valerie Silensky, 

Larry Sperling, Shannon Swanson, Lisbeth Thompson, Eva Weigold, Ivan 

Weinstein, Rick Yoneoka, Jamie Young.

Global Financial Services personnel in Charleston, Bangkok, Paris and 

Washington.

Special acknowledgment to the Bureau of Public Affairs, Paul Claussen 

and Amy Garrett from the Office of the Historian; Phyllis Smith and Renaldo 

Powell from the Office of Multi-Media Services; and David G. Smith and 

Leo Dillon in the Office of the Geographer for their masterful map-making. 

We offer our special thanks to The DesignPond, in particular Michael 

James, Sheri Beauregard, and Don James for their outstanding 

contributions to the design of this report.
2201 C Street, N.W.

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United States 

Department of State