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The Financial Report of the U.S. Government

The Financial Report of the U.S. Government. AGA West Virginia September 3, 2009. Scott Bell Senior Accountant Department of the Treasury. What is the Financial Report of the United States Government?. The U.S. Government’s ‘Annual Report to its Stockholders’ on its financial condition.

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The Financial Report of the U.S. Government

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  1. The Financial Report of the U.S. Government AGA West Virginia September 3, 2009 Scott Bell Senior Accountant Department of the Treasury

  2. What is the Financial Report of the United States Government? • The U.S. Government’s ‘Annual Report to its Stockholders’ on its financial condition. • Complement to the President’s Budget • Government Management Reform Act (GMRA) of 1994, as amended requires: • Treasury, in conjunction with OMB, to prepare FR • GAO to audit FR • Submission deadline • Until 2004: 180 days after FY-end (@ March 31). • 2004 to present: December 15 following year-end per OMB acceleration policy.

  3. Components of FR • Secretary’s letter • Management Discussion & Analysis (MD&A) • GAO letter • Basic financial statements, including Statement of Social Insurance (2006) • Notes to financial statements • Stewardship information • Supplemental information

  4. FY 2008 Results • For the 4th year in a row, all CFO Act agencies completed their audits within 45 days of fiscal year-end (November 15th). • 21/24 major Federal agencies received clean audit opinions, (FY07 - 19) • For the 5th consecutive year, the total number of material weaknesses government-wide declined(from 39 to 32 during FY 2008). • 14 agencies earned a clean audit opinion with no material weaknesses (including the Departments of Commerce, Education, Energy, HUD, Justice, Labor, State, and Transportation). • The Government issued its consolidated financial report on time by December 15th. • Audit Opinion Disclaimer • For the2nd consecutive year, the Government: • earned an unqualified audit opinion on its Statement of Social Insurance. • issued a ‘Citizen’s Guide to the Financial Report of the U.S. Government’.

  5. A Year of Unprecedented Change

  6. Budget Deficit vs. Net Cost $339b Change in VA estimates $549.8b Change in unfunded postemployment benefit estimates 2008 Unified Budget Deficit $454.8 billion + $110b Change in DoD estimates + $100b Change in OPM estimates $4.5b Net Increase in: Environmental Liabilities; Net Capitalized Fixed Assets; Other $(46.6b) Decrease in Capitalized Fixed Assets, net of Depreciation = 2008 Net Cost $1,009.1 billion $51.1b Other

  7. A Significant Impact

  8. What Came In & What Went Out In Out

  9. What We Own & What We Owe Liabilities Assets • $1.97 trillion • Mostly Property Plant &Equipment • Other (off-balance sheet) • Stewardship Land (national parks, forests) • Heritage Assets (national memorials, historic structures)

  10. Key Issues • Current Financial Position and Condition • Market Stabilization & Recovery • Social Insurance & Sustainability

  11. Market Stabilization & Recovery Housing & Economic Recovery Act (HERA) Emergency Economic Stabilization Act (EESA) Troubled Assets Relief Program (TARP) American Recovery and Reinvestment Act (ARRA) Only a small fraction of activity impacted the FY 2008 statements.

  12. Social Insurance: An Issue Now & in the Future Historical & Projected U.S. Debt Held by the Public as % of GDP Historical & Projected U.S. Revenue and Cost as % of GDP • Under current conditions, actuaries estimate that there will be a social insurance shortfall of $43t. • 75-year estimate of future benefit expenditures net of contributions.

  13. The Clock is Ticking

  14. We Still Have Work To Do For the 12th Consecutive Year, GAO issued a disclaimer of opinion on the Financial Report of the U.S. Government. • Material Weaknesses: • 1. DoD Accounting Issues • Accounting for/Reconciliation of Intragovernmental Activity and Balances • FMS must ‘PLUG’ a “harmonizing” entry (i.e., ‘PLUG’) into the equity reported on the Statement of Changes in Net Position to balance. • Preparation of Consolidated Financial Statements

  15. On the Horizon • Continue to build on agency audit successes. • Continue to pursue systems and structure initiatives to resolve governmentwide material weaknesses. • Accounting for the economic crisis. • Credit Reform • Federal Reserve Bank • FASAB’s Role?

  16. Find Out More! http://www.fms.treas.gov/fr/index.html http://www.whitehouse.gov/omb/financial/index.html www.gao.gov www.financialstability.gov

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