GPO Sustainable Environmental Stewardship Good Business. Good Government. 1

U.S. Government Printing Office | Annual Report 2008

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GPO Sustainable Environmental Stewardship

G o o d B u s i n e s s . Good Government.
GPO Sustainable Environmental Stewardship Good Business. Good Government. 1

As the largest industrial manufacturer in the District of 

Columbia, the U.S. Government Printing Office (GPO) 

tries to be as environmentally sensitive as possible.

This includes trying to be green in virtually every step of 

our printing processes. GPO has a long history of recycling. 

For nearly 150 years, GPO has been recycling waste paper, 

copper, brass, and scrap metal. Since 1954, GPO has been 

recycling corrugated boxes. Other materials we recycle include 

aluminum, silver, photographic film, phototypesetting paper, 

empty paint cans, 55-gallon metal drums, plastic drums, CDs, 

floppy disks, and video cassettes. 

In this Annual Report, we will show you how GPO is taking heed of 

the words spoken by President Theodore Roosevelt a century ago. 

It is our obligation to be a good steward of the resources under 

GPO’s control. Sustainable Environmental Stewardship is 

good business and good Government.

 ur position in the world has been attained by the extent 

and thoroughness of the control we have achieved over 

nature; but we are more, not less, dependent upon what 

she furnishes than at any previous time of history.

O

President Theodore Roosevelt made this observation 100 years ago during a speech to a national 

conference on conservation held at the White House. It is just as accurate today as it was in 1908 

and remains a timeless call to sustainable environmental stewardship.
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I Message From The Public Printer

It has been a privilege to have 

completed my first year as the Nation’s 

25th Public Printer. Working with 

the talented men and women of GPO 

in Keeping America Informed on the 

documents of our democracy has been 

an honor. Together, we have all made 

some remarkable accomplishments 

this past year, and I am looking 

forward to more great achievements 

in the coming year.

Building on our continuing 

transformation efforts, GPO recorded 

another year of strong performance 

in FY 2008. Revenue increased by 

$103.3M over the previous year, 

resulting in net income of $46.3M, 

compared with net income of $90.9M 

for FY 2007. This addition to retained 

earnings will help GPO meet its 

requirements for necessary investments 

in technology and equipment in the 

coming year.

GPO’s financial performance was 

attributable primarily to the production 

of e-Passports. The State Department’s 

requirement for these documents grew 

significantly during the year, rising by 

nearly a third—from an estimated 18 

million to approximately 24 million—by 

year’s end. In addition to financing the 

cost of this work, the reimbursements 

for passport production financed 

the completion of a second, remote 

production facility in Stennis, MS, for 

continuity-of-operations purposes. GPO 

brought this facility online on time 

and under budget by April 2008. Due 

to the volume of e-Passport demand, 

GPO was also able to refund to the 

State Department a portion of the 

reimbursements that were excess to our 

requirements.

GPO’s support for Congress during 

FY 2008 was highlighted, among other 

things, by work on products required 

for the Joint Congressional Committee 

on Inaugural Ceremonies, including 

invitations, maps, signs, programs, 

tickets, and other products. GPO also 

began producing the new edition of 

the U.S. Code and delivered a number 

of other noteworthy Congressional 

products, including Black Americans 

in Congress, 1807–2007. For Federal 

agencies, GPO procured work to 

support the upcoming 2010 Census, 

and with the Office of Management and 

Budget, GPO coordinated the electronic 

delivery to Congress of the official 

version of the Budget of the United 

States Government for FY 2009. This is 

the first time in history that the official 

version of this critically important 

Government document was delivered 

electronically, and GPO authenticated it 

by digital signature. 

GPO’s digitization efforts 

proceeded apace as we readied our 

Federal Digital System (FDsys) for its 

first public release in early 2009. This 

system, with a state-of-the-art search 

and retrieval system, will eventually 

replace and improve on the services 

of GPO Access, which has provided 

the public with online access to 

Government information since 1994. 

FDsys will also serve as GPO’s digital 

platform, with a planned capability 

to provide for the intake, storage, 

processing, and output of Government 

publication content in a variety of 

forms and formats. During the year, 

GPO also expanded its authentication 

capabilities. In addition to the Budget, 

GPO completed work on authenticating 

selected congressional bills for the 

110th Congress and will implement 

this capability for all bills in the 111th 

Congress.

Over the past several years, 

GPO has implemented a variety of 

green initiatives in its operations. 

These initiatives have become part 

of the products and services that 

GPO routinely provides for Congress, 

Federal agencies, and the public. For 

more than a decade, for example, 

printing papers used by GPO have met 

the requirements for recycled content 

contained in the Resource Conservation 

and Recovery Act of 1989, as amended, 

and in corresponding Executive 

Orders. The printing inks used by 

GPO and its contractors comply with 

the requirements of the Vegetable Ink 

Printing Act of 1994. GPO works with 

the Environmental Protection Agency 

and the District of Columbia to meet 

the standards for emissions of volatile 

organic compounds established by the 

Clean Air Act. 

However, there is more that GPO 

can do in this field, and during FY 2008 

sustainable environmental stewardship 

was the focus of a concentrated effort 

at GPO. In my view, the future of 

sustainable environmental stewardship 

means being proactive and making 

changes so that GPO becomes a more 

efficient operation that makes better 

use of the resources under our control. 

This is not a partisan issue. It’s good 

business, and it’s good Government.

During FY 2008, we articulated a 

vision for the entire lifecycle of what 

GPO produces, from how we source 

the raw materials and how we produce 

our products, to what happens to the 

products when consumers are done 

with them. For GPO, this means:

n moving from web offset presses to 

digital equipment to reduce paper 

consumption;

n accelerating the re-engineering of 

business processes in production, 

procurement, documents 

Robert C. Tapella

Public Printer of the United States

dissemination, and administration 

to take advantage of the efficiencies 

offered by digital technology, reduce 

paperwork, and improve efficiency;

n conducting energy audits throughout 

our facilities with the objective of 

reducing our energy demand while 

increasing our functionality and 

efficiency;

n using paper in our plant and for 

our Congressional and agency 

customers, that goes beyond meeting 

the minimum requirements for 

recycled content but still meets the 

challenge of cost and performance;

n reducing hazardous waste through 

solvent recovery systems, and 

reducing the total amount of waste 

generated by our operations; and 

n installing a “green” roof on our 

building, in targeted areas, that 

features an energy efficient, 

bio-based roofing system, which 

should double the life expectancy 

of the roof and reduce heating 

demands in the building. 

The call to sustainable 

environmental stewardship will not 

go unheeded at GPO. Together, the 

men and women of GPO, who work 

tirelessly in support of the information 

production and service requirements 

of Congress, Federal agencies, and 

the public, will move forward with 

President Roosevelt’s timeless vision 

of sustainability.
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G P O H E A D Q U A R T E R S 

GPO has been Keeping America Informed by producing 

and distributing the documents of our democracy from 

this location since the presidency of Abraham Lincoln. 

The facility is composed of four buildings totaling 1.5 

million square feet. GPO’s newest building was completed 

in 1940. Our plant is located on multiple floors, requiring 

numerous elevators for the transportation of our product. 

The buildings are too large and antiquated to meet the 

printing and digital needs of the 21st century.

GPO has proposed moving into a modern factory 

that has the plant on the ground level, increasing 

efficiency and saving the American taxpayer money. GPO 

would like to become the first LEED Platinum printing 

plant in America. LEED is a voluntary green building 

rating system that provides measurable benchmarks for 

developing high-performance, sustainable buildings. 

Platinum is the highest standard.

GPO would like to construct this new facility at its 

current location and turn the current buildings over to a 

commercial developer. In the meantime, GPO is taking 

steps to increase the efficiencies of the current facility. 

Currently, we are piloting a new bio-based green roofing 

system in a small portion of our facility that will double 

the typical life expectancy of a new roof. If this pilot is 

successful, we hope to be able to replace our entire roof 

with this application. 

The agency has conducted multiple energy audits to 

help identify areas where we can increase our buildings, 

efficiency by looking at programs and processes that have 

short returns on investment. Some of these include:

 Replacing over 25,000 light bulbs with lower 

wattage bulbs when they require replacement

 Installing a steam meter to further monitor 

steam consumption that will help identify faulty 

equipment and ensure its replacement/repair 

 Evaluating the efficiency of the air handling 

units that supply air and humidification 

throughout the facility

The headquarters for the United States Government Printing Office (GPO) is located several blocks 

from the United States Capitol in Washington, D.C. 

 Performing a compressed air audit of our 

facility’s air system to increase efficiency and 

reduce energy loss

GPO has enlisted its 2,300 employees to help the agency 

be more sustainable. Management has instituted an incentive program called Goal Sharing. This year-round program is designed to give all employees a monetary award 

for making a positive difference that helps GPO reduce 

costs through several objectives:

 Reduce Electric and Steam Usage

 Reduce Absence Without Leave (AWOL) 

 Reduce Workers’ Compensation Costs 

 Reduce Sick Injury-Administrative Costs 

 Reduce the Number of Workforce Injuries 

At the end of the year, if GPO meets specific goals in certain 

incentive areas, the employees receive a cash or time off 

award. This program gives all employees the opportunity to 

participate in sustainable environmental stewardship.

P l n oer

GPO prints what are essentially two daily newspapers—

the Congressional Record and Federal Register. These 

newspapers are produced on 40% post consumer waste 

recycled newsprint. They are printed on offset web 

presses just like those used in the newspaper industry. 

These presses use a significant amount of paper in make 

ready. As the quantities printed continue to decline, 

GPO would like to move from web offset to digital equipment for these publications to significantly reduce paper 

consumption. 
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GPO began testing papers and running them in 

our Digital Print Center. Additionally, GPO’s plant ran 

a 40lb white offset 100% post consumer waste recycled 

paper through the web presses. There was no difference 

in printability or run-ability as compared to the 40% post 

consumer waste recycled paper the agency has been using 

for years. GPO is adding more 100% post consumer waste 

recycled papers to our qualified products list.

Beyond 100% recycled paper, we need to look at 

the fiber used in other papers. Have the fibers come from 

responsibly managed forests? While there are a number of 

paper certification programs, only 10% of all the world’s 

forests are certified to any system. GPO’s customers are 

asking us whether they can get paper certified by one 

of the programs. And so, GPO is making changes to our 

print procurement regulations that would allow our customers to specify certified papers.

This past year marked a turning point in GPO’s 

distribution of the Federal Budget: on February 4, 2008, 

the President of the United States submitted the first ever 

electronic budget (e-budget) to Congress. GPO authenticated by digital signature the Budget of the U.S. Government for fiscal year 2009. GPO’s digital signature assures 

the public the document has not been changed or altered. 

Digital signatures on PDF documents serve the same 

purpose as handwritten signatures or wax seals on printed 

documents. The Office of Management and Budget (OMB) 

estimates that by not printing any copies for its own use, 

it saved more than 20 tons of paper and roughly 480 trees 

by going paperless. OMB also estimates the Government 

will save more than $1 million over five years if it continues this practice.

GPO has made tremendous progress in reducing hazardous materials use and waste generation in GPO’s plant. 

The Environmental Protection Agency (EPA) has lowered 

GPO’s status from a Large Quantity to a Small Quantity 

Hazardous Waste Generator in recognition of its successful 

efforts to reduce such wastes. As part of this ongoing effort, 

a solvent recovery system to improve operations sustainGPO’s plant prints the equivalent of nearly three 

billion standard 8.5" x 11" pages per year. In 2008, more 

than 5.6 million pounds of waste paper has been recycled 

resulting in:

 34,020 trees saved

 28.9 million gallons of water flow conserved

 3 million pounds of landfill waste diverted

 5.9 million pounds of greenhouse gas 

emissions eliminated

Those are significant savings, but GPO is moving toward 

using more environmentally responsible paper in the 

plant, and GPO is taking the lead on that front. GPO is 

one of the largest providers of copier paper to Federal 

agencies. Our Federal customers have asked for more 

sustainable paper choices.

GPO has opened a dialogue with the paper industry 

during the past year. This dialogue has been very helpful 

as we navigate and determine the parameters for gauging 

paper sustainability. Last May, GPO hosted a Paper Industry Day to listen and learn about paper sustainability from 

dozens of paper industry leaders from around the world. 

Important environmental issues come to mind in 

the manufacturing of paper. Millions of trees are cut down 

each year to make paper. Energy is used, water is used, 

and carbon dioxide goes into the air. There are now ways 

to make significant, environmentally positive improvements on all of these fronts. With important advances in 

technology, and now with attractive, high quality paper 

available, GPO sees the industry becoming a beacon for 

sustainability. GPO would like to dramatically increase the 

use of 100% post consumer waste recycled paper at the 

agency, provided the industry can meet the challenge of 

cost and performance. 

While there are a number of paper certification programs, only 10% of all the world’s forests 

are certified to any system.
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ability and generate significant cost savings has been installed. The system recovers solvent from color presses used 

in the plant through a distillation system. Up to 90% of the 

solvent is purified and recovered for reuse and the resulting 

distilled water is reused in the process. A minute amount 

of sludge material—a small fraction of the volume of the 

former waste stream—is then disposed as a non-hazardous 

waste. This system has the following benefits:

 Reduction of up to 90% of GPO’s solvent waste

 Reduction of solvent waste will eliminate about 

5,000 gallons of the product from leaving GPO 

per year

 Reduction of virgin production and solvent wastes 

used will save more than $20,000 per year 

As part of its ongoing efforts to reduce actual and 

potential environmental impacts from its operations, 

GPO evaluated its underground storage tank systems. It 

determined that a 1,500-gallon underground storage tank 

system, although still in use and only halfway through its 

design life, was functionally obsolete. It was decided that 

the potential environmental risk posed to the groundwater 

and to the public by the tank outweighed its usefulness 

and it was successfully removed, resulting in a “clean 

closure” and the elimination of the risks. A 6,000-gallon 

gasoline underground storage tank system is now 

undergoing a similar evaluation. 

S curI Y  I nteligen   Docu

GPO plays a critical role in our Nation’s security by 

producing security and intelligent documents for Federal 

agencies, most prominently the e-Passport for the State 

Department. GPO produced 24 million blank passports 

in FY 2008, an increase of 10 million over the previous 

year. Producing the passport requires over 100 employees, 

multiple print engines, and bindery machinery. GPO has 

increased the routine maintenance program to ensure 

maximum production capacity, which ultimately reduced 

manufacturing waste and increased efficiencies. 

In addition to the plant in the Nation’s capital, 

GPO has invested in a Secure Production Facility (SPF) 

at the Stennis Space Center in Mississippi. NASA and 

about 30 other Federal agencies are located there. The 

facility opened on time and under budget in April 2008. 

GPO employees are producing blank passport books at 

this location. More than 875,000 blank passports were 

produced at the SPF in FY 2008. This operation will 

ensure we continue to meet passport demand by the 

American people and the Department of State’s request 

for a secure Continuity of Operations site outside of 

Washington, D.C. The SPF has created more than 50 

Government jobs, which has contributed to the growth 

and development of the Gulf Coast economy.

This state-of-the-art facility is a prime example of 

sustainable environmental stewardship through energy 

efficiency and resource management. The SPF has made 

great strides in reducing its waste production by simply 

installing newer equipment and implementing recovery 

systems that protect the environment and provide a short 

return on investment. During the building of the SPF, 

GPO selected energy efficient lights, glass, cooling and 

heating systems, and a solvent recovery system with a 

water evaporator. 

GPO has launched two initiatives to enhance the 

already high standards in place in all of its facilities. First, 

GPO is adopting ISO 9001. ISO (the International Organization for Standardization) sets industrial standards recognized around the globe. Once in place, ISO 9001 will 

standardize all GPO business and production processes. 

Second, GPO has adopted 5S, a workplace organization 

way of life. The name is derived from the steps of the 

process: Sort, Set-in-order, Shine, Standardize, and Sustain. 

5S will enhance employee safety and efficiency.

The Secure Production Facility (SPF) contains energy efficient lights, glass, cooling and heating 

systems, and a solvent recovery system with a water evaporator.
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FY 2008 marked the opening of the GPO Secure 

Credential Center, where secure Federal credential cards 

are personalized and prepared for delivery. GPO used 

these capabilities to supply more than 400,000 personalized Trusted Traveler cards to the Department of Homeland Security, Customs and Border Protection. The cards 

facilitate expedited crossing for pre-approved travelers at 

U.S. borders with Canada and Mexico. In the last quarter of 

FY 2008, the Secure Credential Center prepared to produce 

over 10,000 Presidential Inaugural Credentials. These will 

assist U.S. Capitol Police in coordinating security. GPO is 

now well positioned to service numerous Federal secure 

card programs in FY 2009 and beyond.

L iray  Sr 

C nte tMan 

Through the Federal Depository Library Program (FDLP), 

GPO’s Library Services and Content Management group 

works with the library community to provide free, open, 

and permanent public access to the documents of our 

democracy. 

The FDLP, pursuant to direction from Congress, has 

transformed into a primarily electronic program and many 

publications are now produced only in electronic form. 

This practice increases the dissemination of information 

to approximately 1,250 Federal depository libraries, 

and people from all over the world can access these 

publications at their fingertips day or night. More than 

1,300 titles have been converted to electronic form only. 

Previously, paper copies were distributed to a Federal 

depository library and users would have to physically 

go to the library to view the publication. One successful 

example of this practice is The Monthly Labor Review. This 

publication has been compiled by the Department of Labor 

since 1915, and is used by the public for researching labor 

statistics. Users have found the electronic version is far 

superior to the paper version because the indexing is better 

and allows for more efficient comparison of statistics in 

different issues. 

GPO continues to work with the library community 

in making many resources and printed products go 

electronic, thus saving on paper and reducing waste:

 The Federal Depository Library Directory

provides important contact information for every 

depository library. The information was previously 

printed every other year and distributed in paper. 

That information is now available online, 

http://catalog.gpo.gov/fdlpdir/public.jsp

 The Federal Depository Library Handbook

outlines requirements for library operations. 

This publication had about 400 printed pages 

that were distributed to 1,250 depository 

libraries. The publication now is only available 

electronically and found on the FDLP Desktop 

website: http://www.fdlp.gov/

 The Monthly Catalog of U.S. Government 

Publications and the Congressional Serial Set 

Catalog are available online. GPO worked with 

the Joint Committee on Printing to develop this 

new online resource, http://catalog.gpo.gov

 The newsletter of the FDLP, Administrative 

Notes, is a bi-monthly publication and published 

only in electronic form.

 GPO Annual Reports are no longer sent to 

depositories in paper form, as they are available 

electronically

 A Customer Relationship Management (CRM) 

system and has been created for answering 

customer inquiries, and has significantly reduced 

paper waste. The CRM provides an electronic 

record of customer transactions, which 

previously were recorded via paper logs, 

http://www.gpoaccess.gov/help

Users found the electronic version far superior to the paper version because the indexing is better 

and allows for more effective comparison of statistics in different issues.
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As mentioned earlier in this report, the President 

of the United States submitted the Budget of the U.S. 

Government for FY 2009 to Congress electronically. This 

is the first time in history that the official version of this 

critically important Government document was delivered 

electronically. GPO authenticated it by digital signature. 

This authentication verifies to anyone who downloads 

the Budget that the content is official and unaltered. The 

electronic delivery of the Budget truly ushered in a new 

era for GPO and the Federal Government.

Where once GPO and the library community solely 

relied on ink and paper, we now also use electronic ions 

and integrated circuits, but our job is still the same: to 

record the words and actions of our Government and 

make them available for our people.

GPO’S F dera  D g ita l S yste 

Digitization itself is a key sustainability initiative, and 

is at the core of an ongoing transformation of GPO’s 

operations and programs. GPO’s Federal Digital System 

(FDsys) is an advanced digital system that will enable 

the agency to manage Government information, from all 

three branches of the Federal Government. The system 

will replace GPO Access to meet the public demand for 

immediate online access to information. FDsys will ensure 

that information is readily and permanently available for 

public access, as well as guarantee that the information 

contained within the system has been created by an 

official source and has remained unaltered. FDsys will 

contain information gathered through three methods: files 

submitted by Federal agencies and Congress, information 

gathered from Federal agencies’ websites, and previously 

printed products which are converted into digital files 

through scanning. This information will not only include 

text files, but also graphics, audio, and video files as well. 

When complete, FDsys will give the public a one-stop site 

for authentic, published Government information. GPO 

is planning to release FDsys in phases; each phase will 

introduce new content and functions. 

While developing FDsys, GPO has focused on 

building an energy efficient, sustainable system. FDsys 

requires 80 servers to operate. GPO sought out the most 

energy efficient servers available. The agency chose servers that use 50-watt processors instead of the standard 

80-watt processors. By using processors that require less 

consumption, GPO will realize energy savings of more 

than $12,000 a year. 

GPO has made energy upgrades to servers in 

place that service the agency in all capacities. GPO’s 

Information Technology organization has completed a 

server upgrade to provide faster and improved search 

results for our Government publications on GPO Access. 

This modification eliminated over 20 separate servers, and 

resulted in about a 50% reduction in energy to support 

this application. All components of the retired servers will 

be recycled or used for parts within our current operation. 

These sustainable efforts in the transformation of GPO 

Access earned GPO international recognition as a finalist 

in Computerworld magazine’s “Best Practice in Green IT” 

Computing Awards in September. 

Additionally, GPO plans to implement virtualization 

technology for servers once this technology proves to be reliable for our applications. Virtualization offers us the ability 

to share single physical servers to support multiple applications and operating systems. This will further reduce our 

Information Technology energy consumption by over 60%. 

GPO has also adopted a Citrix thin client solution 

for several processes which has substantially reduced our 

energy use. These initiatives replaced nearly 60 desktop 

systems with Citrix, reducing our power consumption by 

over 75%. GPO is also adopting Microsoft applications 

that better reduce paper waste and individual desktop 

energy consumption.

GPO chose servers that use 50-watt processors instead of the standard 80-watt processors, which 

resulted in energy savings of more than $12,000 a year. 
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Summary Balance Sheets (in thousands) 2008 2007

Assets

Current Assets

Fund balance with Treasury $ 265,251 $ 273,446 

Accounts receivable, net 153,696 146,118 

Inventory, net 48,291 34,592 

Prepaid expenses 903 3,958 

Total current assets $ 468,141 $ 458,114 

Property, Plant and Equipment, Net 107,194 67,600 

Total Assets $ 575,335 $ 525,714 

Liabilities and Net Position

Current Liabilities

Accounts payable & accrued expenses $ 112,858 $ 109,324 

Deferred revenues 89,376 81,715 

Accrued annual leave 10,549 9,813 

Total current liabilities $ 212,783 $ 200,852 

Other Liabilities

Workers’ compensation liability 67,067 66,723 

Product warranty liability 1,418 4,833

Total Liabilities $ 281,268 $ 272,408 

Net position

Cumulative Results of Operations

Retained earnings $ 154,425 $ 108,164

Invested capital 92,879 92,879 

Unexpended Appropriations 46,763 52,263 

Total Net Position $ 294,067 $ 253,306 

Total Liabilities and Net Position $ 575,335 $ 525,714 

Financials

The GPO’s Balance Sheet continued to strengthen as a result of its improved operating performance. Although working 

capital decreased by $1.9 million, to $255.4M in 2008 from $257.3M in 2007, the total assets of GPO increased by $49.6M, to 

$575.3M in 2008 from $525.7M in 2007. Cash decreased by $8.2M, or 3.0%. 

GPO ended fiscal 2008 with positive retained earnings of $154.4M, compared to $108.2M at the end of fiscal 2007.

The following summary tables are excerpts from the full audited consolidated financial statements and are not intended to 

substitute for the full audited financial statements presented on the accompanying CD–ROM.

For fiscal year 2008 (October 1, 2007 through September 30, 2008), the GPO received a clean audit opinion on its 

consolidated financial statements from KPMG LLP.

GPO earned a contribution to new investment of $46.3M in fiscal 2008 compared with $90.9M in fiscal 2007. Revenue 

from operations increased 11.0% to $1.042B from $939.1M. The major factor driving the operating revenue increase was the 

increased demand for electronic passports. Operating costs increased 17.4%, to $996.2M from $848.2M, due mainly to an 

increase in electronic passport materials cost.

The GPO had a positive contribution of $46.3M in fiscal 2008, compared to a positive contribution of approximately 

$90.9M in fiscal 2007. It is important to note that approximately $11.1M of the fiscal 2008 positive contribution, and $39.5M 

of the fiscal 2007 positive contribution, is the result of the accounting for funds received to pay for capital projects. In 

both years, this resulted in revenues without corresponding expenses in the profit and loss statements. The expenses 

associated with these revenues will be reflected in future financial statements as these capital projects are completed and 

put into use. The $11.1M was comprised of $4.3M for the development and fit-out of the new secure production facility, 

and approximately $6.8M for the development of FDsys. An additional $14.1M of revenue was used for working capital to 

purchase inventory for the production of electronic passports. 

Cash provided by operations decreased by $37.0M from the prior year, primarily due to the decrease in net income. 

In 2008, GPO generated $44.5M from operations compared to $81.5M in 2007. The GPO made investments for capital items 

of $47.2M in fiscal 2008, compared to $22.4M expended in fiscal 2007. 

Summary Statements of Cash Flows (in thousands) 2008 2007

Cash Flows from Operating Activities

Net Income $ 46,261 $ 90,883

Provided by (used in) operating activities:

Depreciation and other $ 10,412 $ 8,847 

(Increase) decrease in current assets (21,077) (57,485) 

Increase (decrease) in current liabilities 11,931 37,698

Workers’ compensation liability 344 (3,228)

Product warranty liability (3,415) 4,833

Total adjustments $ (1,805) $ (9,335) 

Net cash provided by operating activities $ 44,456 $ 81,548

Cash flows from Investing Activities (47,151) (22,407) 

Cash flows from Financing Activities (5,500) (15,500)

Net (decrease) Increase in Cash Balance $ (8,195) $ 43,641 

Summary of Revenues, Expenses, and Net Income (in thousands) 2008 20

Operating Revenues $ 1,042,425 $ 939,108

Operating Expenses 996,164 848,225

Net Income $ 46,261 $ 90,883

Planned Uses of Net Income

Secure Production Facility (SPF) $ 4,318 $ 27,800

Passport Inventory Funding 14,100 20,919

Federal Digital System (FDsys) 6,800 11,700

Net Income after Planned Uses $ 21,043 $ 30,464

U.S. Government Printing Office 2008 Annual Report 
GPO Sustainable Environmental Stewardship Good Business. Good Government. 3

GPO has been environmentally conscious for 

nearly 150 years and is becoming a model for 

showing how sustainable environmental 

stewardship is good business and good 

government. As the men and women of GPO 

continue to carry out the historic mission of Keeping 

America Informed, we are seeking new ways to be 

better stewards of the resources under our control.

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GPO Sustainable Environmental Stewardship

G o o d B u s i n e s s . Good Government.

U.S. GOVERNMENT PRINTING OFFICE I FINANCIAL YEAR IN REVIEW

Fiscal Years 2008 and 2007 ( with Independent Auditors’ Report Therein )

I. Management’s Discussion and Analysis (Unaudited) ..................................................................................2

Mission......................................................................................................................................................3

Basis of Financial Reporting.....................................................................................................................3

Programs and Operations .........................................................................................................................3

Funding ................................................................................................................................................................3

Programs and Operations Overview...................................................................................................................4

Management Initiatives to Improve Agency Operations ....................................................................................5

Financial Position and Results for Fiscal Year 2008..................................................................................6

Consolidated Balance Sheets ...............................................................................................................................6

Consolidated Statements of Revenues, Expenses, and Changes in Retained Earnings .....................................6

Consolidated Revenues ..................................................................................................................................6

Consolidated Expenses...................................................................................................................................7

Changes in Retained Earnings .......................................................................................................................8

Consolidated Statements of Cash Flows..............................................................................................................9

Performance Measures ..............................................................................................................................9

Operating Performance Measures .......................................................................................................................9

On-Time Delivery of Congressional Record ..................................................................................................9

On-Time Delivery and Quality Acceptance of Procured Printing.................................................................9

Financial Performance Measures .......................................................................................................................10

Cash Management ........................................................................................................................................10

Debt Management ........................................................................................................................................ 10

Possible Future Effects of Existing Events and Conditions.....................................................................10

Fiscal Year 2009 Financial Projections ....................................................................................................11

II. Inspector General’s Report........................................................................................................................12

III. Independent Auditors’ Report...................................................................................................................18

IV. Consolidated Financial Statements.............................................................................................................34

Consolidated Balance Sheets...................................................................................................................35

Consolidated Statements of Revenues, Expenses, and Changes in Retained Earnings ...........................36

Consolidated Statements of Cash Flows..................................................................................................37

Notes to Consolidated Financial Statements ...........................................................................................38

1. Summary of Significant Accounting Policies ..................................................................................................38

2. Fund Balance with Treasury ...........................................................................................................................43

3. Accounts Receivable, Net ................................................................................................................................ 44

4. Inventory, Net..................................................................................................................................................44

5. Prepaid Expenses ............................................................................................................................................45

6. General Property, Plant and Equipment, Net .................................................................................................45

7. Accounts Payable and Accrued Expenses.......................................................................................................46

8. Deferred Revenues ..........................................................................................................................................46

9. Workers’ Compensation Liability ....................................................................................................................47

10. Commitments ...................................................................................................................................................47

11. Contingencies...................................................................................................................................................48

12. Net Position......................................................................................................................................................49

13. Appropriated Funds......................................................................................................................................... 50

14. Employee Benefit Plans...................................................................................................................................52

15. Concentration of Credit Risk...........................................................................................................................52

16. Major Customers ..............................................................................................................................................53

17. Regional Operations .......................................................................................................................................53

Acronym List ...................................................................................................................................................54

UNITED STATES GOVERNMENT PRINTING OFFICE

FY 2008 Financial Year in Review — Table of Contents
2 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

SECTION I

Management’s 

Discussion 

and Analysis

(Unaudited)

As of September 30, 2008

2 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008
Mission

The mission of the U.S. Government 

Printing Office (GPO or Agency) is 

Keeping America Informed, by providing 

excellent publishing and dissemination services for official and authentic 

Government publications to its customers: 

the Congress, Federal agencies, Judiciary, 

Federal Depository Libraries, and the 

American public.

The GPO accomplishes this mission 

by working in close partnership with all 

three branches of the Federal Government 

in the creation, collecting, cataloging and 

indexing, reproduction, dissemination, 

authentication, and preservation of Federal 

Government information. GPO utilizes 

conventional and digital technology, and 

state-of-the-art methods, to produce and 

distribute Federal Government information. To ensure that Federal Government 

information is readily available to all citizens, GPO makes information accessible 

in an array of communication mediums 

from traditional printed products to digital 

documents and on-line databases that are 

accessible through the Internet.

Basis of Financial Reporting

The consolidated financial statements 

of the GPO are prepared pursuant to 

the requirements of United States Code 

(U.S.C.) Title 31, Money and Finance, § 

3515, Financial Statements of Agencies. 

The consolidated financial statements have 

been audited by an independent external 

auditor selected by the Public Printer in 

accordance with U.S.C. Title 44, Public 

Printing and Documents, § 309, Revolving 

Fund for Operation and Maintenance of 

Government Printing Office.

The consolidated financial statements 

of the GPO are prepared from GPO’s 

financial system on the accrual basis 

of accounting in conformity with U.S. 

generally accepted accounting principles 

(GAAP). Under the accrual basis, revenues 

are recognized (recorded) when earned, 

and expenses are recognized when a 

liability is incurred, without regard to the 

receipt or the payment of cash. GAAP also 

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 3

requires that accounting principles used 

be applied in a manner consistent with 

that of the previous year. 

GPO’s consolidated financial statements and accompanying notes provide 

information on the Agency’s financial 

position, results of operations, changes in 

net position, and cash flows, and disclose 

all significant events and economic affairs 

controlled by GPO, in conformity with applicable laws, regulations, standards, and 

policies relevant to financial reporting. 

GPO is committed to maintaining 

strong financial systems and internal 

controls to ensure accountability, integrity, 

and reliability. GPO’s internal controls are 

designed to provide reasonable assurance that obligations and costs comply 

with applicable laws and regulations and 

are within budgetary limits; that funds, 

property, and other assets are safeguarded 

against loss from unauthorized acquisition, 

use, or disposition; and that transactions 

are properly recorded. 

GPO Instruction 825.18A, Internal 

Control Program, established the internal control standards and assessment 

methodology employed by GPO to 

ensure adequate and effective systems 

of management control, and compliance 

with applicable laws and regulations. 

Management monitors the internal control 

systems and regularly conducts vulnerability assessments and internal control 

reviews of GPO’s programs, operations, 

and other activities.

The Office of the Inspector General 

(OIG) monitors the Internal Control 

Program at GPO and keeps the Public 

Printer informed of management’s 

progress in addressing internal control 

deficiencies noted in the annual financial 

statement audit. Additionally, the OIG and 

the U.S. Government Accountability Office 

(GAO) conduct audits of GPO’s programs 

and operations, and as such, evaluate management controls. The Internal 

Control Program, along with recommendations from these audits, have strengthened 

management controls and improved the 

economy, efficiency, and effectiveness of 

GPO’s programs, operations, and other 

activities.

Programs and Operations

The Government-wide programs and 

operations managed by GPO are based 

on various public laws codified in Title 

44. GPO’s statutory responsibilities include 

fulfilling the printing needs of the Federal 

Government and distributing Federal 

Government information products to the 

public.

Funding 

The Agency’s programs and operations are 

funded through a business-type revolving fund, authorized by Title 44, and by 

annual and certain no-year and multi-year 

appropriations provided by Congress. The 

GPO Revolving Fund is authorized to be 

self-sustaining, without fiscal year limitations that are applicable to most annual 

appropriations. Accordingly, the Revolving 

Fund pays for the cost of the Agency’s 

programs and operations and is reimbursed 

at rates and prices that are intended to 

recover the full cost of goods and services 

delivered to customers. GPO’s rates and 

prices for products and services are 

developed using estimates of direct labor 

and direct material expenses, overhead 

expenses, and anticipated volumes. 

The major sources of reimbursement 

to the GPO Revolving Fund are: 

n	 Payments from Federal customers for 

printing and binding, blank paper 

and paper products, and information 

products and design services; 

n	 Sales of Government publications and 

information products to the general 

public, bookstores, book dealers, and 

businesses; and,

n	 Fund transfers from the Congressional 

Printing and Binding (CP&B) 

Appropriation and the Salaries and 

Expenses (S&E) Appropriation. 

The CP&B and S&E appropriations 

reimburse the GPO Revolving Fund for 

costs incurred producing congressional 

work and fulfilling statutory requirements 

to disseminate Federal Government information to the public, respectively. Congress 

has also occasionally made no-year and 

multi-year appropriations available to the 

Agency for special purposes. For example, 

appropriations have been made for building improvements, security enhancements, 
4 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

and workforce retraining. Reimbursements 

to the Revolving Fund from the appropriations are recorded as revenue when related 

liabilities are incurred. Generally, unexpended annual appropriations are returned 

to the U.S. Department of the Treasury 

after five years.

Programs and Operations Overview

The Agency is organized into separate 

business units or segments, as described 

below, to assist management of the various 

programs and operations of the Agency.

Plant Operations The Plant Operations 

unit publishes, conventionally and digitally, the important journals of the Federal 

Government, along with many other 

Federal Government documents that are 

available to the public. The Plant provides 

Congress with all legislative printing and 

binding services, including overnight 

production of the Congressional Record, 

and Congressional bills, reports, and hearings. GPO also publishes the daily Federal 

Register and produces the Code of Federal 

Regulations for the Executive Branch.

Security and Intelligent Documents 

This business unit works with other Federal 

agencies to assist in the safe and secure 

design, production, and distribution of 

security and intelligent documents and 

credentials. These security products incorporate electronic technologies and other 

fraud and counterfeit protection security 

features. This unit’s principal products are 

electronic passport books (e-Passports) 

for the U.S. Department of State. In 2008, 

production of electronically enabled 

smartcard secure credentials for the U.S. 

Department of Homeland Security, Customs 

and Border Patrol began. Also in 2008, 

GPO opened a new Secure Production 

Facility (SPF) to produce blank e-Passports. 

Customer Services The majority of 

the Government’s printing needs are satisfied through Customer Services’ partnership with industry that takes advantage of 

the vast resources, expertise, and specialization in the private sector. This business 

unit acquires services competitively from 

the private sector through various types of 

print procurement vehicles tailored to the 

Section I: Management’s Discussion and Analysis

specific needs of customers. Thousands 

of pre-qualified businesses, small to large 

in size, openly compete for printing jobs. 

GPO’s performance measures, for on-time 

delivery and quality acceptance, demonstrate the effectiveness of this partnership 

between industry and government.

GPO assigns customer service teams 

to provide print brokerage and related 

services to Federal customers. The teams 

work diligently to become authorities on 

the mission of their respective agencies to 

anticipate and exceed customer expectations. The teams are assisted by GPO’s 

sales force of national account managers. 

Both team members and national account 

managers meet regularly with customer 

agency program managers to ensure high 

levels of satisfaction. 

Customer Services also provides training opportunities for Federal customers 

through the Institute for Federal Printing 

& Electronic Publishing. This GPO unit 

provides classroom instruction focusing 

on using information technology to meet 

program objectives, printing requirements, 

and electronic dissemination initiatives.

Creative and Digital Media Services 

GPO provides Congress and Federal customers with many products and services 

to assist in the creation and dissemination 

of information. 

The Creative Services unit is comprised 

of a team of professional designers that 

provides branding and identity design, 

Web graphics, and multimedia presentations. The team consults with customers 

to develop appropriate solutions based on 

audience, budget, and schedule requirements. Their work includes designing annual reports, magazines, brochures, books, 

posters, and Web layout and pages. They 

also create specialized security designs for 

passports, credentials, and other secure 

documents.

The Digital Media team creates 

complex Web applications and rich media. 

They support Web site hosting and Web 

site maintenance services for other Federal 

Agencies, including content management, 

Web statistics reporting, database management, and administration. In addition, 

they offer Web application development 

and digital consulting services to ensure 

compliance with Federal mandates.

Publication and Information Sales 

Program Through this business unit 

GPO increases public access to U.S. 

Government information through sales 

of Government information products. 

The public purchases copies of Federal 

Government publications and subscriptions via GPO’s Online Bookstore, as 

well as by e-mail, phone, fax, and postal 

mail. GPO also works with commercial 

sales channels, including major bookstore 

chains and leading book distributors 

nationwide, to enhance Government 

information distribution. In addition to its 

traditional sales activities, GPO provides 

Government agencies with expert advice 

on how to make their publications more 

user-friendly and commercially viable. 

Reimbursable Services Program 

This business unit provides a variety of 

global order fulfillment, inventory, and list 

management services to Federal agencies 

through two distribution centers located in 

Pueblo, Colorado, and Laurel, Maryland. 

The business unit supports the U.S. 

General Services Administration’s popular 

Federal Citizen Information Center.

Library Services and Content 

Management This business unit supports and manages the Federal Depository 

Library Program (FDLP), the Cataloging and 

Indexing Program, the By-Law Program, 

and the distribution component of the 

International Exchange Service of the 

Library of Congress. The FDLP, under the 

direction of Congress, ensures equitable, 

secure, convenient, and permanent no-fee 

access to published U.S. Government 

information. The FDLP includes 1,249 

designated Federal depository libraries 

throughout the United States and its territories that provide the American public 

access to U.S. Government publications in 

tangible collections, and GPO Access, which 

provides direct online access to Federal 

Government publications from all three 

branches of Government. Other popular 

online services managed by this business 

unit include the Catalog of U.S. Government 

Publications, the FDLP Desktop, and Ben’s 

Guide to the U.S. Government. 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 5

Management Initiatives 

to Improve Agency Operations

The transformation program underway 

at GPO places emphasis on the effective 

and efficient accomplishment of GPO’s 

mission, while at the same time maintaining the Agency’s core values of integrity, 

teamwork, commitment, and dependability. The Strategic Vision for the 21st Century 

continues to keep GPO on track to embrace sustainable technology of the 21st 

century. Policy decisions, budgeting and 

capital investments decisions, workforce 

development plans, industry partnerships, 

customer relations, operational decisionmaking, and related actions are based on 

or tied to the transformation plan.

The following is an overview of some 

of the major management initiatives 

underway that will transform GPO. These 

transformation efforts, along with other 

modernization efforts, will enable GPO to 

better satisfy the existing and future needs 

of the U. S. Congress, customer agencies, 

the library and information communities, 

and the public.

GPO’s Federal Digital System 

(FDsys) The core of GPO’s future, 

customer-facing operations will revolve 

around a new digital information platform 

called the GPO’s Federal Digital System 

(FDsys). FDsys will organize, manage, and 

output authenticated content for any purpose. This system will manage information 

in a central repository that will contain 

all public documents of the Government 

and reduce that information to a uniform 

character set and coding structure for data. 

FDsys will preserve content independent 

of specific hardware or software so that it 

can be migrated forward for the benefit of 

future generations.

Eventually all known Federal documents, whether printed or digital, will be 

cataloged, authenticated, and entered into 

the FDsys according to GPO metadata 

and document creation standards. Content 

may include text and associated graphics, video, and sound. Content will be 

available for Web searching and Internet 

viewing, downloading, and printing.

FDsys will replace current GPO Access 

functionality with the first public release 

in fiscal 2009. The public will benefit from 

Section I: Management’s Discussion and Analysis

the more advanced search and retrieval 

capabilities, including the ability to search 

both full text content and metadata fields. 

Content and metadata will be available for 

downloading through FDsys.

Mapping the Future of the FDLP 

In the future, the FDLP will determine the 

content of FDsys, as well as set standards 

for Federal documents, authenticate 

documents, catalog and manage the 

content, and determine the standards for 

preservation of the content for coming generations. The depository library 

community will help define the future of 

this program while continuing to move it 

toward an electronic environment in the 

digital age, as required by Congress. 

Customer-Friendly Print 

Procurement Vehicles The Agency 

has established two new programs that allow GPO customers to work directly with 

GPO vendors. Growth in these programs, 

which generally handle small value or 

short turnaround requirements, improve 

GPO and customer agency efficiency 

and effectiveness in delivering services to 

agency clients. 

The GPOExpressSM Program allows 

Federal government personnel to order 

from any FedEx OfficeSM print center, day 

or night, at any of the more than 1,800 

locations throughout the United States 

and around the world. Agencies receive 

significant discounts on printing and 

finishing needs at any store location when 

they use the new GPOExpressSM card. 

GPOExpressSM continues to grow in use 

by Federal customers, with program sales 

nearly doubling over the last fiscal year. 

The GPO Online Paper Store allows 

Federal Government organizations to 

purchase, at significant savings, environmentally safe, xerographic copier paper 

using a Web-based system. GPO teamed 

with Unisource® Worldwide, Inc., a global 

paper distributor, to develop the online 

store. Unisource® Worldwide, Inc. has 

approximately 100 distribution centers that 

quickly fill customer orders.

Modernizing Agency Information 

Systems GPO launched the GPO 

Enterprise Program in 2004 to replace 

unsustainable legacy systems. This major 

project has been progressively implementing modern application systems that 

support GPO business and support units. 

Phase 2 of this modernization project 

commenced in 2007. The applications, 

known collectively as the Government 

Printing Office Business Information 

System (GBIS), will become operational in 

fiscal 2009. GBIS will replace mainframe 

software placed into operation more than 

30 years ago. In 2008, GPO acquired 

Business Objects licenses for use with 

Oracle applications. Business Objects will 

provide seamless reporting functionality 

from GBIS. Together, the two initiatives 

will deliver high-performance analysis, 

data integration, and efficiency between 

sustainable business applications.

International Organization for 

Standardization (ISO) 9001 

Certification GPO is aggressively 

pursuing ISO 9001 certification. Obtaining 

certification will provide a framework 

and systematic approach to managing the 

Agency’s business processes to produce 

products and services that conform to 

reference documents that are globally 

accepted. The certification process will 

improve the Agency’s processes, save 

resources, and improve product quality.

Process Improvement Methodology 

The Agency is re-energizing its emphasis 

on process improvement methodologies. 

GPO will be analyzing and re-engineering 

programs and processes to be less costly, 

faster, and more effective. This program 

will include adopting appropriate 

characteristics and capabilities of highperforming organizations; developing 

and identifying best practices to assess 

organizational transformation, structure, 

and management; and conducting targeted 

reviews and assessments of management 

practices in industry and applying best 

practices and lessons learned. 
Financial Position and 

Results for Fiscal Year 2008

The following is an overview of the 

financial position and operating results 

reflected in GPO’s basic consolidated 

financial statements as of and for the fiscal 

year ended September 30, 2008.

Consolidated Balance Sheets

The consolidated balance sheets present the combined amounts the Agency 

had available to use (assets), versus the 

amounts the Agency owed (liabilities), and 

the residual amounts (net position) after 

liabilities were subtracted from assets. 

GPO’s total assets increased to $575.3 

million as of September 30, 2008 from 

$525.7 million as of September 30, 2007. 

The increase of $49.6 million (9.4 percent) 

in total assets is primarily attributable to 

a $39.6 million increase in general plant, 

property and equipment. This increase 

occurred mainly because of $24.7 million 

in equipment acquisitions and leasehold 

improvements for GPO’s new Secure 

Passport Facility, and $11.2 million for 

the FDsys project. Inventory increased to 

$48.3 million as of September 30, 2008 

from $34.6 million as of September 30, 

2007, an increase of $13.7 million. The 

growth in inventory is due to increased 

demand for e-Passports and the need to 

have an adequate base of raw materials to 

support two production facilities.

GPO’s liabilities increased to $281.3 

million as of September 30, 2008 from 

$272.4 million as of September 30, 2007. 

The net increase of $8.9 million (3.3 

percent) in total liabilities is primarily the 

result of an increase in deferred revenues 

of $7.7 million, an increase in accounts 

payable and other accrued expenses of 

$3.5 million, and a decrease in the product 

warranty liability of $3.4 million.

The increase in deferred revenues is a 

result of an increase of $8.3 million in customer deposit accounts for printing and 

binding. The number of customer deposit 

accounts maintained by GPO increased to 

1,003 as of September 30, 2008 from 865 

as of September 30, 2007. An increase in 

accounts payable and accrued expenses 

of $3.5 million was primarily attributable to the increased demand for goods 

Section I: Management’s Discussion and Analysis

and services acquired by GPO from the 

commercial sector. The product warranty 

liability decreased to $1.4 million as of 

September 30, 2008, from $4.8 million 

as of September 30, 2007 as a result of 

the formalization of a Memorandum of 

Understanding with the U.S. Department 

of State (State) regarding the production 

of e-Passports that limits the product warranty liability of the GPO. 

GPO’s net position increased to 

$294.1 million as of September 30, 2008 

from $253.3 million as of September 30, 

2007. The increase of $40.8 million (16.1 

percent) in GPO’s net position is primarily 

a result of the consolidated net income 

of $46.3 million for fiscal 2008. The $46.3 

million of net income includes contributions to new investment of $18.4 million 

for e-Passport requirements and $6.8 

million for FDsys requirements.

Consolidated Statements 

of Revenues, Expenses, and 

Changes in Retained Earnings

The consolidated statements of revenues, 

expenses, and changes in retained earnings present the accrued reimbursements 

for goods sold and services provided 

(revenues), the accrued cost of assets and 

services used (expenses) in the creation 

of revenues, and the change, within the 

period presented, of the accumulated 

net income of the Agency (changes in 

retained earnings).

Consolidated Revenues

GPO had total consolidated revenues of 

$1.042 billion for fiscal 2008 and $939 

million for fiscal 2007. This is an increase in 

revenues of $103 million (11 percent). 

The primary reason for the increase 

in revenues from the prior fiscal year was 

an increase in e-Passport revenues, which 

grew from $241.5 million in fiscal 2007 to 

$300.6 million in fiscal 2008, an increase 

of $59.1 million (24.5 percent). The GPO 

Customer Services business unit, which 

procures printing from the commercial 

sector, experienced revenue growth of 

$49.3 million (10.2 percent) from $483.3 

million in fiscal 2007 to $532.6 million in 

fiscal 2008.

GPO’s consolidated revenues are 

derived from four major sources: Printing 

and Binding services; Appropriations; Sales 

of Publications; and Agency Distributions. 

A brief discussion of each of these revenue 

sources follows.

n Printing and Binding Revenu

The Agency earns revenues from Federal 

Government customers for printing, binding, and other related services performed 

by GPO business units and from work 

performed by commercial contractors. The 

printing and binding revenues are based 

on a system of rates, prices, and surcharges designed to recover costs. The revenues 

for printing and binding originate from the 

programs and operations of four business 

units at GPO: Plant Operations, Security 

and Intelligent Documents, Customer 

Services, and Creative and Digital Media 

Services. The revenues earned from an 

in-plant job are generally recognized 

on a value-added basis, as the work is 

performed in GPO’s production operations. The revenues from a commercially 

procured job are generally recognized on 

the date that the contract requirements 

are fulfilled. For procured jobs, this is the 

date of shipment by the contractor to the 

Federal Government customer.

Revenues from printing and binding 

operations totaled $890.6 million for fiscal 

2008 and $780.5 million for fiscal 2007. 

This represents an increase in revenues 

of $110.1 million (14.1 percent). As 

mentioned, two business units generated 

most of the revenue growth, Security 

and Intelligent Documents and Customer 

Services.

Security and Intelligent Documents 

revenues increased due to increased 

demand for e-Passports by the State 

Department. GPO produced 24.0 million 

passports in fiscal 2008, of which 23.6 

million were e-Passports, compared to 

20.4 million in fiscal 2007, of which 14.8 

million were e-Passports. 

The new e-Passports, which GPO 

started producing in fiscal 2007, contain a 

computer chip and other security features 

required by the State. In fiscal 2008 and 

2007, the GPO and the State agreed to a 

price per e-Passport that reimbursed GPO 

for the total costs required to manufacture 

the new e-Passports. The price included 

sufficient reimbursement to fund the costs 

of constructing and operating the new 

6 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008
SPF, the purchase of SPF equipment, the 

procurement of the necessary inventory 

of raw materials required to ensure the 

timely and uninterrupted production of 

e-Passports, and a contribution to GPO investment. Revenues for these requirements 

were $18.4 million in fiscal 2008 and $48.7 

million in fiscal 2007. The GPO operates 

under the accrual basis of accounting in 

conformity with U.S. generally accepted 

accounting principles. As such, revenues 

are recognized when they are earned, 

and expenses are recognized when they 

are incurred, without regard to the timing 

of the receipt or disbursement of cash. 

The expenses that relate to capital assets 

acquired with these revenues appear as 

depreciation expense and begin when 

these assets are placed into service. The 

expense will continue over their useful 

lives. The SPF and some of the related 

equipment were placed into service in 

May 2008.

Customer Services business unit 

revenues increased 10.2 percent to $532.6 

million in fiscal 2008 from $483.3 million 

in fiscal 2007. The $49.3 million increase is 

attributable to new business with existing 

customers. New work with the Department 

of Defense, the U.S. Department of State, 

the Millennium Challenge Corporation, and 

the U.S. Department of Commerce are the 

chief reasons for the increase. Customer 

Services revenue also increased in the 

GPOExpressSM program, to $6.5 million 

from $3.1 million, and in the reimbursable 

postage program, to $11.4 million from 

$5.7 million. 

n Appropriation Revenu

The GPO receives annual, no-year, and 

multi-year appropriations from Congress 

to finance certain costs in accordance with 

the underlying appropriation act and enabling legislation. The Legislative Branch 

Appropriations Act, 2008 (Public Law 

110-161, December 26, 2007) made a total 

of $125.0 million in annual appropriations 

available to the Agency for fiscal 2008. 

A subsequent rescission of 0.25 percent 

reduced the 2008 appropriations available 

to GPO by almost $313,000. 

Revenues earned from appropriations 

totaled $130.1 million for fiscal 2008 

and $137.0 million for fiscal 2007. The 

decrease in revenues of $6.9 million 

Section I: Management’s Discussion and Analysis

(5 percent) is primarily the result of a 

decrease in appropriation expenditures by 

the Agency for CP&B.

The CP&B Appropriation, an annual 

appropriation, is primarily used to fund 

printing and binding services provided 

to Congress by GPO’s Plant Operations. 

The requirements of Congress (workload) 

placed on GPO fluctuate because of many 

variables and therefore, cannot be forecast 

with a high degree of certainty for budgeting purposes. Revenues from this appropriation were $83.9 million in fiscal 2008 

and $95.0 million in fiscal 2007, a decrease 

of $11.1 million (11.7 percent).

Despite the decrease in CP&B expenditures in fiscal 2008 (when compared 

with fiscal 2007), the fiscal 2008 CP&B appropriation is estimated to have a shortfall 

in funding of about $6.2 million, and the 

overall CP&B Program is estimated to 

have a shortfall of $8.8 million to complete the Congressional printing requirements of fiscal 2008 and prior years. In 

2008, Congress authorized the transfer of 

about $1.23 million in prior year appropriations to the GPO Revolving Fund 

to help finance shortfalls. Generally, the 

CP&B Appropriation has been adequate 

to cover the costs of GPO services to 

Congress. However, in those years where 

the Congressional printing requirements 

exceed the annual funding provided by 

Congress, GPO uses the Revolving Fund 

to temporarily fund the shortfall until sufficient appropriated funds are available. 

The S&E Appropriation is provided 

annually by Congress to fund the dissemination of Federal Government information 

to the public by GPO’s Library Services 

and Content Management business unit. 

Revenues from this appropriation were 

$31.7 million in fiscal 2008 and $29.3 

million in fiscal 2007.

In fiscal 2005, Congress authorized 

the transfer of prior year appropriated 

funds to the Revolving Fund to finance 

the development of FDsys and to cover 

annual appropriation shortfalls. In fiscal 

2008, GPO recognized revenues of $6.5 

million to develop FDsys and $6.9 million 

to cover annual appropriation shortfalls. 

In fiscal 2007, these amounts were $11.7 

million and $467,000, respectively.

In fiscal 2006 and 2007, Congress 

appropriated $2 million ($1,980,000 after 

rescission) and $1 million to the Revolving 

Fund for workforce retraining, respectively. Revenues from this appropriation 

were $677,000 in fiscal 2008 and $469,000 

in fiscal 2007.

n Sales of Publications Reven

GPO earns revenues from the sales of 

publications to the public and others. The 

Publication and Information Sales Program 

sells publications, subscriptions, and other 

Federal Government information products 

at prices designed to recover costs. The 

demand for printed products continues to 

decline due to expansion in the availability of free information from the Federal 

Government on the Internet.

Revenues from sales of publications 

totaled $15.9 million for fiscal 2008 and 

$16.0 million for fiscal 2007. This represents a small decrease in revenues of 

$166,000 (1.0 percent).

n Agency Distribution Reven

GPO earns revenues from Federal 

agencies for the storage, packaging, and 

distribution of Federal Government publications to the public and others. Agency 

Distributions provides these services on 

a cost reimbursement basis, and at rates 

and prices designed to recover costs. 

Revenues from Agency Distributions 

totaled $5.8 million for fiscal 2008 and 

$5.6 million for fiscal 2007. This represents 

an increase in revenues of $265,000 (4.7 

percent). Revenues for this program tend 

to fluctuate because of the varying level of 

demand for services from customers. 

Consolidated Expenses

GPO incurred total consolidated operating expenses of $996.2 million for fiscal 

2008 and $848.2 million for fiscal 2007, an 

increase of $148.0 million (17.4 percent). 

The increase in operating expenses is due 

primarily to the growth in the demand for 

e-Passports which resulted in a relative 

rise in costs for supplies and materials. 

A similar increase in the printing and 

reproduction expenses of the Customer 

Services business unit was realized to support the business unit’s revenue growth. 

A brief description of the major expense 

categories for the Agency follows.

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 7
n Printing and Reproduction Expens

GPO incurred expenses for printing and 

reproduction of $470.5 million for fiscal 

2008 and $423.8 million for fiscal 2007. 

This represents an increase in printing and 

reproduction expenses of $46.7 million 

(11.0 percent). The Customer Services and 

Library Services and Content Management 

business units incur almost all of the printing and reproduction costs of the GPO.

The Customer Services business unit 

incurs costs for printing that is purchased 

from the private sector and is passedthrough to the GPO’s Federal customers. 

The increase in printing and reproduction 

expenses for fiscal 2008 was primarily attributable to Customer Services purchasing 

$42.8 million more in printing from contractors. The Library Services and Content 

Management business unit purchases and 

distributes Government publications to the 

1,249 Federal depository libraries located 

throughout the United States. The printing and reproduction expenses for this 

business unit increased to $10.1 million in 

fiscal 2008 from $8.7 million in fiscal 2007, 

an increase of $1.4 million (16.1 percent).

n Personnel Compensation an

Benefits Expenses

GPO incurred expenses for personnel compensation and benefits of $224.7 million 

during fiscal 2008 and $198.7 million during 

fiscal 2007. This represents an increase 

in personnel compensation and benefit 

expenses of $26.0 million (13.1 percent). 

The increase is due to an increase in the 

number of employees and to mandated 

annual pay increases that typically occur in January of each calendar year. As 

of September 30, 2008, GPO had 2,398 

employees, compared to 2,291 at the same 

time in fiscal 2007. This increase of 107 

employees (4.7 percent) can be attributed 

to additional headcount needed to support 

the growth in e-Passports. The Secure and 

Intelligent Documents business unit, which 

produces and supports e-Passports, added 

87 employees during fiscal 2008. 

n Supplies and Materials Expens

GPO incurred expenses for supplies and 

materials of $214.8 million for fiscal 2008 

and $152.2 million for fiscal 2007. This 

represents an increase in supplies and 

materials expenses of $62.6 million (41.1 

percent). The two business units that 

incur significant costs for supplies and 

materials are the Security and Intelligent 

Documents and Plant Operations business 

units. These units operate large production facilities that use significant quantities 

of supplies, materials and paper. The 

supplies and materials expense group also 

includes equipment, furniture, and vehicle 

purchases that were expensed because 

they did not meet the Agency’s capitalization threshold. The $62.6 million increase 

in supplies and materials consumed is 

primarily attributable to the increase in the 

production volume of e-Passports.

n Other Services Expens

This expense category includes the cost of 

professional services provided by contractors for audits, investigations, consulting 

services, system development, tuition, and 

training. These expenses are recognized 

when the contractual services have been 

performed. This expense category also includes the warranty expense for passports. 

GPO incurred expenses for these services 

of $29.7 million for fiscal 2008 and $23.9 

million for fiscal 2007. This represents an 

increase in this category of expenses of 

$5.8 million (24.3 percent). The increase 

was primarily attributable to the net effect 

of a $7.1 million increase in consulting 

services and a $3.5 million increase in 

information maintenance, both related to 

new systems, a $4.7 million increase in 

bad debt expense, and an $8.2 million 

decrease in product warranty expense 

for e-Passports as a result of reducing the 

liability established in fiscal 2007 of $4.8 

million by $3.4 million in fiscal 2008.

n Travel, Transportation, and Postag

 Expenses

This expense group includes the cost of 

employee travel and relocation, commercial transportation and delivery services, 

and postage and commercial mailing 

services. GPO incurred expenses for 

travel, transportation and postage of $23.7 

million for fiscal 2008 and $16.4 million 

for fiscal 2007. This represents an increase 

of $7.3 million (44.5 percent), and it is 

primarily attributable to an increase in 

reimbursable postage cost of $5.9 million 

over fiscal 2007, due to an increase in 

customer orders requiring this service.

n Rents, Communications

and Utilities Expenses

This expense category includes rents for 

building space outside of Washington, 

DC, leased equipment and vehicles, and 

utilities. GPO incurred expenses for rents, 

communications, and utilities of $16.5 

million for fiscal 2008 and $15.9 million 

for fiscal 2007. This represents an increase 

of $634,000 (4.0 percent).

n Depreciation and Amortizatio

 Expense

Total depreciation and amortization 

expense for fiscal 2008 was $10.4 million 

compared with $8.9 million in fiscal 2007. 

The increase in depreciation and amortization expense is primarily the result of 

placing the SPF and SPF equipment into 

service during fiscal 2008.

n Publications Sold Expens

This expense is incurred when GPO’s 

Publication and Information Sales business 

unit sells publications, subscriptions, and 

other Federal Government information 

products to customers. This expense 

totaled $5.9 million in fiscal 2008 compared 

to $8.4 million in fiscal 2007. Fiscal 2007 

expenses included an adjustment to write 

inventory down to stock on hand. This adjustment was not necessary in fiscal 2008. 

Changes in Retained Earnings

GPO’s retained earnings increased $46.3 

million to $154.4 million at the end of 

fiscal 2008, compared to about $108.2 million at the end of fiscal 2007. The increase 

reflects the accrual basis net income 

earned by GPO in fiscal 2008. 

The GPO’s financial statements are 

prepared using U.S. generally accepted 

accounting principles (GAAP) and the 

accrual basis of accounting. Under GAAP 

and the accrual basis of accounting, 

revenues are recognized when earned and 

expenses are recognized when incurred, 

without regard to the timing of the receipt 

or disbursement of cash. Timing differences may occur in the recognition of net 

income and the expenses associated with 

the future use of the net income.

Section I: Management’s Discussion and Analysis

8 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008
During fiscal 2008 and fiscal 2007, 

the GPO set aside $25.2 million and 

$60.4 million, respectively, of net income 

to fund planned uses (approved and 

required investments in capital projects) 

related to the production of e-Passports 

and the development of FDsys. Of these 

amounts, $14.1 million and $20.9 million 

of the funds set aside for fiscal 2008 and 

fiscal 2007 respectively, is to maintain an 

adequate and uninterrupted supply of 

passport raw materials. With the exception 

of funding for inventory, these investments 

are recognized as depreciation or amortization expense, over the investment’s useful life, beginning at the time it is placed 

into service. The SPF and some related 

equipment were placed into service in 

May 2008, and the investment in the SPF’s 

construction and equipment is expected 

to be recognized as depreciation expense 

over varying periods of up to fifteen years. 

The first release of the FDsys is expected 

to be placed into service in fiscal 2009, 

and the portion of the investment placed 

into service will be amortized (depreciated) over a period of five years.

As presented in the table above right, 

GPO’s net income includes the planned 

uses of net income as approved by appropriate parties. As indicated above, the 

capital investments will be recognized as 

depreciation and amortization expense 

over the specific investment’s useful life. 

Thus, income has been recorded in one 

year, and the related amortization expense 

in future years.

 Excluding the impact of the timing 

differences between income and expenses 

as noted above, the GPO had net income 

after planned uses of $21.0 million (2.0 

percent) on revenue of $1.042 billion 

in fiscal 2008, compared to net income 

after planned uses of $30.5 million (3.2 

percent) on revenue of $939.1 million in 

fiscal 2007.

Consolidated Statements 

of Cash Flows

The consolidated statements of cash flows 

present the Agency’s cash position at 

the beginning and end of the reporting 

period, and the sources and uses of cash 

for all operating, investing, and financing 

activities. 

Fund Balance with Treasury (cash) 

decreased by $8.2 million during fiscal 

2008 compared with an increase of $43.6 

million in fiscal 2007. The decrease in 

fiscal 2008 cash is the net result of the 

following.

n	 In fiscal 2008, GPO generated $44.5 

million from operations compared with 

$81.5 million in fiscal 2007. 

n	 Cash invested in capital assets was 

$47.2 million in fiscal 2008 compared 

with $22.4 million in fiscal 2007. The 

increase in capital investments was 

due to outlays for construction of facilities and the purchase of equipment 

for the SPF, and outlays for FDsys.

n	 Financing activities used $5.5 million 

in cash in fiscal 2008, compared with 

$15.5 million in fiscal 2007. Less cash 

was provided to the Agency from 

appropriated sources as the appropriated funds for FDsys were fully 

expended in fiscal 2008. Cash for this 

capital project is now provided from 

operations.

Performance Measures

GPO gauges its overall efficiency and 

effectiveness using certain performance 

measures. Generally, these performance 

measures are based on established 

standards, goals, or objectives that are 

compared against actual performance or 

results for each fiscal year. The following 

sections discuss the major operating performance measures and financial performance measures used by the Agency.

Operating Performance Measures

On-Time Delivery of 

Congressional Record

The Congressional Record is the official 

record of the proceedings and debates 

of the Congress. This important Federal 

information product is published daily 

when Congress is in session. GPO uses a 

performance measure to evaluate the timeliness of the delivery of this core product 

to Congress. To measure GPO’s success 

in delivering the Congressional Record

to Congress on time, GPO established a 

deadline of 9 a.m. the following day when 

copy is received in GPO by midnight, 

regardless of whether the Senate or the 

House of Representatives is in session. The 

on-time delivery rate was 96 percent for 

fiscal 2008 and 77 percent for fiscal 2007. 

The Agency’s goal of 95 percent or better 

was achieved for fiscal 2008. The goal will 

remain the same for fiscal 2009.

On-Time Delivery and Quality 

Acceptance of Procured Printing

Customer Services contracted with commercial businesses to produce and ship 

104,600 jobs for GPO customers in fiscal 

2008. For fiscal 2008, the goals were to 

have at least 95 percent of procured printing orders delivered on schedule and a 

quality acceptance rate of at least 99 percent. Customer Services met both of these 

goals for fiscal 2008, with 96.1 percent 

of procured printing jobs delivered on 

time and a quality acceptance rate of 99.5 

percent. In comparison, GPO contractors 

shipped 107,600 jobs in fiscal 2007, with 

95.9 percent of the procured printing jobs 

delivered on time and a quality acceptance rate of 99.3 percent. The two goals 

will remain the same for fiscal 2009.

Section I: Management’s Discussion and Analysis

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 9

(Dollars in thousands)

2008 2007

Consolidated Net Income $ 46,261 $ 90,883

Planned Uses of Income:

 Secure Production Facility 4,318 27,800

 Passport Inventory Funding 14,100 20,919

 GPO’s Federal Digital System (FDsys) 6,800 11,700

 Total Planned Uses of Income 25,218 60,419

Net Income after Planned Uses $ 21,043 $ 30,464
10 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Orders placed at GPO have decreased 

over the last two years due primarily to 

the success of the GPOExpressSM Program. 

This program enables Federal customers 

to purchase small printing jobs directly 

from a nationwide contractor, without 

sending the order to GPO. For fiscal 2008, 

customers used GPOExpressSM to place 

12,100 orders to purchase $6,454,000 in 

convenience printing jobs locally without going through GPO. In fiscal 2007, 

customers placed nearly 1,300 orders to 

purchase $3,142,000 in convenience printing jobs through this program.

Financial Performance Measures

Cash Management

Payment Performance 

In fiscal 2008, GPO continued to save 

millions of dollars by taking favorable 

prompt payment discounts offered by 

contractors for the payment of invoices 

within the discount period. GPO earned 

prompt payment discounts of $6.4 million 

on purchased printing expense of $475.7 

million. In comparison, GPO earned $6.4 

million in discounts on $436.2 million in 

printing expenses last year. The average 

discount rate earned was 1.35 percent 

for fiscal 2008 and 1.5 percent for fiscal 

2007. The average discount rate earned 

for fiscal 2008 was just short of the goal of 

1.4 percent. The goal will be the same for 

fiscal 2009.

Lost prompt payment discounts 

decreased to $363,000 in fiscal 2008 from 

$434,000 in fiscal 2007. The percentages 

of discounts lost to discounts offered were 

5.4 percent and 6.4 percent in fiscal 2008 

and 2007, respectively. GPO did not meet 

its goal of 2.5 percent or less for fiscal 

2008. The lost discounts were generally 

due to inadequate supporting documentation and other essential information 

needed to properly examine and certify 

invoices for payment in a timely manner. 

The Agency’s goal will be the same for 

fiscal 2009.

Electronic Payments 

Electronic Funds Transfer (EFT) is the 

most secure, efficient, and economical 

method of making payments to GPO 

Section I: Management’s Discussion and Analysis

contractors, employees, and other nonFederal entities. While it costs the U.S. 

Government $.89 to issue each check 

payment, the cost is only $.09 to issue 

an EFT payment. In fiscal 2008 about 80 

percent of GPO payments were made by 

EFT. In comparison, about 93 percent of 

all payments were made by EFT last year. 

The decrease is due to an EFT software 

problem that occurred in mid-2008 that 

required GPO to issue paper checks to 

contractors. The Agency’s EFT payment 

goal for fiscal 2008 was 90 percent of all 

payments. Thus, GPO did not achieve this 

goal in fiscal 2009. The EFT payment goal 

will remain at 90 percent for fiscal 2009.

Debt Management

Federal Receivables 

GPO billed customers about $1.0 billion 

for printing and binding services during 

fiscal 2008. The U.S. Department of the 

Treasury’s Intra-governmental Payment 

and Collection (IPAC) System was used to 

collect about $844.6 million or 84.5 percent 

of this debt from customers. Additionally, 

about $47.8 million, or 4.8 percent of this 

debt, was collected from funds held in 

customer Printing and Binding Deposit 

Accounts maintained by GPO. Furthermore, 

$18.8 million, or 1.9 percent of this debt, 

was collected via credit card. These 

electronic-based methods allow the prompt 

collection of funds, as opposed to the 

more traditional methods of collection that 

require the creation and exchange of paper 

documents and checks through the mail.

GPO’s billed accounts receivable from 

Federal Government customers totaled 

approximately $47.4 million at the end of 

fiscal 2008, compared with $38.4 million at 

the end of fiscal 2007. In comparison, the 

billed accounts receivables increased by 

$9.0 million.

IPAC collections initiated by GPO are 

sometimes charged back by Federal agencies, the customers, for various reasons. 

In these instances, GPO contacts the 

customer and inquires about the reason(s) 

for non-payment of the indebtedness. In 

most instances, the customer’s financial 

representative requires additional information and supporting documentation 

on the billing before the IPAC collection 

is allowed. IPAC charge backs totaled 

approximately $19.2 million at the end of 

fiscal 2008 and $22.2 million at the end of 

fiscal 2007. 

The U.S. Department of Defense 

(DoD) is GPO’s second largest customer 

and largest debtor. Exclusive of IPAC 

charge backs, DoD owed GPO about $7.3 

million at September 30, 2008, of which 

$6.7 million, or 91.8 percent, was past due 

in payment (i.e., over 30 days old). DoD 

owed $567,000 for invoices between 31 

to 60 days old, $810,000 between 61 to 

90 days old, and about $5.3 million over 

90 days old. DoD’s indebtedness to GPO 

of $5.3 million represents 19.9 percent of 

GPO’s total billed accounts receivables of 

$26.6 million, over 90 days old, at yearend. At September 30, 2007, DoD owed 

$7.1 million to GPO. 

At the end of the year, GPO maintained 1,003 P&B deposit accounts valued 

at $82.9 million. Additionally, GPO held 

$3.3 million in customer deposit accounts 

for the Publication and Information Sales 

Program. Combined, these customer deposit accounts totaled about $86.2 million 

as of September 30, 2008. At September 

30, 2007, GPO maintained $78.0 million 

in these two customer deposit accounts 

($74.3 million and $3.7 million, respectively). The $8.2 million increase is primarily 

attributable to new customers, more accounts, and existing customers increasing 

their account balances. 

Customer agencies also have the 

option of paying for their printing and 

binding needs by credit card. Credit card 

transactions in fiscal 2008 totaled $18.8 

million for 24,654 printing jobs. In comparison, credit card transactions totaled 

$16.9 million for 24,039 printing jobs in 

fiscal 2007.

Possible Future Effects of Existing 

Events and Conditions

Several existing events and conditions 

will likely have a major impact on the 

Agency’s programs and operations in the 

future. A synopsis of each of these major 

events and conditions follows.
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 11

Major Investments in 

New Technology 

GPO is making significant investments in 

digital production capabilities and modern 

information technology systems to move 

core infrastructure onto efficient, sustainable platforms. The Office of Innovation 

and New Technology continues to identify 

new technologies and practices to help 

the Agency move forward as a world-class 

organization. The Agency is making significant investments in information technologies to improve performance. First, 

Phase 1 of the FDsys Project will replace 

GPO Access in fiscal 2009. Afterwards, the 

FDsys project will continue with efforts 

to integrate and modernize operations. 

Second, GBIS will continue to replace 

old legacy systems with modern Oracle 

applications. Phase 2 of the GBIS commenced in 2007 and should be completed 

in fiscal 2009.

Demand for Security and 

Intelligent Documents 

The continued production of security and 

intelligent documents, such as e-Passports 

and smartcards, and the development 

of new security documents such as 

Federal identification cards will be vital to 

GPO’s success. Demand for e-Passports 

is expected to be about 10.4 million 

e-Passports annually. In contrast, GPO 

produced 24,013,400 total passports, of 

which 23,580,900 were e-Passports in 

fiscal 2008, and 20,408,300 total passports 

(14,815,400 e-Passports) in fiscal 2007. 

Demand growth is expected, however, for sensitive documents, such as 

smartcards, immigration forms, Public Key 

Infrastructure (PKI) electronic certificates 

for credentialing, and traditional and 

embedded electronics security documents.

Possible Federal Appropriation 

Reductions 

Printing and duplicating are generally 

considered a discretionary cost for Federal 

customers. The Continuing Resolution 

(Public Law 110-329, dated September 

30, 2008) in regard to fiscal 2009 appropriation bills, and possible future budget 

reductions and restrictions on growth, may 

impact the availability of funds for Federal 

Government printing and duplicating in 

the future. 

Decline in Ink-on-Paper Products 

GPO continues to manufacture and sell 

a sizable array of Federal Government 

information products to the public. An 

upward trend in Government electronic 

documents available on the Internet, and 

a downward trend in customer demand 

for printed documents will continue to 

place downward pressure on sales. After 

many years of year-to-year declines, the 

Publication and Information Sales Program 

business unit did generate a positive contribution margin for the first time in more 

than five years. The major management focus has been to identify market segments 

for the program’s vast product offerings, 

to employ focused advertising, and to 

provide better customer service to a niche 

customer base. This effort has stabilized 

the revenue decline and when combined 

with further operating expense reductions, has created a major turnaround 

for the program. However, operational 

efficiencies must improve continuously to 

maintain positive operating margins.

Fiscal Year 2009 

Financial Projections

Congress established the GPO Revolving 

Fund to finance the operations of the 

Agency on July 1, 1953. The receipts and 

disbursements from the Agency’s continuing cycle of business-type operations are 

recorded in the GPO Revolving Fund that 

was established to be financially selfsustaining. 

The Agency’s overall financial objective 

has been to earn revenues sufficient to recover all costs, including depreciation and 

overhead, in accordance with Section 309 

of Title 44. This is accomplished through 

a system of rates, prices, and surcharges 

used to bill customers for goods delivered 

and services performed by the Agency. 

The Agency has achieved this financial 

objective, by recording net income in 

fiscal years 2004 through 2008. This recent 

trend represents a positive turnaround in 

financial performance for the Agency. The 

GPO had net losses for five straight years 

before fiscal 2004.

In fiscal 2008, the Agency realized net 

income of $46.3 million or $21.0 million 

after planned uses of the net income. In 

fiscal 2007, net income was $90.9 million 

or $30.5 after planned uses of the net 

income. The Agency has a revenue and 

expense budget for fiscal 2009 of $2.1 million in net income. This is a sharp drop in 

net income compared with the prior two 

years. In fiscal 2008 and 2007, the GPO 

had unusually large revenues derived 

from the unexpected and unprecedented 

demand for e-Passports, which included 

a fee component for e-Passport investments, such as the construction of the SPF 

facility and the associated requirement 

for necessary raw materials inventory 

to support the e-Passports demand. In 

fiscal 2009, the GPO projects a reduction 

in e-Passport revenue due to a return 

to normal passport demand, less-appropriation revenue to fund the continuing 

FDsys capital project, and an increase 

in operating expenses, due to mandated 

salary increases and depreciation expense 

increases related to the SPF. 

The Agency’s transformation, customer 

demand for secure and intelligent documents, and other management initiatives 

completed and underway have put GPO’s 

operations back on sound footing, both 

organizationally and financially. The 

Agency’s positive trend in financial performance is expected to continue into fiscal 

2009. Positive financial results help ensure 

that the GPO Revolving Fund remains 

financially self-sustaining as Congress 

intended and that GPO can continue 

Keeping America Informed.

Section I: Management’s Discussion and Analysis
SECTION II

Inspector 

General’s Report

12 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008
U.S. GOVERNMENT 

PRINTING OFFICE 

KEEPING AMERICA INFORMED 

DATE: January 15,2009 

REPLY TO 

ATIN OF: Inspector General 

Office of the Inspector General 

SUBJECT: Report on the Consolidated Financial Statement Audit of the Government Printing 

Office for Fiscal Years Ended September 30, 2008 and 2007 

Report Number 09-06 

TO: Public Printer 

This report contains the audit of the annual consolidated financial statements of the 

Government Printing Office (GPO) as of the fiscal years (FY) ended September 30, 2008 and 

2007. We contracted with the independent public accounting firm ofKPMG LLP (KPMG) 

to audit the consolidated balance sheet; statement of revenue and expenses; and statement of 

cash flows for the years then ended. The audits were conducted in accordance with auditing 

standards generally accepted in the United States; and the standards applicable to financial 

audits contained in Government Auditing Standards (GAS), issued by the Comptroller 

General of the United States. 

Results of Independent Audit 

KPMG expressed an unqualilied opinion on the GPO consolidated financial statements as of 

the FYs ended September 30, 2008, and 2007, by concluding that the GPO financial 

statements were fairly presented, in all material respects, in conformity with generally 

accepted accounting principles (Gt\AP). 

KPMG's consideration of internal control over financial reporting resulted in the following 

three significant deficiencies,' one of which, Financial Reporting Controls, is considered by 

KPMG to be a material weakness.' Details on these three defic iencies are as follows: 

1 A signilicant deficiency is a control deficiency, or combination of control deficiencies, that adversely affec.ts 

the GPO's ability to initiate, authorize, record, process, or report financial data reliably in accordance with 

GAAP such that there is more than a remote likelihood that a misstatement of the GPO's consolidated financial 

statements that is more than inconsequential will not be prevented or detected by the GPO's internal control over 

financial reporting. 

2 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more 

than a remote likelihood that a material misstatement of the linancial statements will not be prevented or 

detected by the GPO's internal control. 

7 32 North Capitol Street NW Washington, DC 20401 -0050 lnspe<torCeneral®gpo.gov 
14 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Public Printer 

January 15, 2009 

Page 2 of4 

J. Financial Reporting Controls 

Due to improperly functioning management internal controls, KPMG concluded that the 

following significant deficiencies related to financial reporting controls, when viewed in the 

aggregate, constitute a material weakness: 

• GPO recorded additions to General Property, Plant and Equipment (PP&E) in its 

subsidiary ledger and general ledger based on when cash disbursements were made 

for the assets instead of when it was received and accepted by GPO. ln addition, 

GPO's controls over the recording of internal use software need to be improved. 

Specifically, auditors identified several invoices that were improperly expensed rather 

than capitalized. 

• GPO is recording an estimated product warranty fore-Passports despite not having 

experienced a claim for spoilage since the inception of thee-Passport program in 

2007. 

• GPO improperly recorded passport work-in-process inventory as unbilled 

receivables.' 

• GPO's existing process for compiling its consolidated financial statements is complex 

and difficult to review and there are no written procedures documenting how GPO's 

consolidated financial statements are compiled. Management review of the 

consolidated financial statements needs to be strengthened. 

• Key reconciliations in the areas of Fund Balance with Treasury, accounts payable, 

payroll, and expenses were not always performed timely and when performed, 

di!Terences noted were not consistently investigated and resolved in a timely manner. 

2. Controls over Processing Human Resource Information 

KPMG reported that there is no application control to prevent Human Capital (HC) 

Assistants and Specialists from making changes to their own personnel files. In addition, 

there is no supervisory review of personnel action changes to ensure accuracy and 

completeness prior to being uploaded into the National Finance Center's (NFC) Entry, 

Processing, Inquiry, and Correction System (EPIC). Further, for those employees whose pay 

rates do not follow the General Schedule, IIC Assistants/Specialists have the ability to allow 

EPIC to bypass the NFC payroll system's edit checks with no compensating review. 

' Although GPO was required to make an adjustment to properly reflect the work-in-process inventory in the 

balance sheet as of September 30, 2008, this adjustment did not affect the Consolidated Statements of Revenue. 

Expenses and Changes in Retained Earnings or the Consolidated Statements of Cash Flows. 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 15

Public Printer 

January 15, 2009 

Page 3 of4 

3. Information Technology (IT) General Controls 

Although GPO continued to make progress in addressing IT general control weaknesses 

identified in prior years, deficiencies in the design and/or operation of controls continue to 

exist in the areas of entity-wide security, access controls, system software, and service 

continuity. 

KPMG disclosed no instances of noncompliance with certain provisions of laws, regulations 

and contracts or other matters that are required to be reported under GAS. 

Material Weakness Corrective Action Plan 

Appendix A, "Internal Control over Financial Reporting," of the Chief Financial Officer's 

Council's Implementation Guide for OMB Circular A-123, "Management's Responsibility 

for Internal Control,'"' (Guide) explains that a comprehensive corrective action plan (CAP) 

lists the detailed actions that agency personnel must perform to resolve the weakness. The 

Guide also describes the basic elements of a comprehensive CAP as including: 

• A sununary description of the deficiency. 

• The year the deficiency was first identified. 

• The targeted corrective action date (the date of management follow-up). 

• The agency official responsible for monitoring progress. 

• The indicators, statistics, or metrics used to gauge resolution progress (in advance of 

audit follow-up) to validate the resolution of the deficiency. 

• The quantifiable target or otherwise qualitative characteristic (e.g., milestone) that 

reports how resolution activities are progressing. 

While GPO is not required to follow OMB Circular A~l23, the Circular is considered to 

contain policy related to internal controls that we consider to be a Federal Government best 

practice. As such, GPO should prepare a CAP to address the deficiencies associated with 

financial reporting controls that were identified during the audit. CAPs are the mechanism 

whereby management presents the procedures the agency will follow to resolve deficiencies. 

Recommendation 

We recommend that GPO prepare a comprehensive CAP to address the material weakness 

described above. The CAP should include measurable indicators of compliance and 

resolution to assess and validate progress throughout the resolution cycle. GPO should 

closely monitor and update the CAP periodically. 

4 July, 2005 version. 
16 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Public Printer 

January 15, 2009 

Page 4 of4 

Evaluation and Monitoring of Audit Performance 

.We reviewed the KPMG audit of the GPO consolidated financial statements by: 

• Evaluating the independence, objectivity, and qualifications of the auditors and 

specialists. 

• Reviewing the approach of and planning for the audit. 

• Attending key meetings with auditors and GPO officials. 

• Monitoring the audit progress. 

• Examining audit documentation. 

• Reviewing the auditors' reports. 

• Reviewing the financial statements and associated footnotes. 

KPMG is responsible for the attached reports dated January 14,2009, and the conclusions 

expressed in the reports. Our review, as differentiated from an audit in accordance with 

GAS, was not intended to enable us to express, and accordingly we do not express, an 

opinion on GPO's financial statements, the effectiveness of internal controls, or compliance 

with laws and regulations. However, our monitoring review, as limited to the procedures 

listed above, disclosed no instances in which KPMG did not comply, in all material respects, 

with GAS. 

If you have any questions or comments about this report, please do not hesitate to contact me, 

or Mr. Kevin Carson, Assistant Inspector General for Audits and Inspections, at (202) 512-

2009 or through email at kcarson@gpo.gov. 

#A~ ' J. Anthony gden 

Inspector General 

Attachment 

. cc: 

Deputy Public Printer 

Chief Management Officer 

Chief of Staff 

General Counsel 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 17
SECTION III

Independent

Auditors’ Report

18 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 19

The Pub I ic Printer 

KPMG LLP 

2001 M Str""t NW 

Washinglon. DC 20036 

Independent Audilors' Re)lorl 

United Stares Government Prin1ing Otlice: 

We huve uud itccl tl•e llCcompunying con~ol dutcd balan.ctt shcelS or I he Uni1ed States Gnvcri1111CJ1t Printing 

Office ((jPO) as of September 30, 200& and 2007, and the related consolidated :;tatements of revenues, 

cx.p<.:nses. ilnd changes in retained earnings and cash nu,vs {hercinallcr Tdcrrcd to a& "cunsolidotcd 

1inandal statements' ') ior the years then ended. TI1e objective of our audits was to express an Otl1n1on M 

the fair pres~ntalion of these consolidated financial statements. In connection witl1 our fiscal year 1008 

audit, we also considered GPO's internal cnmrols over Jinancial reporting and tested GPO's compliance 

with ccr <~ in provisions of11pplicabtclaws, TcguJations and contracts tl1at could hav~ a dir~ct and material 

cflccl on thc&e consolidated linonclal statements. 

Summar)• 

As stated in our opinion on th~ consolidated tinanciul smtements. we concluded thai GPO' s consolidated 

fina ncia l &latement• 3.$ of and for tl1c year~ ended September JO, JOOR and 2007, arc p•·escnted f;l irly, in all 

m<llerial re&pects. in confom1ity with U.S. generally accepted accounting principles. 

Our consideration nf internal contml over linanoial reporting resulted in !he following conditions being 

id~ntilied as significant deficiencies: 

A. Financial Rcpt•rting Controls 

13. Controls over Processing of' Human Resource In forma lion 

C. lnfonnation Tcchnolog) Gcncrol Controls 

We consider the Pinancial Reporting Comrols signiiic;mt <!"fici ncy, above. to be ll lllalc.rittl weakness. 

The results of our tests of compliance with certain provisions of laws, regulations and contracts disclosed 

no inst c~s of noncompliance or other matter& that an: required to be reported und.:r (iovem ~nt A11dililtg 

SttlndaNlt. i~;;ued by the tomrtroller Gen~ral ofthe United States. 

Th~ followi ng s~ctions di~cuss our opinion on Gl'O's consolidut<>d financial stateme-nts: our considcnttion 

of GPO's int~rnal conti'Ois over tinancial repo1ting; O\U' te.<ts of GPO's compliance with certain provisions 

ofapplicabk laws, n:gulrrtians and contracts; and manag~m~nt 's and •>ur rc;;po sibiliti~s. 

Opinion on the Financial Statements 

We have aud ited the accompanying consolidated llalonce sheets or the United States Government Printing 

0 flicc liS of s~ptl•mbcr 30. 2008 and 2007, and the related consolidated statements of revenues, explmses, 

and change;; in re tained earnings and cash Jlows lor the years then ended. 

In our opinion. tl1e consolidated financial statements rcferr~d to above prt:scnt fairly, in all material 

re~pecrs. the financia l p.wilion of the United States Government Priming Office as of s~ptcmbcr 30. 1008 

and 2007. and tfle results of its operations and tts cash flows for the years then ended, in conforn1ily with 

U.S. gcn~rall y accepted acoountillg prirJCipl!IS. 
20 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Our audits were conducted for 1he purpose of fom1lng an opinion on the oonso id 1l ed financial statemems 

taken as a whole. Th;, information in the Mnnagem~nt's Discussion and Am1lysis st<ction is present~d for 

pvrposes q/' ~ddit onal ~na ys s •ru;l is not ~ required part of the cortsolidated Jit\;ulcial statements. This 

information has nor been subjccrcd to auditing procedures and, accordingly. we express no opinion on it. 

lntern nl Control over fi nllncinl RcJlorting 

Our consideration of the Internal oontrol over tinondal reporting was for the limited purpose described in 

the Re,;ponsibilities section of this repc)rl :md would nolnt;:eessarily identify all delicit•ncies in the tern:~! 

coniroi over tin~ncia l reporling •Mtruighl bttsignificunl d~f ciencies or material wc;rknBsscs, 

A control deficiency exists when the design or operation of a control does nm allow manogement or 

cmplelyccs, in the norma l ce\llrsc ofp~rforming 1hclr assigned fune,tinns, 10 pr~vcnt or iletcct misstatement& 

on 3 1imely basis. A signifioam deficiency is a control deliciency, or combination of control deficiencies, 

1hat adversely affects GPO's <tbility to initiate. authorize. r~:cord . process, or report financial data rcliab{y in 

accordance with U.S. generally acccptod accowlting principles such that there is nrorc d•an a r·emnte 

likelihood that s misstatement of GPO's consolidated financial statements that is more than 

incC\nscquentfnl 'viii not be prc,•cntcd M detected hy GPO's fntemal control. A mnkriol \vcakncss is a 

sig.nificam deficiency, or combination of signiticant defioiencies, 1hal results in more than a remote 

likelihood that <t m;ttcrial misstaltlment of the fin3ncial St<~temcnts will not be prevented or detected by 

GPO's intemal control. 

In ()tiT l'i~cal y..:ar 2008 audit, \VI:- C011Sidcr th~ d'efitiencits, dcsdlbcd in Ex hibits r nnd n, tt'l be sigrlilicant 

deticiencies in internal comrol over financia l reponing. llowever, of 1he si_gnlfioant deficiencies de-scribed 

in Exhibits I and II. we believe that the significant detieien.-y presented in Exhibit I is n matcrial weakness. 

Exhibit Ill present$ !he status tit' prior year significant ~~~ticiertcies. 

We noted certain additional matters that we reported tl.> management of OPO in a separate letter dated 

.January t4. 2009. 

Compllanc<' and Other Matters 

The re,suhs of our tests of compliance described >n the Rt!Sponsibilitit·s st«:tion of this roport disclosct.l no 

instances Clf noncumplionce or other matters thal ore required to be reported herein under (iovemme111 

A udilir!g Stnndard~. 

t'~ Jl ihilili l\~ 

Mlmu~e nt's Responsibilities. Munagemeni is responsible for the C(lllStllidmed financial statements; 

eshtblishing and maintaining ~ITt,ctiwintcmal control: and t'OillJll)ing with laws, regulations anti conlr;tcts 

3Jlplicablc to GPO. 

Auditors'Rcsponsibilitics. Our re>-ponsibilit)< is to express an opinion on the fiscal year 2008 and 2007 

consolidated finahcia l statements ot' GPO hascd on our audits. We conducted out audits ln accordance with 

auditing standards gen~ ally accepted in the Unitt.'d States of America and t~e shmdards applicable lo 

'litlancial audits contailtCd in Govenmwnt Auditl11g SttJndurd<. issued by 1hc Complroller General of 1hc 

United States. Those standar·ds require that we plan and perfonn the audits to obtain t·easonable assuranct> 

about whether the consolidated fin~ucial statements are free of material misstatcmcnl. 1\n audil includ~:s 

considemtion of internal control over tinanc·iaT reporting as a basis for designin~ audil procedures that nr~. 

appropriuic in the circumstances. but not for the purpose of expressing an opiniw1 011 the ciTectiwncss or 

GPO's imen1al control over financial reponing. Accordjngly, we express no suet( opinlrm. 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 21

An audTt also inc lu d~s: 

• Examining, on a test basls, evidence supporting the amounts and disclosur~s ;,, the consolidoted 

,financial statements: 

• Asses~ ng the accounting principles used and significant <~st mates made by management; and 

• Evalunting the ovemll consoltdated fina nl~al stotcm~nt presentation. 

We believe that our nudits provide a reasonable basis for our opinion. 

In plannins and perfonning our fisca l year1008 audit. w~ considered GPO's intemul control ovor financi<~l 

reporting by obtaining ;m understanding of GPO'$ internal control, dctenniniltg whether internal controls 

had been placed in operation, assessing control risk. and petfonnin.g tests of controls as a basis for 

deslgning our ~auditing procedures fin the purpose of expressing our opinion on the ..:onsolidated tlnandnl 

statements. The objective of OlU' audit was not to express an opinion on the effectiveness of GPO's intemal 

control owr financial reporting. Accordingly. we do not expr~ an opinio11 on the effectiveness of GPO·s 

internal control over financial reporting. 

As part of obtaining reasonable assurance about whetb<:r GPO's fiscal ycllt 2008 consolidated financial 

stat~mems are fr~e or material mfsstatemem, we l)erformed tests of GPO's comjllinnce with certain 

provisions of laws. regulations and contracts. noncompliance with whioh could have a direct and material 

ct,ect on the dctcnninulion of the consolidated financi31 statement aJ110UJtts. We limited our te')t'< of 

compliance to the provisions described in the preceding s~nte ce, and we did not test compliance with all 

laws, regulations r.ml contnlcfs applicable to GPO. However, proViaing an opini011 on eomplianc.c with 

laws. regulations and t\Ontracts was nor an objecti ~ of our audit ond, accordingly, we do not express such 

an opinion. 

GPO's re,5ponse to the findings identified in our audit is pre&emed in Exhibit land Exhibit IL We did not 

audit Gl'O's response am], accordingly, wc.: c.~ press no opinion on it. 

This report is Intended solely for the Information "lind use of GPO's management. GPG's Oflle,e of 

Inspector Gcn~ral, lhc U.S. Gowmm~ t Ao;countability Office, and the U.S. Congress and is not intemkd 

to ~ ;utd should not ~ used by anyone other daan these specified parties. 

January 14, 2009 
22 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Exhibit I 

Fiscal Year 2008 Material Weakness 

A. Financial Reporting Controls 

During our fiscal year 2008 audit, we noted the following areas where GPO needs to improve its 

non-infonnation technology intemal controls over financial reporting. When considered in the 

aggregate, these control deficicncic.s arc considered to be a material weakness. 

1. Review and Reporting of General Property, Phmt >lnd Equipment 

We noted that GPO recorded additions to General Property, Plant and Equipment (PP&E) in its 

subsidiary ledger and general ledger based on when cash disbursements were made for the assets 

instead of recording the PP&E when it was receive<! and accepted by GPO. As a result, GPO was 

required to make an adjustment of approximately $405,000 to increase PP&E as reflected in the 

consolidated financial statements as of September 30, 2008. 

Additionally, we noted that GPO's controls over the recording of internal use software need to be 

improved. We identified several invoices that were improperly expensed rather than capitali:~:ed in 

accordance with U.S. generally accepted accounting principles. As a result, GPO was required to 

make an adjustment of approximately S900,000 to increase PP&E as reflected in the consolidated 

financial statements as of September 30, 2008. 

2. Review and Reporting of Product Warranty Lh1bility 

We noted management is recording an estimated product warranty liability related to ePassports. 

However, GPO has not experienced a claim for spoilage since the inception of the program in 

2007. Therefore, the liability is being recorded without proper support that the liability exists. 

As a result, liabilities arc overstated by approximately $1.4 million in the consolidated balance 

sheet as of September 30, 2008. This adjustment was not corrected and was included in the FY 

2008 Summary of Audit Differences, wh ich was auached to the FY 2008 Management 

Representation Letter. 

3. Reporting of Passport Work-in-process Inventory 

We noted management was improperly recording passport work-in-process (WlP) inventory as 

unbilled receivables. As a result, GPO was required to make an adjustment of approximately 

$10.3 million to properly reflect the WJP inventory in the consolidated balance sheet as of 

September 30, 2008. This adjustment did not affect the Consolidated Statements of Revenues, 

Expenses, and Changes in Retained Eamings or the Consolidated Statements of Cash Flows. 

4. Compilation and Management Review of the Consolidated Financial Statements 

GPO's existing process for compiling its consolidated financial statements is complex and 

difficult to review. Additionally, there arc currently no wriuen procedures documenting how 

GPO's consolidated financial statements are compiled. Also, we noted that the management 

review of the consolidated financial statements ne.eds to be strengthened. Spe.cifica lly, we noted 

management's review of the consolidated financial statements did not identify misclassifications 

amounting to approximately $1 1.9 million. Management properly reclassified $1 1.4 million from 

printing and binding to appropriation revenue, while the remaining difference was not corrected 

in the consolidated financial statements. The remaining difference of approximately $500,000 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 23

Exhibit I (continued) 

Fiscal Yea r 2008 Material Weakness 

was included in the FY 2008 Summary of Audit Differences, which was attached to the FY 2008 

Management Representation Lener. 

5. Certain Reconciliation Controls 

During fiscal year 2008, key reconciliations in the areas of Fund Balance with Treasury, accounts 

payable, payroll, and expenses were not always performed timely and when performed, 

differences noted were not consistently investigated and resolved in a timely manner. 

GPO management considered the identified differences to be immaterial to the fiscal year 2008 

consolidated financial statements. As such, these differences were not corrected in the 

consolidated financial statements and were included in the FY 2008 Summary of Audit 

Differences, whi ch was anached to the FY 2008 Management Representation Letter. 

The Government Accountability Office's (GAO) Slandards .for !merna/ Control in the Federal 

Government requires: 

• Transactions be promptly recorded to maintain their relevance and value to management in 

controlling operations and making decisions. This applies to the entire process or life cycle of 

a transaction or event from the initiation and authorization through its final classification in 

summary records. In addition, control activities help 10 ensure that all transactions are 

completely and accurately recorded. 

• That internal control, such as comparisons and reconciliations, be designed to assure that 

ongoing monitoring occurs in the course of normal operations. Without proper controls 

timing differences within the monthly reconciliations may not be corrected timely. 

In addition to the GAO criteria above, the following provides specific criteria for the proper 

accounting and financial reporting of the specific transactions referenced above. 

• Statement of Financial Accounting Concepts (SFAC) No. 6, Elements of Financial 

Statemems, states that: "Assets are recorded when there is future economic benefit and the 

asset is controlled by the entity." 

• Statement of Position 98-1, Accouming for the Costs of Computer Software Developed or 

Obtained for lntemal Use, states that: "Internal and external costs incurred to develop 

internal-use computer software during the application development stage should be 

capitalized. Costs to develop or obtain sotlware that allows for access or conversion of old 

data by new systems should also be capitalized. ·rraining costs are not internal-use sotlware 

development costs and, if incurred during this stage, should be expensed as incurred." 

• Statement of Financial Accounting Stondt>rds (SFAS) No. 143, Accounting for Assel 

Retirements, states the following: "In periods subsequent to initial measurement of the asset 

retirement obligation, an entity shall recognize period-to-period changes in the liability for an 

asset retirement obligation resulting from (a) the passage of time and (b) revisions to either 

the timing or the amount of the original estimate of undiscounted cash !lows." 

• SFAS No. 5, Accounting .for Camingencies, states the following: "An estimated loss rrom a 

loss contingency shall be accrued by a charge to income if both of the following conditions 

arc met: a) Information available prior to issuance of the financial statements indicates that it 
24 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Exhibit I (continued) 

Fiscal Yea r 2008 Material Weakness 

is probable that an asset had been impaired or a liability had been incurred at the date of the 

financial statements. It is implicit in th is condition that it must be probable that one or more 

future events will occur confirming the fact of the loss; and b) The amount of the loss can be 

reasonably estimated." 

• The U.S. Department of the Treasury's Financial Manual (TFM) Pan 2, Chapter 5100, states 

"Agencies must reconcile the SGL 1010 account balances for each fund symbol with 

Treasury's records (Financial Management System (FMS) 6653 I 6654) each month". In 

addition, in relation to FMS 5206, the TFM further states that, "no material prior month 

differences should be outstanding over three months." 

The conditions above were caused by the lack of properly functioning management internal 

controls over financial reponing. 

Recommendations: 

We recommend that GPO strengthen its controls surrounding each of these areas as follows: 

I. Implement controls to ensure that GPO accountants are recording PP&E in the PP&E 

subsidiary ledger and general ledger at the full costs upon receiving title to the assets. GPO 

can accomplish this by using the asset receipt and acceptance document, together with the 

contract and applicable invoices, to record the asset in its subsidiary ledger and general 

ledger. Additionally, GPO should improve controls over the review of invoices related to 

internal use software to detennine if the items noted should be capitalized or expensed. 

2. Review and properly apply historical infonnation when recording contingent liabilities. 

3. Ensure that all revenue recognition criteria have been met before recording an unbilled 

receivable. 

4. Perform a detailed and thorough management review of the financial statements, related 

footnotes, and any other accompanying information to ensure the reasonableness and 

accuracy of the infonnation that is being reponed. We also recommend that management 

reassess the existing process for compiling the consolidated financial statements. 

Additionally, the process for compiling the consolidated financial statements should be 

documented. The implementation of these recommendations will also help to facilitate a more 

thorough management review. 

5. Enforce its existing policies that require monthly reconciliations to be perfom1ed and the 

timely investigation and resolution of all differences identified in compliance with TFM 

requirements and GAO standards. 

Management Response: 

Management concurs with findings # I, 3, 4, and 5 and will take corrective action on each. 

Management docs not fu lly agree with KPMG on finding 112, Review and Reporting of Product 

Warranty Liability. GPO is responsible for replacing defective e-Passports up to the point of 

personalization by the U.S. Department of State. At September 30, 2008, there were 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 25

Exhibit I (continued) 

Fiscal Yea r 2008 Material Weakness 

approximately 10 million e-Passports which had not been personalized. As with any new 

manufactured product, it is reasonably possible and potentially probable that some of these ePassports could have latent defects for which GPO would be responsible for fixing or replacing. 

KPMG states that the warranty liability of S 1.4 million for e-f>assports is overstated by 

$ 1.4 million. Management believes that although this may be the case, it is possible that it could 

also be understated as there is not enough historical data available to make a reasonable estimate, 

nor can this unique product be bcnchmarkcd against other reasonable industry comparisons at this 

time. Based on favorable experience to date, Management has reduced the warranty liability rrom 

$4.8 million at September 2007 to $1.4 million at September 2008 and will continue to review the 

associated risk and adjust the warranty liability accordingly. 

KPMG Response: 

We respect management's position related to finding 2 of the material weakness. However, we 

continue to believe our finding and recommendation is appropriate. 
26 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Exhibit II 

Fiscal Year 2008 Significant Deficiencies 

B. Controls over Processing Human Resource Information 

During our fiscal year 2008 audit, we noted the following areas where GPO needs to improve its 

internal controls over the processing of human resource infom1ation: 

I. GPO has 15 Human Capital (HC) Assistants and Specialists who are responsible for 

preparing the Request for Personnel Action Form (SF-52), reviewing the SF-52 for accuracy 

and eligibility, and uploading the changes to the National Finance Center (NFC) Entry, 

Processing, Inquiry, and Correction System (EPIC). While GPO's policy is that HC 

Assistants/ Specialists are not supposed to make changes in EPIC to their own fil e, there is no 

application control to prevent them from doing so. 

2. There is no supervisory review of personnel action changes made once uploaded into EPIC to 

ensure accuracy and completeness of modi tications. 

3. For those employees whose pay rates do not follow the Genera l Schedule, the HC 

Assistants/Specialists have the ability to allow EPIC to bypass NFC's edit checks, which 

check for correct data fields and match the individual's pay rate to the Office of Personnel 

Management pay step and grade. However, no compensating review is in place to ensure that 

what is uploaded is correct. 

The GAO's Standards for /merna/ Comrol in the Federal Govemment requires the following: 

• Control activities are the policies, procedures, techniques, and mechanisms that enforce 

management's directives, such as the process of adhering to requirements or budget 

development and execution. They help ensure that actions are taken to address risks. Control 

activities are an integral part of an entity's planning, implementing, reviewing, and 

accountability for stewardship of govemment resources and achieving effective results. 

• Controls activities occur at all levels and functions of the entity. They include a wide range 

of diverse activities such as approvals, authorizations, verifications, reconciliations, 

performance reviews, maintenance of security, and the creation and maintenance of related 

records which provide evidence of execution of these activities as well as appropriate 

documentation. Control activities may be applied in a computerized information system 

environment or through manual processes. 

The causes of the conditions above were due to lack of controls and edit checks to ensure all 

changes made in the system were proper and accurate. 

Recommendations: 

We understand that GPO is planning on converting to a new Human Resources lnfonnation 

System -EmpowHR in March 2009, which will have security restrictions for access to the system 

based on the roles and responsibilities of the person performing the transaction. However, we 

recommend the below actions be not only considered when developing and implementing the 

new system, but also in the interim period: 

l. Reassess access rights in EPIC for all employees within HC to ensure they are consistent with 

their roles and responsibilities and preventing them from being able to access their own file. 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 27

Exhibit II (continued) 

Fiscal Year 2008 Significant Deficiencies 

2. Print an exception/edit report from EPIC each pay period to track changes that have been 

made to employee files. This report should be reviewed by supervisory personnel within HC 

who do not also have access to make changes to employee files to ensure all changes to each 

employee payroll file were appropriate and accurate. 

3. Implement a system control or management review that would require additional approval 

and review for employees when FC edit checks are overridden. 

Management Response: 

Management concurs with these findings and recommendations. The following corrective actions 

have been implemented or are being implemented by GPO: 

I. Conducted a review of all EPIC access rights and modified access for employees' to match 

their role in the personnel action process. 

2. Implemented that each pay period HC prints a report from EPIC and review all actions 

processed for accuracy and reasonableness. 

3. Implemented a two-tiered management review to be performed on the 49 current employees 

whose pay rate determinant code (PRO) is 4. The two HC managers identified will not have 

access to make changes in EPIC. Additionally, during this review, GPO will detem1ine 

whether the employee's PRO can be changed and the salary be placed in the appropriate table 

on the NFC database. 

C. Information Technology General Controls 

During fiscal year 2008, Gf'O continued to make progress in addressing infom1ation technology 

(IT) general control weaknesses identified in prior years. However, deficiencies in the design 

and/or operation of controls continue to exist in the areas of Entity-Wide Security, Access 

Controls, System Software, and Service Continuity. Current year testing of IT general controls 

revealed the following control weaknesses: 

I. Entity-Wide Security Program 

GPO's enterprise-wide security program needs improvement. During fiscal year 2008, GPO 

made progress in implementing an enterprise-wide security program to fonnal ize GPO's 

established information security objectives and high level policy. GPO completed the system 

security plan and the risk assessment for Oracle On-Demand as well as the system security 

plan for the General Support System (GSS). However, as noted in the prior year, GPO has 

not completed the certification and accreditation of Oracle On-Demand or the GSS. This 

process is a critic-al clement of an organization's overall security program. Specifically, it is 

used to identifY risks posed to the system, plan or implement the controls necessary to 

mitigate those risks, and certify the operation of the controls. Without a strong entity-wide 

security program, security controls may be inadequate; responsibilities may be unclear, 

misunderstood, and improperly implemented; and controls may be inconsistently applied. 

2. Access Controls 

Overall, access controls at GPO require strengthening in order to provide a more secure 

financial processing and computing environment. During fiscal year 2008, GPO 

implemented a process to provide monthly notifications of employee separations to GPO IT 

Security and End User Support personnel who arc responsible for managing acce.ss to 

information systems. Additionally, GPO implemented procedures for the periodic review of 
28 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Ex hibit II (continued) 

Fiscal Year 2008 Signifi cant Deficiencies 

user access to information systems and applications. However, several access controls at 

GPO need improvement: 

a. First, as noted in the prior year, add itional oversight is needed to ensure that documented 

policies and procedures for notifying all system owners of terminated employees and 

contractors are followed. GPO must ensure that system access, including remote access, 

is properly and timely removed for separated employees and contractors. 

b. Second, GPO management is not consistently following documented policies and 

pmcedures for granting and reviewing access to the Data Center. We noted three users 

who were granted access to the Data Center via the card reader system but were not 

identified as authorized users during the quarterly access review process. 

c. Third, program development personnel have been granted inappropriate privileged access 

to Oracle On-Demand. Access to financial systems must be properly restricted to limit 

processing errors, protect the integrity of data, and prevent the submission of 

unauthorized transactions. 

d. Folll1h, GPO does not have adequate user identification controls to verify the identity of 

users during phone calls requesting password resets from the Information Technology 

and Support (IT&S) Help Desk. Additional user identification controls are needed to 

ensure that passwords are not improperly communicated to unauthorized individuals. 

Access controls should provide reasonable assurance that computer resources (data fi les, 

application programs, and computer-related facilities and equipment) are protected against 

unauthorized modification, disclosure, loss, or impairment. This includes controls that 

prevent unauthorized or inappropriate access to sensitive fi les and revoke access following 

employee tennimuion. Because of the sensitivity of this infonnation, the details of the 

findings are not provided in this report, but were provided to GPO management during the 

audit. 

3. System Softwa re 

The controls over the maintenance of desktop system software need improvement. During 

fiscal year 2008, GPO management began the development of a desktop patch management 

plan. However, GPO has not been able to complete the implementation of the patch 

management plan and process. System software controls are essential to provide reasonable 

assurance that operating system-based security controls are not compromised and that the 

system will not be impaired. Therefore, system software needs to be properly maintained to 

ensure that security patches arc appropriately implemented to enhance the security of 

computers and the network. If system software is not properly maintained, unauthorized 

individuals may exploit unmitigated security weaknesses to read, modify, or delete critical or 

sensitive information and programs. 

4. Service Continuity 

Losing the capability to process, retrieve, and protect data can significantly impact GPO's 

ability to accomplish its mission. For this reason, GPO should have (I) procedures in place 

to protect infonnation resources and minimize the risk of unplanned interruptions, and (2) a 

plan to recover critical operations should interruptions occur. During fiscal year 2008, GPO 

continued its eflorts to minimize the risk of unplanned interruptions and recover critical 

operations should an interruption occur. GPO completed a Business Impact Analysis in 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 29

Ex hibit II (continued) 

Fiscal Year 2008 Significant Deficiencies 

October 2007 and drafted a contingency plan in support of the recovery of financial reporting 

systems and the GSS. However, the plan has not been tinalized. 

National Institute of Standa•·ds and Technology (NIST) Special Publication (SP) 800-37, 

Guide for the Security Certification and Accreditation of Federal Information Systems, States 

that the successful completion of the security certification and accreditation process provides 

agency officials with the necessary confidence that the information system has adequate 

security controls, that any vulnerabilities in the system have been considered in the risk-based 

decision to authorize processing, and that appropriate plans and funds have been identified to 

correct any deficiencies in the information system. 

Office of Management and Budget (OMS) Circular No. A-130, Management of Federal 

Information Resources, states that agencies shall (i) protect govenunent information 

commensurate with the risk and magnitude of harm that could result from the loss, misuse, or 

unauthorized access to or modification of such information; (ii) establish a level of security 

for all information systems that is commensurate with the risk and magnitude of the harm 

resulting from the loss, misuse, or unauthorized access to or modification of the infonnation 

contained in these information systems. 

NIST SP 800-53, Recommended Security Comrols for Federal li?f'ormation Systems, states 

that the organization promptly installs newly released security relevant patches, setvice 

packs, and hot fixes, and tests patches, service packs, and hot fixes for effectiveness and 

potential side effects on the organization's information systems before installation. 

NIST SP 800-34, Contingency Planning Guide for Information Technology Systems, states 

that it is critical that the services provided by systems are able to operate effectively without 

excessive intemtption. Contingency planning supports this requirement by establishing 

thorough plans and procedures and technical measures that can enable a system to be 

recovered quickly and cflcctively following a service disruption or disaster. 

Recommendations: 

We recommend that GPO continue to strengthen its IT general controls m each of the four 

domains as follows: 

I. Entity-Wide Security Program 

a. We recommend that GPO complete the certification and accreditation of Oracle OnDemand and the GSS. 

2. Access Controls 

a. We recommend that GPO management enhance policies and procedures regarding the 

removal of access for terminated employees and contractors and provide oversight to 

ensure that access to GPO IT resources belonging to separated employees and contractors 

is removed timely. 

b. We recommend that GPO management enhance policies and procedures regarding the 

assignment, removal, and review of access to the Data Center. 

c. We recommend that GPO management and the appropriate system administrators review 

the current access privileges and modify those privileges for Oracle On-Demand users, 

such that the access privileges arc properly segregated and grant with the least amount of 

privilege necessary. 
30 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Exhibit II (continued} 

Fiscal Year 2008 Significant Deficiencies 

d. We recommend that GPO management enhance its policies and procedures for fulfilling 

requests for password resets to include the verbal verification of users. 

3. System Software 

a. We recommend that GPO management continue to improve the patch management 

process by completing the desktop patch management plan that began in June 2008. 

4. Service Continuity 

a. We recommend that GPO finalize its contingency plans for all financial reporting 

systems and the GSS. 

Management Response: 

Management concurs with these tindings and recommendations. Information Technology & 

Systems (IT &S) will develop a plan during Q2 FY09 to address the implementation of the 

recommendations. This plan will include the need for additional resources or investments to 

complete the implementation. Should the assessment determine that additional resources and/or 

investments are required for any of these recommendations, we will coordinate these needs with 

GPO's Planning and Strategy Board (PSB) for investment review and approval. 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 31

Exhibit Ill 

Status of Prior Year Significant Deficiencies 

Prior Year Condition 

Prior Year Status as of 

Recommendation September 30, 2008 

Certain reconciliation controls Enforce its existing policies that Material Weakness: This 

should be improved require monthly reconciliations to finding has been repeated in the 

be performed and the timely current year, see Exhi bit I, 

investigation and resolution of lener A. 

differences identified in compliance 

with TFM requirements and GAO 

standards. 

Misapplication of U.S. I. Review and Reporting of Material Weakness: This 

generally accepted accounting PP&E: Accountants should finding has been partially 

principles validate the receipt of a PP&E repeated in the current year, see 

(through physical inspection, Exhibit 1, letter A. 

confimtation from the program 

managers, and comparison of 

the invoice to the receiving 

documents and the purchase 

order) or validate GPO's title to 

an asset, whichever is 

applicable, before recording the 

expenditure as PP&E in its 

subsidiary ledger in accordance 

with GPO's policy. In addition, 

program managers should be 

provided additional guidance to 

ensure the proper coding of 

such equipment acquisitions in 

the future. 

2. Revenue Recognition of 

Appropriated Revenue: 

Improve controls to ensure that 

all Revolving Fund 

expenditures incurred during 

the fiscal year that are to be 

funded with Federal 

appropriations are identified so 

that the related appropriated 

revenues can be recogni zed at 

the time that the liability is 

incurred in accordance with 

GAAP. 
32 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Exhibit Ill (continued) 

Status of Prior Year Significant Deficiencies 

Prior Year Condition Prior Year Status as of 

Recommendntion September 30, 2008 

Information Technology {1T) general controls should be improved 

Entity-Wide Security Program a. We recommend that GPO Significant Deficiency: This 

complete the certification and finding has been repeated in the 

accreditation of all major current year, see Exhi bit II, 

applications, including key letter C. 

financial systems, and the GSS. 

Access Controls a. We recommend that GPO Significant Deficiency: This 

implement review procedures to finding has been partially 

ensure that user access 10 all repeated in the current year, see 

GPO IT resources be removed Exhibit 11, Jetter C. 

timely for all separated 

employees and contractors. 

b. We recommend that GPO 

management update GPO Data 

Center proximity card system 

so that badge access is removed 

for terminated employees and 

contractors, as well as other 

current, unauthorized 

employees and contractors, and 

perform quarterly reviews of 

GPO Data Center access, as 

noted in the memorandum 

entitled Process for Access 

Control of the !{'' Floor Data 

Cefller. 

c. We recommend that GPO 

management. work to ensure 

that policies and pi'Ocedures for 

requesting, monitoring, and 

removing access to all GPO IT 

resources are consistently 

followc.d and all requests for 

access are documented and 

approved. 

d. We recommend that GPO 

update pol icics and procedures 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 33

Exhibit III (continued) 

Status of Prior Year Significant Deficiencies 

for the sanitization of electronic 

media to include both servers 

and magnetic/removable media. 

System Softwa re 

a. We recommend that GPO Significant Deficiency: This 

management continue to finding has been repeated in the 

improve the patch management 

current year, see Exhibit II, 

process by finalizing desktop- letter C. 

specific patching procedures 

and continuing to work towards 

full implementation of the 

ConfigureSofi configuration 

management software. 

Application Software a. We recommend that GPO Closed 

Development and Change develop change control 

Control procedures for GPO server 

environment and GPO-specific 

responsibilities regarding 

changes to the Oracle OnDemand application. 

Service Continuity a. We recommend that GPO Significant Deficiency: This 

management continue to finding has been partially 

develop a business resumption repeated in the current year, see 

and contingency plan for all Exhibit II, letter C. 

major applications, including 

key financial applications, and 

the GSS. 

b. We recommend that GPO 

update backup and recovery 

procedures to include the server 

environment. 
SECTION IV

Consolidated 

Financial 

Statements

34 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY2008
Consolidated Balance Sheets

As of September 30, 2008 and 2007

(Dollars in thousands)

UNITED STATES GOVERNMENT PRINTING OFFICE

The accompanying notes are an integral part of these financial statements.

 2008 2007

ASSETS 

Current assets 

 Fund balance with Treasury (Note 2) $ 265,251 $ 273,446 

 Accounts receivable, net (Note 3) 153,696 146,118 

 Inventory, net (Note 4) 48,291 34,592 

 Prepaid expenses (Note 5) 903 3,958 

 Total current assets 468,141 458,114 

General property, plant and equipment, net (Note 6) 107,194 67,600 

 Total assets $ 575,335 $ 525,714

LIABILITIES AND NET POSITION 

Current liabilities

 Accounts payable and accrued expenses (Note 7) $ 112,858 $ 109,324

 Deferred revenues (Note 8) 89,376 81,715

 Accrued annual leave 10,549 9,813 

 Total current liabilities 212,783 200,852 

Other liabilities 

 Workers’ compensation liability (Note 9) 67,067 66,723 

 Product warranty liabilities (Note 10) 1,418 4,833 

 Total liabilities 281,268 272,408 

Commitments and contingencies (Notes 10 and 11)

Net position (Note 12)

 Cumulative results of operations:

 Retained earnings 154,425 108,164 

 Invested capital 92,879 92,879 

 Unexpended appropriations 46,763 52,263

 Total net position 294,067 253,306

 Total liabilities and total net position $ 575,335 $ 525,714 

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 35
Consolidated Statements of Revenues, Expenses, and Changes in Retained Earnings

For the Fiscal Years Ended September 30, 2008 and 2007

(Dollars in thousands)

UNITED STATES GOVERNMENT PRINTING OFFICE

 2008 2007

OPERATING REVENUES 

Printing and binding $ 890,630 $ 780,482 

Appropriations 130,111 137,041

Sales of publications 15,866 16,032

Agency distributions 5,818 5,553 

 Total operating revenues 1,042,425 939,108

OPERATING EXPENSES 

Printing and reproduction 470,454 423,845

Personnel compensation and benefits 224,688 198,722

Supplies and materials 214,848 152,182

Other services 29,685 23,901 

Travel, transportation, and postage 23,690 16,428

Rents, communications, and utilities 16,507 15,873

Depreciation and amortization 10,428 8,850

Publications sold 5,864 8,424 

 Total operating expenses 996,164 848,225 

 Net Income 46,261 90,883

 Retained Earnings, beginning of year 108,164 17,281

 Retained Earnings, end of year $ 154,425 $ 108,164

36 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Cash Flows

For the Fiscal Years Ended September 30, 2008 and 2007

(Dollars in thousands)

UNITED STATES GOVERNMENT PRINTING OFFICE

The accompanying notes are an integral part of these financial statements.

 2008 2007

CASH FLOWS FROM OPERATING ACTIVITIES 

Net income $ 46,261 $ 90,883

Adjustments to reconcile net income to net cash 

 provided by operating activities:

 Depreciation and amortization 10,428 8,850 

 Gain on disposal of general property, plant and equipment (16) (3)

 Changes in assets and liabilities:

 (Increase) decrease in assets-

 Accounts receivable (7,578) (36,572)

 Inventory (13,699) (21,498)

 Prepaid expenses 200 585

 Increase (decrease) in liabilities-

 Accounts payable and accrued expenses 3,534 25,316

 Deferred revenues 7,661 12,155

 Accrued annual leave 736 227

 Workers’ compensation liability 344 (3,228)

 Product warranty liability (3,415) 4,833

 Total adjustments (1,805) (9,335)

 Net cash provided by operating activities 44,456 81,548

CASH FLOWS FROM INVESTING ACTIVITIES 

Capital purchases (47,167) (22,410)

Proceeds from sale of general property, plant and equipment 16 3

 Net cash used in investing activities (47,151) (22,407)

CASH FLOWS FROM FINANCING ACTIVITIES

Decrease in unexpended appropriations (5,500) (15,500)

 Net cash used in financing activities (5,500) (15,500)

 Net (decrease) increase in fund balance with Treasury (8,195) 43,641

Fund balance with Treasury, beginning of year 273,446 229,805 

Fund balance with Treasury, end of year $ 265,251 $ 273,446

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 37
38 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

SECTION IV (cont’d)

Notes to Consolidated Financial Statements

September 30, 2008 and 2007

1. Summary of Significant Accounting Policies

A. Reporting Entity

The U.S. Government Printing Office (GPO or Agency) is a Legislative Branch agency of the Federal Government. The Agency’s 

mission and authority are derived from various statutes codified in Title 44, Public Printing and Documents, of the United States Code 

(U.S.C.). The Congress established GPO to provide the Federal Government with an efficient and effective means for the production, 

procurement, and dissemination of Federal Government information to the Nation.

The Public Printer of the United States, appointed by the President of the United States with the advice and consent of the 

U.S. Senate, serves as the Agency head and oversees GPO’s programs and operations. These programs and operations are funded 

through a business-type revolving fund, authorized by 44 U.S.C. § 309, and annual and special appropriations provided by Congress. 

The GPO Revolving Fund maintains a system of accounts and records transactions to comply with the requirements of Section 309 

of Title 44.

The Joint Committee on Printing (JCP) has primary responsibility for Congressional oversight of GPO’s programs and operations. 

The JCP is comprised of five members of the U.S. House of Representatives and five members of the U.S. Senate. Every two years 

the JCP chairmanship and vice-chairmanship rotate between the House and the Senate.

B. Accounting Environment

Basis of Accounting

As allowed by the Federal Accounting Standards Advisory Board (FASAB), the consolidated financial statements of GPO have been 

prepared in conformity with U.S. generally accepted accounting principles (GAAP) as promulgated by the Financial Accounting 

Standards Board (FASB). Under GAAP, revenues are recognized when earned, and expenses are recognized when incurred, without 

regard to the timing of the receipt or disbursement of cash.

Basis of Presentation and Consolidation

GPO prepares annual financial statements that reflect the overall financial position and results of operations to meet the requirements of GAAP and 31 U.S.C. § 3515(b) mandated by 44 U.S.C. § 309(e). The accompanying consolidated financial statements include 

all funds under GPO’s control that have been established and maintained to account for the resources of the Agency. All significant 

intra-agency balances and transactions have been eliminated in the preparation of the consolidated financial statements. 

The GPO consolidated financial statements do not include the effects of centrally administered assets and liabilities of the Federal 

Government, as a whole, such as interest on the public debt, which may in part be attributable to GPO. Other Federal agencies 

make financial decisions and report certain financial matters on behalf of the entire Federal Government, including matters in which 

individual agencies may be an indirect party. Financial matters maintained or reported by other Federal agencies in which GPO is 

indirectly involved include employee benefit plans and certain legal settlements.

Funds

GPO maintains a revolving fund and a general fund to account for its various programs and operations. Each of these funds is a distinct fiscal and accounting entity that accounts for cash and other financial resources together with all related liabilities and equities.

Revolving Fund – The GPO Revolving Fund is an inter-governmental fund established by Congress on July 1, 1953. This businesstype revolving fund is available without fiscal limitation for financing the operation and maintenance of GPO, except for those 

information dissemination programs of the Agency that are funded by annual appropriations.

The GPO Revolving Fund is a self-sustaining financial entity used primarily to finance and account for GPO’s Printing and 

Binding Operations and Publication and Information Sales Program. Accordingly, the two major sources of revenue to the Revolving 

Section IV: Consolidated Financial Statements
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 39

Fund are reimbursements from the Congressional Printing and Binding Appropriations and other Federal customers for providing 

printing, binding and distribution services, and publication and subscription sales to the public.

The Printing and Binding Operations account for the revenues and expenses associated with services provided by in-plant printing and purchased printing. The costs of these services are recovered through a system of rates used to bill customers. These rates 

include direct costs, depreciation, overhead, and related expenses permitted under 44 U.S.C. § 309.

The Publication and Information Sales Program sells Federal Government information products to the public. The sales price of 

a Federal Government publication is established in accordance with 44 U.S.C. § 1708. Designated bookstores at educational institutions, book dealers, and other purchasers of large quantities may receive a 25-percent discount on the domestic price of a product. 

This price discount is also available to GPO employees.

General Fund – The General Fund is financed by two annual Congressional appropriations to the Agency. These appropriated 

funds finance the cost of GPO’s support of the Congress and the Government information dissemination services provided to the 

public without charge to the recipients.

The Congressional Printing and Binding (CP&B) Appropriation is used to pay the cost of the printing and binding requirements 

of the Congress, and the printing, binding, and distribution of publications authorized by law to be distributed to others without 

charge to the recipient.

The Salaries and Expenses (S&E) Appropriation is used by the Library Services and Content Management, a GPO business unit, 

to fund four information dissemination programs: the Federal Depository Library Program (FDLP) that includes GPO Access; the 

Cataloging and Indexing Program; the By-Law Distribution Program; and the International Exchange Program. The majority of this 

annual appropriation is used to finance the FDLP.

Expenditures from these appropriations are used to reimburse the GPO Revolving Fund for printing and binding, and other 

services and supplies furnished by GPO in accordance with Title 44.

C. Fund Balance with Treasury

Fund balance with Treasury represents all balances in GPO accounts with the U.S. Department of the Treasury (Treasury). Treasury 

processes cash receipts and disbursements for GPO.

D. Accounts Receivable 

Accounts receivable consist of intra-governmental amounts due to GPO, as well as amounts due from the public. Accounts receivable are shown net of a provision for uncollectible accounts. The allowance for doubtful accounts is based on GPO’s recent debt 

collection experience.

E. Inventories

Inventories of publications held for sale are valued at the lower of cost, using the weighted average cost method, or market. The 

publication inventories are shown net of a provision for excess inventory that may be disposed of by the Agency in the future. The 

allowance for surplus publications is based on life cycle studies of product sales that provide a historical basis for determining the 

percentage of potential excess inventory stock items on hand. Inventories of paper, supplies and materials include the cost of production material (e.g., blank paper, computer chips, ink, and book cloth), as well as the cost of administrative-use supplies. These 

inventories are valued at the lower of cost, using the weighted moving average cost method, or market. Inventories of supplies and 

materials are shown net of a provision for obsolescence. The allowance for obsolescence is determined based on historical usage of 

paper, supplies and materials.

F. Property, Plant and Equipment

Property, plant and equipment purchases are generally valued at their acquisition cost. The Agency capitalizes the cost of the property as an asset when the cost is $25,000 or more, and the estimated useful life is two years or more. The costs of major alterations 

and renovations to the GPO facility are capitalized and depreciated, while the costs of maintenance and repairs are expensed when 

incurred. The depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated useful life of the 

asset. The depreciation of an asset commences the month after the asset is first placed in service.

Section IV: Consolidated Financial Statements
40 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

The following table reflects the standard estimated useful life of each major asset category. Exceptions to these standard estimated asset lives are authorized when justified.

Land has an indefinite life and is not subject to depreciation. Leasehold improvements are generally depreciated over 10 years or 

the remaining duration of the lease for real property, whichever is shorter.

Printing equipment transferred to GPO from other Federal agencies under the provisions of 44 U.S.C. § 312 is valued in accordance with JCP Regulation Number 26, Government Printing and Binding Regulations. This valuation approximates fair market 

value at the time of the property transfer.

G. Deferred Revenues

Deferred revenues are funds received in advance from customers for the future delivery of goods and services. The Agency records 

these advances as revenue when the goods are delivered or the services are performed.

H. Accrued Annual Leave

Annual leave is accrued as a liability when earned. The liability is reduced when leave is used. The annual leave liability is calculated 

using the current hourly salary or wage of employees multiplied by their total hours of unused annual leave. Employees will receive 

a lump-sum payment for any unused annual leave when they separate from Federal service or enter active military service. 

Sick leave and other types of non-vested leave are expensed when used. Employees are not entitled to a lump-sum payment for 

their unused sick leave.

I. Workers’ Compensation Liability

The Federal Employees’ Compensation Act (FECA) provides income and medical cost protection to covered Federal civilian employees injured on the job, employees who have incurred a work-related occupational disease, and beneficiaries of employees whose 

deaths are attributable to job-related injuries or occupational diseases.

The U.S. Department of Labor (DOL) administers the FECA Program, which provides workers’ compensation benefits to GPO 

employees and others through the Special Benefit Fund. GPO annually reimburses DOL for the cost of FECA benefits paid on GPO’s 

behalf.

Future workers’ compensation estimates are generated from the application of actuarial procedures developed by DOL to estimate the liability for FECA benefits. The liability for future workers’ compensation benefits includes the expected liability for death, 

disability, medical, and miscellaneous costs for approved compensation cases related to injuries incurred but not reported. The 

liability is determined by utilizing historic benefit payment patterns related to a particular period to estimate the ultimate payments 

related to that period.

Section IV: Consolidated Financial Statements

Estimated Useful Life Of Capitalized Assets

Asset Category Estimated Useful Life (Years)

Land N/A

Building Improvements 20

Building Appurtenances 20

Other Structures and Facilities 20

Furniture and Fixtures 20

Leasehold Improvements 10

Plant Machinery and Equipment 10

Office Machinery and Equipment 5

Motor Vehicles 5

Computer Software 3
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 41

J. Commitments and Contingencies

Liabilities from loss contingencies, including environmental remediation costs not within the scope of FASB Statement No. 143, 

Accounting for Asset Retirement Obligations, arising from claims, assessments, litigation, fines and penalties, and other sources, are 

recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Loss contingencies that do not meet these criteria are not accrued. 

In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47), which 

requires a liability to be accrued if the reporting entity has an obligation to perform asset retirement activities and a reasonable estimate of the fair market value of the obligation can be made at year end. FIN 47 also provides guidance as to when an entity would 

have sufficient information to reasonably estimate the fair value of an asset retirement obligation. 

K. Product Warranty Liabilities

Product warranty liabilities are recognized for U.S. Passports manufactured by GPO for the U.S. Department of State. The estimate 

is based on the number of passports produced that have not been personalized by the U.S. Department of State and an estimated 

percentage of potentially defective e-Passports. GPO sells blank electronic passports (e-Passports) to the U.S. Department of State, 

which completes this travel document that is sold to millions of U.S. Citizens annually. The product replacement warranty program 

started in fiscal 2007 to coincide with the Federal Government’s transition from the legacy passport to the new e-Passport that 

contains a computer chip. 

L. Revenue Recognition

Printing and Binding – GPO must be reimbursed for the cost of printing and binding services furnished customers at rates set by 

the Public Printer in accordance with 44 U.S.C. §309. Revenues from in-house printing and binding work are recognized on a valueadded basis, as work is performed, while revenues from commercially procured printing and binding are recognized on the date the 

contract requirements are fulfilled, which is generally the date of shipment by the commercial printer to the customer agency.

Appropriations – Appropriation revenues are recorded when a liability is incurred for purposes permitted by the appropriations 

act and program legislation. Unexpended appropriations are recorded as a component of net position. Unexpended appropriation 

balances are generally canceled after 5 years.

Sales of Publications – Revenues from the sale of publications and subscriptions to customers are recognized when shipped by 

the Publication and Information Sales Program.

Agency Distributions – Revenues from the storage, packaging, and distribution of publications for other Federal agencies are 

recorded when services have been performed.

M. Expense Recognition 

Printing and Reproduction – This expense includes the cost of printing, duplicating, and reproduction orders that are procured 

by GPO from the private sector to satisfy the needs of the Federal Government. The expense is generally recorded on the date of 

shipment by the contractor, and is shown net of vendor prompt payment discounts earned by the Agency.

Personnel Compensation and Benefits – Personnel compensation consists of the wages and salaries, including overtime 

premium and night differential, paid to GPO employees on a biweekly cycle. Personnel benefits include the Agency’s share of 

contributions towards Federal Employees Health Benefits (FEHB), Federal Employees’ Group Life Insurance (FEGLI) and two Federal 

Government civilian employee retirement programs. The two retirement programs are the Civil Service Retirement System (CSRS) 

and the Federal Employees Retirement System (FERS) that includes the related Thrift Savings Plan (TSP). Personnel benefits also 

include the cost of workers’ compensation expense, transit benefits provided by GPO to employees, and the cost of incentive and 

performance awards to employees. Personnel compensation and benefits are recorded as expenses when earned by employees.

Supplies and Materials – Computer chips required for U.S. Passport production are the most significant cost component within 

the category of supplies and materials. Passport supplies and materials are recorded as an expense when used in production operations. The second most significant component is paper and paper products that are commercially procured to satisfy GPO’s in-plant 

printing requirements and customer orders for blank paper. The expense is recorded when paper is drawn from inventory to fulfill 

an order or delivered to the customer, in the case of direct mill-to-customer shipments. This expense category also includes all other 

supplies and materials that are not capitalized as property, such as personal computers, furniture, and office supplies. 

Section IV: Consolidated Financial Statements
42 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

Other Services – This expense category includes the costs of professional services by contractors, the expenses related to a 

provision for uncollectible accounts receivable, and the expenses related to the product liability for e-Passports. The expenses for 

professional services are recognized when the contracted services have been performed. The expenses for uncollectible accounts 

receivable are recognized when receivables are deemed as potentially uncollectible, based on GPO’s collection experience. The 

expenses for product liabilities are recognized on a percentage of e-Passports produced but not personalized by the Department of 

State.

Travel, Transportation, and Postage – This category includes travel and transportation costs of persons or things, including 

employee relocation costs, and postage expenses. Travel costs are incurred by persons on official business for audits, attendance at 

conferences, inspections, investigations, training, or other authorized business of the Agency. Transportation includes shipping costs 

for printing and reproduction products from GPO or contractors to customer agencies, depository libraries, or other GPO locations. 

Incurred travel expenses are accrued when they are estimable, while transportation costs are generally recorded on the date of 

shipment. Postage and commercial mail services are recorded as expenses when the delivery services are provided by the U.S. Postal 

Service and commercial carriers.

Rents, Communications, and Utilities – Rent and lease costs are incurred for the use of building space, equipment, and motor 

vehicles. GPO leases office and warehouse space from the U.S. General Services Administration (GSA) and commercial landlords. 

GPO also rents automobiles and other motor vehicles. Communications costs include data, voice, video, and wireless services. 

Utilities include electricity, gas, steam, and water. Expenses are recorded as services are provided and energy resources are used.

Depreciation and Amortization – GPO uses the straight-line method of depreciation and amortization to allocate a portion of 

the acquisition cost of property, plant and equipment to each accounting period. The acquisition cost of each capitalized asset is 

depreciated, or amortized, over the asset’s estimated useful life which is generally measured in years. The monthly depreciation, or 

amortization, of a capitalized asset commences at the beginning of the first full-month after the date that the capitalized asset was 

placed in service.

Publications Sold – Publications sold expense represents the cost of publications sold to customers and the cost of subscriptions 

issued to subscribers. Expenses are recorded at the time of publication sale or subscription issuance. Additionally, this expense 

includes any change in the estimated cost of the publications held in inventory for sale to the public that are potentially obsolete, 

damaged, or surplus. The allowance for surplus publications is based on life cycle studies of product sales that provide a historical 

basis for the determination of potential excess inventory on hand.

N. Consolidated Statements of Cash Flows 

The consolidated statements of cash flows identify cash receipts and disbursements and classify each into operating, investing, and 

financing activity categories. This statement assesses the ability of GPO to generate funds from current operations to identify financing acquired from outside sources and to identify the major non-operating (investing) uses of funds.

O. Use of Estimates

The preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the 

disclosure of contingent liabilities at the date of the consolidated financial statements, and the amount of revenues and expenses 

reported during the reporting period. Actual results could differ from these estimates. 

The estimates that most significantly impact the assets, liabilities, revenues, and expenses reflected in the accompanying consolidated financial statements are: the allowance for inventory obsolescence for supplies, materials, and publications held for sale; the 

allowance for doubtful accounts related to accounts receivable; the estimated useful lives of capitalized assets; the actuarial estimated 

liability for future workers’ compensation benefits; the product warranty liability for the replacement of defective passport books; 

and the estimate for contingent liabilities.

P. Tax Status

GPO is a legislative branch agency within the Federal Government, and therefore, is not subject to federal, state, or local income 

taxes. Accordingly, no provisions for income taxes are recorded by the Agency.

Section IV: Consolidated Financial Statements
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 43

Q. Reclassifications

Certain amounts included in accounts receivable, net, as of September 30, 2007, have been reclassified as inventory, net, in 

the consolidated balance sheet to conform to the September 30, 2008 presentation. In addition, certain amounts presented 

in General Property, Plant and Equipment, Net, (Note 6) as of September 30, 2007 for computers and computer software 

have been reclassified as computer software in process to conform to the September 30, 2008 presentation. 

2. Fund Balance with Treasury

A table of items included in GPO’s funds with Treasury, including funds on-hand or in-transit to the Treasury, as of 

September 30, 2008 and 2007 follows.

Unrestricted funds are available to meet the financial obligations of the Revolving Fund. Restricted funds are comprised 

of customer deposit accounts, and other restrictions for accrued wages and salaries, payroll taxes and other withholdings, 

earned annual leave not used by employees, and amounts due to the Office of Personnel Management (OPM) from the 

GPO Retirement Separation Incentive Program (RSIP). These funds can only be used for the purpose specified.

Supplemental and other general funds include unexpended appropriations made to the GPO for specific purposes as 

discussed in Net Position, Unexpended Appropriations (Note 12B). 

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Fund Balances: 

Revolving Fund: 

 Unrestricted $ 103,783 $ 117,150

 Restricted: 

 Customer deposit accounts 86,260 77,961

 Other 26,520 23,355

 Total revolving fund 216,563 218,466

General Funds: 

 Congressional printing and binding 22,239 17,620

 Salaries and expenses 20,035 17,645

 Supplemental and other 6,414 19,715 

 Total general funds 48,688 54,980

 Total $ 265,251 $ 273,446 

Status of Fund Balance with Treasury: 

Unobligated balance:

 Available $ 101,752 $ 58,612 

 Unavailable 6,414 19,715

 Total 108,166 78,327

Obligated balance not yet disbursed 157,085 195,119

 Total $ 265,251 $ 273,446
44 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

3. Accounts Receivable, Net

Accounts receivable, net of an allowance for doubtful accounts, as of September 30, 2008 and 2007, consisted of the following.

The majority of accounts receivable are due from other Federal agencies that ordered goods and services from GPO. By law, 

these customers are required to reimburse the GPO Revolving Fund for the cost of their orders.

Unbilled accounts receivable result from the delivery of the goods and performance of services for which bills have not been 

presented to the customer for payment yet. Accordingly, unbilled accounts receivable includes the value of work in process and 

completed work for customer orders as of September 30, 2008 and 2007.

Employee accounts receivable includes amounts owed by current and former employees who were advanced leave. Employees 

generally repay their leave indebtedness through biweekly installments from their earned leave or from leave donations from other 

employees under the GPO Leave Donation Program. 

4. Inventory, Net

Inventories, net of an allowance for surplus and obsolete stock, as of September 30, 2008 and 2007, consisted of the following.

The supplies and materials inventory included $25.1 million in electronic chips at September 30, 2008, compared to $18.4 million 

at September 30, 2007. The computer chips are used in the production of electronic passports. 

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Federal Agencies: 

Unbilled accounts receivable $ 110,031 $ 110,183 

Billed completed work 47,397 38,410

 Subtotal 157,428 148,593

Other receivables: 

The public 2,571 1,685

GPO employees 1,008 934

 Subtotal 3,579 2,619 

 Total accounts receivable 161,007 151,212

Less: Allowance for doubtful accounts (7,311) (5,094)

 Total accounts receivable, net $ 153,696 $ 146,118

(Dollars in thousands)

 2008 2007

Publications for sale $ 6,199 $ 5,406

Paper 4,324 3,455

Supplies and materials 32,518 25,435

Work in process 10,274 4,859

 Total inventory 53,315 39,155

Less: Allowance for surplus and obsolete inventory (5,024) (4,563)

 Inventory, net $ 48,291 $ 34,592
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 45

5. Prepaid Expenses

Prepaid expenses totaled $.9 million as of September 30, 2008, and $4.0 million as of September 30, 2007. This represents a 

decrease of $3.1 million. During fiscal 2007, GPO made advances of $2,854,000 to two contractors manufacturing speciality 

equipment with long construction periods. This plant machinery and equipment was delivered to the new SPF in fiscal 

2008, thereby reducing the prepaid expenses account. On the Consolidated Statement of Cash Flows this transaction has 

been treated as a capital purchase.

6. General Property, Plant and Equipment, Net

Net property, plant and equipment as of September 30, 2008 and 2007, consisted of the following.

The increases in plant machinery and equipment and in leasehold improvements were attributable primarily to the purchase of new equipment and building improvements to the leased property for the new SPF. The increases in computers

and computer software and in software in process result primarily from purchases for the FDsys.

Depreciation expense was $10.4 million for fiscal 2008 and $8.9 million for fiscal 2007.

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Land $ 9,971 $ 9,971

Buildings and improvements 77,886 76,910 

Plant machinery and equipment 88,818 74,128 

Computers and computer software 43,201 35,501 

Furniture and fixtures 6,268 6,231

Motor vehicles 556 565

Leasehold improvements 10,162 729 

Software in process 20,978 10,963

 Total 257,840 214,998 

Less: Accumulated depreciation and amortization (150,646) (147,398)

 General property, plant and equipment, net $ 107,194 $ 67,600 
46 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

7. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of September 30, 2008 and 2007, were composed of the following. 

The increase in accounts payable of $3.5 million was attributable to the net effect of increased demand for goods and services 

acquired by GPO from the commercial sector for printing, and a decrease in other accounts payable. Other accounts payable are for 

the purchase of materials, supplies, and services necessary to continue Agency operations. These include $14.4 million in computer 

chips used in the production of e-Passports in fiscal 2008 and $22.5 million in fiscal 2007.

8. Deferred Revenues 

As of September 30, 2008 and 2007, deferred revenues from customers consisted of the following.

GPO held $86.3 million and $78.0 million in customer deposit accounts as of September 30, 2008 and 2007, respectively. Of 

these amounts, Federal Government customers had advanced funds of $82.9 million and $74.3 million for printing and binding 

deposit accounts, while customers had advanced $3.4 million and $3.7 million for publication and information sales program deposit 

accounts as of September 30, 2008 and 2007, respectively. Additionally, GPO held advanced funds from the Federal Government and 

other customers of $2.8 million and $3.1 million for subscriptions for the sales of publications as of September 30, 2008 and 2007, 

respectively. The restricted funds in these deposit accounts will generally be applied to future orders placed by customers, or may be 

refunded on request.

GPO defers the recognition of revenues for subscription services that will be provided to customers in the future. Customers pay 

for subscriptions to the Congressional Record, the Federal Register, and other publications in advance of delivery. The revenues from 

subscriptions are recognized as the periodicals are published and distributed to subscribers. The unfilled subscription balance will be 

refunded in instances where the subscription is no longer available for sale, or the customer cancels their subscription.

The Agency also defers the recognition of revenues for unfilled customer orders of publications and other information products 

until the orders are shipped.

Additionally, GPO defers the recognition of revenues for advance billings to Federal Government customers. Advance billings are 

occasionally used to finance the cost of producing certain large printing and binding jobs. GPO will recognize the revenue as work 

is completed.

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Deposit accounts $ 86,260 $ 77,961 

Subscriptions 2,773 3,072

Unfilled orders 294 396 

Advance billings 49 286

 Total $ 89,376 $ 81,715

(Dollars in thousands)

 2008 2007

Accounts payable: 

Commercial printing $ 51,619 $ 42,761

U.S. Government agencies 14,305 13,488 

Other 31,454 39,573 

 Total accounts payable 97,378 95,822 

Accrued salaries and payroll taxes 15,480 13,502 

 Total accounts payable and accrued expenses $ 112,858 $ 109,324 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 47

9. Workers’ Compensation Liability

The DOL develops an actuarial estimate of future workers’ compensation benefits for each Federal entity to use for financial reporting each year. The U.S. Department of the Treasury requires Federal entities to use DOL’s estimates for intra-governmental accounting of this liability. The workers’ compensation liability estimate for GPO was $67,067,000 as of September 30, 2008, and $66,723,000 

as of September 30, 2007. 

The DOL liability estimate includes the expected payments for death, disability, medical, and miscellaneous costs for approved 

compensation cases, as well as a component for incurred but not reported claims. The liability is determined using historical benefit 

payment patterns related to specific incurred periods to predict the ultimate payments related to those periods. The methodology 

provides for the effects of inflation and adjusts historical payments to current year constant dollars by applying wage inflation factors 

(cost of living adjustments or COLAs) and medical inflation factors (consumer price index medical or CPIMs) to the calculation of 

projected benefits. The COLAs and CPIMs used in the compensation projections for 2008 and 2007 follow.

Projected annual payments were discounted to the present value based on the Office of Management and Budget’s (OMB) 

economic assumptions for 10-year Treasury notes and bonds. For 2008, interest rate assumptions were 4.368 percent in Year 1, and 

4.770 percent in Year 2 and thereafter. For 2007, interest rate assumptions were 4.930 percent in Year 1, and 5.078 percent in Year 2 

and thereafter.

10. Commitments

 10. A. Operating Leases

As of September 30, 2008, GPO was committed to various non-cancelable operating leases, primarily covering warehouse and office 

space. Some of these leases contain escalation clauses and renewal options. A schedule of future minimum rental payments required 

under operating leases by type, which have initial or remaining non-cancelable lease terms in excess of one year, follows.

Lease and rental expenses for real and personal property were $4.1 million and $3.7 million for fiscal 2008 and 2007, respectively. 

Section IV: Consolidated Financial Statements

 

COLA CPIM

Fiscal Year 2008 2007 2008 2007

2008 N/A 2.63% NA 3.74%

2009 3.87% 2.90% 4.01% 4.04%

2010 2.73% 2.47% 3.86% 4.00%

2011 2.20% 2.37% 3.87% 3.94%

2012 2.23% 2.30% 3.93% 3.94%

2013 and beyond 2.30% 2.30% 3.93% 3.94%

Future Minimum Rental Payments Required Under Operating Leases

(Dollars in thousands)

Fiscal Year Warehouse Office Total

2009 $ 1,004 $ 513 $ 1,517

2010 993 360 1,353

2011 534 176 710

2012 381 147 528

2013 64 1 65

2014 and beyond — — —

 

Total minimum lease payments $ 2,976 $ 1,197 $ 4,173
48 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

 10. B. Obligations

GPO had unliquidated obligations of $157.1 million and $195.1 million, at September 30, 2008 and 2007, respectively, of which 

$125.9 million and $166.4 million, respectively, are undelivered orders related to commercial printing. These obligations include 

purchase orders and contractual obligations by GPO to acquire goods and services from the private sector and other sources. Some 

of these orders are scheduled for delivery or performance in the next fiscal year.

 10. C. Product Warranty Liabilities

GPO and the U.S. Department of State (State) share responsibility for the replacement of defective e-Passports. State is responsible 

for the cost associated with the replacement of the first 2-percent, per order, of blank e-Passports containing defective computer 

chips. GPO is liable for any warranty expense that exceeds 2-percent, per order, of passport books that are deemed to have failed 

due to GPO production problems.

The following table summarizes the warranty activity for the years ended September 30, 2008 and 2007.

GPO reserved $1.4 million and $4.8 million for product warranty liabilities at September 30, 2008 and 2007, respectively. This 

liability was reduced in fiscal 2008 because there were no replacement claims made by State in fiscal 2007 or 2008.

11. Contingencies

 11. A. Administrative Proceedings, Legal Actions, and Claims

GPO is a party in various administrative proceedings, legal actions, and claims brought against the Federal Government by employees, contractors, and other parties. The uncertainty involving the outcome of these pending matters will be resolved when future 

events occur or fail to occur. In some cases, legal matters relate to contractual arrangements GPO has entered into for goods and 

services procured on behalf of other Federal entities. The costs of administering, litigating, and resolving these actions are borne by 

the GPO Revolving Fund unless the costs are recovered from another Federal entity.

As of September 30, 2008 and 2007, GPO has recorded estimated liabilities of $155,000 and $90,000, respectively, related to two 

claims that management believes the likelihood of an adverse result against GPO is probable. Such amounts are included in accounts 

payable and accrued expenses in the accompanying balance sheets. Certain legal matters in which GPO is a named party may be 

administered and litigated on behalf of GPO by the U.S. Department of Justice. In these cases, amounts paid under any judgment, 

compromise settlement, or award are funded from the Judgment Fund administered by the U.S. Department of the Treasury (31 

U.S.C. § 1304). The Judgment Fund paid a total of $67,000 and $64,000 on behalf of GPO for the years ended September 30, 2008 

and 2007, respectively. These amounts are not reflected in GPO’s consolidated financial statements.

There were no litigation contingencies involving GPO where the risk of loss was reasonably possible as of September 30, 2008 

and as of September 30, 2007.

 11. B. Environmental Liabilities

The GPO Central Office in Washington, DC, is located in an industrial facility comprised of four older buildings that contain asbestos 

building materials. When they were constructed, asbestos was a common building material used as flame retardant, thermal system 

insulation, and in a variety of building materials (e.g., wall, floor, and ceiling tiles). GPO asbestos abatement efforts have been 

successful in the removal, enclosure, and encapsulation of friable asbestos to comply with applicable laws and regulations. GPO 

routinely performs asbestos abatement when unexposed asbestos is detected during building renovation projects.

Section IV: Consolidated Financial Statements

Warranty Liability for U.S. Passports (Dollars in thousands)

2008 2007

Beginning Balance $ 4,833 $ —

Provision and adjustments (3,415) 4,833

Cost of replacement U.S. Passports — —

Ending Balance (September 30) $ 1,418 $ 4,833
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 49

The estimated costs to remove exposed asbestos within the GPO facility, mainly pipe insulation that has been encapsulated, were 

$580,000 as of September 30, 2008 and $570,000 as of September 30, 2007. These amounts are included in accounts payable and 

accrued expenses on the consolidated balance sheet. The costs to remediate all non-visible asbestos is not reasonably estimable and 

accordingly has not been accrued in the accompanying financial statements due to the uncertainty surrounding the date and manner 

in which the liability will be settled.

12. Net Position

 12. A. Cumulative Results of Operations

Retained Earnings – Retained earnings include the net operating results of the GPO Revolving Fund, since inception, less certain 

required transfers to other Federal agencies.

Invested Capital – Invested capital represents the resources of the Federal Government that were directly appropriated to the 

Agency by Congress for investment in GPO assets (land, buildings, equipment, and capital).

 12. B. Unexpended Appropriations

The following table presents the unexpended appropriation balances from September 30, 2006 through September 30, 2008, for the 

appropriations made available to GPO.

As of September 30, 2008, GPO had obligated all the $22.2 million of the unexpended appropriations available for Congressional 

Printing and Binding, and all the $18.1 million of the unexpended appropriations available for Salaries and Expenses. This 

$40.3 million in obligations is based on the estimated cost of open orders as of September 30, 2008. The obligations totaled $32.5 

million at September 30, 2007. This amount consisted of $17.6 million in obligations against Congressional Printing and Binding 

Appropriations and $14.9 million in obligations against Salaries and Expenses Appropriations.

The Revolving Fund unexpended appropriations balances at September 30, 2008 and September 30, 2007 were $6.4 million and 

$19.7 million, respectively. The Revolving Fund unexpended appropriations balances are the results of the following appropriation 

activities:

In fiscal 2001, Congress authorized the transfer of $9.5 million to the Revolving Fund from prior year Congressional Printing and 

Binding Appropriations to cover the cost of congressional work. At the end of fiscal 2008, the entire $9.5 million was expended. 

In fiscal 2001, Congress also authorized the transfer of $3.3 million to the Revolving Fund from prior year Salaries and Expenses 

Appropriations to pay for the printing and distribution of publications to depository libraries. At the end of fiscal years 2008 and 

2007, a balance of $1.3 million was available for future expenditures.

Section IV: Consolidated Financial Statements

(Dollars in thousands) 

Revolving Salaries and Congressional

Fund Expenses Printing and

Appropriations Appropriation Appropriation Binding Appropriation Total

Unexpended balance at September 30, 2006 $ 26,233 $ 11,117 $ 30,413 $ 67,763 

 2007 fiscal year appropriation activity:

 Received 1,000 33,096 87,954 122,050 

 Transferred 5,700 — (5,700) —

 Expended (13,218) (29,286) (95,046) (137,550)

Unexpended balance at September 30, 2007 19,715 14,927 17,621 52,263 

 2008 fiscal year appropriation activity:

 Received — 34,913 89,775 124,688 

 Transferred 1,230 — (1,230) —

 Expended (14,531) (31,730) (83,927) (130,188)

Unexpended balance at September 30, 2008 $ 6,414 $ 18,110 $ 22,239 $ 46,763 

 
50 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

In fiscal 2005, Congress authorized GPO to transfer $22 million to the GPO Revolving Fund from prior year appropriated funds 

to finance the development of the FDsys. These funds were also available for annual appropriation shortfalls. The $22 million transfer consisted of $14.6 million from Congressional Printing and Binding Appropriations and $7.4 million from Salaries and Expenses 

Appropriations. As of September 30, 2008, GPO has expended $20.9 million of these appropriated funds. At the end of fiscal years 

2008 and 2007, balances of $1.1 million and $10.0 million were available for future expenditures, respectively.

In fiscal 2005, GPO transferred $2.5 million from the prior year’s unexpended Salaries and Expenses Appropriation to the GPO 

Revolving Fund. The funds were advanced to the U.S. Department of the Interior (i.e., GovWorks) for improvements to GPO Access 

that were ordered in fiscal 2004. System enhancements included increased storage capacity, stronger security, and improved user 

performance. This major project was completed during fiscal 2008 with procurement assistance from GovWorks, a Federal acquisition center. As a result, the entire $2.5 million was expended as of September 30, 2008.

In fiscal 2006, Congress appropriated $2 million (before rescission of $20,000) to the Revolving Fund for workforce retraining. 

GPO expended a total of $1,407,000 from the $1,980,000 in available appropriations. At the end of fiscal 2008, $573,000 was available for future expenditures. In fiscal 2007, Congress appropriated an additional $1 million to the GPO Revolving Fund for workforce retraining. At the end of fiscal 2008, the entire balance of $1 million was available for future expenditures.

In fiscal 2007, Congress authorized the transfer of $5.7 million to the GPO Revolving Fund from prior year Congressional Printing 

and Binding Appropriations to help cover appropriation shortfalls through fiscal 2007. At the end of fiscal 2008, a balance of $1.3 

million was available for expenditure.

In fiscal 2008, Congress authorized the transfer of $1.23 million to the GPO Revolving Fund from prior year Congressional 

Printing and Binding Appropriations to help cover appropriation shortfalls. At the end of fiscal 2008, a balance of $1.1 million was 

available for expenditure. 

13. Appropriated Funds

 13. A. Available Appropriations

The total net appropriations made available to GPO, after rescissions, for fiscal years 2008 and 2007, were as follows.

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Congressional printing and binding $ 89,775 $ 87,954 

Salaries and expenses 34,913 33,096

Workforce retraining — 1,000 

Total available appropriations $ 124,688 $ 122,050 
UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 51

 13. B. Expended Appropriations

The total appropriations expended by GPO during fiscal years 2008 and 2007, were as follows.

Section IV: Consolidated Financial Statements

(Dollars in thousands)

 2008 2007

Congressional printing and binding: 

Congressional Record products $ 23,615 $ 25,920 

Miscellaneous publications and printing and binding 20,177 23,690

Hearings 16,019 19,595 

Bills, resolutions, and amendments 7,378 11,624 

Details to Congress 2,619 2,922 

Other 14,119 11,295 

 Total congressional printing and binding 83,927 95,046

Salaries and expenses: 

Depository library distribution 23,309 21,235 

Cataloging and indexing 6,368 6,347

By-law distribution 705 547 

International exchange 1,348 1,157 

 Total salaries and expenses 31,730 29,286 

Revolving Fund: 

Appropriations 13,854 12,749

Workforce retraining 677 469 

 Total revolving fund 14,531 13,218

 Total expended appropriations $ 130,188 $ 137,550 

Reconciliation of expended appropriations to the

consolidated statements of revenues, expenses, 

and changes in retained earnings: 

 Total expended appropriations $ 130,188 $ 137,550 

Eliminations (Intra-agency) (77) (509)

Consolidated revenues from appropriations $ 130,111 $ 137,041 
52 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

14. Employee Benefit Plans

GPO funds a portion of pension contributions for its employees under the Civil Service Retirement System (CSRS) and the Federal 

Employees Retirement System (FERS), and makes payroll deductions from employees for their pension contributions. OPM determines the employer contributions for these defined benefit plans that are required to be paid by GPO. OPM is responsible for 

Government-wide reporting of CSRS and FERS assets, accumulated plan benefits, and unfunded liabilities. In accordance with FASB, 

and consistent with multi-employer pension plans, GPO has reflected only the required contribution to these programs in its financial statements. OPM is responsible for funding any other costs. Therefore, GPO is not required to disclose the unfunded pension 

liability and post-employment benefits relative to its employees.

Civil Service Retirement System

The CSRS is a defined benefit plan. Generally, it covers Agency employees first hired before 1984. Total GPO (employer) contributions to CSRS for employees covered under this retirement program were 7.5 percent of basic pay in both 2008 and 2007 for 

investigators and law-enforcement officers, and 7 percent of basic pay in both years for all other employees. GPO contributions were 

$4.1 million and $4.4 million for the years ended September 30, 2008 and 2007, respectively.

Federal Employees Retirement System

Using Social Security benefits as a base, FERS provides a defined benefit plan (Basic Benefit Plan) and a voluntary defined contribution plan. Employees first hired after December 31, 1983 were automatically covered by FERS and Social Security, while employees 

hired prior to January 1, 1984 were able to choose between joining this plan or remaining in CSRS.

The employer contribution rate to FERS for GPO law enforcement officers was 24.9 percent of basic pay in fiscal 2008 and 23.8 

percent in fiscal 2007. The FERS contribution rate for all other employees was 11.2 percent in both years. GPO contributions to FERS 

totaled $11.6 million for fiscal 2008 and $9.6 million for fiscal 2007.

Thrift Savings Plan

The Thrift Savings Plan (TSP) allows employees to defer the recognition of income tax on contributions made to the plan. The TSP 

elective deferral limit for employees was $15,500 for 2008 and 2007. Employees, who were 50 years or older, were allowed additional catch-up contributions of $5,000 in 2008 and 2007. For FERS employees, the employer is required to contribute 1 percent of 

the employee’s base pay to the TSP, and to match voluntary employee contributions dollar-for-dollar for the first 3 percent of pay, 

and 50 cents on the dollar for the next 2 percent of pay. Thus, the employer contribution to the TSP can be up to 5 percent for FERS 

employees. Employees participating in CSRS may contribute to the TSP, but they do not receive any matching contributions from the 

employer. GPO made employer contributions to the TSP of $3.6 million in fiscal 2008 and $3.2 million in fiscal 2007. 

Social Security System

As an employer, GPO matches employee contributions to the U.S. Social Security Administration (SSA) under the Federal Insurance 

Contributions Act (FICA) for employees in the FERS. GPO contributes matching amounts of 6.2 percent of gross pay (up to $102,000 

in 2008 and $97,500 in 2007) to SSA’s Old Age, Survivors, and Disability Insurance (OASDI) Program. Additionally, GPO makes 

matching contributions for all employees of 1.45 percent of gross pay, without limit, to SSA’s Medicare Hospital Insurance Program. 

Contributions to these SSA programs for the years ended September 30, 2008 and 2007 totaled $9.4 million and $8.0 million, 

respectively.

Employment, Pension, and Other Post-Employment Benefits Provided by Others

OPM is responsible for the management, administration, and funding of certain Government-wide programs that provide pension 

and other post-employment benefits to retired employees of the Federal Government. These OPM administered programs provide 

benefits to former employees of GPO. OPM administered pension programs include the CSRS and the FERS. Other OPM administered programs provide health, life, and long-term care insurance benefits to active, inactive, and retired employees. Permanent employees of GPO may participate in the Federal Employees Health Benefit Program (FEHBP), Federal Employee Group Life Insurance 

Program (FEGLIP), and/or Federal Long Term Care Insurance Program (FLTCIP) before and after their retirement from the Agency.

15. Concentration of Credit Risk

GPO financial instruments, none held for trading purposes, consist primarily of funds with Treasury, accounts receivable, and 

accounts payable at September 30, 2008 and 2007. GPO estimates the fair value of financial instruments at September 30, 2008 and 

2007 to be the carrying value.

Section IV: Consolidated Financial Statements
16. Major Customers

GPO’s primary customers are the Congress and large Federal agencies in the Executive Branch of the Federal Government. In 

fiscal years 2008 and 2007, billings to those customers representing 10 percent or more of GPO’s total billings follow.

Department of Health & Human Services

The increase in billings to the U.S. Department of State in fiscal 2008 is attributable to the increased demand for U.S. 

Passports.

17. Regional Operations

The GPO Central Office and regional offices work to serve the Agency’s customers located throughout the entire United 

States and overseas. From time to time, changes in regional operations, such as openings and closings, are necessary to 

improve customer service and maintain economical and efficient operations. Two changes to regional operations occurred 

during fiscal 2008.

GPO opened a new Secure Production Facility (SPF) to produce e-Passports. The new SPF is in a remote, secure 

location on Federal Government property leased from another Federal agency. The project, budgeted at $41.4 million, was 

completed at a cost of approximately $32.1 million. As agreed to with the U.S. Department of State, funding for the project 

was derived from the price GPO charged for e-Passports. This new facility supplements existing passport production 

operations and supports the Agency’s plans for continuity of business operations.

GPO completed efforts that had started in fiscal 2006 to reduce leased space at their warehousing and distribution facility in Laurel, Maryland. The total leased space was reduced from 202,000 to 104,460 square feet under this management 

cost savings initiative. 

Section IV: Consolidated Financial Statements

UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008 53

(Dollars in thousands)

 2008 2007

Amount Percent Amount Percent

Department of State $ 366,302 35.1% $ 230,424 24.5%

Department of Defense 162,506 15.6% 145,218 15.5%

Congress of the United States 90,498 8.7% 95,477 10.2%

83,797 8.0% 97,124 10.3%
54 UNITED STATES GOVERNMENT PRINTING OFFICE Financial Year in Review — FY 2008

ACRONYM LIST

COLA Cost of Living Adjustments 

CP&B Congressional Printing and Binding

CPIM Consumer Price Index Medical

CSRS Civil Service Retirement System 

DoD U.S. Department of Defense 

DOL U.S. Department of Labor 

EFT Electronic Funds Transfer

e-Passport Electronic Passport Book 

FASAB Federal Accounting Standards Advisory Board 

FASB Financial Accounting Standards Board 

FDLP Federal Depository Library Program 

FDsys GPO’s Federal Digital System

FECA Federal Employees’ Compensation Act 

FEGLI Federal Employees’ Group Life Insurance 

FEGLIP Federal Employee Group Life Insurance Program

FEHB Federal Employees Health Benefits 

FEHBP Federal Employees Health Benefit Program 

FERS Federal Employees Retirement System 

FICA Federal Insurance Contributions Act

FLTCIP Federal Long Term Care Insurance Program 

GAAP U.S. Generally Accepted Accounting Principles

GAO U.S. Government Accountability Office

GBIS U.S. Government Printing Office Business Information System 

GPO or Agency U.S. Government Printing Office 

GSA U.S. General Services Administration 

IPAC Intra-governmental Payment and Collection 

ISO International Organization for Standardization 

JCP Joint Committee on Printing 

OASDI Old Age, Survivors, and Disability Insurance 

OIG Office of the Inspector General

OMB Office of Management and Budget 

OPM Office of Personnel Management 

PKI Public Key Infrastructure 

RSIP GPO Retirement Separation Incentive Program 

S&E Salaries and Expenses

SPF Secure Production Facility

SSA U.S. Social Security Administration 

State U.S. Department of State 

Treasury U.S. Department of the Treasury

TSP Thrift Savings Plan 

U.S.C. United States Code

50% Black + 100% Black

PMS 540 + 100% Black

White (version for reverse)

White (version for reverse)

732 North Capitol Street, NW, Washington, DC 20401-0001