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The FY 2012 Financial Report of the U.S. Government Scott Bell Office of the Fiscal Assistant Secretary U.S. Department of the Treasury AGA – WV Joint Meeting May 14, 2013 2 Citizen’s Guide Key Issues • Current Financial Position and Condition (Traditional) • Social Insurance & Sustainability (Non-Traditional) 3 Financial Report of the U.S. Government & Citizen’s Guide Audit Bureau of Government Accountability Office Fiscal Service (Treasury) 4 Treasury Office of the Fiscal Assistant Secretary Analysis Office of Management and Budget (OMB) Fiscal Projections Agencies reclassify financial information into common format for consolidation 35 Significant Reporting Entities. 115 Other Reporting Entities Agency Agency Agency Performance & Accountability Report Performance & Accountability Report Performance & Accountability Report Annual Financial Report Annual Financial Report Annual Financial Report Audit Audit Audit Inspector General Inspector General Inspector General Contract Contract Contract Comparing Cost and Deficit 5 What Came In & What Went Out Total FY 2012 Taxes & Other Revenues: $2.5t Gross Cost: $3.9t - Earned Revenue $350.9b +/- Assumption Loss/Gain $320.2b Net Cost: $3.8t - Taxes / Other Revenue $2.5t Net Operating Cost: $1.3t 6 What We Own & What We Owe Assets: Cash & Other Monetary Assets $ 206.2 Loans Receivable and Investments, Net* $ 1,009.1 Inventories $ 299.0 Property, Plant & Equipment, Net $ 855.0 Other $ 379.0 Total Assets $ 2,748.3 *Includes Net Loans Receivable and Mortgage-Backed Securities, Troubled Asset Relief Program (TARP) Direct Loans and Equity Investments, and Investments in Government-Sponsored Enterprises (GSEs). Off-balance sheet resources of the U.S. Government (not intended to be used to meet obligations): • Stewardship Land (e.g., National parks) and Heritage Assets (e.g., monuments) (Note 27) • Stewardship Investments in (1) Non-Federal Physical Property (e.g., interstate, national highways); (2) Human Capital (e.g., job-training, employment programs); and (3) Research and Development (e.g., NIH, DoD, NASA). • Natural Resources (oil/gas royalties Required Supplementary Information through 2015, then “basic”). • Government’s power to tax 7 Statement of Social Insurance Social Insurance Future Expenditures in Excess of Future Revenues Dollars in Billions Open Group (Net): Social Security (OASDI) Medicare (Parts A, B, & D) Other Total Social Insurance Expenditures, Net (Open Group) 2012 2011 Increase / (Decrease) $ % $ (11,278) $ (9,157) $ $ (27,174) $ (24,572) $ $ (102) $ (101) $ 2,121 2,602 1 23% 11% 1% $ (38,554) $ (33,830) $ 4,724 14% • Net present value: projected expenditures and receipts: – “Open” vs. “Closed” Group • Audit Disclaimer - “…significant uncertainties…primarily related to the achievement of projected reductions in Medicare cost growth…prevented us from expressing an opinion on those statements.” • Statement of Changes in Social Insurance 8 A Broader Perspective – Fiscal Sustainability • What is Fiscal Sustainability? – Debt/GDP stable over the long term. • Look at ALL revenues and spending. – Broader focus than SOSI. KEY ASSUMPTIONS Current Law/Policy Projections, NOT Predictions 9 Pieces of the Puzzle 10 Effect on the Debt “Blessed are the young, for they shall inherit the National debt.” --- Herbert Hoover 11 NATION BY THE NUMBERS A Snapshot of The Government's Financial Position & Condition 2012 billions of dollars 2011 Gross Costs Less: Earned Revenues Gain/(Loss) from Changes in Assumptions Net Cost Less: Total Taxes and Other Revenues Unmatched Transactions and Balances Net Operating Cost $ (3,844.9) $ (3,998.3) $ 350.8 $ 365.6 $ (320.2) $ (28.1) $ (3,814.3) $ (3,660.8) $ 2,518.2 $ 2,363.8 $ (20.2) $ (15.6) $ (1,316.3) $ (1,312.6) Assets: Less: Liabilities, comprised of: Debt Held By the Public & Accrued Interest Federal Employee & Veteran Benefits Other Total Liabilities Net Position (Assets Minus Liabilities) $ 2,748.3 $ 2,707.3 $ (11,332.3) $ (10,174.1) $ (6,274.0) $ (5,792.2) $ (1,243.0) $ (1,526.4) $ (18,849.3) $ (17,492.7) $ (16,101.0) $ (14,785.4) Sustainability Measures: Social Insurance Net Expenditures 1 Total Non-Interest Net Expenditures 2 $ $ (38,554) $ (16,500) $ Sustainability Measures as Percent of Gross Domestic Product (GDP): -4.2% Social Insurance Net Expenditures 3 Total Federal Government Non-Interest Net Expenditures -1.7% (33,830) (6,400) -3.8% -0.7% Budget Results Unified Budget Deficit $ (1,089.4) $ (1,298.6) 12 FY 2012 Audit Results • Agency Audits - 31 of 35 significant reporting agencies (21 of 24 CFO Act agencies) received clean audit opinions. – Qualified: Dept of Homeland Security, U.S. Agency for International Development (USAID) – Disclaimer: DoD Railroad Retirement Board (RRB). • Governmentwide Audit – Disclaimer (16th consecutive year) – DoD accounting weaknesses – Intragovernmental Balances and Transactions – Compilation / Consolidation Process 13 14 “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 Find Out More! http://www.fms.treas.gov/finrep12/fr_index_new.html http://www.whitehouse.gov/omb/ www.gao.gov [email protected] 15