REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION (UNAUDITED) 204 

United States Government

Required Supplementary Stewardship

Information (Unaudited) for the Years

Ended September 30, 2017, and 2016

Stewardship Investments

Stewardship investments focus on government programs aimed at providing long-term benefits by improving the

Nation’s productivity and enhancing economic growth. These investments can be provided through direct federal spending or

grants to state and local governments for certain education and training programs, research and development, and federally

financed but not federally owned property, such as bridges and roads. When incurred, these investments are included as

expenses in determining the net cost of operations. Stewardship investments for the current year and for the immediately

preceding four years are shown in the table below.

Stewardship Investments for the Years Ended

September 30, 2013, through 2017

Fiscal Fiscal Fiscal Fiscal Fiscal

Year Year Year Year Year

(In billions of dollars) 2017 2016 2015 2014 2013

Investments in non-federal physical property... 65.0 65.1 64.8 65.6 66.1

Investments in human capital ......................... 111.6 131.1 97.8 108.5 58.7

Research and development:

Investments in basic research...................... 36.5 35.5 29.4 34.0 35.2

Investments in applied research................... 32.7 32.5 28.8 28.1 28.0

Investments in development ........................ 68.2 64.9 63.3 61.8 64.1

Total investments ..................................... 314.0 329.1 284.1 298.0 252.1
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Non-Federal Physical Property

The Government makes grants and provides funds for the purchase, construction, and/or major renovation of state and

local government physical properties. Costs for non-federal physical property programs are included as expenses in the

Statements of Net Cost and are reported as investments in the table. They are measured on the same accrual basis of

accounting used in the Financial Report statements. DOT, HUD, and EPA had $56.8 billion (87.4 percent), $3.4 billion (5.2

percent), and $2.8 billion (4.3 percent), respectively, of the total non-federal physical property investments in fiscal year

2017. Within DOT, the Federal Highway Administration invested $42.0 billion during fiscal year 2017, primarily via

reimbursement from the Highway Trust Fund, for States’ construction costs on projects related to the federal highway

system. The main programs in which the States participate are the National Highway System, Interstate Systems, Surface

Transportation, and Congestion Mitigation/Air Quality Improvement programs. The States’ contribution is 10 percent for the

Interstate System and 20 percent for most other programs.

Human Capital

The Government runs several programs that invest in human capital. Those investments go toward increasing and

maintaining a healthy economy by educating and training the general public. Costs do not include training expenses for

federal workers.

Education, VA, and DOL had $83.4 billion (74.7 percent), $15.0 billion (13.4 percent), and $6.2 billion (5.6 percent),

respectively, of the total human capital investments in fiscal year 2017. Increases and decreases in Education’s annual human

capital investments are primarily attributable to fluctuations in the loan program subsidy estimate and loan modification

costs.

Education administers a wide variety of programs related to general public education and training programs that are

intended to increase or maintain national economic productive capacity. The Office of Federal Student Aid administers needbased financial assistance programs for students pursuing postsecondary education and makes available federal grants, direct

loans, and work-study funding to eligible undergraduate and graduate students.

The significant human capital programs administered by DOL relate to grants for job training and employment

programs. The significant human capital programs administered by VA include veterans rehabilitation and employment

programs which are provided to service disabled veterans; they are designated to improve employability and promote

independence for the disabled. They also include education and training programs intended to provide higher education to

dependents that might not be able to participate otherwise.

Research and Development

Federal investments in research and development (R&D) comprise those expenses for basic research, applied research, 

and development that are intended to increase or maintain national economic productive capacity or yield other future 

benefits.

x Investments in basic research are for systematic studies to gain knowledge or understanding of the fundamental 

aspects of phenomena and of observable facts without specific applications toward processes or products in mind.

x Investments in applied research are for systematic studies to gain knowledge or understanding necessary for 

determining the means by which a recognized and specific need may be met.

x Investments in development are the systematic use of the knowledge and understanding gained from research for the 

production of useful materials, devices, systems, or methods, including the design and development of prototypes 

and processes.

With regard to basic and applied research, HHS had $17.9 billion (49.0 percent) and $12.5 billion (38.3 percent), of the 

total basic and applied research investments, respectively, in fiscal year 2017. HHS also had similar R&D investment 

amounts (and percentage contributions) in each of the preceding four years.

Within HHS, the National Institutes of Health (NIH) conducts almost all (97 percent) of the Department’s basic and 

applied research. The NIH research program includes all aspects of the medical research continuum, including basic and 

disease-oriented research, observational and population-based research, behavioral research, and clinical research, including 

research to understand both health and disease states, to move laboratory findings into medical applications, to assess new 

treatments or compare different treatment approaches; and health services research. The NIH regards the expeditious transfer 
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of the results of its medical research for further development and commercialization of products of immediate benefit to 

improved health as an important mandate.

With regard to development, the DOD and NASA had $58.0 billion (85.0 percent) and $6.6 billion (9.7 percent), 

respectively, of total development investments in fiscal year 2017. Major outputs of DOD development are scientific studies, 

investigations, research papers, hardware components, software codes, or limited construction of a weapon system 

component, to include non-system-specific development efforts. Development takes what has been discovered or learned 

from basic research and uses it to establish technological feasibility, assessment of operability, and production capability.

Development is comprised of five stages: 1) advanced technology development, 2) advanced component development and 

prototypes, 3) system development and demonstration, 4) research, development, test and evaluation management support, 

and 5) operational systems development.

NASA development includes activities to extend the knowledge of Earth, its space environment, and the universe, and 

to invest in new aeronautics and advanced space transportation technologies that support the development and application of 

technologies critical to the economic, scientific, and technical competitiveness of the United States.