- Bureau of the Fiscal Service
- Financial Report of the United States Government
- Management's Discussion & Analysis

# Management's Discussion & Analysis

## The Government's Financial Position and Condition

This *Financial  Report* presents the government’s financial position at the end of the  fiscal year, explains how and why the financial position changed during the  year, and discusses the government’s financial condition and how it may change  in the future.

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Note 1.U
1
Note 24

Table 1 on the previous page and the following summarize the federal government’s financial position:

- This  Financial Report  includes discussion and analysis of the  significant impact that the federal government’s response to the COVID-19  pandemic had on the government’s financial position during FY 2020. 
- During FY 2020, the budget deficit increased by $2.1 trillion (218.2  percent) to $3.1 trillion and net operating cost increased by $2.4 trillion  (164.7 percent) to $3.8 trillion.
- The government’s gross costs of $7.2 trillion, less $461.6 billion in  revenues earned for goods and services provided to the public (e.g., Medicare  premiums, national park entry fees, and postal service fees), plus $679.5  billion in net losses from changes in assumptions (e.g., interest rates,  inflation, disability claims rates) yields the government’s net cost of $7.4  trillion, an increase of $2.3 trillion or 46.3 percent over FY 2019.
- Deducting $3.6 trillion in tax and other revenues, with some adjustment  for unmatched transactions and balances, results in a “bottom line” net  operating cost of $3.8 trillion for FY 2020, an increase of $2.4 trillion or  164.7 percent over FY 2019. 
- Comparing total 2020 government assets of $6.0 trillion to total  liabilities of $32.7 trillion (comprised mostly of $21.1 trillion in federal  debt and interest payable 3 ,  and $9.4 trillion of federal employee and veteran benefits payable) yields a  negative net position of $26.8 trillion.
- The budget deficit is primarily financed through borrowing from the public.  As of September 30, 2020, debt held by the public, excluding accrued interest,  was $21.0 trillion. This amount, plus intra-governmental debt ($6.0 trillion)  equals gross federal debt, which, with some adjustments, is subject to the  statutory debt limit. As of September 30, 2020, the government’s total debt  subject to the debt limit was $26.9 trillion. The statutory debt limit was most  recently suspended through July 31, 2021

This *Financial Report* also contains information about projected impacts on the government’s future financial condition. Under federal accounting rules, social insurance amounts as reported in both the SLTFP and in the SOSI are not considered liabilities of the government. From Table 1:

- The SLTFP shows that the PV 4  of total non-interest spending, including Social Security, Medicare, Medicaid, defense, and education, etc., over the next 75 years, under current policy, is projected to exceed the PV of total receipts by $79.5 trillion (total federal non-interest net expenditures from Table 1). 
- The SOSI shows that the PV of the government’s expenditures for Social Security and Medicare Parts A, B and D, and other social insurance programs over 75 years is projected to exceed social insurance revenues 5  by about $65.5 trillion, a $6.4 trillion increase over 2019 social insurance projections. 
- The two sustainability measures in Table 1 differ primarily because total non-interest net expenditures from the SLTFP include the effects of general revenues and non-social insurance spending, neither of which is included in the SOSI. 

The government’s current financial position and long-term  financial condition can be evaluated both in dollar terms and in relation to  the economy as a whole. GDP is a measure of the size of the nation’s economy in  terms of the total value of all final goods and services that are produced in a  year. Considering financial results relative to GDP is a useful indicator of  the economy’s capacity to sustain the government’s many programs. For example:

- The budget deficit (i.e., including the consolidated receipts and outlays from federal funds and the Social Security Trust Fund) increased from $984.4 billion in FY 2019 to $3.1 trillion in FY 2020. The deficit-to-GDP  ratio in 2020 was 14.9 percent, an increase from 4.6 percent in FY 2019. 
- The budget deficit is primarily financed through borrowing from the  public. As of September 30, 2020, the $21.0 trillion in debt held by the  public, excluding accrued interest, equates to approximately 100 percent of GDP.
- The 2020 SOSI projection of $65.5 trillion net PV excess of expenditures  over receipts over 75 years represents about 4.2 percent of the PV of GDP over  75 years. The excess of total projected non-interest spending over receipts of  $79.5 trillion from the SLTFP represents 4.8 percent of GDP over 75 years. As  discussed in this  Financial Report , changes in these projections can, in turn, have a significant impact on  projected debt as a percent of GDP.
- To prevent the debt-to-GDP ratio from rising over the next 75 years, a combination of non-interest spending reductions and receipts increases that amounts to 5.4 percent of GDP on average is needed (3.8 percent of GDP on average  in the 2019 projections). The fiscal gap represents 30.2 percent of 75-year PV  receipts and 23.8 percent of 75-year PV non-interest spending.

### FY 2020 Financial Statement Audit Results

For FY 2020, GAO issued a disclaimer of audit opinion on the accrual-based, government-wide financial statements, as it has for the past 23 years, due to certain material weaknesses in internal control over financial reporting and other limitations on the scope of its work. In addition, GAO issued a disclaimer of opinion on the sustainability financial statements due to significant uncertainties primarily related to the achievement of projected reductions in Medicare cost growth and certain other limitations. GAO’s audit report on page 226 of this *Financial Report*, discusses GAO’s findings.

Twenty-two of the 24 entities required to issue audited financial statements under the CFO Act received unmodified audit opinions, as did 13 of 16 additional significant consolidation entities (see Table 11 and Appendix A).6

### The Government-wide Reporting Entity

This *Financial Report* includes  the financial status and activities of the executive, legislative, and judicial branches of the federal government. SFFAS No. 47, *Reporting Entity* , provides criteria for identifying organizations that are consolidation entities, disclosure entities, and related parties. Such criteria are summarized in Note 1.A, Significant Accounting Policies, Reporting Entity, and in Appendix A, which lists the entities included in this *Financial Report* by these categories. The assets, liabilities, results of operations, and related activity for consolidation entities are consolidated in the financial statements.

Fannie Mae and Freddie Mac meet the criteria for disclosure entities  and, consequently, are not consolidated into the government’s financial  statements. However, the values of the investments in such entities, changes in  value, and related activity with these entities are included in the  consolidated financial statements. The FR System and the SPVs are disclosure  entities and are not consolidated into the government’s financial statements.  See Note 1.A and Note 26—Disclosure Entities and Related Parties for additional information. In addition, per SFFAS  No. 31, *Accounting for Fiduciary  Activities*, fiduciary funds are not consolidated in the government financial statements.7

Most significant consolidation entities prepare financial reports that include financial and performance related information, as well as Annual Performance Reports. More information may be obtained from entities’ websites indicated in Appendix A and at https://www.performance.gov/.

The following pages contain a more detailed discussion of the  government’s financial results for FY 2020, the budget, the economy, the debt,  and a long-term perspective about fiscal sustainability, including the  government’s ability to meet its social insurance benefits obligations. The  information in this *Financial Report*,  when combined with the *Budget*,  collectively presents information on the government’s financial position and  condition.

### The Federal Government’s Response to the Pandemic

During FY 2020, the federal government took broad action to protect  public health from the effects of the unprecedented pandemic, signing into law  four major pieces of legislation:

- Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (P.L. 116-123)
- Families First Coronavirus Response Act (FFCRA, P.L. 116-127)
- Coronavirus Aid, Relief, and Economic Security (CARES Act, P.L. 116-136 )
- Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act, P.L. 116-139)

These laws address the health and economic effects of COVID-19, providing assistance to American workers and families, small businesses, and state, local, tribal governments, and preserving jobs for American industry. As indicated here and in the *Financial Report*, these essential programs had significant effects on the federal government’s budgetary and financial results.

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Chart 1 summarizes the more than $2.6 trillion in appropriations enacted for key pandemic-related assistance programs, which include, but are not limited to:

- The  PPP , administered by  SBA , is a loan guaranty program designed to provide a direct incentive for small businesses to retain employees by  providing loan forgiveness for amounts used for eligible expenses for payroll and benefit costs, interest on mortgages, rent, and utilities. ($670.3 billion)
- Through its Economic Stabilization and Assistance to Severely Distressed Sectors of the U.S. Economy efforts (CARES Act Title IV),  Treasury , including in collaboration with the Federal Reserve, provides funding through direct loans and loan guarantees or other support for various businesses and state and local governments. ($500.0 billion)
- Through its UI Program,  DOL  expands states’ ability to provide UI for many workers impacted by the pandemic, including for workers who are not eligible for regular/traditional unemployment benefits. ($394.3 billion)
- The  IRS  provided a refundable tax credit, the recovery rebate, of $1,200 per qualifying adult, and $500 per dependent child, and a deferral of payment of employer’s share of Social Security taxes through December 2020. ($282.0 billion) 
- Through  the  PHSSEF ,  HHS  provides broad support, including, but not limited to: reimbursements to health care providers for expenses or  lost revenues attributable to the pandemic, and support for the development and  purchase of vaccines, therapeutic treatment, testing, and medical supplies.  ($231.7 billion) 
- Through Coronavirus Relief Fund efforts,  Treasury  provides for payments  to states, local, and tribal governments for pandemic-related spending. ($150.0 billion)
- Many other agencies and programs comprise the remaining $405.3 billion  reported as “Other” in Chart 1, including, but not limited to funding for:  transportation system assistance at the  DOT , student loan deferrals provided by Education, and FEMA’s Disaster Relief Fund. 
- Note 29—Subsequent Events , discusses the financial effects of significant  events that occurred following the end of the fiscal year, but prior to issuance of this  Financial Report . Those subsequent events include additional appropriations as well as subsequent recessions (i.e., reductions) to appropriated amounts referenced above. 8  Additional subsequent events are referenced throughout the Financial Report as appropriate.

Three key components of the U.S. budget process are: 1) appropriations,  2) obligations, and 3) outlays. An appropriation is a provision of law  authorizing the expenditure of funds for a given purpose. Once funds are  appropriated by Congress, Treasury issues warrants that officially establish  the amounts available to be obligated and spent (i.e., expended or outlayed) by  each agency. An agency’s obligation of funds is a binding agreement to outlay  funds for a particular purpose immediately or in the future. Table 2 below compares the obligated and outlaid amounts  to the appropriation amounts for each program summarized in Chart 1.  Obligations and outlays provide an indication of how much appropriations have  been used. Outlays for SBA’s PPP and Treasury’s Economic Stabilization &  Assistance to Distressed Sectors programs detailed in Table 2 represent the  subsidy cost reflected in the budget deficit for such programs. The PPP budget  outlays primarily represent estimated subsidy cost for which cash payments have  not yet been made to the lenders, resulting in a liability on the balance sheet  as of September 30, 2020. Concerning Treasury’s Economic Stabilization &  Assistance to Distressed Sectors Program, the outlays primarily relate to  estimated losses on Investments in Special Purpose Vehicles reported on the  balance sheet.

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| Paycheck Protection Program (PPP) (SBA)                                  | $670.3   | $532.3   | $525.9   |
|--------------------------------------------------------------------------|----------|----------|----------|
| Economic Stabilization & Assistance to Distressed Sectors (Treasury) | $500.0   | $31.8    | $19.3    |
| Unemployed Insurance (DOL)                                               | $394.3   | $358.0   | $345.5   |
| Economic Impact Payments (Treasury-IRS)                                  | $282.0   | $274.7   | $274.7   |
| Public Health & Social Services Emergency Fund (PHSSEF) (HHS)        | $231.7   | $141.7   | $108.1   |
| Coronavirus Relief Fund (Treasury)                                       | $150.0   | $150.0   | $149.5   |
| Other                                                                    | $405.3   | $301.9   | $199.2   |
| **Total**                                                                | $2,633.6 | $1,790.4 | $1,622.2 |

Chart 1 and Table 2 above reflect only amounts appropriated, obligated, and outlaid as of September 30, 2020. The Treasury website, www.USAspending.gov provides more current information about amounts spent by the federal government  for COVID-19 response and for other purposes. 

Budgetary  activity, such as appropriations, obligations, and outlays are different from,  but related to financial activity, such as costs, assets, and liabilities. The  following section provides a brief discussion of the relationship between  budgetary and financial accounting in the federal government. As agencies  implement programs, the appropriations, obligations, and outlays referenced in Table 2 precipitate a wide range of financial effects, including the incurrence  of program costs, and the creation of or changes in assets such as advances or  loans receivable, or liabilities such as loan guarantees. Table 3 in the following section, which summarizes the *Reconciliation of Net Operating Cost and  Budget Deficit* statement, presents  the significant differences between the two accounting perspectives utilized by  the federal government. The corresponding financial effects are  discussed later in the MD&A in the section entitled “The Government’s Net  Position: ‘Where We Are’".

### Accounting Differences Between the Budget and the Financial Report

Each year, the Administration issues two reports that detail  the government’s financial results: the *Budget* and this *Financial  Report*. The exhibit on the following page provides  the key characteristics and differences between the two documents.

Treasury  generally prepares the financial statements in this *Financial Report*on an accrual basis of accounting as prescribed by GAAP for  federal entities.9 These principles are tailored to the government’s unique  characteristics and circumstances. For example, entities prepare a uniquely structured  “Statement of Net Cost,” which is intended to present net government resources  used in its operations. Also, unique to government is the preparation of  separate statements to reconcile differences and articulate the relationship  between the budget and financial accounting results.

### Budget Deficit vs. Net Operating Cost

The budget deficit is measured as the excess of outlays, or payments made by the government, over receipts, or cash received by the government. Net operating cost, on an accrual basis, is the excess of costs (what the government has incurred but has not necessarily paid) over revenues (what the government has collected and expects to collect but has not necessarily received). As shown in Chart 2, net operating cost typically exceeds the budget deficit due largely to the inclusion of cost accruals associated with increases in estimated liabilities for the government’s postemployment benefit programs for its military and civilian employees and veterans as well as environmental liabilities. 

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The government’s primarily cash-based10 budget  deficit increased by $2.1 trillion (about 218.2 percent) from approximately $984.4 billion in  FY 2019 to about $3.1 trillion in FY 2020 due to a combined slight decrease in  receipts and a significant increase in outlays in FY 2020. The $42.2 billion  (1.2 percent) decrease in receipts can be attributed primarily to lower net  individual and corporation income tax receipts and excise taxes, partially  offset by higher social insurance and retirement receipts and deposits of  earnings by the Federal Reserve. Outlays increased $2.1 trillion (47.3  percent). Contributing to the dollar increase over FY 2019 were higher outlays  for Medicare, Defense, Medicaid, Social Security, Treasury and SBA.11

The Treasury’s September  2020 MTS is the source of receipts, spending, and deficit  information for this Report. The MTS presents primarily cash-based spending, or  outlays, for the fiscal year in a number of ways, including by month, by  entity, and by budget function classification. The federal budget is divided  into approximately 20 categories, or budget functions, as a means of organizing  federal spending by primary purpose (e.g., National Defense, Transportation,  and Health). Multiple entities may contribute to one or more budget functions,  and a single budget function may be associated with only one entity. For  example, DOD, DHS, DOE, and multiple other entities administer programs that  are critical to the broader functional classification of National Defense. DOD,  OPM, and many other entities also administer Income Security programs (e.g.,  retirement benefits, housing, financial assistance). By comparison, the  Medicare program is a budget function category unto itself and is administered  exclusively at the federal level by HHS. Federal spending information by budget  function and other categorizations may be found in the September 2020 MTS.12

The government’s largely accrual-based net operating cost increased by $2.4 trillion (164.7 percent) to  $3.8 trillion during FY 2020. As explained below, net operating costs are  affected by both changes in revenues and costs.

Table 3 provides a summary of the items reported in the *Reconciliation of Net Operating Cost and Budget Deficit*, which articulates the relationship between the government’s accrual-based net  operating cost and the primarily cash-based budget deficit. From Table 3, the $696.9 billion net difference between the government’s budget deficit and net operating cost for FY 2020, is mostly attributable to: 1) a $969.0 billion net increase in liabilities for federal employee and veteran  benefits payable; 2) a $91.1 billion increase in net taxes receivable; 3) a  $44.9 billion timing difference between when credit reform costs are recorded  in the budget versus net operating cost; and 4) a $150.7 billion net change in  Other Assets, attributed mostly to advances and prepayments for certain COVID-19 related programs (see Note 10—Other Assets). 

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Note 1.U

### The Government’s Net Position: "Where We Are"

The  government’s financial position and condition have traditionally been expressed  through the *Budget*, focusing on  surpluses, deficits, and debt. However, this primarily cash-based discussion of  the government’s net outlays (deficit) or net receipts (surplus) tells only  part of the story. The government’s accrual-based net position, (the difference between its assets and liabilities, adjusted for  unmatched transactions and balances), and its “bottom line” net operating cost  (the difference between its revenues and costs) are also key financial  indicators.

### Financial Effects of the Federal Government’s Pandemic Response

The financial effects of the government’s response to the COVID-19 pandemic were broad, impacting many agencies in a variety of ways and to varying degrees. This section includes brief discussions of some of the more significant effects of the pandemic on the government’s financial results for FY 2020. Please refer to Note 28—COVID-19 Activity and other disclosures in this Financial Report, as well as in the individual entities’ financial statements for more information.

### Costs and Revenues

The  government’s Statement of Operations and Changes in Net Position, much like a corporation’s income statement, shows the government’s “bottom line” and  its impact on net position (i.e., assets net of liabilities, adjusted for unmatched transactions and balances). To derive the government’s  “bottom line” net operating cost, the Statement of Net Cost first  shows how much it costs to operate the federal government, recognizing expenses when incurred, regardless of when payment is made (accrual basis). It shows the derivation of the government’s net cost or the net of: 1) gross costs, or the costs of goods produced and services rendered by the government, 2) the earned revenues generated by those goods and services during the fiscal year, and 3) gains or losses from changes in actuarial assumptions used to estimate certain liabilities. This amount, in turn, is offset against the government’s taxes and other revenue reported in the Statement of Operations and Changes in Net Position to calculate the “bottom line" or net operating cost.13

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Note 1.U

Table 4 shows that the government’s “bottom line” net operating cost increased $2.4 trillion (164.7 percent) during 2020 from $1.4  trillion to $3.8 trillion. This increase is due mostly to a $2.3 trillion (46.3 percent) increase in entity net costs, combined with a $49.4 billion (1.4  percent) decrease in tax and other revenues over the past fiscal year as discussed in the following.

### Gross Cost and Net Cost 

The Statement of Net Cost starts with the government’s total gross costs of $7.2 trillion, subtracts revenues earned for goods and services provided (e.g., Medicare premiums, national park entry fees, and postal service fees), and adjusts the balance for gains or losses from changes in actuarial assumptions used to estimate certain liabilities, including federal employee and veteran benefits to derive its net cost of $7.4 trillion (See Chart 3), a $2.3 trillion (46.3 percent) increase over FY 2019.

Typically, the annual change in the government’s net cost is impacted by a variety of offsetting increases and decreases across entities. For example, offsetting changes in net cost during FY 2020 included:

- As referenced earlier, the federal government’s response to the COVID-19 pandemic had significant effects on agency and government-wide financial results. Congress appropriated $2.6 trillion as of September 30, 2020, which translated into substantial increases in costs across multiple agencies, including but not limited to:                   - The primary driver of a $559.1 billion increase in  SBA  net costs is a $527.8 billion  increase in loan subsidy costs, including reestimates, attributable to the PPP  and Debt Relief programs under the CARES Act. As noted earlier, the PPP  provides loan forgiveness for amounts used for eligible expenses  for payroll and benefit costs. Under the Debt Relief program, SBA pays six  months of principal, interest, and any associated fees that borrowers owe for  all current loans in regular servicing status in its 7(a), 504, and Microloan  programs, as well as new 7(a), 504, and Microloans disbursed prior to September  27, 2020;
  - The $405.0 billion increase in  Treasury  net costs is largely due  to payments issued to individuals pursuant to the CARES Act to help stimulate  the economy through recovery rebates for individuals (also referred to as EIPs).  In FY 2020, the IRS disbursed $274.7 billion of EIPs to eligible recipients in  every state and territory and at foreign addresses. Treasury’s net cost  increase is also due in part from Coronavirus relief fund payments made to  affected states, local, territorial, and tribal governments. $80.6 billion of  the $149.5 billion of such payments made was recognized as net costs in FY  2020. Treasury costs also include $28.2 billion of financial assistance  payments to passenger air carriers, air cargo carriers, and contractors to  provide payroll support to aviation workers during the pandemic;
  - $115.2 billion out of a total $184.8 billion net cost increase at  HHS  is primarily due to increases  to the  PHSSEF , which, as noted earlier, funds a wide array of pandemic response  efforts, including, but not limited to: 1) Provider Relief Fund, which provides  payments to assist eligible health care providers for health care related  expenses or lost revenues attributed to the pandemic, 2) SNS, and 3) vaccine,  therapeutic and diagnostic                    research and development; and 
  - A significant portion of the $452.7 billion increase at  DOL  is attributable to a $461.4 billion increase in Income Maintenance programs  costs, primarily due to unemployment benefits authorized by the CARES Act.  These programs include the FPUC program, which provided an additional $600 of  weekly unemployment benefits and the PUA program, which provides temporary  benefits for individuals who are not eligible for regular/traditional UI,  respectively. 

- Entities administering federal employee and veteran benefits programs  employ a complex series of assumptions, including but not limited to interest  rates, beneficiary eligibility, life expectancy, and medical cost levels, to  make actuarial projections of their long-term benefits liabilities. Changes in  these assumptions can result in either losses (net cost increases) or gains  (net cost decreases). Across the government, these  net losses from changes in assumptions amounted to $679.5 billion in FY 2020, a  loss increase (and a corresponding net cost increase) of $480.6 billion  compared to FY 2019. The primary entities that administer programs impacted by these  assumptions – typically federal employee pension and benefit programs – are the  OPM ,  VA ,  and  DOD . These entities recorded  losses and gains from changes in assumptions in the amounts of $89.9 billion  loss, $602.7 billion loss, and $17.4 billion gain, respectively. These  actuarial estimates and the resulting gains or losses from changes in  assumptions can sometimes cause significant swings in total entity costs from  year to year. For example, for FY 2020, changes in net cost at OPM ($67.3  billion increase), VA ($567.4 billion increase), and DOD ($163.4 billion  decrease), were impacted by the corresponding changes in gains or losses from  assumption changes at these entities.

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- While most of the $163.4 billion decrease in  DOD  net costs is primarily due to  a $156.4 billion loss decrease (net gain) from changes in assumptions as  referenced above, the majority of DOD’s net costs included military operations,  readiness, and support; procurement; military personnel; and R&D, which  collectively decreased slightly.
- $184.8 billion and $56.4 billion increases at  HHS  and  SSA , respectively, were due to pandemic response at  HHS as discussed above as well as to cost increases of the benefit programs  that these entities administer (HHS – Medicare and Medicaid programs, SSA –  OASDI programs).
- As referenced above,  VA  net costs increased $567.4 billion due largely to changes in benefits program  experience and assumptions, including, but not limited to an increase in  veterans who first became eligible for benefits during FY 2020.
- DHS  costs increased by $49.7 billion due to costs  associated with disaster responses to COVID-19, hurricanes, and wildfires.
- A $32.5 billion decrease in  interest on debt held by the public  due largely to a decrease in average interest rates on outstanding debt held by  the public.

Chart 3 shows the composition of the government’s net cost. In FY 2020, 80 percent of the federal government’s total net cost came  from only seven agencies: HHS, SSA, VA, DOD, Treasury, DOL, and SBA. The other more  than 150 entities included in the government’s FY 2020 Statement of Net Cost  accounted for a combined 20 percent of the government’s total net cost for FY 2020. Chart 4 shows the two-year trend in these costs,  illustrating the significant impact that the pandemic had on certain agency  costs as summarized above. Aside from pandemic relief costs, as discussed  above, HHS and SSA net costs for FY 2020 ($1.4 trillion and $1.2 trillion,  respectively) are attributable to major social insurance programs administered  by these entities. VA net costs of $985.0 billion support health, education and  other benefits programs for our nation’s Veterans. DOD net costs of $745.0  billion relate primarily to operations, readiness, and support; personnel;  research; procurement; and retirement and health benefits. Treasury net costs  of $560.7 billion support a broad array of programs that promote conditions for  sustaining economic growth and stability, protecting the integrity of our  Nation’s financial system, and effectively managing the U.S. government’s  finances and resources. SBA net costs of $559.0 billion support agency programs  and services that enable the establishment and vitality of small businesses and  by providing assistance in the economic recovery of communities after disasters.

### Tax and Other Revenues

As noted earlier, tax and other revenues from the Statement of Operations and Changes in Net Position are deducted from total net cost to derive the government’s  “bottom line” net operating cost. Chart 5 shows that total tax and other revenue decreased by $49.4 billion or 1.4 percent to $3.6 trillion for FY 2020. This net decrease was due to primarily to a $51.6 billion decrease in individual tax revenue, compared with an offsetting, comparatively smaller decreases and increases in corporate and other tax revenue, respectively.14 Taxes receivable increased $91.1 billion during FY 2020 principally due  to increased unpaid transition taxes on foreign earnings pursuant to the TCJA, coupled with a decrease in the related allowance for uncollectible taxes  receivable due to a change in the methodology for estimating collectability,  and the CARES  Act Section 2302 provision allowing employers to defer payment of  FICA Social Security taxes. Earned revenues from Table 4 are not considered  “taxes and other revenue” and, thus, are not shown in Chart 5. Individual income tax and tax withholdings and  corporate income taxes accounted for about 79.9 percent and 8.9 percent of  total revenue, respectively in FY 2020; other revenues from Chart 5 include Federal Reserve earnings, excise taxes,  unemployment taxes, and customs duties.

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As previously shown in Table 4, the decrease in tax and other revenue combined with the increase in net cost, yielded a $2.4 trillion increase to the government’s bottom line net operating cost to $3.8 trillion for FY 2020.

### Tax Expenditures

Tax and other revenues reported reflect the effects of tax expenditures,  which are special exclusions, exemptions, deductions, tax credits, preferential  tax rates, and tax deferrals that allow individuals and businesses to reduce  taxes they may otherwise owe. Tax expenditures may be viewed as alternatives  to other policy instruments, such as spending or regulatory programs. For  example, the government supports college attendance through both spending  programs and tax expenditures. The government uses Pell Grants to help low- and  moderate-income students afford college and allows certain funds used to meet  college expenses to grow tax free in special college savings accounts. Tax  expenditures may include deductions and exclusions which reduce the amount  of income subject to tax (e.g., deductions for personal residence mortgage  interest). Tax credits, which reduce tax liability dollar for dollar for the  amount of credit (e.g., child tax credit), are also considered tax  expenditures. Tax expenditures may also allow taxpayers to defer tax  liability.

Receipts in the calculation of surplus or deficit, and tax revenues in  the calculation of net position, reflect the effect of tax expenditures. As  discussed in more detail in the Other Information section of this *Financial Report*, tax expenditures will  generally lower federal government receipts although tax expenditure estimates  do not necessarily equal the increase in federal revenues (or the change in the  budget balance) that would result from repealing these special provisions. 

Tax expenditures are reported annually in the Analytical Perspectives of  the *Budget*. In addition, current and  past tax expenditure estimates and descriptions can be found at the following  location from Treasury’s Office of Tax Policy:  https://home.treasury.gov/policy-issues/tax-policy/tax-expenditures. 

### Assets and Liabilities

The government’s net position at the end of the fiscal year is derived by netting the government’s assets against its liabilities, as presented in the Balance Sheet (summarized in Table 5). The Balance Sheet does not include the financial value of the government’s sovereign powers to tax, regulate commerce, or set monetary policy or value of nonoperational resources of the government, such as national and natural resources, for which the government is a steward. In addition, as is the case with the Statement of Operations and Changes in Net Position, the Balance Sheet includes a separate presentation of the portion of net position related to funds from dedicated collections. Moreover, the government’s exposures are broader than the liabilities presented on the Balance Sheet. The government’s future social insurance exposures (e.g., Medicare and Social Security) as well as other fiscal projections, commitments and contingencies, are reported in separate statements and disclosures. This information is discussed later in this MD&A section, the financial statements, and RSI sections of this Financial Report.

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Note 1.U

### Assets

From Table 5, as of September 30, 2020, more than  three-fourths of the government’s $6.0 trillion in reported assets is comprised  of: 1) cash and monetary assets ($1.9 trillion), 2) net loans receivable ($1.6  trillion), 3) and net PP&E ($1.1 trillion).15 Chart 6 compares the  balances of these and other balance sheet amounts as of September 30, 2020 and  2019, some of which were substantially impacted by the pandemic response.

Cash and monetary assets ($1.9 trillion) is comprised largely of the operating cash of the U.S. government. Operating cash held by Treasury increased $1.4 trillion (371 percent) to $1.8 trillion during FY 2020 largely due to Treasury maintaining an elevated cash balance to maintain prudent liquidity in light of the size and relative uncertainty of COVID-19--related outflows (see Note 2—Cash and Monetary Assets ).

The federal government’s direct loans and loan  guarantee programs are used to promote the nation’s welfare by making financing  available to segments of the population not served adequately by non-federal  institutions, or otherwise providing for certain activities or investments. For  those unable to afford credit at the market rate, federal credit programs  provide subsidies in the form of direct loans offered at an interest rate lower  than the market rate. For those to whom non-federal financial institutions are  reluctant to grant credit because of the high risk involved, federal credit  programs guarantee the payment of these non-federal loans and absorb the cost  of defaults. For example, Education supports individuals engaged in education  programs through a variety of student loan, grant and other assistance  programs. USDA administers loan programs to support the nation’s farming and  agriculture community. HUD loan programs support affordable homeownership, as  well as the construction and rehabilitation of housing projects for the elderly  and persons with disabilities. SBA loan programs enable the establishment and  vitality of small businesses and assist in the economic recovery of communities  after disasters. Significant changes to the federal government’s direct loans  and loan guarantees receivable and loan guarantees liability, as discussed in Note 4, include, but are not limited to: 

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- Education’s  Federal Direct  Student Loan Program accounted for $1.1 trillion (69.8 percent) of total net  direct loans and loan guarantees receivable. During FY 2020, Education’s net  loans receivable decreased by $32.4 billion, largely the result of net upward  loan subsidy reestimates combined with loan modifications that increased the  subsidy allowance by $97.7 billion, offset by increases in loans outstanding  and accrued interest receivable. This change was due to a CARES Act provision  and subsequently a Presidential Memorandum which provided support for student  loan borrowers by temporarily suspending nearly all federal student loan  payments, which increased costs to the government. In addition, all federal  wage garnishments and collections actions for borrowers with federally held  loans in default were halted.
- SBA ’s  credit program receivables comprise business and disaster direct loans and  defaulted business loans purchased per the terms of SBA’s loan guaranty  programs, offset by an allowance for related program subsidy costs. These  receivables were valued at $182.9 billion as of FY 2020, stemming from a $173.2  billion increase in direct disaster loans primarily funded by the CARES Act.  SBA’s liability for loan guarantees increased $510.7 billion due to guarantees  made under the PPP program.

Federal government PP&E includes many of the physical resources that  are vital to the federal government’s ongoing operations, including buildings,  structures, facilities, equipment, internal use software, and general purpose  land. DOD comprises approximately 69.0 percent of the government’s reported PP&E of  $1.1 trillion  as of September 30, 2020.

 “Other” Assets of $921.7 billion in Table 5 and Chart 6 includes: 1) $218.6 billion in “Advances and  Prepayments” and 2) $108.4 billion of “Investments in SPVs”. The $150.6 billion increase in this amount during FY 2020 is largely attributable to HHS and  Treasury. HHS had an increase due to issuance of the COVID-19 AAP program and PHSSEF advances for personal protection equipment and test kits for COVID-19. Treasury provided Coronavirus Relief Fund financial assistance payments until such payments are either used by the                recipients on or before December 31, 2021 (as extended – see Note 10)                or returned unused to Treasury (see Note 10—Other Assets).

In addition, in response to the COVID-19 pandemic, under Section 4003 of the CARES Act, Treasury holds equity investments in SPVs established through  the FRBNY and FRBB for the purpose of enhancing the liquidity of the U.S.  financial system. These non-federal investment holdings are reported at their  fair value on the Balance Sheet, and changes in the valuation of these  investments are recorded on the Statement of Net Cost. See Note 8—Investments in Special Purpose Vehicles, and Note 28—COVID-19 Activity, as well as Treasury’s FY 2020 financial statements for additional information.

Please refer to Note 28—COVID-19 Activity , as well as the FY 2020 entities financial  statements for additional information about the pandemic’s effects on the  federal government’s costs and revenues over the past fiscal year. 

In addition, as indicated earlier, Note 29—Subsequent Events, discusses the financial effects of  significant events that occurred following the end of the fiscal year, but  prior to issuance of this *Financial Report*. For example, On December 27,  2020, the President signed into law the *Consolidated Appropriations Act, 2021 (P.L. 116-120)*.  Effective January 9, 2021, this statue eliminates Treasury’s ability to make  new loans and investments under Section 4003 of the CARES Act (SPVs). These and  other subsequent events and their effects are discussed in Note 29.

### Liabilities

As indicated in Table 5 and Chart 7, of the government’s $32.7 trillion in total liabilities, the largest liability is federal debt and interest payable, the balance of which increased by $4.2 trillion (25.0 percent) to $21.1 trillion as of September 30, 2020.

The other major component of the government’s liabilities is  federal employee and veteran benefits payable (i.e., the government’s pension and other  benefit plans for its military and civilian employees), which increased $969.0  billion (11.5 percent) during FY 2020, to about $9.4 trillion. This total  amount is comprised of $2.7 trillion in benefits payable for the current and  retired civilian workforce, and $6.7 trillion for the military and veterans. OPM administers the largest civilian pension plan, covering about 2.8 million  current employees and 2.7 million annuitants and survivors. The military  pension plan covers about 2.1 million current military personnel (including  active service, reserve, and National Guard) and approximately 2.3 million retirees and survivors.

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### Federal Debt

The budget surplus or deficit is the difference between total federal  spending and receipts (e.g., taxes) in a given year. The government borrows from the public (increases federal debt levels) to finance  deficits. During a budget surplus (i.e., when receipts exceed spending), the government typically uses those excess funds to reduce the debt held by the  public. The Statement of Changes in Cash Balance from Budget and Other Activities reports how the annual budget surplus or deficit  relates to the federal government’s borrowing and changes in cash and other monetary assets. It also explains how a budget surplus or deficit normally  affects changes in debt balances.

The government’s federal debt and interest payable (Balance Sheet  liability), which is comprised of publicly-held debt and accrued interest  payable, increased $4.2 trillion (25.0 percent) to $21.1 trillion as of  September 30, 2020. It is comprised of Treasury securities, such as bills,  notes, and bonds, net of unamortized discounts and premiums issued or sold to  the public; and accrued interest payable. The “public” consists of individuals,  corporations, state and local governments, FRBs, foreign governments, and other  entities outside the federal government. As indicated above, budget surpluses  have typically resulted in borrowing reductions, and budget deficits have  conversely yielded borrowing increases. However, the government’s debt  operations are generally much more complex. Each year, trillions of dollars of  debt mature and new debt is issued to take its place. In FY 2020, new  borrowings were $19.0 trillion, and repayments of maturing debt held by the  public were $14.8 trillion, both increases from FY 2019.

In addition to debt held by the public, the government has about $6.0  trillion in intra-governmental  debt outstanding, which arises when one part of the government  borrows from another. It represents debt issued by Treasury and held by  government accounts, including the Social Security ($2.9 trillion) and Medicare  ($221.2 billion) trust funds. Intra-governmental debt is primarily held in  government trust funds in the form of special nonmarketable securities by  various parts of the government. Laws establishing government trust funds  generally require excess trust fund receipts (including interest earnings) over  disbursements to be invested in these special securities. Because these amounts  are both liabilities of Treasury and assets of the government trust funds, they  are eliminated as part of the consolidation process for the government-wide  financial statements (see Note 12). When those securities are redeemed, e.g.,  to pay Social Security benefits, the government must obtain the resources  necessary to reimburse the trust funds. The sum of debt held by the public and  intra-governmental debt equals gross federal debt, which (with some  adjustments), is subject to a statutory ceiling (i.e., the debt limit). At the  end of FY 2020, debt subject to the statutory limit was $26.9 trillion16 (see sidebar).

***Sidebar:** Prior to 1917, Congress approved each debt issuance. In 1917, to facilitate planning in World War I, Congress and the President established a dollar ceiling for federal borrowing. With the Public Debt Act of 1941 (P.L. 77-7), Congress and the President set an overall limit of $65 billion on Treasury debt obligations that could be outstanding at any one time. Since then, Congress and the President have enacted a number of measures affecting the debt limit, including several in recent years. Congress and the President most recently suspended the debt limit from August 2, 2019 through July 31, 2021. It is important to note that increasing or suspending the debt limit does not increase spending or authorize new spending; rather, it permits the U.S. to continue to honor pre-existing commitments to its citizens, businesses, and investors domestically and around the world.*

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The federal debt held by the public measured as a percent of GDP (debt-to-GDP ratio) (Chart 8) compares the country’s debt to the size of its economy, making this measure sensitive to changes in both. Over time, the debt-to-GDP ratio has varied widely:

- For most of the nation’s history, through the first half of the 20th century, the debt-to-GDP ratio has tended to increase during wartime and decline during peacetime.
- Chart 8  shows that wartime spending and borrowing pushed the debt-to-GDP ratio to an all-time high of 106 percent in 1946, soon after the end of World War II, but it decreased rapidly in the post-war years.
- The ratio grew rapidly from the mid-1970s until the early 1990s. Strong economic growth and fundamental fiscal decisions, including measures to reduce the federal deficit and implementation of binding PAYGO rules (which require that new tax or spending laws not add to the deficit), generated a significant decline in the debt-to-GDP ratio, from a peak of 48 percent in 1993-1995, to 31 percent in 2001.
- During the first decade of the 21st century, PAYGO rules were allowed to lapse, significant tax cuts were implemented, entitlements were expanded, and spending related to defense and homeland security increased. By September 2008, the debt-to-GDP ratio was 39 percent of GDP.
- PAYGO rules were reinstated in 2010, but the extraordinary demands of the last economic and fiscal crisis and the consequent actions taken by the federal government, combined with slower economic growth in the wake of the crisis, pushed the debt-to-GDP ratio up to 74 percent by the end of FY 2014.
- The debt was 100 percent of GDP at the end of FY 2020 (compared to 79 percent at the end of FY 2019 and as reported in the FY 2019 Financial Report). 17  From  Chart 8 , since 1940, the average debt-to-GDP ratio is 48 percent.

### The Economy in  FY 2020

A review of U.S. economic performance can help place the discussion of  the government’s financial statements in a broader context. Yet, in the latest  fiscal year, further consideration of the effects of an  external shock, the COVID-19 global pandemic, and the U.S. government’s  response, is also warranted.

The economy ended FY 2019 on  a firm footing, with the unemployment rate at a half-century low, strong wage  growth, and a pace of job creation more than sufficient to account for new entrants to the  labor force. Through the first five months of FY 2020, the  pace of payroll job growth accelerated to 219,000 per month, and the  unemployment stood at 3.5 percent, the half-century low seen at the end of FY  2019. In addition, the labor force participation rate climbed to a six-year high in  February 2020, and housing sector  activity became increasingly buoyant. By February 2020, business  and consumer sentiment had advanced to multi-year highs as well.

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*Financial Report*

However, the spread of the COVID-19 virus ended  the longest recovery in U.S. history in February 2020 at 128 months. The  economy contracted sharply in the second and third quarters of FY 2020 as state  and local governments implemented stay-at-home orders and mandated closures of  non-essential businesses to mitigate the impact of the pandemic on health care  resources. Meanwhile, the U.S. government responded quickly with  unprecedentedly bold measures to support American households and small  businesses during the pandemic. By March 27, 2020 – or roughly two weeks after  stay-at-home orders were issued, three record-setting economic aid packages  were passed totaling roughly $2.6 trillion. The administration rapidly  implemented the various measures, including EIPs, expanded eligibility for UI  payments, and the PPP, which provided forgivable loans to small businesses to  encourage employee retention. These measures boosted household liquidity,  contributed to a rapid reduction in unemployment, and allowed small businesses  to maintain viability until their local economies reopened. Due to the  relaxation of stay-at-home orders and this robust response, the economy  expanded in the final quarter of FY 2020 at the fastest quarterly rate in  seventy years, accompanied by a brisk pace of payroll job growth and strong  growth in wages.

As summarized in Table 6, U.S. economic growth  slowed markedly over FY 2020 as a whole compared with FY  2019. Real (i.e., inflation-adjusted) GDP declined by 2.8 percent over the four  quarters of FY 2020, following growth of 2.1 percent during the previous fiscal  year. A temporary collapse in personal consumption expenditures lead the overall contraction in the latest fiscal year, and business fixed  investment also declined sharply. However, residential investment, government  spending, net exports, and private inventory investment all supported growth. Over  the four quarters of FY 2020, consumer spending contracted by 2.8 percent after  growing by 2.5 percent the previous fiscal year. Early in the latest fiscal  year, business fixed investment had been constrained by ongoing headwinds,  including slowing global growth, policy uncertainty, low oil prices, and disruptions at specific domestic companies. The onset of the pandemic  also put investment plans on hold, such that business fixed investment declined  4.5 percent in FY 2020, after growing 2.7 percent in FY 2019. Residential  investment, despite a temporary setback in mid-2020, led growth in the latest  fiscal year, with a gain of 7.2 percent following a 1.2 percent contraction in  FY 2019. A smaller increase in government spending in the latest fiscal year (a  0.3 percent rise for FY 2020 as a whole, following a 2.2 percent advance in FY  2019), masked the significant increase in federal government expenditures in  April 2020 to support the economy. Net exports made  an essentially neutral contribution to growth while inventory investment contributed  positively to real GDP growth in FY 2020; in the previous fiscal year, each of  these components had posed a small drag on growth.

Although labor market strength was  evident in the first five months of FY 2020, the imposition of stay-at-home  orders and mandated business closures reduced economic activity severely, and  the unemployment rate jumped to a post-World War II high of 14.8 percent in  April 2020. More than 22 million payroll jobs were lost over March and April,  but in May, job creation resumed, far earlier than expected. By the end of FY  2020, the unemployment rate had fallen by 6.8 percentage points to 7.8 percent,  and a total of 11.5 million jobs had been recovered.

Continuing the trend seen over FY 2019, headline inflation slowed, during  FY 2020, reflecting lower oil prices, but also weaker aggregate demand. Core  inflation (excludes food and energy), which had accelerated modestly during FY  2019, also slowed in the latest fiscal year. The CPI rose 1.4 percent over the  twelve months of FY 2020, decelerating from the 1.7 percent pace during the  previous fiscal year. Core inflation was 1.7 percent over the FY ending  September 2020, decelerating from the 2.4 percent pace during FY 2019.

Relatively low inflation and stronger nominal DPI growth helped to boost purchasing power in real terms in FY 2020. Real DPI grew 5.7 percent over the twelve months of FY 2020, after growing by 2.0 percent during the previous fiscal year. Nominal average hourly earnings grew at a consistently strong pace during the first half of FY 2020, and grew faster during the second half, reflecting the temporary unemployment of lower-wage workers. Slower inflation helped boost wages in real terms. Real average hourly earnings increased 3.0 percent during FY 2020, after rising 2.3 percent during the previous fiscal year. Growth of non-farm labor productivity also accelerated over the four quarters of FY 2020, rising by 4.0 percent after growing 1.7 percent during FY 2019. 

### Footnotes

3 On the government’s Balance Sheet, federal debt and interest payable  consists of Treasury securities, net of unamortized discounts and premiums, and  accrued interest payable. The “public” consists of individuals, corporations,  state and local governments, FRB, foreign governments, and other entities  outside the federal government. Back to Content)4 PVs recognize that a dollar paid or collected in the future is worth  less than a dollar today because a dollar today could be invested and earn  interest. To calculate a PV, future amounts are thus reduced using an assumed  interest rate, and those reduced amounts are summed. (Back to Content)5 Social Security is funded by the payroll taxes and revenue from taxation  of benefits. Medicare Part A is funded by the payroll taxes, revenue from  taxation of benefits, and premiums that support those programs. Medicare Parts  B and D are primarily financed by transfers from the General Fund, which are  presented, and by accounting convention, eliminated in the SOSI. For the FYs  2020 and 2019 SOSI, the amounts eliminated totaled $40.9 trillion and $36.8 trillion,  respectively.  (Back to Content)6The 22 entities include the HHS, which received disclaimers of opinions  on its 2020, 2019, 2018, 2017, and 2016 SOSI and its 2020 and 2019 SCSIA. The 13 entities include the FDIC, the NCUA, and the FCSIC, which operate  on a calendar year basis (December 31 year-end). Statistic reflects 2019 audit  results for these organizations if 2020 results are not available. (Back to Content)7 See Note 22—Fiduciary Activities.(Back to Content)8 On December 27, 2020, the President signed into law the *Consolidated Appropriations Act, 2021 (P.L. 116-120)*. This act  included provisions for an additional $900.0 billion in stimulus relief related  to the pandemic. In addition, as of the date of enactment, this act rescinded $478.8  billion of the $500.0 billion appropriation provided to Treasury under Section  4027 of the CARES Act. Effective January 9, 2021, the statute eliminates  Treasury’s ability to make new loans and investments under Section 4003 of  the CARES Act. In addition, $146.5 billion that was appropriated to SBA under  the SBA-Business Loans Program Account, CARES Act, was rescinded under the  Consolidated Appropriations Act, 2021. In addition, on March 11, 2021, the  President signed into law the American Rescue Plan Act, 2021, a $1.9 trillion  economic relief package to address the continued impact of COVID-19 on the  economy. See Note 29—Subsequent Events and Treasury’s financial statements for  more information. (Back to Content)9 Under GAAP, most U.S. government revenues are recognized on a ‘modified  cash’ basis, (see Financial Statement Note 1.B). The Statement of Social  Insurance presents the PV of the estimated future revenues and expenditures for  scheduled benefits over the next 75 years for the Social Security, Medicare,  RRP; and 25 years for the Black Lung program. The Statement of Long-Term Fiscal  Projections presents the 75-year PV of the projected future receipts and  non-interest spending for the federal government.  (Back to Content)10 Interest outlays on Treasury debt held by the public are recorded in the  budget when interest accrues, not when the interest payment is made. For  federal credit programs, outlays are recorded when loans are disbursed, in an  amount representing the PV cost to the government, commonly referred to as  credit subsidy cost. Credit subsidy cost excludes administrative costs. (Back to Content)11 10/16/20 press release -- Joint Statement of Treasury Secretary Steven T. Mnuchin and OMB Director  Russell Vought on Budget Results for FY 2020. (Back to Content)12Final MTS for FY 2020 through  September 30, 2020 and Other Periods..  (Back to Content)13 As shown in Table 4, net operating cost includes an adjustment for  unmatched transactions and balances, which represent unreconciled differences  in intra-governmental activity and balances between federal entities. These  amounts are described in greater detail in the Other Information section of  this *Financial Report*. (Back to Content)14 FY 2020 Treasury's financial statements, p. 42. (Back to Content)15 For financial reporting purposes, other than  multi-use heritage assets, stewardship assets of the government are not  recorded as part of PP&E. Stewardship assets are comprised of stewardship  land and heritage assets. Stewardship land consists of public domain land  (e.g., national parks, wildlife refuges). Heritage assets include national  monuments and historical sites that among other characteristics are of  historical, natural, cultural, educational, or artistic significance. See Note 25—Stewardship Land and Heritage Assets. (Back to Content)16 During FYs 2019 and 2018, Treasury faced two delays in raising the  statutory debt limit that required it to depart from its normal debt management  procedures and to invoke legal authorities to avoid exceeding the statutory  debt limit. During these periods, extraordinary actions taken by Treasury have  resulted in federal debt securities not being issued to certain federal  government accounts with the securities being restored including lost interest  to the affected federal government accounts subsequent to the end of the delay period.  The first delay occurred beginning on December 9, 2017 and ending on February 9,  2018, with the enactment of the BBA of 2018 (P.L. 115-123) which suspended the  statutory debt limit through March 1, 2019. The second delay in raising the  statutory debt limit occurred beginning on March 2, 2019 and ending on August 2,  2019, with the enactment of the BBA of 2019 (P.L. 116-37) which suspended the  statutory debt limit through July 31, 2021. (Back to Content)17Joint Statement of Treasury Secretary Steven T. Mnuchin and OMB  Director Russell Vought on Budget Results for FY 2020.  (Back to Content) 

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            Table of Contents
            Current Report: Fiscal Year 2020
 - 
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            By Section
            A Message from the Secretary of the Treasury - 
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Table of Contents - 
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Results in Brief
 - 
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The Nation By The Numbers
Executive Summary
 - 
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Where We Are Now
An Unsustainable Fiscal Path
Find Out More

Management's Discussion & Analysis
 - 
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The Government's Financial Position and Condition
An Unsustainable Fiscal Path
Financial Management
Additional Information

Statement of the Comptroller General of the United States - 
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Financial Statements
 - 
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Statements of Net Cost
Statements of Operations and Changes in Net Position
Reconciliations of Net Operating Cost and Budget Deficit
Statements of Changes in Cash Balance from Budget and Other Activities
Balance Sheets
Statements of Long-Term Fiscal Projections
Statements of Social Insurance and Changes in Social Insurance Amounts
Statement of Changes in Social Insurance Amounts

Notes to the Financial Statements - 
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Note 1. Summary of Significant Accounting Policies - 
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Note 2. Cash and Other Monetary Assets - 
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Note 3. Accounts  Receivable, Net - 
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Note 4. Direct Loans and Loan Guarantees Receivable, Net and Loan Guarantees Liability - 
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Note 5. Inventory and Related Property, Net - 
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Note 6. General Property, Plant, and Equipment, Net - 
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Note 7. Securities and Investments - 
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Note 8. Investments in Special Purpose Vehicles - 
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Note 9. Investments in Government-Sponsored Enterprises - 
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Note 10. Other Assets - 
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Note 11. Accounts Payable - 
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Note 12. Federal Debt and Interest Payable - 
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Note 13. Federal Employee and Veteran Benefits Payable - 
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Note 14. Environmental and Disposal Liabilities - 
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Note 15. Benefits Due and Payable - 
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Note 16. Insurance and Guarantee Program Liabilities - 
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Note 17. Other Liabilities - 
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Note 18. Collections and Refunds of Federal Revenue - 
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Note 19. Commitments - 
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Note 20. Contingencies - 
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Note 21. Funds from Dedicated Collections - 
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Note 22. Fiduciary  Activities - 
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Note 23. Social Insurance - 
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Note 24. Long-Term  Fiscal  Projections - 
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Note 25. Stewardship Property, Plant, and Equipment  - 
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Note 26. Disclosure Entities and Related Parties - 
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Note 27. Public-Private Partnerships - 
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Note 28. COVID-19 Activity - 
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Note 29. Subsequent Events - 
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Required Supplementary Information (Unaudited) - 
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The Sustainability of Fiscal Policy - 
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Social Insurance - 
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Deferred Maintenance and Repairs - 
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Other Claims for Refunds - 
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Tax Assessments - 
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Federal Oil and Gas Resources - 
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Federal Natural Resources Other than Oil and Gas - 
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Other Information (Unaudited) - 
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Tax Burden - 
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Tax Gap - 
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Tax Expenditures - 
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Unmatched Transactions and Balances - 
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Appendices              
Appendix A: Reporting Entity - 
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Appendix B: Glossary of Acronyms - 
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U.S. Government Accountability Office Independent Auditor's Report - 
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Related Resources

            Certain material weaknesses, limitations, and uncertainties prevented the Government Accountability Office from expressing an opinion on the U.S. Government's consolidated financial statements included in the *Financial Report* and, therefore, GAO disclaimed an opinion on such statements. Certain information included on or referenced in this website, such as individual agency financial reports that were audited by other auditors, is separate from and not specifically reported in the *Financial Report* and therefore not covered by GAO's disclaimer. 
            
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