The FY 2017 Financial Report of the U.S. Government

Size: px

Start display at page:

Download "The FY 2017 Financial Report of the U.S. Government"

Oswin Hamilton
5 years ago
Views:

1 The FY 2017 Financial Report of the U.S. Government R. Scott Bell Senior Staff Accountant Department of the Treasury AGA NOVA April 2, 2018

"We might hope to see the finances of the Union as clear and intelligible as a merchant's books, so that every member of Congress and every man of any mind in the

2 "We might hope to see the finances of the Union as clear and intelligible as a merchant's books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them." President Thomas Jefferson to Treasury Secretary Albert Gallatin,

3 The first Monthly Treasury Statement of Receipts and Expenses was issued in A.1789 B.1790 C.1800 D

4 The first statutory Financial Report of the U.S. Government under GAAP covered which Fiscal Year? A.1927 B.1957 C.1977 D

5 Key Dates in FR History 1973 Fortune Magazine Carol Loomis 1970s Treasury Prototypes 1990 Chief Financial Officers Act 1990 FASAB is formed 1999/2002 AICPA designation 1994 Govt Management Reform Act 1998 First GAAP-Based FR issued (FY 97). 5

6 6 Agency Financial Reports Performance & Accountability Reports 39 Significant Reporting Entities 115 Other Reporting Entities Audited By Inspectors General & Contract Auditors Audits Report & Financial Statements Fiscal Projections Analysis & Summary

7 Traditional Reporting 7

8 Which agency is not one of the Government Net Cost Big Four? A) Dept. of Education B) Social Security Administration C) Dept. of Veterans Affairs D) Dept. of Defense E) Dept. of Health & Human Svcs 8

9 Traditional Reporting Costs and Revenues Gross Cost: $4.6t - Earned Revenue $431.9b +/- Assumption Loss/Gain $356.5b Net Cost: $4.5t - Taxes / Other Revenue $3.4t Net Operating Cost: $1.2t 9

10 The Government s largest asset recorded on its consolidated balance sheet is: A) Cash B) Property, Plant, & Equipment C) Loans Receivable D) Inventories & Related Property E) Land 10

11 Traditional Reporting Assets and Liabilities on the Government s Balance Sheet 11

12 Non-Traditional Reporting Social Insurance Social Insurance Future Expenditures in Excess of Future Revenues Dollars in Trillions Increase / (Decrease) $ % Open Group (Net): Social Security (OASDI) $ (15.4) $ (14.1) $ % Medicare (Parts A, B, & D) $ (33.5) $ (32.5) $ % Other $ (0.1) $ (0.1) $ % Total Social Insurance Expenditures, Net $ (49.0) (Open Group) $ (46.7) $ % Total Social Insurance Expenditures, Net (Open Group) - Percent of GDP (4.0% ) (3.8% ) Source: Statement of Social Insurance 12

13 Non-Traditional Reporting Trust Fund Status Fund Medicare Hospital Insurance (HI)* Combined Old-Age Survivors and Disability Insurance (OASDI)** Projected Depletion 2029 (2028 in FY 2016 Report) 2034 (unchanged from FY 2016 Report) Table 1: Trust Fund Status Projected Post-Depletion Trend In 2029, trust fund income is projected to cover 88 percent of benefits, decreasing to 81 percent in 2041, then increasing to 88 percent by In 2034, trust fund income is projected to cover 77 percent of scheduled benefits, decreasing to about 73 percent by * Source: 2017 Medicare Trustees Report ** Source: 2017 OASDI Trustees Report Projections assume full Social Security and Medicare benefits are paid after fund depletion contrary to current law. 13

14 Projected revenues and spending are impacted in the long-run by: A) The retirement of the baby boom generation B) Rising health care costs C) Longevity and birth rates D) A, B, and C E) None of the above 14

15 Non-Traditional Reporting Long-Term Fiscal Projections Government Receipts and Non-Interest Spending trillions of dollars % of GDP Receipts: Social Security Payroll Taxes $ 58.0 $ % 4.3% Medicare Payroll Taxes $ 19.4 $ % 1.4% Individual Income Taxes $ $ % 10.7% Other Receipts $ 49.0 $ % 3.6% Total Receipts $ $ % 20.1% Non-Interest Spending: Social Security $ 78.7 $ % 5.8% Medicare Part A, B, & D $ 26.6 $ % 2.0% Medicaid $ 32.3 $ % 2.4% Other Mandatory $ 32.1 $ % 2.4% Defense Discretionary $ 40.5 $ % 3.2% Non-Defense Discretionary $ 39.1 $ % 2.5% Total Non-Interest Spending: $ $ % 20.9% Receipts less Non-Interest Spending $ (16.2) $ (10.6) (1.2% ) (0.8% ) Fiscal Gap (2.0% ) (1.6% ) Source: Statement of Long-Term Fiscal Projections 15

16 Fiscal Sustainability Sustainability Definition: Debt/GDP remains stable/declines over the long term. Key Assumptions: Current Law & Policy 75-Year Projections = Uncertainty Projections, NOT Predictions. *UNCERTAINTY 16

17 The federal government s fiscal path could be described as: A) Sustainable B) Unsustainable C) Impossible D) Unchangeable 17

18 Historical and Projected Trends - Debt as Percent of GDP FY

19 Non-Traditional Reporting Fiscal Gap Table 2 Costs of Delaying Fiscal Reform Period of Delay Change in Average Primary Surplus Reform in 2018 (No Delay) percent of GDP between 2018 and 2092 Reform in 2028 (Ten-Year Delay) percent of GDP between 2028 and 2092 Reform in 2038 (Twenty-Year Delay) percent of GDP between 2038 and 2092 Reduction of primary deficits over 75 years to to keep/make fiscal policy sustainable. Keep Debt/GDP at current level (76%). Some combination of revenue/spending changes. Longer delay = bigger changes needed. 19

20 FRUSG: Then & Now Financial Report of the U.S. Government Selected Data Budget Deficit $15 b $665.7b Tax and Other Revenue $1.6 t $3.4 t Net Operating Cost $21 b $1.2 t Total Assets $1.6 t $3.5 t Public Debt + Accd Int $3.8 t $14.7 t Total Liabilities $6.6 t $23.9 t Social Insurance Net Expenditures $1.8 t* $49.0 t *Required Supplementary Stewardship Information Unmodified Audit Opinion? No No 20

21 Audit 21 of 24 CFO Act agencies received unmodified audit opinions Disclaimer (DOD, HUD); Yet to be released (Energy) Governmentwide Disclaimer DOD Intragovernmental Transactions Compilation Process / Budget-Accrual Reconciliation 21

22 NATION BY THE NUMBERS A Snapshot of The Government's Financial Position & Condition * Financial Measures (Dollars in Billions): Gross Costs $ (4,609.3) $ (4,515.7) Less: Earned Revenue $ $ Gain/(Loss) from Changes in Assumptions $ (356.5) $ (273.3) Net Cost $ (4,533.9) $ (4,405.1) Less: Total Tax and Other Revenues $ 3,374.6 $ 3,345.3 Unmatched Transactions and Balances $ 2.6 $ 8.1 Net Operating Cost $ (1,156.7) $ (1,051.7) Budget Deficit $ (665.7) $ (587.4) Assets: $ 3,480.7 $ 3,534.8 Less: Liabilities, comprised of: Debt Held By the Public & Accrued Interest $ (14,724.1) $ (14,221.1) Federal Employee & Veteran Benefits $ (7,700.1) $ (7,209.4) Other $ (1,472.7) $ (1,401.1) Total Liabilities $ (23,896.9) $ (22,831.6) Net Position (Assets Less Liabilities) $ (20,416.2) $ (19,296.8) Sustainability Measures (Dollars in Trillions): Social Insurance Net Expenditures $ (49.0) $ (46.7) Total Federal Non-Interest Net Expenditures $ (16.2) $ (10.6) Sustainability Measures as Percent of Gross Domestic Product (GDP): Social Insurance Net Expenditures (4.0%) (3.8%) Total Federal Non-Interest Net Expenditures (1.2%) (0.8%) Fiscal Gap 1 (2.0%) (1.6%) *Restated (See Financial Statement Note 1.V) 1 To prevent the debt-to-gdp ratio from rising over the next 75 years, a combination of noninterest spending reductions and receipts increases that amounts to 2.0 percent of GDP on average is needed (1.6 percent of GDP on average in 2016). See Financial Statement Note

23 23 To state the facts frankly is not to despair the future nor indict the past. The prudent heir takes careful inventory of his legacies and gives a faithful accounting to those whom he owes an obligation of trust. - John F. Kennedy

24 DATA Act Overview Goal Track $3.8 trillion dollars in annual spending on a quarterly basis and link data from the budget, accounting, procurement and financial assistance databases into one common format Challenge Collect, store, and display more than 400 data elements from over 100 federal agencies Grants Loans and Other Financial Assistance $3.8 Trillion in Federal Spending Procurements and Contracts Other Agency Expenditures Better Data. Better Decisions. Better Government 2 4

DATA Act Challenges & Benefits Large, Intricate Data Sets Lack of data standards, multiple stakeholders managing different data sets, multiple vendor solutions Improved Data Quality Increase access

25 DATA Act Challenges & Benefits Large, Intricate Data Sets Lack of data standards, multiple stakeholders managing different data sets, multiple vendor solutions Improved Data Quality Increase access to searchable and reliable Federal spending data Strict Mandated Timelines Short, legislatively-mandated timelines outlined in the law One-Size Fits All Approach Requirements and solutions must work for 100+ federal agencies CHALLENGES BENEFITS Better Oversight Encourage better tracking of how the Federal government spends funds Data Centric Decision Making Promote data driven decision making due to access of reliable agency data Diverse Data Users Federal agencies, journalist, oversight bodies, industry, state/local governments, and the public Research and Innovation Promote research and innovation both inside and outside of government 2 5

26 usaspending.gov Homepage 2 6

27 usaspending.gov Homepage (Continued) 2 7

28 Spending Explorer (By Agency) 2 8

29 Federal Account Profile: Child Nutrition Programs (Fiscal Year Snapshot) 2 9

30 Federal Account Profile: Child Nutrition Programs (Spending Over Time & By Category) 3 0

31 Federal Account Profile: Child Nutrition Programs (Spending by Award) 3 1

32 Contract Profile: Department of Agriculture, Food and Nutrition Service 3 2

33 Contract Profile: Department of Agriculture, Food and Nutrition Service 3 3

34 usaspending.gov Data Download Options 3 4

35 Find Out More!

Subject: Financial Audit: U.S. Government s Fiscal Years 2012 and 2011 Consolidated Financial Statements

Subject: Financial Audit: U.S. Government s Fiscal Years 2012 and 2011 Consolidated Financial Statements Comptroller General of the United States United States Government Accountability Office Washington, DC 20548 January 17, 2013 The President The President of the Senate The Speaker of the House of Representatives