Final answer:
Federal agencies detail their performance goals, results, and challenges in the Management Discussion and Analysis section of their annual reports, which enhances stakeholders' understanding of the agencies' financial conditions and performance.
Step-by-step explanation:
Federal agencies report information concerning their performance goals, performance results, and future challenges in the Management Discussion and Analysis (MD&A) section of their annual performance and accountability reports. This section provides a narrative explanation of the financial statements, offering insights into the agency's financial condition, and includes a detailed discussion of performance results against established goals, as well as the challenges faced and future outlook. The purpose of the MD&A is to enhance the overall understanding of the agency's financial position and to articulate how the agency has performed in terms of meeting its stated objectives. This conversation between the agency and its stakeholders, such as Congress, aligns with the president's constitutional responsibility to keep Congress informed on the 'state of the union,' which has evolved into a nationally televised performance summarizing key policy agenda items.