46 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

About the Financial Section

I

n FY 2021, the Department prepared its financial 

statements as a critical aspect of ensuring accountability 

and stewardship for the public resources entrusted to it. 

Preparation of these statements is an important part of 

the Department’s financial management goal of providing 

accurate and reliable information for decision-making.

FINANCIAL STATEMENTS AND NOTES

The Consolidated Balance Sheets summarize the assets, 

liabilities, and net position by major category as of the 

reporting date. Intragovernmental assets and liabilities 

resulting from transactions between federal agencies 

are presented separately from assets and liabilities from 

transactions with the public.

The Consolidated Statements of Net Cost show, by 

program, the net cost of operations for the reporting 

period. Net cost of operations consists of full program 

costs incurred by the Department less exchange revenues 

earned by those programs.

The Consolidated Statements of Changes in Net 

Position present the Department’s beginning and 

ending net position by two components—Unexpended 

Appropriations and Cumulative Results of Operations. 

It summarizes the change in net position by major 

transaction category. The ending balances of both 

components of the net position are also reported on the 

Consolidated Balance Sheets.

The Combined Statements of Budgetary Resources

present the budgetary resources available to the 

Department, the status of these resources, and the outlays 

of budgetary resources.

The Notes to the Financial Statements provide 

information to explain the basis of the accounting and 

presentation used to prepare the statements and to 

explain specific items in the statements. They also provide 

information to support how particular accounts have been 

valued and computed.

Note 1. Summary of Significant Accounting Policies

Note 2. Non-Entity Assets

Note 3. Fund Balance with Treasury

Note 4. Other Assets

Note 5. Loan Receivables, Net, and Loan 

Guarantee Liabilities

Note 6. Liabilities Not Covered by 

Budgetary Resources

Note 7. Debt Associated with Loans

Note 8. Subsidy Due to Treasury

Note 9. Other Liabilities

Note 10. Net Cost of Operations 

Note 11. COVID-19 Activity

Note 12. Statements of Budgetary Resources

Note 13. Reconciliation of Net Cost to Net Outlays

Note 14. Commitments and Contingencies

Note 15.

Note 16.

Subsequent Event

Reclassification of Statement of Net Cost and 

Statement of Operations and Changes in Net 

Position for FR Compilation Process
FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 47

AbOuT ThE FINANCIAL SECTION | FINANCIAL SECTION

REPORT OF ThE INDEPENDENT AuDITORS

The results of the audit of the Department’s financial 

statements for FY 2021 and FY 2020 to comply with 

the Chief Financial Officers Act of 1990, as amended, are 

presented to be read in conjunction with the Financial 

Section in its entirety. The Department’s Office of Inspector 

General contracted with the independent certified public 

accounting firm of KPMG LLP to audit the financial 

statements of the Department as of September 30, 2021, and 

2020, and for the years then ended. 

R E Q u I R E D S u P P L E M E N TA RY 

INFORMATION (uNAuDITED)

This section contains the Combining Statements of 

Budgetary Resources for the years ended 

September 30, 2021, and September 30, 2020.