from the secretary of the treasury...

STATEMENT OF THE

SECRETARY OF THE TREASURY

The Department of the Treasury’s Financial Management Service has prepared

the ‘‘Consolidated Financial Statements of the United States, Prototype 1995,’’

which provides an unaudited summary of information on Federal operations and

financial positions.

During fiscal year 1995, the American economy continued to expand, aided in

part by the effects of the 1993 deficit reduction package. As a result, these

statements reflect a significantly improved federal financial picture for fiscal year

1995. For the third year in a row, the federal budget deficit declined----it was

reduced by $39 billion to $164 billion----its lowest level since 1989. In addition,

inflation remained low at 2.5%, the unemployment rate dropped to 5.6%, and

overall, the economy grew by 2.0% (real GDP).

The Department of the Treasury, the Office of Management and Budget (OMB),

and the General Accounting Office are working with a Task Force of agency Chief

Financial Officers and Inspectors General to ensure that the necessary financial

information is available to meet the requirement of the Government Management

and Reform Act of 1994 that all major federal agencies prepare audited financial

statements for fiscal year 1996 by March 1, 1997. The act also requires that

Treasury issue the first Government-wide audited financial statements covering

fiscal year 1997 by March 31, 1998.

To help federal agencies meet these requirements and paint the federal financial

picture more clearly, the Director of OMB, the Comptroller General of the United

States, and I have approved all of the basic accounting standards recommended

by the Federal Accounting Standards Advisory Board. This marks the beginning

of an era, where for the first time, the Federal Government has a body of

‘‘generally accepted accounting principles’’ to govern the preparation of financial

statements by departments and agencies. The implementation of these standards

will improve the quality of the financial data presented in future consolidated

statements. 

Robert E. Rubin

cfs statement 1

 
from the comptroller general...

Comptroller General

of the United States

Washington, D.C. 20548

For fiscal year 1996, our national government will achieve an important milestone

when the 24 major federal departments and agencies prepare financial statements

and have them independently audited. This is a major step in providing more useful

and reliable information for decisionmakers to effectively manage government

operations. These annual statements----required by the Government Management

Reform Act (GMRA) of 1994, which expanded the requirements of the Chief

Financial Officers Act of 1990----will help to identify and address weaknesses and

high-risk areas and will offer meaningful data to assess the performance of entities

that make up 99 percent of federal outlays.

Starting with fiscal year 1997, GMRA also mandates that the Department of the

Treasury prepare annual consolidated financial statements for the executive branch

and that the statements be audited by GAO. These new statements will replace the

accompanying unaudited prototype financial statements, which have limited

usefulness and reliability. This upgraded financial reporting and our associated 

audit role are key parts of the federal government’s commitment to, for the first

time, give the American people an overall scorecard on the national government’s

financial status and stewardship.

We are working closely with the executive branch and the Congress to address the

unique circumstances affecting the accounting, reporting, and auditing of both the

agencywide and governmentwide financial statements. While important progress

has been made over the past several years, as I have reported in the past, agency

financial managers must continue to (1) build integrated information systems

capable of producing reliable financial, cost, and performance information, 

(2) establish effective systems of internal control to better control risks, and 

(3) develop more effective financial organizations with the strong leadership

needed to produce auditable financial statements and provide quality services in an

efficient manner. Full government accountability to the American public will only

be achieved by continuing to make sustained progress in these areas.

Charles A. Bowsher

2 statement cfs

 
Economic and Budget Results for Fiscal 1995

AFTER RAPID ACCELERATION IN FISCAL

1994, economic growth slowed in fiscal

1995 to a rate more in line with steady,

long-term trends consistent with low inflation. Despite the slower pace, job growth

continued through the fiscal year, with

over 2-1/2 million new jobs added. The

unemployment rate remained within a

very low 5.4 percent to 5.7 percent band.

Inflation was well contained, with the underlying rate of inflation dropping below

3 percent over the fiscal year for the first

time in 23 years. The Federal budget deficit continued to fall, declining by $39 billion in fiscal 1995 for a total drop of $127

billion over the past 3 fiscal years.

The Economy in Fiscal 1995

Real gross domestic product (GDP)

grew by 2.0 percent across the four quarters of fiscal 1995, which encompasses

the fourth quarter of calendar 1994

through the third quarter of calendar

1995. This was much slower than growth

over the four quarters of fiscal 1994,

when GDP expanded by 3.9 percent. That

rate of growth had led to increased concerns about a possible speed-up in the

rate of inflation, prompting the Federal

Reserve Board to tighten monetary policy

during the course of fiscal 1994 and on

into fiscal 1995. The rate of economic

growth dropped from 3.0 percent at an annual rate in the first quarter of fiscal 1995

to an average of just 0.6 percent in the

next two quarters. Growth accelerated to

a 3.8 percent pace by the final quarter of

the fiscal year.

All sectors of the economy slowed in fiscal 1995, but the deceleration was most

dramatic in housing. Residential construction (in real terms) had surged by 11.6

percent over the four quarters of the prior

fiscal year after mortgage interest rates

dropped to 25-year lows. As rates moved

up and growth in jobs and income settled

down, expansion of residential housing

eased, and by the end of fiscal 1995, residential construction spending was 3.0 percent lower than at the end of fiscal 1994.

Consumer spending moderated in fiscal 1995 to a 2.4 percent increase from

3.0 percent in fiscal 1994, with most of

the softness occurring in the second quarter of the fiscal year. Business investment

spending also slowed over the fiscal year,

especially in the second half. Growth in

business fixed investment averaged 13.7

percent at an annual rate in the first two

quarters of the fiscal year, but just 4.2 percent in the final two quarters.

Employment gains also moderated in

fiscal 1995, but the economy still added

more than 2-1/2 million new jobs. Most

of those jobs were in the private serviceproducing sector, with especially strong

growth in business services. Employment

in manufacturing remained essentially

flat over the fiscal year after growing by

330,000 in fiscal 1994. The unemployment rate stayed within a very narrow

range of 5.4 percent to 5.7 percent over

the course of fiscal 1995, the lowest rates

of unemployment in 5 years. Broad measures of inflation remained very subdued

in fiscal 1995. Consumer prices increased

just 2.5 percent over the year, below the

3.0 percent rate of increase in fiscal 1994.

Declining energy prices contributed to

the lower rate, but underlying inflation

was also well behaved. Excluding food

and energy, the ‘‘core’’ rate of inflation

dipped to 2.9 percent in fiscal 1995, the

first time it went below 3.0 percent since

1972.

Growth in the first three quarters of fiscal 1996 started out weak but then picked

up speed. The economy slowed to a 0.3

percent rate of growth in the first quarter

of the 1996 fiscal year, but then accelerated rapidly over the next two quarters.

Inflation in fiscal 1996 remains under

control----higher energy prices at the beginning of the fiscal year have since receded. Over the next several quarters the

economy is projected to resume a modercfs discussion and analysis 3

 
ate growth rate consistent with its longterm potential.

Budget Results

The Federal budget deficit narrowed

significantly in fiscal 1995, declining by

$39 billion to $163.9 billion, the lowest

in 6 years. After reaching an all-time high

of $290.4 billion in fiscal 1992, the deficit has dropped by a total of $126.5 billion over the past 3 years. As a share of

GDP, the deficit fell from 4.7 percent in

fiscal 1992 to 2.3 percent in fiscal 1995,

the lowest share since fiscal 1979.

The large improvement over the last 3

years resulted partly from passage of the

President’s Economic Plan in 1993 (the

Omnibus Budget Reconciliation Act) and

partly from the speed-up in economic

growth since 1992. The 1993 Budget Act

provided for $505 billion in total deficit

reduction across the 5 years ending in fiscal 1998 from what otherwise would

have occurred. That figure was about

evenly split between revenue increases

and curbs on growth of spending.

In fiscal 1995, growth of outlays was

held to $58 billion, or 4.0 percent. That

figure was held down a bit by a timing

quirk in the calendar, which artificially

boosted outlays in fiscal 1994, and by

large asset sales in the deposit insurance

account, which are counted as negative

outlays. Excluding the timing differences

and the outlays of the deposit insurance

agencies, growth of outlays in fiscal 1995

was closer to 5.0 percent.

Outlays for defense continued to decline in fiscal 1995, down by $9-1/2 billion, or 3.4 percent. Along with lower

defense spending, budget balance was

also assisted by declines in farm support

payments, resulting from strong farm

prices, and in unemployment insurance

benefits, reflecting lower unemployment.

Net interest payments, in contrast,

jumped by $29.2 billion, or 14.4 percent,

in fiscal 1995 due to higher interest rates.

Receipts increased by 7.8 percent in

the fiscal year, which was more than 3

percentage points faster than the rise in

economic activity over the fiscal year, as

measured by the nominal value of GDP.

Growth of receipts in 1995 was led by an

11.8 percent advance in corporate income

tax receipts, reflecting a strong gain in

profits.

The deficit is on track to decline further in fiscal 1996. The fiscal 1996 deficit

is expected to fall to $116.8 billion, $47

billion below the fiscal 1995 level. If realized, this would be the smallest deficit in

15 years. It would represent less than a

1.6 percent share of GDP, the lowest

since fiscal 1974.

4 discussion and analysis cfs

 
Revenues and Expenses

The graphs on this page show the amounts of

the U.S. Government revenues and expenses

for fiscal 1995 and 1994. The charts below

show categories of revenues by source, and a

breakdown of the Government’s expenses by

agency. Charts are in billions of dollars. All

revenues levied under the Government’s

sovereign power are reported on the cash

basis. Revenues earned through Government

business-type operations and the data

supporting the graph of expenses by agency

are reported on the accrual basis.

Sources of Revenues

Categories of Expenses

1

 Includes EPA, GSA, NASA, OPM, SBA, and other independent agencies.

2

 Does not include interest on investments held by Government agencies.

3

 Departmental agencies with expenses less than $50 billion.

6 discussion and analysis cfs
Major Categories of Assets

as of September 30, 1995

Assets are resources owned by or

owed to the Federal Government that are

available to pay liabilities or to provide future public services. The chart below is

derived from the Statement of Financial

Position (page 11). It depicts the major

categories of assets as of September 30,

1995, as a percentage of total assets.

The components for each of these categories are contained in Notes to Financial

Statements.

Total Assets:

$1,298.3 billion

Assets, Liabilities,

and Accumulated

Position as of

September 30,

1994-1995

(In billions of dollars)

The chart at right depicts assets,

liabilities, and accumulated position reported in the Statement of

Financial Position, as of September 30, 1994-1995.

cfs discussion and analysis 7
Gross Accounts and Loans Receivable

as of September 30, 1995

The amounts in these graphs were derived from the agencies’ adjusted trial balances (ATB) as reported on the Federal

Agencies’ Centralized Trial-Balance System (FACTS). These gross amounts, less

allowances of $79.4 billion and $68.8

billion for accounts receivable and loans

receivable, respectively, are included in

the Statement of Financial Position on

page 11.

Accounts Receivable

Total: $166.6 billion

Loans Receivable

Total: $189.6 billion

* Includes Executive Office of the President.

8 discussion and analysis cfs
Commitments

and Contingencies

For a breakdown of the figures illustrated in these

charts, see Commitments and Contingencies of the

United States Government for the Years Ended September 30, 1995 and 1994, on pages 26 and 27.

Commitments

Total: $438.0 billion

Contingencies (at face value)

Total: $5,419.5 billion

cfs discussion and analysis 9
Federal Debt

The following charts represent different facets of the net Federal debt, excluding intragovernmental investments. For abreakdown of the Federal debt, see the

tables on pages 18 and 19.

Types of Securities as of

September 30, 1994-1995

(In billions of dollars)

Federal Debt

Held by the

Public, Fiscal

1991-1995

(In billions of dollars)

Interest Expense

for Federal Debt

Held by the

Public, Fiscal

1991-1995

(In billions of dollars)

10 discussion and analysis cfs
consolidated financial statements

United States Government

Consolidated Statement of Financial Position,

as of September 30 (Unaudited) 

(In billions of dollars)

Assets 1995 1994*

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.8 56.3

Other monetary assets (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 126.7 126.2

Accounts receivable, net of allowances (Note 4) . . . . . . . . . . . . . . 87.2 76.6

Inventories and related properties. . . . . . . . . . . . . . . . . . . . . . . . . . 259.1 222.9

Loans receivable, net of allowances (Note 4). . . . . . . . . . . . . . . . . 120.8 118.8

Advances and prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 22.8

Property, plant, and equipment, net of accumulated depreciation . 503.4 576.2

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109.4 151.1

Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,297.6 1,350.9

Liabilities 

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.2 48.4

Interest payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.3 45.1

Accrued payroll and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 17.2

Unearned revenue (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.8 36.0

Federal Debt held by the public (Note 9) . . . . . . . . . . . . . . . . . . . . 3,603.3 3,432.3

Pensions and other actuarial liabilities (Note 10) . . . . . . . . . . . . . . 1,628.2 1,526.2

Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425.5 251.9

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5,810.6 5,357.1

Accumulated position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

-4,513.0 -4,006.2

The accompanying notes are an integral part of this statement.

* Amounts are restated due to Defense audit adjustments.

cfs consolidated financial statements 11
United States Government

Consolidated Statement of Operations

for the Year Ended September 30

(Unaudited)

(In billions of dollars)

Revenues 1995 1994 

Levied under the Government’s sovereign power:

Individual income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590.2 543.1

Corporate income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.0 140.4

Social insurance taxes and contributions. . . . . . . . . . . . . . . . . . . 484.5 461.5

Excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.5 55.2

Estate and gift taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.8 15.2

Customs duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.3 20.1

Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.3 22.0

1,350.6 1,257.5

Earned through Government business-type operations:

Sale of goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.0 82.1

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 10.6

Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.0 35.9

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,481.0 1,386.1

Expenses by agency

Legislative branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 2.5

Judicial branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 2.6

Executive branch:

Funds appropriated to the President 1

. . . . . . . . . . . . . . . . . . . . . 1.8 1.2

Departments:

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1 73.6

Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 3.2

Defense (military) 2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248.6 274.1

Defense (civil). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.2 26.5

Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 29.0

Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 26.2

Health and Human Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 342.5 301.2

Housing and Urban Development . . . . . . . . . . . . . . . . . . . . . . . 34.6 29.0

Interior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 6.7

Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 6.9

Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 34.3

State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 6.9

Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.2 37.6

Treasury:

Interest on debt held by the public. . . . . . . . . . . . . . . . . . . . . . 234.2 207.7

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.5 26.2

Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.5 21.1

Independent:

Social Security Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 362.7 330.6

Other 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198.3 134.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,791.0 1,581.3

Veterans Affairs adjustment for actuarial liability change . . . -65.6

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,791.0 1,515.7

Expenses in excess of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . 

310.0 129.6

The accompanying notes are an integral part of this statement.

1

 Includes Executive Office of the President.

2

 Fiscal 1994 amount includes Defense audit adjustments.

3

 Includes EPA, GSA, NASA, OPM, SBA, and other independent

agencies.

12 consolidated financial statements cfs
notes to financial statements

1. Summary of significant

accounting policies

Principles of consolidation

The ‘‘Consolidated Financial Statements of

the United States Government, Prototype

1995’’ (CFS) were prepared using Federal

agencies’ financial data. Agencies submit their

pre-closing adjusted trial balances under the

Federal Agencies’ Centralized Trial Balance

System (FACTS) to the Financial Management Service electronically, via the Government On-Line Accounting Link System

(GOALS).

The Consolidated Financial Statements report on the financial activity of the legislative,

judicial, and executive branches of the Federal

Government, and those Government corporations that are part of the Federal Government;

the Federal Reserve System and the Government-sponsored enterprises are excluded. The

legislative branch provides limited reports voluntarily. The judicial branch does not provide

financial reports to Treasury. Therefore, the financial information on the judicial branch presented in the CFS is an estimate based on the

‘‘Final Monthly Treasury Statement.’’

All significant intragovernmental transactions were eliminated in consolidation.

Basis of accounting

The Secretary of the Treasury, the Director

of the Office of the Management and Budget

(OMB), and the Comptroller General of the

United States, principals of the Joint Financial

Management Improvement Program (JFMIP),

established the Federal Accounting Standards

Advisory Board (FASAB) in October 1990.

FASAB recommends accounting standards to

the JFMIP principals for approval. Upon approval, they become effective on the date

specified in the standards published by OMB

and GAO.

In March 1991, the JFMIP principals approved the FASAB’s recommendations governing interim accounting standards used in

preparing financial statements for audit. Until

a sufficient set of comprehensive ‘‘generally

accepted accounting principles’’ have been

published by JFMIP principals, the revised

guidance recommends a hierarchy of ‘‘other

comprehensive basis of accounting’’ to be

used for preparing Federal agency financial

statements. The hierarchy is as follows:

1. Individual standards agreed to and published by the JFMIP principals.

2. Form and content requirements included

in OMB bulletin 93-02, dated October 22,

1992, and subsequent issuance, OMB Bulletin

94-01.

3. Accounting standards contained in an

agency accounting policy, procedures manuals

and/or related guidance as of March 29, 1991,

so long as they are prevalent practices.

4. Accounting principles published by

authoritative standard-setting bodies and other

sources (1) in the absence of other guidance in

the first three parts of this hierarchy, and (2) if

the use of such accounting standards improves

the meaningfulness of the financial statements.

To date, FASAB has recommended eight

accounting standards. However, the majority

were not yet effective for fiscal 1995.

Principal financial statements

The principal statements are unaudited and

consist of the Statements of Financial Position

and Operations, and use the accrual basis of

accounting in their presentation. However,

revenues levied under the Government’s sovereign power are reported on the cash basis. 

Fiscal year

The fiscal year of the U.S. Government

ends September 30.

cfs notes to financial statements 13
2. Cash

The cash reported in the financial statements represents balances from tax collections, customs duties, other revenues, public

debt receipts, foreign currencies, and various

other receipts maintained in accounts at the

Federal Reserve banks and the U.S. Treasury

tax and loan accounts.

3. Other monetary assets

Gold

Gold is valued at market for fiscal 1995

and 1994. The market value represents the

price reported for gold on the London fixing,

and is based on 261,734,796.787 and

261,806,237.617 fine troy ounces as of September 30, 1995 and 1994, respectively (as

reported in Treasury’s general ledger). The

statutory price of gold is $42.2222 per troy

ounce.

Other monetary assets as of September 30

(In billions of dollars) 1995 1994 

Gold (at market value of $385.00 per troy ounce for 1995 and

$394.85 for 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.5 103.4

U.S. reserve position in the International Monetary Fund . . . . . . . 14.7 12.0

Special drawing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.0 10.0

Nonpurchased foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . .3 .3

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 .5

Total other monetary assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

126.7 126.2

Special drawing rights

The value of special drawing rights is

based on a weighted average of exchange

rates for the currencies of selected member

countries. The value of a special drawing

right was $1.5063 and $1.467 as of September 30, 1995 and 1994, respectively. For details see the table above.

4. Accounts and loans

receivable

Summary of accounts and loans

receivable due from the public

The Federal Government is the Nation’s

largest source of credit and underwriter of

risk. The Debt Collection Act of 1982 (31

U.S.C. 3719) requires agencies to prepare

and transmit a report summarizing any outstanding receivables on their books.

Accounts and loans receivable as of September 30

Accounts receivable Loans receivable

(In billions of dollars) 1995 1994 1995 1994

Gross receivables . . . . . . . . . . . . . . . . . 166.6 144.5 189.6 181.4

Less: Allowances for losses 1

. . . . . . . . 79.4 67.9 61.6 57.4

Less: Allowance for subsidy 2 

. . . . . . . - - 7.2 5.2

Net receivables. . . . . . . . . . . . . . . . . . 

87.2 76.6 120.8 118.8

1 Allowance for losses represents estimated amount of uncollectable receivables.

2

 Allowance for subsidy represents unamortized credit reform subsidy for direct loans and for defaulted guaranteed loans assumed for

collection by the Federal Government.

14 notes to financial statements cfs
Inventories and related properties

as of September 30

(In billions of dollars) 1995 1 1994 2 

Inventories held for sale. . . . . . . 60.3 17.9

Operating supplies. . . . . . . . . . . 57.0 90.9

Stockpiled materials. . . . . . . . . . 136.5 92.7

Other . . . . . . . . . . . . . . . . . . . . . 5.3 21.4

Total inventories . . . . . . . . . . . 

259.1 222.9

1

 Some of the differences between inventory items from 1994 to 1995 are due to

Defense reclassifying inventories and recognizing previously unreported

inventory items.

2

 Amounts are restated due to Defense audit adjustments.

Agencies are required to submit those reports to the OMB and

the Department of the Treasury.

The Federal Government uses the

data in these reports to improve

the quality of its debt collection

methods.

In 1990, the Credit Reform Act

was enacted to improve the Government’s budgeting and management of credit programs. The

primary focus of the Act is to provide an accurate measure of the

long-term costs of both direct

loans and loan guarantees, and to

include these costs at the time of

loan origination. Most direct loans

obligated and loan guarantees committed after September 30, 1991,

are reported on present value basis.

5. Inventories and

related properties

Inventories and related properties consist of several categories.

Inventory held for sale is tangible

personal property that is either (a)

being held for sale, (b) in the process of production for sale, or (c) to

be consumed in the production of

goods for sale or in the provision

of services for a fee. Operating materials and supplies are tangible

personal property to be consumed

in normal operation. Stockpiled

materials are strategic and critical

materials held due to statutory requirements

or for use in national defense, conservation,

or national emergencies. Other includes forfeited property, foreclosed property, commodities and other. For amounts see the

table at right.

Agencies use a wide variety of methods

to value inventories (e.g. first-in-first-out,

last-in-first-out, latest acquisition cost, and

weighted or moving averages). The Department of Defense uses the latest acquisition

method to value its inventories. The Department of Energy uses the lower of cost or

market to value its inventories.

6. Property, plant, and

equipment

Property, plant, and equipment includes

land, buildings, structures and facilities,

ships and service craft, industrial equipment

in plant, and construction-in-progress. It

also includes automated data processing software, assets under capital lease, and other

fixed assets that have been capitalized. 

Land purchased by the Federal Government is valued at historical cost. The land acquired through donation, exchange, bequest,

forfeiture, or judicial process is estimated at

amounts the Government would have paid if

purchased at the date of acquisition. No

value has been assigned to the Outer Continental Shelf and other offshore lands. More

than 651 million acres of public domain

land have been assigned a minimal value of

$1 per acre, and are included in the total

land amount. 

The accumulated depreciation reported

by agencies in 1995 and 1994 was $76.5 billion and $66.8 billion, respectively. Most

agencies use the straight-line method. Treasury estimates the depreciation for those

agencies that do not report, using the

straight-line method applied to the total of

reported depreciable assets.

cfs notes to financial statements 15
Other assets as of September 30

(In billions of dollars) 1995 1994

Funds Appropriated to the President 1

. . . . . . . . . . . . . . . . . . . . 54.9 70.6

Federal Deposit Insurance Corporation 2

. . . . . . . . . . . . . . . . . 5.9 9.9

Resolution Trust Corporation 3

. . . . . . . . . . . . . . . . . . . . . . . . . 13.6 28.5

U.S. Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.9 27.2

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 14.9

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

109.4 151.1

1

 Amount reported for International Monetary Program was analyzed for the first time in fiscal 1995 and as a result, the U.S. currency

and dollar deposits were found to be over valued in the prior year. Includes Executive Office of the President.

2 Decrease was due to $4.2 billion write-off of advances to financial institutions.

3

 Decrease was due to reduction in net advances and net subrogated claims.

The useful lives for each classification of assets are as follows:

Buildings . . . . . . . . . . . . . . . . 50 yrs.

Structures and facilities. . . . . 21 yrs.

Ships and service craft. . . . . . 13 yrs.

Industrial equipment in plant 13 yrs.

All other assets . . . . . . . . . . . 13 yrs.

The largest ownership of Federal property,

plant, and equipment, except for land, remains

within the domain of the Department of Defense, whose major equipment items and weapons systems are valued at acquisition cost.

When the acquisition cost cannot be determined, the estimated fair market value of such

equipment and the costs of obtaining the

equipment in the form and place to be put into

use are recorded. Real and personal property

are also recorded at acquisition cost. For more

information see the table above.

7. Other assets

Other assets includes receivables and other

assets from banking assistance and failures,

deferred retirement costs from the Postal Service, and investments held by the agencies and

other miscellaneous assets. Other assets are

summarized by agency in the table below.

Property, plant, and equipment as of September 30

(In billions of dollars) 1995 1994 1

Military equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2

 566.8 475.1

Buildings, structures, facilities, and lease-hold improvements 253.0 267.4

Construction in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.7 99.8

Equipment, other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.0 102.5

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.0 23.2

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 157.8

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055.7 1,125.8

Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . 552.3 549.6

Total property, plant, and equipment . . . . . . . . . . . . . . . . . 

503.4 576.2

1

 Amounts are restated due to Defense audit adjustments.

2

 Some of the differences from 1994 to 1995 are due to Defense reclassifying items such as aircraft and missiles from ‘‘other’’ in fiscal

1994 to military equipment for fiscal 1995.

16 notes to financial statements cfs
8. Unearned

revenue

Unearned revenue represents an obligation to

provide goods or services

for which payment has already been received. Examples of unearned

revenue include unearned

rent, unearned subscriptions, and advances from

customers. Unearned

revenue is summarized by agency at right.

9. Federal debt held by the

public

Total Federal debt held by the public

amounted to $3,603.3 billion and $3,432.3 billion at the end of fiscal 1995 and 1994, respectively. The three debt tables on pages 17-19

Unearned revenue as of September 30

(In billions of dollars) 1995 1994

Funds Appropriated to the President * 14.3 14.2

Department of the Interior . . . . . . . . . . 3.5 3.5

Housing and Urban Development . . . . 6.8 7.0

U.S. Postal Service . . . . . . . . . . . . . . . 3.1 2.8

Other . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 8.5

Total. . . . . . . . . . . . . . . . . . . . . . . . . . 

33.8 36.0

* Includes Executive Office of the President.

reflect information on borrowing to finance

Government operations. These tables support

the Statement of Financial Position caption,

‘‘Federal debt held by the public,’’ and are

shown net of intragovernmental holdings and

unamortized premium or discount. Intragovernmental holdings represent that portion of

the total Federal debt held as investments by

Federal entities, including major trust funds.

Federal debt held by the public as of September 30

1995 1994

Average

interest

rate

(percent)

Total debt

(in billions

of dollars)

Average

interest

rate

(percent)

Total debt

(in billions

of dollars)

Public debt

Marketable . . . . . . . . . . . . . . . . . . . . . . 6.869 3,260.5 6.507 3,091.6

Nonmarketable. . . . . . . . . . . . . . . . . . . 7.500 1,690.2 7.667 1,598.0

Non-interest-bearing debt . . . . . . . . . . 23.3 3.2

Total public debt outstanding. . . . . . . 4,974.0 4,692.8

Plus premium on public debt

securities . . . . . . . . . . . . . . . . . . . . . 1.2 1.3

Less discount on public debt

securities . . . . . . . . . . . . . . . . . . . . . 81.2 78.6

Total public debt securities . . . . . . . 4,894.0 4,615.5

Agency debt

Tennessee Valley Authority . . . . . . . . . 24.8 26.1

Farm Credit System Financial

Assistance Corporation . . . . . . . . . . . 1.3 1.3

Housing and Urban Development . . . . .1 .1

Federal Deposit Insurance Corporation

 FSLIC resolution fund. . . . . . . . . . . . .2 .2

National Archives and Records

Administration . . . . . . . . . . . . . . . . . . .3 .3

Architect of the Capitol. . . . . . . . . . . . . 

.2 .2

Total agency securities . . . . . . . . . . . 26.9 28.2

Total Federal securities. . . . . . . . . . 4,920.9 4,643.7

Less Federal securities held as

investments by Government

accounts . . . . . . . . . . . . . . . . . . . . 1,317.6 1,211.4

Total Federal debt

held by the public . . . . . . . . . . . . 

3,603.3 3,432.3

cfs notes to financial statements 17
Summary of Federal Debt Outstanding Part I

Total Debt Outstanding as of September 30

1995 1994

(In billions of dollars)

Average

interest

rate

(percent) Total debt 

Average

interest

rate

(percent) Total debt 

Marketable

Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.897 742.5 4.735 697.3

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.610 1,980.4 6.388 1,867.5

Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.134 522.6 9.229 511.8

Federal Financing Bank . . . . . . . . . . . . . . 8.917 1

 15.0 8.917 15.0

Total marketable . . . . . . . . . . . . . . . . . . . 6.869 3,260.5 6.507 3,091.6

Nonmarketable

Foreign series . . . . . . . . . . . . . . . . . . . . . . 7.696 40.9 7.363 42.0

Government account series . . . . . . . . . . . 7.693 1,324.3 7.895 1,211.7

State and local government series . . . . . . 5.000 113.4 7.011 137.4

U.S. savings bonds . . . . . . . . . . . . . . . . . . 6.763 181.2 6.597 176.4

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.570 30.4 7.927 30.5

Total nonmarketable . . . . . . . . . . . . . . . . 6.210 1,690.2 7.667 1,598.0

Total interest-bearing debt . . . . . . . . . . . . 

6.517 4,950.7 6.897 4,689.6

Non-interest-bearing debt . . . . . . . . . . . . . 

2

 23.3 3.2

Total public debt outstanding . . . . . . . . . 4,974.0 4,692.8

Plus premium on public debt securities . . 1.2 1.3

Less discount on public debt securities . . 81.2 78.6

Total public debt (Treasury securities) . . 4,894.0 4,615.5

Agency securities . . . . . . . . . . . . . . . . . . . 26.9 28.2

Total Federal securities . . . . . . . . . . . . . 4,920.9 4,643.7

Less Federal securities held as

investments by Government accounts . . 1,317.6 1,211.4

Total Federal debt held by the public . . 

3,603.3 3,432.3

1

 These marketable securities were issued to the Civil Service

Retirement Fund and are not currently traded in the market. 

2

 Includes matured debt of $22.0 billion and other various non-interest-bearing debt of $1.3 billion.

Types of marketable securities

Bills--Short-term obligations issued with a term of 1 year or less.

Notes--Medium-term obligations issued with a term of at least 1 year,

but not more than 10 years.

Bonds--Long-term obligations of more than 10 years.

18 notes to financial statements cfs
Summary of Federal Debt Outstanding Part II

Intragovernmental Holdings----Federal Securities

Held as Investments by Government Accounts as of September 30

(In billions of dollars) 1995 1994

Intragovernmental holdings

Federal

Funds 1

Trust

Funds 2 Total

Federal

Funds

Trust

Funds Total

Legislative branch . . . . . . . . . . . . . . . . . . .4 .1 .5 .5 - .5

Judicial branch. . . . . . . . . . . . . . . . . . . . . - .3 .3 - .2 .2

Executive branch

Funds appropriated to the President. . . 2.1 - 2.1 1.9 - 1.9

Departments

Agriculture. . . . . . . . . . . . . . . . . . . . . . - .3 .3 - .3 .3

Defense. . . . . . . . . . . . . . . . . . . . . . . . -

3

115.2 115.2 - 107.6 107.6

Energy. . . . . . . . . . . . . . . . . . . . . . . . . 5.0 - 5.0 4.5 - 4.5

Health and Human Services . . . . . . . . -

4

144.4 144.4 - 151.1 151.1

Housing and Urban Development. . . . 11.1 - 11.1 9.7 - 9.7

Interior. . . . . . . . . . . . . . . . . . . . . . . . . 3.4 .3 3.7 2.7 .2 2.9

Justice. . . . . . . . . . . . . . . . . . . . . . . . . .5 - .5 .1 - .1

Labor. . . . . . . . . . . . . . . . . . . . . . . . . . 5.8 5

 47.2 53.0 5.3 39.8 45.1

Social Security Administration . . . . . . - 483.2 483.2 419.5 419.5

State . . . . . . . . . . . . . . . . . . . . . . . . . . - 7.8 7.8 - 7.2 7.2

Transportation. . . . . . . . . . . . . . . . . . . .5 6

 31.6 32.1 1.0 31.6 32.6

Treasury . . . . . . . . . . . . . . . . . . . . . . . 3.1 .2 3.3 7.5 .3 7.8

Veterans Affairs . . . . . . . . . . . . . . . . . - 13.6 13.6 .6 13.5 14.1

Independent agencies

Environmental Protection Agency . . . . . - 7.3 7.3 - 6.2 6.2

Export-Import Bank . . . . . . . . . . . . . . . . .1 - .1 .1 - .1

Farm Credit System Insurance

Corporation . . . . . . . . . . . . . . . . . . . . . 1.4 .2 1.6 1.0 - 1.0

Federal Deposit Insurance

Corporation . . . . . . . . . . . . . . . . . . . . . 25.2 - 25.2 18.1 - 18.1

Federal Emergency Management

Agency . . . . . . . . . . . . . . . . . . . . . . . . - - - .2 - .2

National Credit Union Administration . . 3.3 - 3.3 3.0 - 3.0

Office of Personnel Management . . . . . -

7

389.9 389.9 - 361.4 361.4

Railroad Retirement Board . . . . . . . . . . - 14.4 14.4 - 12.2 12.2

Tennessee Valley Authority . . . . . . . . . 1.2 - 1.2 4.0 - 4.0

U.S. Postal Service . . . . . . . . . . . . . . . . 1.3 - 1.3 1.3 - 1.3

Various scholarship funds . . . . . . . . . . . - .4 .4 - .3 .3

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . 64.4 1,256.4 1,320.8 61.5 1,151.4 1,212.9

Less discount on Federal securities

held as investments by Government

accounts . . . . . . . . . . . . . . . . . . . . . . . 3.2 - 3.2 1.5 - 1.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . 

61.2 1,256.4 1,317.6 60.0 1,151.4 1,211.4

1

 Federal funds are monies held by Government accounts that are

not trust funds.

2

 Trust funds are monies held by the Government in accounts

established by law or by trust agreement for specific purposes and

designated by law as being trust funds.

3

 Includes military retirement fund of $112.9 billion.

4

 Includes medicare trust funds of $143.4 billion.

5

 Unemployment Trust Fund.

6

 Includes Highway Trust Fund of $18.5 billion and Airport and

Airway Trust Fund of $11.1 billion.

7

 Includes civil service retirement and disability fund of $366.1 billion

and employee life insurance fund of $15.8 billion.

cfs notes to financial statements 19
10. Pensions and other

actuarial liabilities

The Federal Government administers more

that 40 pension plans. The largest are administered by the Office of Personnel Management

(OPM) for civilian employees and by Department of Defense (DOD) for military personnel. The majority of the pension plans are

defined benefit plans.

The accounting for accrued pension, retirement, disability plans, and annuities is subject

to several different assumptions, definitions,

and methods of calculation. Each of the major

plans is summarized in the table at the bottom

of the page, and the actuarial liability is included on the Statement of Financial Position.

Civilian employees and military

personnel

Pension expense for the various Federal

pension plans is calculated for budgetary purposes by a variety of methods. For financial

reporting purposes, Federal pension plans report their accumulated benefit obligation

(ABO) pursuant to directions under the provisions of Public Law Number 95-595. The

ABO is calculated with the ‘‘unit credit’’ actuarial cost method. The ABO is recognized as

a liability in the Consolidated Statement of Financial Position. An expense is recognized

equal to the annual change in the ABO. Most

Federal pension plans are funded with obligations issued by the Treasury pursuant to the

actuarial method and funding requirements

specified by the governing law. These plan assets (Treasury bonds or other debt), being obligations of the United States, were eliminated from the consolidated statements.

Civilian

The Federal Government has both defined benefit and defined contribution pension plans.

Defined benefit

The principal plan is administered by

OPM and covers approximately 90 percent of all Federal civilian employees. It

includes two components of defined benefits the Civil Service Retirement System

(CSRS) and the Federal Employee’s Retirement System (FERS). The basic benefit components of the CSRS and the FERS

are financed and operated through the

Civil Service Retirement and Disability

Fund (CSRDF), and all disbursements for

both are made from the CSRDF. Most employees covered by CSRS contribute 7.0

percent of their basic pay, an amount fixed

by statute. The FERS employees contribution is 0.8 percent in fiscal 1995. The valuation of the Retirement Program has been

prepared by OPM in accordance with Financial Accounting Standard (FAS) 35.

Defined contribution

The Federal Retirement Thrift Investment Board is a Federal agency that operates the Thrift Savings Plan. The fund’s

assets are owned by Federal employees

and retirees, who have individual accounts. For this reason, the fund is excluded from the CFS and the fund’s

Pensions and other actuarial liabilities as of September 301

Actuarial liabilities Plan assets

Unfunded

liabilities

(In billions of dollars) 1995 1994 1995 1994 1995 1994

Civilian retirement-OPM . . . 722.4 2

 694.8 344.3 344.3 378.1 350.5

Military retirement-Defense 547.7 529.1 148.6 131.8 399.1 397.3

Veterans’ compensation

and benefits . . . . . . . . . . . . 266.6 213.8 - - 266.6 213.8

Compensation programs . . 20.3 20.6 - - 20.3 20.6

Other pension programs. . . 30.8 27.9 16.2 14.9 14.6 13.0

Other benefits . . . . . . . . . . . 40.4 40.0 35.9 32.0 4.5 8.0

Total . . . . . . . . . . . . . . . . . 

1,628.2 1,526.2 545.0 523.0 1,083.2 1,003.2

1

 Does not include actuarial liability for future costs of post-retirement health benefits.

2

 OPM’s accumulated benefit obligation is presented as of the beginning of the year, under FAS 35. To make the unfunded liabilities more

meaningful, plan assets are also presented at the same valuation date.

Note.--For Social Security, see note 14.

20 notes to financial statements cfs
holdings of Federal debt are considered part

of the debt held by the public rather than

debt held by the Government.

The Thrift Savings Plan is a defined contribution plan for eligible employees covered

under the Civil Service Retirement System

(CSRS) and the Federal Employees’ Retirement System (FERS).

FERS employees may contribute up to 10

percent of base pay to the plan, which is

matched by the Government up to 5 percent.

CSRS employees may contribute up to 5 percent of base pay with no Government match.

An individual’s total annual contribution

could not exceed $9,500 in 1995.

The plan was started in April 1987 and as

of September 30, 1995, the total invested was

$33.1 billion. Investments consist primarily

of U.S. Government nonmarketable certificates of $21.2 billion, which are included in

‘‘Federal debt held by public’’ in the Statement of Financial Position. In addition, $9.9

billion and $2.0 billion have been invested in

the Common Stock Index and the Fixed Income Funds, respectively.

Military

The Department of Defense Military Retirement Fund was authorized in Public Law

Number 98-94 for the accumulation of funds

in order to finance liabilities of the Department of Defense under military retirement

and survivor benefit programs. The fund provides retirement benefits for military personnel and their survivors.

Veterans’ compensation and pension

benefits

Veterans or their dependents receive compensation benefits if the veteran was disabled

or died from military service- connected

causes. War veterans or their dependents receive pension benefits, based on annual eligibility review, if the veterans were disabled or

died from nonservice-connected causes. Certain pension benefits are subject to specific

income limitations.

VA has a liability for benefits expected to

be paid in future fiscal years to veterans and,

if applicable, their survivors who have met or

are expected to meet defined eligibility criteria. The liability of the Compensation and

Pension Programs (C&P) is not currently

funded, nor is there any intent to do so.

Rather, payments for benefits that become

due in a particular year are financed from

that year’s appropriation, in effect, on a payas-you-go basis. Payments of the liability as

it becomes due rely on Congressional

authorization of future tax revenues or other

methods, such as public borrowing, for their

financing. 

The actuarial present value of the liability

of C&P benefits as determined by VA on September 30, 1995 and 1994, is shown in the table above.

Compensation programs

This amount represents the estimated future costs for injuries incurred to date for approved Federal Employees’ Compensation

Act cases and Black Lung cases. 

Other pension programs

Other annual pension reports received

from plans covered by Public Law Number

95-595 are reported in the same manner as

those for military personnel and civilian employees (described earlier).

Other benefits

Other benefits consist of various items for

which the Government is responsible, such

as life insurance benefits for veterans and

Veterans’ compensation and benefits as of September 30

(In billions of dollars) 1995 1994

Compensation

Veterans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169.3 137.4

Survivors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.7 45.2

Total compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229.0 182.6

Pension and burial benefits

Veterans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.7 19.8

Survivors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 8.8

Burial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 2.6

Total pension and burial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.6 31.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

266.6 213.8

cfs notes to financial statements 21
Federal employees. VA insurance includes

the following programs United States Government Life Insurance; National Service

Life Insurance; Veterans Insurance and Indemnities; Veterans Special Life Insurance;

Veterans Reopened Insurance; Service Disabled Veterans Insurance; and Servicemen’s

Group Life Insurance.

The Federal insurance program is the

Federal Employees Government Life Insurance. These other benefits do not include the

actuarial liability for the future costs of postretirement health benefits for retirees.

Post employment benefits other

than pensions

The Federal Government operates a payas-you-go system for health benefits for

both civilian and military retirees. The actuarial estimates on retirees’ health care costs

are summarized below.

Civilian employees retiree health

benefits

Generally, employees are eligible for

post-retirement health benefits if they participated in the Program for the 5 years immediately preceding their retirement. As a

condition of participation, retirees must

make contributions toward their premiums,

which, for the vast majority, are deducted directly from their monthly annuity payments.

Contributions for future post-retirement

health benefit premiums are required neither

of active employees nor their employers.

The Federal Accounting Standards Advisory Board (FASAB) has recommended

standards for the calculation and reporting

of a retirement health benefits obligation.

These standards were promulgated in the

Statement of Federal Financial Accounting

Standards Number 5, (SFFAS No. 5), Accounting for Liabilities of the Federal Government, issued in December 1995.

When it is effective, the standard will require the use of the accrual method of accounting to recognize the cost of retirement

health benefits over the active years of employee service. Upon the implementation of

SFFAS No 5. the Program will recognize a retirement obligation (RO), which is the future

cost of retirement benefits for future retirees relating to active service rendered up to the date

of implementation. The Program plans to

adopt the standard no later than fiscal 1997, as

required by SFFAS No. 5.

In computing the Program’s RO, an actuary

will apply actuarial assumptions to historical

health benefit cost information to estimate the

future cost of retirement benefits for current

and future retirees. This estimate will be adjusted for the time value of money (through

discounts for interest) and the probability of

having to pay (by means of decrements, such

as those for death and withdrawal).

Although the standard has not yet been implemented by the Program, the initial (or transition) RO, has been calculated in accordance

with methodology prescribed to be $113.4 billion on October 1, 1994, and $103.5 billion on

October 1, 1993. [Note: Due to the time-frame

under which these statements must be prepared

and audited, all of the information needed to

compute the RO as of the end of the year is not

available. Therefore, the RO is presented as of

the beginning of the year.] The program’s RO

expense in 1995 would be $12.3 billion and

$11.6 billion for 1994, rather than the $4.2 billion for 1995 and $3.8 billion for 1994 recognized as contributions expense (deductions

from plan assets) under current accounting

practice. Based on this calculation, employing

agencies would have been required to recognize a 1995 retirement health benefit expense

of $1,844 per enrolled employee for 1995 and

$1,839 for 1994.

In these calculations, an annual rate of increase in health benefits costs and a discount

rate of 7.0 percent were assumed. Demographic assumptions are based on the experience of the Retirement Program, with

adjustments based on recent Health Benefits

Program trends and experience. For more information, see OPM’s financial statements.

Military retiree health plans

Military retirees and their dependents are

entitled to health care in military medical faciliRetiree health care costs as of September 30

Actuarial estimates (unfunded)

(In billions of dollars) 1995 1994 

Military health programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.2 203.7

Federal Employees Health Benefits Program . . . . . . . . . . . . . . . . . . . 113.4 103.5

Total unfunded retiree health care costs . . . . . . . . . . . . . . . . . . . . . . 

323.6 307.2

22 notes to financial statements cfs
ties if the facility can provide the needed

care. Until they reach age 65, military retirees and their dependents also are entitled to

health care financed by the Civilian Health

and Medical Programs of the Uniformed

Services (CHAMPUS). No premium is

charged for CHAMPUS-financed care, but

there are deductible and copayment requirements.

After they reach 65 years of age, military retirees are entitled to medicare. The

Department of Defense costs for retiree

health care include costs of buildings, equipment, education and training, staffing, operations, and maintenance of military

medical treatment facilities. They also consist of claims paid by CHAMPUS and the

administration of that program.

Costs are funded annually

by direct appropriations in the

year services are rendered (or,

for CHAMPUS, billed). The

cost of the 1994 CHAMPUS

program was $3.3 billion,

which includes both the benefit

cost and the program administration cost. The funded cost

of CHAMPUS was $3.3 billion. The estimate of the actuarial liability for military health

programs for fiscal 1997 is

$210.2 billion.

11. Other

liabilities

Other reported liabilities are

summarized by agency in the

table above. Included in other liabilities

are liabilities arising from loan guarantees,

capital leases, and contingencies. They

also include checks outstanding, the liabilities incurred from bank resolution and litigation losses, and other miscellaneous

accrued liabilities.

12. Accumulated

position

The accumulated position, as presented

in the table below, represents the excess of

liabilities over assets. It does not, however,

reflect the range of the Government’s resources, such as the sovereign power to

tax, beyond the conventional assets.

Other liabilities as of September 30

(In billions of dollars) 1995 1994

Funds appropriated to the President . . . . . . . . . . . . . . . . . . . . . 6.9 8.7

Departments

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5 10.9

Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 5.3

Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.8 15.2

Energy 1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214.3 58.9

Health and Human Services 2

. . . . . . . . . . . . . . . . . . . . . . . . . 22.4 58.8

Housing and Urban Development . . . . . . . . . . . . . . . . . . . . . . 13.7 17.1

Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.3 27.9

Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.9 22.6

Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6 6.1

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.0 20.4

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

425.5 251.9

1

 Includes environmental cleanup cost of $196.8 billion

2

 Includes SSA, which is now an independent agency.

Accumulated position

as of September 30

(In billions of dollars) 1995 1994 

Accumulated position at

beginning of period . . . . . . . -4,006.2 -3,876.6

Prior period adjustment . . . . . 

1

 -196.8

Current period results. . . . . . . -309.3 2

 -129.6

Accumulated position at

end of period . . . . . . . . . . . 

-4,512.3 -4,006.2

1

 In the past, the Department of Energy reported most of the environmental cleanup cost

as ‘‘other contingencies’’. In fiscal 1995, the entire $196.8 billion cleanup cost is reported

as a liability.

2

 Includes Defense audit adjustments.

cfs notes to financial statements 23
13. Leases

Federal agencies were first required to

provide financial information about lease

commitments in 1986. Agencies are attempting to accumulate the lease information required. The future aggregate

minimum rental commitments for noncancelable capital and operating leases as of

September 30, 1995, are detailed in the

chart at right.

The majority of these lease commitments relate to buildings, equipment, and

office space rental. The current portions of

lease costs are included in accounts payable. The long term portion of capital

leases is reported as ‘‘other liabilities.’’

Data for intragovernmental leasing transactions were not available at the time of publication.

14. Social Security and

Medicare

A liability of $33.0 billion for social security is recognized in ‘‘other liabilities’’

for any unpaid amounts due as of the reporting date. No liability is recognized for

future payment not yet due. 

The Congress and the trustees of the

funds prepare actuarial estimates on an

‘‘open group’’ basis, a financing method

they regard as appropriate for social insurance programs, namely, that future workers

will be covered by the program as they enter the labor force.

The present values of all contributions

and expenditures are computed on the basis of economic and demographic assumptions described as ‘‘Alternative II’’ in the

‘‘1995 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors

Insurance and Disability Insurance Trust

Funds.’’ Alternative II is the ‘‘intermediate’’ set of assumptions, and represents the

Trustees’ ‘‘best estimates’’ of future economic and demographic conditions. In determining present values, total

contributions and expenditures for the trust

Actuarial amounts as of September 30

(In billions of dollars) 1995 1994 

Actuarial expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,255.9 21,747.3

Actuarial contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,423.2 18,909.2

Actuarial surplus/deficit (-) . . . . . . . . . . . . . . . . . . . . . . . . . 

-2,832.7 -2,838.1

Leases for fiscal 1996

and beyond

(In billions of

dollars)

Operating

leases

Capital

leases

1996. . . . . . . . . 2.2 .2

1997. . . . . . . . . 1.9 .2

1998. . . . . . . . . 1.6 .1

1999. . . . . . . . . 1.4 .1

Thereafter . . . . 6.1 1.6

Total . . . . . . . 

13.2 2.2

funds are estimated for a period of 75 years

into the future.

The actuarial amounts in the table below, prepared by the Social Security Administration, are calculated on the basis of

the preceding assumptions.

Medicare has total actuarial expenditures of $3,403.5 billion for the Federal

Hospital Insurance Trust Fund (Part A),

which is the present value of outlays projected between October 1, 1995, and September 30, 2020. This amount includes the

present value of claims incurred to October

1, 1995, but unpaid as of that date and any

administrative expenses related to those

claims incurred by unpaid outlays. The

Federal Hospital Insurance Program has a

total deficit of $1,049.4 billion.

The $3.3 billion in Federal Supplementary Medical Insurance Trust Fund (Part B)

liabilities represents the amount of unpaid

benefits as of October 1, 1995, and the related administrative expenses. The Federal

Supplementary Medical Insurance Program has a total surplus of $17.4 billion.

The Secretary of the Department of

Health and Human Services annually determines the amount to be paid by each Supplementary Medical Insurance enrollee and

by the Department of the Treasury, under

the authority of section 1839 of the Social

Security Act.

24 notes to financial statements cfs
15. Commitments and

contingencies

Commitments are long-term contracts

entered into by the Federal Government,

such as leases and undelivered orders,

which represent obligations. 

Contingencies involve uncertainty as to

a possible loss to the Federal Government

that will be resolved when one or more future events occur. Contingencies of the Federal Government include loan and credit

guarantees, insurance, and unadjudicated

claims.

In accordance with OMB Bulletin 94-01,

‘‘Form and Content of Agency Financial

Statements’’, estimated losses for commitments and contingencies, namely, insurance, indemnity agreements, unadjudicated

claims, and commitments to international institutions are reported if the amounts can be

reasonably estimated and the losses are

probable. OMB Bulletin 94-01 establishes

guidelines for the reporting of liabilities for

loan guarantees and capital leases.

OMB Bulletin 94-01 states that contingencies that do not meet all the conditions

for liability recognition should be disclosed.

The table on the following pages shows the

face value of commitments and contingencies reported by Federal agencies. The

amounts reported in the commitments and

contingencies table are presented without regard to the probability of occurrence and

without deduction for existing and contingent assets that might be available to offset

potential losses.

‘‘Long-term leases’’ includes both operating and capital leases. ‘‘Government loan

and credit guarantees’’ includes guarantees

in force as well as contracts to guarantee.

‘‘Insurance’’ includes insurance in force,

contracts to insure, and indemnity agreements.

In 1993, the Congress approved the

Resolution Trust Corporation Completion

Act, which was signed into law by the President on December 17. The Completion Act

provided for the release of up to $18.3 billion of previously appropriated funds that

had been returned to the Treasury in 1992,

bringing the total funds provided for resolution costs of institutions coming under the

control of the Resolution Trust Corporation

(RTC) to $105 billion.

The total amount of funds needed to

cover losses of institutions coming under

the control of the RTC cannot be fully determined until all of the RTC’s assets and liabilities have been disposed of. The audited

financial statements of the RTC for its final

fiscal year (calendar year 1995) estimate the

amount to be $87.9 billion, however. If that

estimate proves correct, covering RTC

losses will not require $17.1 billion of the

$18.3 billion made available by the Completion Act.

The total cost of protecting depositors in

insolvent thrift institutions is subject to too

many unknown factors to estimate. This

point has gained emphasis from the July 1,

1996, decision of the Untied States Supreme Court in United States versus Winstar Corporations, affirming the ruling of

the U.S. Court of Appeals for the Federal

Circuit that, in changing supervisory goodwill accounting by statute (FIRREA), the

United States became liable for damages

for breach of contract.

The Department of Energy manages one

of the largest environmental programs in

the world. The primary focus of the program is to reduce health and safety risks

from radioactive waste and contamination

resulting from production, development and

testing of nuclear weapons. The Department

of Energy issued in fiscal 1995 its first annual Baseline Environmental Management

Report (BEMR).

The estimate of the life-cycle costs for

the environmental management program

ranges from $200 to $350 billion in constant 1995 dollars. The estimate begins in

fiscal 1995 and ends in approximately

2070, when environmental activities are projected to be substantially completed. In fiscal 1995, the Department of Energy

recorded a liability of $196.8 billion. For

more information, see the Department of

Energy’s financial statements.

The Federal Government, in 1995, continued to be the Nation’s largest source of

credit and underwriter of risk. Large portions of all non-Federal credit outstanding

have been assisted by Federal credit programs, Government-sponsored enterprises,

or deposit insurance. In particular, most

credit for housing, agriculture, and education is federally guaranteed.

For more information on commitments

and contingencies, refer to the tables on the

following pages.

cfs notes to financial statements 25
Commitments and Contingencies

of the United States Government

for Years Ended September 30

(In billions of dollars)

Commitments 1995 1994 

Long-term leases

General Services Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7 9.7

Tennessee Valley Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 .6

U.S. Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 1.5

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 1.8

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4 13.6

Undelivered orders, public

Defense 1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.8 52.6

Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3 24.3

Health and Human Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.3 36.5

Housing and Urban Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171.7 189.8

Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.6 16.4

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.9 65.4

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422.6 385.0

Total commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

438.0 398.6

See footnotes on the following page.

26 notes to financial statements cfs
Commitments and Contingencies, continued

(In billions of dollars) 

Face value of contingencies 1995 1994

Insurance

FDIC Bank Insurance Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,915.3 1,887.6

FDIC Savings Association Insurance Fund . . . . . . . . . . . . . . . . . . 708.6 691.1

Federal Emergency Management Agency . . . . . . . . . . . . . . . . . . . 325.8 267.1

National Credit Union Administration . . . . . . . . . . . . . . . . . . . . . . . 255.6 255.5

Pension Benefit Guaranty Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 853.0 950.0

Transportation 2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 578.8

Veterans Affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504.9 523.2

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.0 43.2

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,623.2 5,196.5

Government loan and credit guarantees

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5 15.6

Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90.2 77.2

Export-Import Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.9 29.2

Housing and Urban Development. . . . . . . . . . . . . . . . . . . . . . . . . . 438.3 408.2

Small Business Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.3 24.4

Veterans Affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.0 63.1

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.7 21.0

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684.9 638.7

Unadjudicated claims

Health and Human Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 22.9

Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.0 30.0

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 .6

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.7 53.5

Other contingencies

Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.8 24.0

Energy 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 180.0

Housing and Urban Development. . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 19.4

Multilateral Development Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 6.5

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 6.8

Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.7 236.7

Total contingencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5,419.5 6,125.4

1

 Includes Army, Air Force and Defense agencies. Reporting is more

complete.

2

 Decrease is due to more appropriate disclosure. 

3

 Decrease is due to recognition as a liability.

cfs notes to financial statements 27
supplemental tables

Additions to

non-Federal economic

resources, fiscal 1995

The Government uses its resources to add

to the physical and human resources of the

Nation without acquiring physical assets.

The table on page 29, compiled from the

fiscal 1997 and 1996 ‘‘Budget of the United

States Government,’’ shows the amounts of

these expenditures.

Some of these investment-type

expenditures, while not adding to Federal

assets, add to the assets of State and local

governments or private institutions. All are

intended to enhance the future productivity

of the Nation.

Additions to State and local assets

included construction grants for highways,

community development, airports, and mass

transit. Other developmental expenditures

include outlays for education and training,

and research and development.

The chart below illustrates how the

Government uses its resources to add to the

physical and human resources of the Nation,

without acquiring physical assets.

Fiscal 1995

Total: $148.1 billion

28 supplemental tables cfs
Additions to Non-Federal Economic Resources

for the Year Ended September 30

(In billions of dollars)

Additions to State and local government assets 1995 1994

Community and regional development . . . . . . . . . . . . . . . . . . . . . . 5.3 4.5

Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 2.4

Transportation: 

Highways and mass transit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8 21.0

Rail and air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 1.6

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 .9

Total additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.8 30.4

Other developmental expenditures

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 1.2

Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 2.7

Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.6 38.0

Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.8 22.0

Education-income support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 7.8

Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 3.6

Health. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 11.5

Science and engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9 7.3

Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6 7.0

Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1.7

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 1.2

Total developmental expenditures . . . . . . . . . . . . . . . . . . . . . . . . 114.3 104.0

Total additions to non-Federal economic resources . . . . . . . . . 

148.1 134.4

cfs supplemental tables 29
Estimates for tax

expenditures in the

income tax

This table shows tax expenditures that are

considered revenue losses because of Federal

tax law provisions that allow special

exclusions, exemptions, deductions from

gross income, or that provide for special

credits, tax rates, and deferrals.

Revenue loss estimates do not take into

account any additional resources required to

provide the same after-tax incentives if the

expenditure program was administered as a

direct outlay rather than through the tax

system. 

Revenue loss estimates are not necessarily

equivalent to the increase in Federal receipts,

or the reduction in budget deficits, that would

result from the repeal of the special provision.

For more information about estimates for

1995 and 1994, see table 5-1, ‘‘Total Revenue

Loss Estimates for Tax Expenditures in the

Income Tax,’’ in the fiscal 1997 and 1996

‘‘Budget of the United States, Analytical

Perspectives.’’

Estimates for Tax Expenditures in the Income

Tax for the Year Ended

September 30

(In billions of dollars)

Estimated amount of

revenue loss

Income exclusions 1995 1994

Disability and retirement benefits (private) . . . . . . . . . . . . . . . . . . . . 71.0 64.7

Medical care and insurance (employer premiums paid) . . . . . . . . . . 59.6 56.1

Interest and dividends (State and local bonds and debt, and life

insurance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3 29.0

Capital gains at death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.3 26.9

Social Security benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 23.7

Payroll benefits and allowances

(group life, accident, and unemployment). . . . . . . . . . . . . . . . . . . . 4.9 4.8

Foreign earnings and investment incentives (income earned

abroad). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 4.4

Education allowances (scholarships and GI benefits). . . . . . . . . . . . .9 .9

Other (e.g., age 55 or over credit on home sales). . . . . . . . . . . . . . . 5.2 4.7

Income deferrals

Real estate (home sales). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2 16.6

Interest on U.S. savings bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.3

Deductions and credits

Interest (mortgage and consumer) . . . . . . . . . . . . . . . . . . . . . . . . . . 48.1 48.4

State and local property tax and other taxes. . . . . . . . . . . . . . . . . . . 43.0 39.8

Accelerated depreciation (rental housing, buildings other than

rental housing, machinery, and equipment) . . . . . . . . . . . . . . . . . . . 32.9 23.9

Contributions (charitable and political) . . . . . . . . . . . . . . . . . . . . . . . 23.6 21.5

Earned income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 4.0

Foreign earnings (corporations doing business in U.S.

possessions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 2.9

Medical. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 3.4

Work incentives (employment credits under work programs)

and dependent care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 2.8

Investments (commercial capital gains, credits, other investment

incentives, construction period interest, and expensing

developmental costs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 2.6

Old-age, disability, and other personal exemptions . . . . . . . . . . . . . 2.2 2.4

Employee stock ownership plans (funded through investment and

tax credits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 2.2

30 supplemental tables cfs
Outlays for

mandatory and

related programs

The Government commits itself to

provide benefits and services by passing

laws that make spending mandatory. Outlays

for mandatory programs consist of spending

for programs whose budget authority is

controlled by means other than

appropriation acts or by entitlement

authority and budget authority for the food

and stamp program.

For further information on fiscal 1995,

refer to table 13-3, ‘‘Outlays for Mandatory

and Related Programs under Current Law,’’

in the ‘‘Budget of the United States

Government, Analytical Perspectives, Fiscal

Year 1997,’’ pages 211-212. For fiscal 1994,

see table 15-3, ‘‘Outlays for Mandatory and

Related Programs under Current Law’’ in

the ‘‘Budget of the United States

Government, Analytical Perspectives, Fiscal

Year 1996,’’ pages 211-212.

Outlays for Mandatory and Related Programs

for the Year Ended September 30

(In billions of dollars)

Human resources programs 1995 1994 

Social Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.3 316.9

Income security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181.3 178.4

Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156.9 141.8

Health. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.4 86.6

Veterans benefits and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.9 20.3

Education, training, and social services . . . . . . . . . . . . . . . . . . . . . 15.7 9.0

Total human resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800.5 753.0

Other

Other mandatory programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14.7 -2.9

Offset prior to the total mandatory programs. . . . . . . . . . . . . . . . . . -44.5 -37.8

Total mandatory programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741.3 712.3

Net interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232.2 203.0

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

973.5 915.3

cfs supplemental tables 31
Federal obligations

‘‘Obligations’’ are the basis on which the

use of funds is controlled by the Federal

Government. They are recorded at the point

at which the Government makes a firm

commitment to acquire goods or services

and are the first of the key elements that

characterize the acquisition and use of

resources--order, delivery, payment, and

consumption.

In general, obligations consist of orders

placed, contracts awarded, services received,

and similar transactions requiring the

disbursement of money.

The obligational stage of Government

transactions is a strategic point in gauging

the impact of the Government’s operations

on the national economy. Obligations

frequently stimulate business investment,

including inventory purchases and

employment of labor, to fulfill those

Government orders.

Disbursements may not occur for months

after the Government places its order, but the

order itself usually places immediate

pressure on the private economy.

For more detail, see ‘‘Object Class

Analysis, Budget of the United States

Government,’’ for fiscal years 1997 and

1996.’’

Obligations by Object Class

for the Year Ended September 30

(In billions of dollars)

Personal services and benefits 1995 1994

Personnel compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.2 111.6

Personnel benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.1 42.2

Benefits for former personnel . . . . . . . . . . . . . . . . . . . . . . . . . . 29.8 30.1

Contractual services and supplies

Supplies and materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 29.9

Rent, communications, and utilities . . . . . . . . . . . . . . . . . . . . . . 15.1 12.8

Travel and transportation of persons. . . . . . . . . . . . . . . . . . . . . 6.5 6.0

Transportation of things . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 5.0

Printing and reproduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 .8

Other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.8 172.4

Acquisition of capital assets

Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.6 64.6

Investments and loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 10.5

Lands and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 10.4

Grants and fixed charges

Insurance claims and indemnities . . . . . . . . . . . . . . . . . . . . . . . 633.3 618.9

Grants, subsidies, and contributions . . . . . . . . . . . . . . . . . . . . . 395.6 380.3

Interest and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355.3 322.1

Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.8 12.2

Other 

Undistributed U.S. obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 15.7

Total direct obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,912.3 1,845.5

Reimbursable and below reporting threshold obligations . . . . . 232.5 243.5

Total gross obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2,144.8 2,089.0

32 supplemental tables cfs