FEDERAL TRADE COMMISSION

FISCAL YEAR 2019

Agency Financial Report

FY 2019 Agency Financial Report 1

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

TABLE OF CONTENTS

INTRODUCTION 3 

About This Report 4

How This Report Is Organized 5

The FTC At-A-Glance 6

Message from the Chairman 7

MANAGEMENT’S DISCUSSION AND ANALYSIS 11

Agency and Mission Information 12

Performance Highlights 17

Agency Mission Challenges 28

Management Assurances 35

Financial Highlights 39

FINANCIAL SECTION 57

Message from the Chief Financial Officer 58

Report of Independent Auditors 62

Principal Financial Statements 67

Notes to the Financial Statements 73

OTHER INFORMATION 91

Summary of the Top Management Challenges Identified by the Office of Inspector General 92

Summary of Financial Statement Audit and Management Assurances 93

Payment Integrity 94

“Reduce the Footprint” Implementation 95

Fraud Reduction Report 96

Civil Monetary Penalty Adjustment for Inflation Implementation Reporting Act Details 97

APPENDICES 99

Appendix A: Acronyms 100

Appendix B: Contact Information and Acknowledgements 102

Introduction

FY2019 Agency Financial Report 3

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INTRODUCTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

ABOUT THIS REPORT 

T

he Federal Trade Commission’s (FTC) fiscal year (FY) 2019 Agency Financial Report (AFR) provides financial 

and high-level performance results and demonstrates to the Congress, the President, and the public the FTC’s 

commitment to its mission and accountability over the resources entrusted to it 

This report, available at the FTC’s website, satisfies the reporting requirements contained in the following legislation: 

▶ Federal Managers’ Financial Integrity Act of 1982 

▶ Prompt Payment Act of 1982

▶ Government Performance and Results Act of 1993 

▶ Government Management Reform Act of 1994 

▶ Federal Financial Management Improvement Act of 1996 

▶ Reports Consolidation Act of 2000 

▶ Accountability of Tax Dollars Act of 2002 

▶ Government Performance and Results Modernization Act of 2010 

▶ Improper Payments Elimination and Recovery Improvement Act of 2012

▶ Digital Accountability and Transparency Act of 2014

▶ Federal Information Security Modernization Act of 2014

▶ Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

▶ Fraud Reduction and Data Analytics Act of 2015

The FTC publishes both an AFR and an Annual Performance Report (APR) The FY 2019 APR will be combined with 

the FY 2021 Annual Performance Plan (APP) and included in the FY 2021 Congressional Budget Justification The 

combined APP and APR will be available at https://www.ftc.gov/about-ftc/performance along with other performance 

documents 

Certificate of Excellence and Best-in-Class Award

The FTC received the Association of Government 

Accountants’ Certificate of Excellence in 

Accountability Reporting for its FY 2018 AFR The 

FTC also received a Special Recognition “Best-inClass” Award for creative use of graphics to depict 

the rise in consumer complaints and mergers to 

the FTC’s budget and employee resources over the 

last 8 years The FY 2018 AFR demonstrates the 

value provided by the FTC, while quantifying the 

benefits the agency brought to the American public 

by highlighting examples of cases and investigations 

the agency pursued 

Building on prior fiscal years financial reporting 

success, the FTC again presents actual 

agency accomplishments to demonstrate its 

continuing commitment to consumers through 

achieving its mission 

 
FY 2019 Agency Financial Report 5

INTRODUCTION

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Financial Section

FY2019 Agency Financial Report 37

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Management’s Discussion 

and Analysis

FY2019 Agency Financial Report 11

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Other Information

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Appendices

HOW THIS REPORT IS ORGANIZED 

The FTC Agency Financial Report is organized into the following three major sections, plus supplemental appendices 

1. MANAGEMENT’S DISCUSSION AND ANALYSIS

 The Management’s Discussion and Analysis is required supplementary information (RSI) 

that provides an overview of the FTC’s financial and summary performance information 

This section includes agency mission and organization, performance goals and highlights, 

mission challenges, management assurances on internal controls, and financial highlights 

2. FINANCIAL SECTION

 This section provides financial details, including the message from the Chief Financial 

Officer (CFO), independent auditor’s report, and audited financial statements with 

accompanying notes 

3. OTHER INFORMATION

 This section provides the Office of Inspector General’s summary of top management 

and performance challenges, a summary of financial statement audit and management 

assurances, payment integrity information, a “Reduce the Footprint” report, a fraud 

reduction report, and a schedule of civil monetary penalties’ adjustments for inflation 

4. APPENDICES

 Appendix A lists the acronyms cited throughout this report; Appendix B provides contact 

information and acknowledgements 
6 FY 2019 Agency Financial Report

INTRODUCTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

THE FTC AT-A-GLANCE

HISTORY

The Federal Trade Commission was created on September 26, 1914, when President Woodrow Wilson signed 

the Federal Trade Commission Act into law The original purpose of the FTC was to prevent unfair methods of 

competition in commerce as part of the battle to “bust the trust ” Over the years, Congress passed additional laws 

giving the agency greater authority to police anticompetitive practices, and in 1938, Congress passed a broad 

prohibition against “unfair and deceptive acts or practices ” Since then, the FTC has been further directed by Congress 

to enforce a wide variety of other consumer protection laws and regulations 

LAWS ENFORCED

The FTC is an independent law enforcement agency with both consumer protection and competition jurisdiction in 

broad sectors of the economy The agency administers a wide variety of laws and regulations Examples include the 

Federal Trade Commission Act, Clayton Act, Telemarketing Sales Rule, Fair Credit Reporting Act, Identity Theft Act 

and Equal Credit Opportunity Act In total, the commission has enforcement or administrative responsibilities under 

more than 70 other laws 

PROFILE

• The agency is headquartered in Washington, D C and operates in seven regions across the United States 

• The agency had 1,130 full-time equivalent employees at the end of FY 2019 

• Total new budget authority for FY 2019 was $311 million, which comprises $168 million in general fund 

appropriations and $143 million in offsetting collections 

HEADQUARTERS

The FTC established its headquarters at 600 Pennsylvania, N W , with President Franklin D Roosevelt laying the 

cornerstone himself Roosevelt remarked, “May this permanent home of the Federal Trade Commission stand for all 

time as a symbol of the purpose of the government to insist on a greater application of the golden rule to conduct the 

corporation and business enterprises in their relationship to the body politic ” Listen to FDR’s speech.

The building, which is particularly 

known for its two art deco-style 

statues, called “Man Controlling 

Trade,” is located at the apex of 

the Federal Triangle, and was 

the culmination of the massive 

Depression-era government building 

project Commissioners and staff 

officially moved in on April 21, 1938, 

and the building continues to function 

as the FTC’s headquarters, serving the 

agency’s adjudicative, executive, policy, 

and administrative functions 
FY 2019 Agency Financial Report 7

INTRODUCTION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

MESSAGE FROM THE CHAIRMAN

Joseph J Simons, Chairman

T

he Federal Trade Commission is an independent law enforcement agency 

with a dual mission of protecting consumers and promoting competition 

in broad sectors of the economy The FTC continues to pursue a vigorous 

law enforcement agenda Our dedicated staff challenge unscrupulous business 

practices and anticompetitive mergers, shut down fraudulent schemes and deceptive 

marketing campaigns, and protect consumers’ privacy and pocketbooks The FTC’s 

policy, research, advocacy, and education initiatives complement our enforcement 

work, advancing the interests of consumers and encouraging competition and 

innovation 

The FTC’s consumer protection law enforcement efforts focus on addressing trends 

in the marketplace that harm consumers During FY 2019, the FTC achieved recordbreaking settlements in the areas of data security and privacy, protected consumers 

from deceptive practices in the financial marketplace, and joined forces with law 

enforcement partners to stem the flood of illegal robocalls 

For over 100 years, the FTC has enforced the antitrust laws and ensured that 

consumers benefit from competition By preventing anticompetitive mergers 

and stopping business practices that diminish competition, the FTC ensures that 

consumers enjoy benefits such as lower prices, higher quality products and services, 

broader choices, and innovation that leads to better products and services In FY 

2019, the FTC continued its commitment to maintain competition through vigorous 

enforcement in a variety of industries including technology, manufacturing, and 

healthcare 

This Agency Financial Report highlights the FTC’s major accomplishments, 

illustrates how the agency efficiently manages its resources, and outlines its plans to 

address the challenges ahead 

FY 2019 PERFORMANCE HIGHLIGHTS 

CONSUMER PROTECTION 

In a landmark year, the Commission continued its leadership in protecting 

consumers’ privacy interests and promoting data security In July 2019, the agency 

negotiated a record-breaking $5 billion civil penalty with Facebook, which also 

agreed to submit to new restrictions and a modified corporate structure to hold 

the company accountable for its decisions about its users’ privacy This penalty is 

20 times greater than the next largest privacy or data security penalty ever imposed 

worldwide The judgment is pending the district court judge’s signature Also in 

July 2019, the agency entered into the largest monetary agreement ever in a data 

security case with credit reporting agency Equifax, which agreed to pay at least $575 

million, and potentially up to $700 million, as part of a global settlement with the 

FTC, the Consumer Financial Protection Bureau, and 50 U S states and territories 

The complaint alleged that the company’s failure to take reasonable steps to secure 
8 FY 2019 Agency Financial Report

INTRODUCTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

its network led to a data breach in 2017 that affected 

approximately 147 million people, exposing them to 

identity theft and fraud 

Children’s privacy was an area of particular focus in FY 

2019 In the largest settlement the FTC has ever obtained 

in a Children’s Online Privacy Protection Act (COPPA) 

case, YouTube/Google agreed to pay $170 million to 

settle allegations that YouTube illegally collected personal 

information from children without their parents’ consent 

and used that information to target ads to children In 

a similar case earlier in the year, operators of the video 

social networking app Musical ly/TikTok, agreed to pay 

$5 7 million to settle COPPA violation allegations 

The fight against the scourge of illegal robocalls 

continued in FY 2019 as the FTC and its law enforcement 

partners banded together to initiate “Operation Call 

It Quits ” This crackdown on illegal robocalls targeted 

operations throughout the country responsible for 

more than one billion calls Ninety-four actions were 

undertaken, including four new cases and three new 

settlements by the FTC 

Stopping fraud against consumers is at the heart of 

the FTC’s mission In November 2018, MoneyGram 

International agreed to pay $125 million to settle 

allegations that the company failed to take steps required 

under a 2009 FTC order to crack down on fraudulent 

money transfers that cost consumers millions of dollars 

In another case, the FTC used its U S SAFE WEB 

authority to halt a massive international real estate 

scam involving Belize’s Atlantic International Bank 

Limited (AIBL) Lots in Sanctuary Belize, a planned 

community located in remote southern Belize, were sold 

to consumers with false promises of luxury amenities, 

early completion, and property appreciation Under a 

proposed consent order, one of the defendants, AIBL, 

will pay back $23 million to U S consumers 

PROMOTING COMPETITION

The Commission was successful in a number of 

anticompetitive conduct and merger enforcement cases 

in FY 2019 

In May 2019, a federal court granted the Commission’s 

injunction challenging Qualcomm’s patent licensing 

practices for baseband processors used in cellular 

devices The court found that Qualcomm used 

anticompetitive tactics to maintain a monopoly on key 

cell phone chip markets and to acquire higher royalties 

than it could obtain based only on its patent value 

Qualcomm obtained a partial stay of the injunction 

pending appeal to the U S Court of Appeals for the 

Ninth Circuit and filed its opening appellate brief The 

FTC’s brief is due in November 

Around the same time, the Commission filed for a 

permanent injunction against Surescripts for using 

tactics such as threats and exclusivity agreements to 

maintain its monopolies in electronic prescribing 

markets FTC alleged that Surescripts’ actions prevent 

healthcare providers from using additional platforms to 

determine patient eligibility for prescription coverage 

and to transmit prescriptions directly to pharmacies, 

thereby blocking competitors’ success 

Several FY 2019 matters demonstrated the FTC’s 

commitment to maintaining competition in the 

healthcare industry Notably, the FTC held that 1-800 

Contacts, the largest online retailer of contact lenses 

in the United States, unlawfully orchestrated a web of 

anticompetitive agreements with rival online contact 

lens sellers that suppressed competition in certain online 

search advertising auctions and restricted truthful and 

non-misleading internet advertising to consumers This 

case, which also has broader implications for preserving 

competition in online advertising, is pending appeal 

The FTC has long prioritized combatting reverse 

payments and other types of anticompetitive behavior 

in the pharmaceutical industry In March 2019, the 

Commission issued a unanimous decision holding that 

Impax Laboratories and Endo Pharmaceuticals had 

entered into a reverse payment arrangement that delayed 

entry of generic competition for Opana ER, an extended 

release opioid used for pain relief This case is pending 

appeal 

In its first “product hopping” case, the agency alleged that 

Reckitt Benckiser engaged in a scheme to shift patients 

away from its branded opioid-addiction treatment, 

Suboxone, which was facing generic competition The 

Commission alleged that the company used deceptive 

means to transfer patients to a more lucrative version of 

the drug that enjoyed patent protection, while providing 

no legitimate health benefits 

The Commission also continued to challenge potentially 

anticompetitive mergers in a variety of industries 

Highlights included: 
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INTRODUCTION

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• Fidelity National’s proposed acquisition of Stewart 

Information Systems, which would have combined 

two of the country’s largest title insurance companies 

Following the FTC challenge, both parties abandoned 

the proposed transaction 

• Tronox Limited’s proposed acquisition of Cristal, which 

would have combined two of the largest suppliers of 

chloride process titanium dioxide (TiO2), used in the 

manufacture of a variety of products, such as paint, 

plastics, and paper The FTC consent order required 

Tronox to divest Cristal’s North American TiO2 assets 

to an approved buyer 

• Boston Scientific’s proposed acquisition of BTG, which 

would have harmed consumers in the U S for drug 

eluting beads (DEBs) used to treat certain liver cancers 

The FTC approved a final order that requires Boston 

Scientific to divest its DEB business, among other 

assets 

• UnitedHealth Group’s acquisition of DaVita Medical 

Group, which would have reduced competition in 

the Las Vegas, NV area for managed care provider 

organization services and Medicare Advantage plans 

Under the settlement, UnitedHealth Group agreed 

to sell DaVita’s Las Vegas operations to International 

Healthcare 

OUTREACH AND PARTNERSHIPS 

Consumers, industry, and law enforcement partners help 

keep the FTC informed about real-world trends and 

challenges in the marketplace Consumers can contact 

the agency online or via toll-free phone numbers The 

agency educates tens of millions of American consumers 

on how to protect themselves and avoid being victims 

of the next scam Online resources include www.ftc.gov, 

social media outlets (Facebook, Twitter, YouTube, and 

LinkedIn), videos, blogs, podcasts, and other educational 

materials, much of which is available in Spanish as well 

as English The FTC’s online Business Center offers 

extensive guidance to businesses The agency’s many 

strong partnerships ensure that materials are distributed 

worldwide 

Among this year’s many consumer and business 

education accomplishments, the agency focused on 

ensuring that consumers understood the new protections 

provided by the Economic Growth, Regulatory Relief, 

and Consumer Protection Act, which allows consumers 

nationwide to freeze their credit and place year-long free 

fraud alerts on their credit reports The FTC also worked 

with the U S Military to ensure that service members 

understood that through the Free Electronic Monitoring 

for Active Duty Military Rule, the Act also provides that 

the nationwide credit reporting agencies must provide 

free electronic credit monitoring services to active duty 

service members serving away from their usual duty 

station, and to National Guard members 

Through numerous public workshops, seminars, 

and webcasts each year, the agency not only shares 

information, but also solicits views from business, legal, 

and academic thought leaders, as well as from the general 

public, on current and emerging issues 

The Commission has a long history of cooperation and 

collaboration with consumer protection and competition 

partners, both nationally and around the world The 

FTC works closely with federal, state, and local law 

enforcement partners to protect consumers and maintain 

competition and, internationally, to seek convergence 

among disparate approaches to competition and 

consumer protection law 

FINANCIAL MANAGEMENT 

The FTC takes very seriously its commitment to 

responsible stewardship of the public resources entrusted 

to us by the American taxpayers and Congress The 

agency’s FY 2019 independent financial audit yielded our 

23rd consecutive unmodified opinion, the highest audit 

opinion available The independent auditors did not 

identify any material weaknesses, significant deficiencies, 

or instances of non-compliance with internal controls, 

financial systems, or laws and regulations I am pleased 

to report that management’s assessment of risks and 

review of controls and financial systems disclosed 

no material weaknesses, and that the financial and 

performance data presented here is reliable and complete 

(see Statement of Assurance, p 36) 

LOOKING FORWARD 

To protect American consumers and maintain 

competition as markets rapidly evolve, the FTC must 

not only address present challenges, but also focus 

intently on the future In particular, the agency always 

seeks to enhance its understanding of new technologies 

that can bring tremendous benefits to consumers, but 

may also pose risks to competition and consumers 
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Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

A key initiative in FY 2019 was the creation of a new 

Technology Enforcement Division (TED) in the Bureau 

of Competition, to ensure that technology companies 

are operating pursuant to the antitrust laws—and to take 

vigorous enforcement action when they are not 

The agency also pursues an active consumer protection 

and competition policy and research agenda to 

continually assess and improve its decision-making In 

June 2019, the FTC concluded a nine-month series of 

14 publicly webcast hearings, held over 23 days in eight 

locations and viewed by over 21,000 webcast viewers 

and numerous in-person attendees, on Competition 

and Consumer Protection Law Enforcement in the 21st 

Century To assess how the FTC should approach 

antitrust and consumer protection law enforcement in 

light of broad-based changes in the economy, evolving 

business practices, new technologies, and international 

developments, the agency gathered a broad spectrum 

of views from 464 legal academics, economists, 

technologists, state Attorneys General, lawyers, business 

leaders, and other thought leaders around the country 

This effort generated 23 written transcripts, totaling 

6,793 pages, as to which the Commission received 950 

comments The agency is generating output based on the 

hearings and additional learning, and will incorporate 

any conclusions into the agency’s forward-looking 

priorities and strategic direction For more details 

regarding the Agency Mission Challenges, see p 28 

The Office of Inspector General (OIG) identified two 

significant management challenges this year: (1) securing 

information systems and networks from destruction, 

data loss, or compromise; and (2) escalating costs of 

expert witnesses In addition, the OIG highlighted two 

“watch list” issues that, while not serious management 

challenges, still warrant attention Agency management 

agrees that these are important challenges and concurs 

with the IG’s assessment of our progress in addressing 

these challenges (see p 92) 

Working with the FTC’s partners and colleagues in 

Congress, industry, and domestic and international 

law enforcement, the agency will continue to fulfill its 

mission to protect American consumers and promote 

competition 

Joseph J Simons, Chairman

November 19, 2019
Management’s Discussion 

and Analysis

FY2019 Agency Financial Report 11

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12 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

AGENCY AND MISSION 

INFORMATION 

The work of the Federal Trade Commission (FTC) is 

critical to protecting and strengthening free and open 

markets and promoting informed consumer choice, both 

in the United States (U S ) and around the world The 

FTC performs its mission through the use of a variety of 

tools, including law enforcement, rulemaking, research, 

studies on marketplace trends and legal developments, 

and consumer and business education 

VISION 

A vibrant economy characterized by vigorous 

competition and consumer access to accurate 

information 

MISSION 

Protecting consumers and competition by preventing 

anticompetitive, deceptive, and unfair business practices 

through law enforcement, advocacy, and education 

without unduly burdening legitimate business activity 

OUR PURPOSE AND HISTORY 

Consumers and businesses are likely to be more familiar 

with the work of the FTC than they think In the 

consumer protection area, the product warranties, care 

labels in clothes, and labels on home appliances showing 

their energy cost provide information that is required 

by the FTC Likewise, businesses must be familiar with 

the laws requiring truthful advertising and protecting 

consumers’ personally identifiable information These 

laws are enforced by the FTC 

Competition among independent businesses is good for 

consumers, the businesses themselves, and the economy 

Competitive markets yield lower prices and better quality 

goods and services, and a vigorous marketplace provides 

the incentive and opportunity for the development of 

new ideas and innovative products and services Many 

of the laws governing competition are also enforced by 

the FTC 

The FTC has a long tradition of maintaining a 

competitive marketplace for both consumers and 

businesses In 1903, Congress created the predecessor to 

the FTC, the Bureau of Corporations, as an investigatory 

agency within the Department of Commerce and 

Labor The Bureau investigated and published reports 

on the operation of interstate corporations, looking for 

monopolistic practices In one case of note, the Justice 

Department used the Bureau’s 1906 report on petroleum 

transportation when it successfully prosecuted and broke 

up Standard Oil in 1911 In 1914, President Woodrow 

Wilson signed the Federal Trade Commission Act into 

law, creating the FTC, which then absorbed the Bureau of 

Corporations in 1915 

When the FTC was created in 1914, its purpose was to 

prevent unfair methods of competition in commerce 

as part of the battle to “bust the trusts ” Over the years, 

Congress passed additional laws giving the agency 

greater authority over anticompetitive practices 

Recognizing that unfair and deceptive practices can 

distort a competitive marketplace as much as unfair 

methods of competition, in 1938 Congress passed a 

broad prohibition against “unfair or deceptive acts or 

practices in or affecting commerce ” Since then, the FTC 

also has been directed to enforce a wide variety of other 

consumer protection laws and regulations 

OUR ORGANIZATION 

The FTC is an independent Federal law enforcement 

agency that reports to the President and to Congress 

on its actions, with both consumer protection and 

competition jurisdiction in broad sectors of the economy 

The agency administers a wide variety of laws, such 

as the Federal Trade Commission Act (FTC Act), 

Fair Credit Reporting Act, and Clayton Act In total, 

the Commission has enforcement or administrative 

responsibilities under more than 70 laws The FTC also 

enforces rules issued pursuant to the Federal Trade 

Commission Act or other laws, including the Business 

Opportunity Rule and the Telemarketing Sales Rule 

FTC actions include pursuing vigorous and effective 

law enforcement; advancing consumers’ interests by 

sharing its expertise with Congress and state legislatures 

and U S and international government agencies; 

developing policy and research tools through hearings, 

workshops, and conferences; and creating practical and 

plain-language educational programs for consumers 

and businesses in a global marketplace with constantly 

changing technologies 
FY 2019 Agency Financial Report 13

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FTC Commissioners (from left to right): Rebecca Kelly Slaughter, Noah Joshua Phillips, Chairman Joseph J. Simons, 

Rohit Chopra, Christine S. Wilson

The FTC is headed by a Commission composed of 

five commissioners, nominated by the President and 

confirmed by the Senate, each serving a staggered sevenyear term No more than three commissioners may be 

from the same political party The President designates 

one Commissioner to act as Chair who is given the 

responsibility for the administration of the Commission 

Joseph J Simons was sworn in as Chairman on May 

1, 2018 The four Commissioners are Noah Phillips, 

Rohit Chopra, Rebecca Slaughter, and Christine Wilson 

who were also sworn in during 2018 This was the first 

complete changeover in leadership since the agency’s 

founding 

The FTC’s workforce is its greatest asset The agency’s 

workforce consists of 1,130 civil service employees 

dedicated to carrying out the agency’s mission 

The FTC’s mission is carried out by three bureaus: 

The Bureau of Competition (BC) enforces the nation’s 

antitrust laws, which form the foundation of our free 

market economy The antitrust laws promote the 

interests of consumers; they support unfettered markets 

and result in lower prices and more choices By enforcing 

the antitrust laws, the Bureau promotes competition 

and protects consumers’ freedom to choose goods 

and services in an open marketplace at a price and 

quality that fit their needs The Bureau seeks to prevent 

anticompetitive mergers and other anticompetitive 

business practices in the marketplace 

The Bureau of Consumer Protection’s (BCP) mandate 

is to protect consumers against unfair, deceptive or 

fraudulent practices The Bureau enforces a variety of 

consumer protection laws enacted by Congress, as well 

as trade regulation rules issued by the Commission Its 

actions include individual company and industry-wide 

investigations, administrative and federal court litigation, 

rulemaking proceedings, and consumer and business 

education In addition, the Bureau contributes to the 

Commission’s on-going efforts to inform Congress and 

other government entities of the impact that proposed 

actions could have on consumers 

The Bureau of Economics helps the FTC evaluate the 

economic impact of its actions To do so, the Bureau 

provides economic analysis and support to antitrust and 

consumer protection investigations and rulemakings It 

also analyzes the impact of government regulation on 

competition and consumers and provides Congress, the 

Executive Branch and the public with economic analysis 

of market processes as they relate to antitrust, consumer 

protection, and regulation 
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The work of the bureaus is aided by several additional 

offices:

The Regional Offices work with the Bureaus of 

Competition and Consumer Protection to conduct 

investigations and litigation, provide advice to state 

and local officials on the competitive implications of 

proposed actions, recommend cases, provide local 

outreach services to consumers and businesspersons, 

and coordinate activities with local, state, and regional 

authorities 

The Office of Congressional Relations works closely 

with members of Congress and their staffs The office 

informs Commissioners and FTC staff of Capitol Hill 

issues and policies, and helps provide information 

on legislation of interest to the Commission It also 

coordinates the preparation of both Congressional 

testimony and responses to Congressional inquiries 

concerning FTC policies and programs to provide 

expertise on topics related to consumer protection and 

business competition 

The Office of Public Affairs informs the news media, 

as well as the public at large, about the activities of the 

FTC and responds to media inquiries about Commission 

actions and policy The office also manages the agency’s 

outward facing public website, FTC.gov, and social 

media accounts, which are critical communication tools 

for the agency 

The Privacy Office ensures that the agency’s practices 

and policies comply with applicable federal information 

privacy and security requirements 

The Office of Policy Planning conducts research, 

develops policy recommendations, and generates written 

comments and reports on a variety of competition 

and consumer protection issues Policy Planning 

staff research and analyze emerging issues relating to 

competition in a variety of industries, including issues at 

the intersection of competition and intellectual property, 

in order to enrich the Commission’s expertise and inform 

enforcement decisions involving novel or complex legal 

issues 

The Office of International Affairs leads and 

coordinates the FTC’s work in international antitrust, 

consumer protection, and technical assistance projects 

The FTC works with competition and consumer 

protection agencies around the world to promote 

cooperation and convergence toward best practices 

The Office of the Secretary oversees swift and prompt 

processing of all matters presented to the Commission 

and supports the Commission decision-making process 

and ensures it operates efficiently The office also 

responds to most Congressional and White House 

correspondence raising constituent issues 

The Office of the General Counsel is the Commission’s 

chief legal officer and adviser The office represents the 

Commission in court and provides legal counsel to the 

Commission, the three bureaus, and other offices 

The Office of the Executive Director is responsible for 

the administration and management of the Commission 

through four organizations, which manage the 

Commission’s human capital, information technology, 

finances, records, and administrative services 

The Office of Administrative Law Judges performs 

the initial adjudicative fact-finding in Commission 

administrative complaint proceedings, guided by the 

FTC Act, the Administrative Procedure Act, relevant 

case law interpreting these statutes, and the FTC’s Rules 

of Practice Administrative Law Judges are independent 

decision makers, appointed under the authority of the 

Office of Personnel Management 

The Office of Inspector General is an independent and 

objective organization within the FTC, established in 

compliance with the Inspector General Act Amendments 

of 1988 Under the Inspector General Act, the office 

conducts audits and investigations relating to the 

programs and operations of the FTC 

The Office of Equal Employment Opportunity and 

Workplace Inclusion advises and assists the FTC in 

carrying out its responsibilities and duties relative to 

Title VII of the Civil Rights Act of 1964, as amended, and 

other laws, executive orders, and regulatory guidelines 

affecting affirmative employment and the processing of 

equal employment opportunity complaints to maintain 

a work environment that is free from all forms of illegal 

discrimination, including reprisal and harassment 

For more information about the agency’s components, 

visit the FTC’s Bureaus and Offices webpage 
FY 2019 Agency Financial Report 15

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FEDERAL TRADE COMMISSION ORGANIZATIONAL CHART

Office of the

Executive Director

David B Robbins

Regions

Bureau of

Competition

Bruce Hoffman

Bureau of

Consumer 

Protection

Andrew Smith

Chairman

Joseph J. Simons

Chief of Staff

Tara Isa Koslov

Chief Technologist

Vacant

Commissioner

Noah Joshua 

Phillips

Office of the

General Counsel

Alden F. Abbott

Bureau of

Economics

Bruce Kobayashi

Commissioner

Rohit Chopra

Commissioner

Christine S. Wilson

Office of

Congressional Relations

Jeanne Bumpus

Office of

Public Affairs

Cathy MacFarlane

Office of

Inspector General*

Andrew Katsaros

Office of

International Affairs

Randolph W. Tritell

Office of

Policy Planning

Bilal Sayyed

Office of Equal Employment 

Opportunity and Workplace 

Inclusion*

Kevin D. Williams

Office of

the Secretary

April Tabor (Acting)

Commissioner

Rebecca Kelly 

Slaughter

Privacy Office 

John Krebs

* An independent organization within the FTC

Office of

Administrative Law Judges*

D. Michael Chappell
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Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

In FY 2018, the Federal Trade Commission celebrated the 100th anniversary of the opening of its first regional offices 

Since 1918, regional offices have played an integral role in fulfilling the FTC’s consumer protection and competition

missions through law enforcement, partnerships, and outreach to community and industry groups Currently, eight 

regional offices covering seven geographic regions conduct investigations and litigation; provide local outreach 

to consumers and industry; and build partnerships with local, state, regional, and cross-border law enforcement 

authorities Read more about the FTC’s regional offices by clicking on the map below 

In June 1918, the FTC opened its first three regional offices in the Northeast Region (New York), Midwest Region

(Chicago), and Western Region (San Francisco) Since that time, the FTC has opened additional regional offices in the 

Northwest Region (Seattle in 1925), East Central Region (Cleveland in 1954), Southeast Region (Atlanta in 1957), 

and Southwest Region (Dallas in 1972), as well as a second Western Region office (Los Angeles in 1961) 

Staff in the Commission’s regional offices work with the Bureaus of Consumer Protection and Competition to conduct 

investigations and litigation, provide advice to state and local officials on the competitive implications of proposed 

actions, recommend cases, provide local outreach services to consumers and industry, and coordinate activities with 

local, state, regional, and cross-border law enforcement authorities The regional offices host events such as Common 

Ground conferences that bring together state and federal consumer protection officials, legal services attorneys, and 

other consumer advocates to discuss emerging trends and challenges facing consumers, and routinely meet with small 

businesses and other industry groups 

The agency is headquartered in Washington, D C , and operates in seven regions across the U S The graphic below 

illustrates the locations of the FTC regions 

San Francisco, CA

NORTHEAST

EAST 

CENTRAL

MIDWEST

SOUTHWEST

WESTERN

NORTHWEST

Los Angeles, CA

Dallas, TX SOUTHEAST

Atlanta, GA

Cleveland, OH Chicago, IL

New York, NY

DC

Hawaii

Alaska

Seattle, WA

Puerto Rico
FY 2019 Agency Financial Report 17

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

PERFORMANCE HIGHLIGHTS

For the sixth year, the FTC has chosen to produce an 

AFR and an Annual Performance Report (APR) in lieu of 

a combined Performance and Accountability Report The 

FY 2019 APR will be combined with the FY 2021 Annual 

Performance Plan (APP) and included in the FY 2021 

Congressional Budget Justification to be published in 

February 2020 The AFR and combined APP and APR, 

will be published at the FTC’s website 

This section explains the FTC’s strategic and 

performance planning framework and summarizes 

the key performance goals The performance results 

described in this report enable the FTC to administer its 

programs, gauge their success, and make adjustments 

necessary to improve program quality for the public 

STRATEGIC AND PERFORMANCE 

PLANNING FRAMEWORK

The FTC’s Annual Performance Report is structured 

around three strategic goals and their supporting 

objectives as established in the FTC Strategic Plan for 

FY 2018-2022 The FTC’s strategic goals, objectives, 

and performance measures articulate what the agency 

intends to accomplish to meet its mandated mission and 

to demonstrate the highest standards of stewardship, and 

support and improve the management functions vital to 

core mission success 

The following table shows the FTC’s net costs for its 

strategic goals 

STRATEGIC GOALS

(Dollars in millions) OBJECTIVES

GOAL 1: Protect consumers from 

unfair and deceptive practices in the 

marketplace.

*Net Costs: $182

1.1 Identify and take actions to address deceptive or 

unfair practices that harm consumers.

1.2 Provide consumers and businesses with knowledge 

and tools that provide guidance and prevent harm.

1.3 Collaborate with domestic and international 

partners to enhance consumer protection.

GOAL 2: Maintain competition to 

promote a marketplace free from 

anticompetitive mergers, business 

practices, or public policy outcomes.

*Net Costs: $20

2.1 Identify and take actions to address anticompetitive 

mergers and practices.

2.2 Engage in effective research, advocacy, and 

stakeholder outreach to promote competition, and 

advance its understanding.

2.3 Collaborate with domestic and international 

partners to preserve and promote competition.

GOAL 3: Advance the FTC’s 

performance through excellence in 

managing resources, human capital, 

and information technology.

Goal 3’s costs are distributed to Goal 1 and Goal 

2 predominately by Goal 1 and Goal 2’s Full-Time 

Equivalent (FTE) usage, except for those non-pay costs 

that are clearly attributable to a specific goal. 

3.1 Optimize resource management and infrastructure.

3.2 Cultivate a high-performing, diverse, and engaged 

workforce.

3.3 Optimize technology and information management 

that supports the FTC mission.

Note: Net Costs represent the resources used to achieve strategic goals and signify the relative efficiency and cost-effectiveness of agency program/

operations. The FTC does not divide net costs by objective.
18 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

PERFORMANCE MEASUREMENT 

REPORTING PROCESS

Bureau and Office representatives serve as the 

Performance Measure Reporting Officials (PMROs), 

who act as data stewards for each of the agency’s 

publicly-reported performance goals The PMROs report 

performance data to the Performance Improvement 

Officer (PIO) on a quarterly or annual basis via an 

internal data reporting tool The Financial Management 

Office (FMO) also leads periodic performance goal 

reviews in coordination with budget execution reviews 

The CFO/PIO, the Executive Director, the Chief of Staff, 

and the Chairman are briefed on the results and any 

significant variances in planned versus actual results The 

PIO and the FMO Performance Team then coordinate 

with the PMROs on any adjustments to strategies and 

tactics based on the performance results 

VERIFICATION AND VALIDATION 

OF PERFORMANCE DATA

The following outlines steps the agency takes to ensure 

the performance information it reports is complete, 

reliable, and accurate:

• The FTC has adopted a central internal repository for 

performance data entry, reporting, and review The 

electronic data tool reduces human error, increases 

transparency, and facilitates review of the agency’s 

performance information 

• The agency maintains written procedures used to 

ensure timely reporting of complete, accurate, and 

reliable actual results relative to the key performance 

goals 

• The agency strives to set meaningful and realistic 

targets that also challenge the agency to better 

leverage its resources This includes ensuring ongoing 

monitoring and updating of performance targets 

Further, when appropriate, program managers are 

required to explain how they will improve performance 

when targets are not met 

• The agency conducts periodic performance 

measurement reviews throughout the fiscal year with 

FTC staff This process includes substantiating that 

actual results reported are indeed correct 

Agency program managers also monitor and maintain 

automated systems and databases that collect, track, 

and store performance data, with support provided 

by the FTC’s Office of the Chief Information Officer 

In addition to internal monitoring of each system, 

experts outside of the business units (e g , the Bureaus 

of Consumer Protection and Competition) routinely 

monitor the data collection For example, senior 

economists from the Bureau of Economics review 

statistical data used by the Bureau of Competition to 

calculate performance results 

The FMO is responsible for providing direction and 

support on data collection methodology and analysis, 

ensuring that data quality checks are in place, and 

accurately reporting performance data 

PERFORMANCE GOALS OVERVIEW

In the FY 2018-2022 Strategic Plan, the FTC has 

established 36 performance goals for assessing program 

performance against strategic goals and objectives In 

FY 2019, 32 performance goals met or exceeded their 

targets, two did not meet their targets, and data was not 

available at the time of publication for two measures 

Of the 36 performance goals, nine are considered 

“key” performance goals because they best indicate 

whether agency activities are achieving the desired 

outcome associated with the related objective For 

each performance goal, the FTC has established a 

performance target 

The following tables summarize actual performance 

during FY 2019 against established targets for the FTC’s 

nine key performance goals The tables also include 

actual results from the prior four fiscal years when 

available as well as a description of how performance 

results are calculated for that performance goal The 

FTC met or exceeded FY 2019 targets on all nine key 

performance goals 

LEGEND FOR UPCOMING TABLES

  Signifies that the target is met or exceede

  Signifies that the target was not me
FY 2019 Agency Financial Report 19

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

STRATEGIC GOAL 1: Protect consumers from unfair and deceptive 

practices in the marketplace.

KEY PERFORMANCE GOAL 1.1.3:

Total consumer savings compared to the amount of FTC resources allocated to consumer protection law enforcement.

Description: This measure tracks the efficiency of the FTC’s consumer protection law enforcement spending We 

compare how much money the FTC saves consumers each year through law enforcement to the amount the FTC 

spends on consumer protection law enforcement Consumer savings comprise: (a) the amount of money returned to 

consumers; and (b) an estimate of the amount of harm that would have occurred but for the FTC’s law enforcement 

action To calculate this latter figure, the FTC assumes that the unlawful conduct would have continued for one year 

but for our action The FTC also assumes that the amount of harm that would have occurred in that year is the same 

as what consumers lost in the past Performance Goals 2 1 3 and 2 1 5 are similar measures that track the impact of 

antitrust law enforcement The amount reported is a three-year rolling average (average of the current year and two 

prior year totals) 1

FY 2019 Results: The agency saved consumers on average around 40 times the amount of resources devoted to the 

consumer protection program in the past three years, or an average of $3 9 billion per year This is largely attributable 

to the Volkswagen, Triangle Media Corporation, and Next-Gen cases 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

N/A

$8.80 in 

consumer 

savings per $1 

spent2

$35.20 in 

consumer 

savings per $1 

spent3

$39.00 in 

consumer 

savings per $1 

spent4

$7.00 in 

consumer 

savings per $1 

spent

$38.60 in 

consumer 

savings per $1 

spent 

1 Calculation/Formula: (Amount of money returned to consumers + the sum of the estimated consumer savings generated by law enforcement 

actions) / Annual expenditures on consumer protection law enforcement 

The amount of money returned to consumers: the sum of refund checks cashed by consumers as the result of FTC consumer protection enforcement actions 

The sum of the estimated consumer savings generated by law enforcement actions: the estimate of harm that would have occurred but for the 

FTC’s law enforcement action The FTC assumes that the unlawful conduct would have continued for one year but for our action and the amount 

of harm that would have occurred in that year is the same as what consumers lost in the past This amount is estimated by BCP case managers by estimating the consumer loss due to fraudulent, deceptive, or unfair practices in the 12 months prior to the FTC’s first contact with the 

defendants or by dividing the estimated total economic injury by the amount of time the defendants’ business operated to derive an annualized 

estimate of consumer savings The measure also includes instances wherein, as a result of FTC law enforcement action directed specifically at a 

business, that business stops its allegedly unfair or deceptive practices 

The annual expenditures on consumer protection law enforcement: the FTC budget dollars spent on consumer protection law enforcement Dollars spent on the Consumer and Business Education and Economics and Consumer Policy work are excluded from this calculation 

2

FY 2016 Actual changed from $8 60 to $8 80 due to the addition of a previously uncounted redress case 

3

FY 2017 Actual changed from $35 00 to $35 20 due to the addition of a previously uncounted redress case 

4

FY 2018 Actual changed from $38 90 to $39 00 due to the addition of a previously uncounted redress case 

For more details on measurement and data quality, see the FTC Data Quality Appendix 
20 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

KEY PERFORMANCE GOAL 1.1.4:

The amount of money the FTC returned to consumers or forwarded to the U.S. Treasury resulting from FTC enforcement 

action. 

Description: This goal tracks the FTC’s effectiveness in returning money to consumers who were defrauded and 

forwarding money to the U S Treasury (e g , if sending money to individuals is impracticable, or if funds were paid 

as a civil penalty) The FTC targets law enforcement efforts on violations that cause the greatest amount of consumer 

harm; the amount of money returned to consumers or forwarded to the U S Treasury is a useful indicator that the 

FTC is targeting the right defendants The number reported is a three-year rolling average (average of the current 

year and two prior year totals) 5

FY 2019 Results: In the last three years, the annual average of the total amount returned to consumers and 

forwarded to the U S Treasury is $3 52 billion In FY 2019, the FTC returned $478 4 million to consumers and 

forwarded $150 0 million to the U S Treasury The FTC returned money to more than 2 2 million consumers in 

dozens of cases, including Vemma, Midway Industries, Tarr Inc , and Sage Auto Group The money returned to the 

U S Treasury included civil penalties obtained in settlements with Google, YouTube, Musical ly, and RealPage In 

addition, in FY 2019, some FTC orders required defendants to self-administer refund programs worth more than 

$344 0 million in refunds to consumers, including Volkswagen, Green Tree, and AdoreMe 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

N/A $95.3 million6

 $2.69 billion7 $3.25 billion8 $65 million $3.52 billion 

5 Calculation/Formula: Sum of refund checks cashed by consumers, plus the amount of money paid to the FTC by defendants and forwarded to 

the U S Treasury, either because sending refunds was not feasible or because the money was paid as a civil penalty 

6

FY 2016 Actual changed from $80 6 million to $95 3 million due to the addition of a previously uncounted redress case 

7

FY 2017 Actual changed from $2 67 billion to $2 69 billion due to the addition of a previously uncounted redress case 

8

FY 2018 Actual changed from $3 22 billion to $3 25 billion due to the addition of a previously uncounted redress case 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

Google and YouTube Agree to Record Settlement

Google and its subsidiary YouTube agreed to pay $170 million to settle allegations by the FTC and the New York 

Attorney General that the YouTube video sharing service illegally collected personal information from children 

without their parents’ consent The settlement requires Google and YouTube to pay $136 million to the FTC and 

$34 million to New York for allegedly violating the Children’s Online Privacy Protection Act (COPPA) Rule 

The $136 million penalty is by far the largest amount the FTC has ever 

obtained in a COPPA case since Congress enacted the law in 1998 In 

addition to the monetary penalty, the proposed settlement requires 

Google and YouTube to develop, implement, and maintain a system 

that permits channel owners to identify their child-directed content on 

the YouTube platform so that YouTube can ensure it is complying with 

COPPA The companies also must notify channel owners that their 

child-directed content may be subject to the COPPA Rule’s obligations, 

and provide annual training about complying with COPPA for 

employees who deal with YouTube channel owners 
FY 2019 Agency Financial Report 21

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

KEY PERFORMANCE GOAL 1.2.1:

Rate of consumer satisfaction with FTC consumer education websites.

Description: This measure gauges the effectiveness, helpfulness, and usability of the FTC’s consumer education 

websites Consumer education serves as the first line of defense against deception and unfair practices Wellinformed consumers are better able to protect themselves from bad actors in the marketplace This measure includes 

the customer satisfaction scores for Consumer ftc gov and Bulkorder ftc gov 9

FY 2019 Results: In FY 2019, the FTC evaluated Bulkorder ftc gov and Consumer ftc gov to determine the rate 

of customer satisfaction with FTC consumer education websites The combined rate of customer satisfaction for 

bulkorder ftc gov and consumer ftc gov was 77 7 The average citizen satisfaction score for participating federal 

government websites was 74 2 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

Data Not 

Available 76 77 77 

74.2 (average 

rate for 

websites) 

78 

9 Calculation/Formula: When visiting Consumer ftc gov and Bulkorder ftc gov, consumers are given the option to complete a short survey to 

provide feedback on the following aspects of the site: information browsing, look and feel, navigation, site information, and site performance The 

formula for the overall satisfaction score is proprietary to ForeSee 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

Record-Breaking Facebook Penalty

Facebook will pay a record-breaking $5 billion penalty, and submit to new restrictions and a modified 

corporate structure, to settle FTC charges that the company violated a 2012 FTC order by deceiving users 

about their ability to control the privacy of their personal information 

The FTC also alleged that Facebook violated the FTC Act’s prohibition 

against deceptive practices when it told users it would collect their phone 

numbers to enable a security feature, but did not disclose that it also used 

those numbers for advertising purposes The $5 billion penalty against 

Facebook is the largest ever imposed on any company for violating 

consumers’ privacy and almost 20 times greater than the largest privacy or 

data security penalty ever imposed worldwide The judgment is pending 

the district court judge’s signature 
22 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

KEY PERFORMANCE GOAL 1.3.2:

Number of investigations or cases in which the FTC obtained foreign-based evidence or information or engaged in other 

mutual assistance that contributed to FTC law enforcement actions or in which the FTC cooperated with foreign agencies 

and/or multilateral organizations on enforcement matters. 

Description: The Office of International Affairs (OIA) works to expand cooperation and coordination between 

the FTC and international consumer protection partners through information sharing, investigative assistance, 

and the development of investigative best practices and enforcement capacity This measure counts the number of 

investigations and cases in which the FTC and foreign consumer protection agencies shared information or engaged 

in other enforcement cooperation 10 

FY 2019 Results: In FY 2019, the FTC cooperated in 48 instances on consumer protection and privacy matters to 

obtain or share evidence or engage in other enforcement cooperation in investigations, cases, and enforcementrelated projects Foreign authorities assisted the FTC in activities such as sharing consumer complaints, obtaining 

corporate records, and providing other investigative information The FTC also provided assistance to numerous 

foreign authorities through various mechanisms using its authority under the U S SAFE WEB Act and other 

cooperation tools to share information and provide investigative assistance using compulsory process The FTC 

also cooperated on enforcement matters with international enforcement organizations such as the International 

Consumer Protection and Enforcement Network, the Global Privacy Enforcement Network, the Unsolicited 

Communications Enforcement Network, and the International Mass Marketing Fraud Working Group 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

58 53 50 43 40 48 

10 Calculation/Formula: # of FTC consumer protection investigations or cases where supporting evidence or information or other investigative 

assistance was obtained from foreign agencies + # of foreign consumer protection investigations or cases where supporting evidence or information or other investigative assistance was provided by the FTC + # of enforcement matters where the FTC otherwise engaged in enforcement 

cooperation with foreign agencies or multilateral enforcement networks 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

Court Upholds FTC Use of SAFE WEB Act to Fight Foreign Fraud 

To protect American consumers, the FTC increasingly must rely on its authority under the U S SAFE WEB Act 

to sue foreign fraudsters operating global scams In March 2019, the Ninth Circuit Court of Appeals affirmed a 

U S district court decision upholding the Commission’s use of these powers to enjoin a fraudulent global scheme 

in FTC v. Triangle Media In that case, the Commission sued to stop a group of 

U S and foreign defendants from defrauding consumers with deceptive “riskfree” trial offers This is the first appellate decision affirming the FTC’s use of its 

SAFE WEB authority to stop fraudulent conduct by intertwined U S and foreign 

defendants The SAFE WEB Act underpins several cases the Commission has 

filed this year against foreign defendants, including: the Belizean operators of the 

massive overseas real estate investment scam, Sanctuary Belize; U K and Latvian 

parties in another free trial scam; and the Canadian and Dominican Republicbased participants in a sham credit card interest rate reduction service 
FY 2019 Agency Financial Report 23

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

STRATEGIC GOAL 2: Maintain competition to promote a marketplace 

free from anticompetitive mergers, business practices, or public policy 

outcomes.

KEY PERFORMANCE GOAL 2.1.1:

Percentage of full merger and nonmerger investigations in which the FTC takes action to maintain competition.

Description: This measure tracks FTC actions taken to maintain competition, including litigated victories, consent 

orders, abandoned transactions, or restructured transactions (either through a fix-it-first approach or eliminating the 

competitive concern) in a significant percentage of full merger and nonmerger investigations 11 

FY 2019 Results: In FY 2019, the agency took action to maintain competition in 22 of 35 full merger and nonmerger 

investigations concluded The FTC’s 22 actions included 10 consent orders, one litigated victory in federal and 

administrative court which was later concluded with a settlement (Tronox/Cristal), one litigated federal court victory 

(Sanford/Mid Dakota Clinic), three federal court stipulated injunctions, one matter in which the parties abandoned 

their transactions after the Commission authorized staff to challenge the proposed acquisition in federal court or 

administrative litigation (Fidelity/Stewart), and six abandoned transactions 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

57.7% 54.6% 49.1% 67.9%12 40%-70% 62.9% ✔

11 Calculation/Formula: The measure is calculated by taking the number of full investigations concluded with an action during the fiscal year 

divided by the total number of full investigations concluded during the fiscal year 

12 Starting in FY 2018, the FTC adjusted how this measure is cal culated When counting full investigations, only those investigations where a 

sec ond request, subpoena, or civil investigative demand has been issued are counted Previously we also included other investigations with more 

than 150 staff hours spent This change will slightly reduce the number of full investigations included and will thus shift the percentage result 

higher Actual results from FY 2015-2017 are reported based on the previous formula 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

FTC Concludes Hearings Examining Competition and Consumer Protection in 

the 21st Century 

In 2019, the FTC continued the series of multi-day, multi-part hearings to 

consider whether broad-based changes in the economy, evolving business practices, 

new technologies, or international developments might require adjustments to 

competition and consumer protection law and policy From September 2018 through 

June 2019, over the course of 23 days, the FTC held fourteen webcast hearings 

that gathered a broad spectrum of views from 464 legal academics, economists, 

technologists, State Attorneys General, lawyers, business leaders, and other thought 

leaders from throughout the country and abroad, including 71 FTC employees 

The hearings garnered over 21,655 webcast viewers and attendees and generated 23 

written transcripts totaling 6,793 pages, as to which the Commission received approximately 950 unique germane 

comments The FTC staff is currently completing output from the hearings 
24 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

KEY PERFORMANCE GOAL 2.1.3:

Total consumer savings compared to the amount of FTC resources allocated to the merger program.

Description: This measure reports the estimated amount of money that the Commission saved consumers by taking 

action against potentially anticompetitive mergers compared to the amount spent on the merger program The 

amount reported is a five-year “rolling average” (average of the current year and four prior year totals) 13 

FY 2019 Results: In FY 2019, the FTC saved consumers approximately $68 for every dollar devoted to its merger 

program Merger actions in the healthcare, consumer goods and services, and chemicals industries resulted in 

considerable consumer savings, which, coupled with slightly reduced resource levels, allowed the agency to continue 

to meet the target for this performance goal Significant consumer savings from merger actions in FY 2015 continued 

to impact this performance goal in FY 2019, and targets have been adjusted accordingly 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

$51.30 in 

consumer 

savings per $1 

spent 

$46.40 in 

consumer 

savings per $1 

spent 

$55.60 in 

consumer 

savings per $1 

spent 

$50.30 in 

consumer 

savings per $1 

spent14 

$42.00 in 

consumer 

savings per $1 

spent 

$65.90 in 

consumer 

savings per $1 

spent

13 Calculation/Formula: Estimated consumer savings are divided by the amount of resources spent on the merger program for the 

current fiscal year When available, case-specific data are used to generate the estimate of consumer savings Otherwise, staff uses a formula of three percent of the volume of commerce of the relevant product market(s) for two years In order to create a balanced performance profile, performance is reported as a “rolling average” over five years, compensating for highly variable results in any individual 

year due to the influence of a few significant cases or the level of merger activity in that year 

14 FY 2018 Actual changed from $50 20 to $50 30 due to a correction to the underlying data 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

Preserving Competition for Paint, Paper Additive 

In FY 2019, the Commission successfully concluded its litigation challenging Tronox Limited’s proposed 

acquisition of Cristal, two of the largest suppliers of chloride process titanium dioxide (TiO2), a white pigment 

used in a wide variety of products including paint, industrial coatings, 

plastics, and paper According to the complaint, the deal would have 

increased the likelihood of coordination among the remaining competitors 

in the industry, as well as the likelihood that Tronox could unilaterally reduce 

output and increase prices In April 2019, following the Administrative Law 

Judge’s decision upholding the Commission’s complaint, the Commission 

issued a consent order settling its charges and requiring Tronox to divest 

Cristal’s North American TiO2 assets to an FTC-approved buyer 
FY 2019 Agency Financial Report 25

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

KEY PERFORMANCE GOAL 2.1.5:

Total consumer savings compared to the amount of FTC resources allocated to the nonmerger program. 

Description: This measure reports the estimated amount of money that the Commission saved consumers by 

taking action against potentially anticompetitive business conduct compared to the amount spent on the nonmerger 

program The amount reported is a five-year “rolling average” (average of the current year and four prior year 

totals) 15 

FY 2019 Results: In FY 2019, the FTC saved consumers approximately $76 per dollar devoted to its nonmerger 

enforcement program Nonmerger actions in the pharmaceutical industry, among others contributed to that total, 

and when coupled with modest reductions in program spending, allowed the agency to again meet the target for this 

performance goal Significant consumer savings from the historic Cephalon investigation in FY 2015 continued to 

impact this performance goal in FY 2019, and targets have been adjusted accordingly 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

$48.60 in 

consumer 

savings per $1 

spent 

$52.30 in 

consumer 

savings per $1 

spent

$39.60 in 

consumer 

savings per $1 

spent 

$40.10 in 

consumer 

savings per $1 

spent 

$40 in 

consumer 

savings per $1 

spent

$75.80 in 

consumer 

savings per $1 

spent 

15 Calculation/Formula: Estimated consumer savings are divided by the amount of resources spent on the nonmerger program for the current 

fiscal year When available, case-specific data are used to generate the estimate of consumer savings Otherwise, staff uses a formula of one 

percent of the volume of commerce of the relevant geographic/product market(s) for one year In order to create a balanced performance profile, 

performance is reported as a “rolling average” over five years, compensating for highly variable results in any individual year due to the influence 

of a few significant cases or the level of nonmerger activity in that year 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

Illegal Monopolization for Opioid Addiction Treatment 

In July 2019, Reckitt Benckiser Group agreed to pay $50 million to settle FTC charges that it used deceptive 

schemes to prevent lower-priced generic competition to its branded drug Suboxone, a prescription oral 

medication used to minimize withdrawal treatments in patients with opioid addiction According to the 

Commission’s complaint, Reckitt misrepresented facts concerning the safety of its Suboxone tablets in order to 

shift patients to its newly developed oral film version, for which the company 

had a longer period of regulatory exclusivity, a practice known as “product 

hopping ” Reckitt (through former subsidiary Indivior) then abused the FDA’s 

citizen petition process by using these same invalid safety claims to further 

delay regulatory approval of competing generic Suboxone tablets The stipulated 

order for permanent injunction and equitable monetary relief bars Reckitt from 

similar conduct in the future and requires the company to notify the FTC of its 

plans to reintroduce any reformulated versions of existing products 
26 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

KEY PERFORMANCE GOAL 2.3.1:

Percentage of FTC cases involving at least one substantive contact with a foreign antitrust authority in which the agencies 

followed consistent analytical approaches and reached compatible outcomes.

Description: The Office of International Affairs strives to ensure appropriate cooperation on and coordination 

of investigations under parallel review by the FTC and foreign competition agencies This measure gauges the 

effectiveness of the FTC’s enforcement cooperation with foreign antitrust authorities pursuing parallel enforcement 

activities 16 

FY 2019 Results: In FY 2019, the FTC cooperated on 36 enforcement matters We engaged in substantive 

cooperation with 21 agencies, including from: Argentina, Australia, Austria, Brazil, Canada, Chile, China, Colombia, 

the European Union, Germany, India, Israel, Italy, Japan, Korea, Mexico, New Zealand, Saudi Arabia, Singapore, 

Spain, and the United Kingdom The FTC and its counterpart agencies reached compatible outcomes in all cases 

completed during the fiscal year While the FTC will continue to strive for 100% success, the target reflects the 

possibility of inconsistent outcomes, particularly as additional antitrust agencies begin to assert their jurisdiction and 

cooperation on unilateral conduct matters expands 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

100% 100% 96% 98% 95% 100% 

16 Calculation/Formula: # of FTC cases, with at least one substantive contact with a foreign antitrust agency, where the foreign agency is pursuing 

a case against the same company(s) and where they followed consistent analytical approaches and reached compatible outcomes / # of FTC cases 

where the FTC had at least one substantive contact with a foreign antitrust agency, where the foreign agency is pursuing a case against the same 

company(s) 

For more details on measurement and data quality, see the FTC Data Quality Appendix 

FTC Supports International Guidance to Improve Competition Agencies 

The FTC has been at the forefront of two groundbreaking initiatives to improve competition agency enforcement 

procedures around the world The FTC’s long-term leadership in this area culminated in the recent adoption 

of two FTC-led projects in the International Competition Network (ICN): the ICN’s Guiding Principles for 

Procedural Fairness in Competition Agency Enforcement, and the ICN’s Recommend Practices for Investigative 

Process These documents, which reflect broad international consensus, provide comprehensive and detailed 

guidance for competition agencies on the use of investigative tools, transparency, engagement with parties, 

internal safeguards, and confidentiality The FTC also played a key role 

in drafting the 2019 ICN Framework on Competition Agency Process 

The Framework couples fundamental due process principles with 

cooperation and consultation mechanisms that encourage improvement 

in agency practices The FTC will continue its leadership on procedural 

fairness issues, focusing on promoting international understanding and 

implementation of these important benchmarks 
FY 2019 Agency Financial Report 27

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

STRATEGIC GOAL 3: Advance the FTC’s performance through excellence 

in managing resources, human capital, and information technology.

KEY PERFORMANCE GOAL 3.2.3:

The extent to which employees believe the FTC cultivates engagement throughout the agency. 

Description: The Employee Engagement Index (EEI) of the Federal Employee Viewpoint Survey (FEVS) determines 

this measure The Index gauges the extent to which employees believe that management listens and provides 

meaningful support and feedback in various areas that assist staff in supporting the overall mission of the agency 

The index is compiled from questions across three sub-factors: Leaders Lead, Supervisors, and Intrinsic Work 

Experience 

• Leaders Lead: Employees’ perceptions of leadership’s integrity as well as leadership behaviors such as 

communication and workforce motivation 

• Supervisors: Interpersonal relationship between worker and supervisor, including trust, respect, and support 

• Intrinsic Work Experience: Employees’ feelings of motivation and competency relating to their role in the 

workplace 17 

FY 2019 Results: For the third year in a row, the FTC ranked the highest among 36 government agencies with 1000 

employees or more on the FEVS Employee Engagement Index 

FY 2015 

Actual

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Target

FY 2019

Actual

FY 2019

Status

78.5% 81.5% 82.5% 83.1% 68% (gov’t 

average) 84% 

17 Calculation/Formula: The FEVS EEI measures conditions important to supporting employee engagement through responses to 20 questions 

across the three sub factors described above The FEVS automatically calculates an agency Index score from responses to these 20 questions 

For more details on measurement and data quality, see the FTC Data Quality Appendix 
28 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

AGENCY MISSION CHALLENGES

Management’s assessment was performed independently 

from the process by which the Inspector General (IG) 

identified management and performance challenges (see 

Other Information Section) Management concurs with 

the IG-identified challenges and assessment of agency 

progress in addressing the challenges 

STRATEGIC GOAL 1: PROTECT 

CONSUMERS

Pursuant to the agency’s Protect Consumers goal, the 

FTC will continue to prioritize the following challenges: 

protecting Americans from fraud, including in the 

financial services marketplace; protecting consumers as 

technology evolves; protecting consumer privacy and 

improving data security, including combating identity 

theft; and addressing emerging advertising issues and 

targeting deceptive advertising 

PROTECTING AMERICANS FROM FRAUD:

Fraud can potentially affect all consumers and businesses 

The FTC will continue its enforcement efforts to stop 

fraud, focusing on those instances that cause or are likely 

to cause the greatest consumer harm The FTC continues 

to receive consumer complaints about imposter scams 

in which the perpetrators pose as government agencies, 

legitimate technical support companies, family members, 

or other trusted entities Certain scams, such as those 

involving business and income opportunities, pose an 

I

n today’s increasingly complex economy, the FTC 

stands as a champion for competition and consumers 

For example, when consumers and businesses 

encounter difficulties with financial scams, deceptive 

or fraudulent advertising, or unfair or deceptive 

practices related to online privacy and data security, 

the FTC is prepared to respond with vigorous law 

enforcement Similarly, when consumers are harmed 

by anticompetitive business practices in key sectors of 

our economy like technology and health care, the FTC 

steps forward, bringing to bear its full complement of 

enforcement and policy tools Of particular note is the 

recently concluded 21st Century Hearing initiative This 

year-long series of public forums gathered experts and 

interested persons to examine whether broad based 

changes in the economy, evolving business practices, 

new technologies, or international developments might 

require adjustments to competition and consumer 

protection law, enforcement priorities, and policies The 

information gathered is being reviewed and evaluated 

with the expectation that it will be used to inform the 

FTC’s near and long-term enforcement and policy 

agendas 

Agency mission challenges are presented as they 

relate to the agency’s strategic goals: Strategic Goal 1 

(Protect Consumers) and Strategic Goal 2 (Maintain 

Competition) A reference to the most applicable 

strategic objectives is also provided, so readers may refer 

to descriptions of related performance targets and actual 

results 

MoneyGram International Agrees to Civil Contempt Order

MoneyGram International agreed to pay $125 million to settle allegations that the company failed to 

take steps required under a 2009 FTC order to crack down on fraudulent money transfers that cost U S 

consumers millions of dollars The $125 million payment is part of a global settlement that resolves allegations 

that MoneyGram also violated a separate 2012 deferred prosecution agreement with the U S Department of 

Justice In addition to the monetary payment, MoneyGram has agreed to an expanded and modified order 

that will supersede the 2009 order and apply to money transfers 

worldwide The modified order requires, among other things, 

that the company block the money transfers of known fraudsters 

and provide refunds to fraud victims in circumstances where its 

agents fail to comply with applicable policies and procedures 
FY 2019 Agency Financial Report 29

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

even greater risk to consumers from lower income or 

underserved communities 

The FTC will maintain a focus on frauds targeting 

specific populations, including military consumers, 

seniors, non-English-speaking consumers, and small 

businesses Con artists continue to target the most 

vulnerable consumers and consumers in financial 

distress This unlawful conduct can have severe 

consequences for consumers who can least afford 

it Therefore, the FTC will continue to pursue law 

enforcement actions to stop deceptive or other unlawful 

conduct in mortgage, student loan, and other debt relief 

services; payday lending; and debt collection The FTC 

will also prioritize education for these populations 

The FTC will continue to coordinate closely with other 

federal agency partners to ensure that consumers are 

protected in the financial marketplace, and to avoid 

duplicative efforts between agencies Through the FTC’s 

Business Center at business ftc gov and other outreach 

efforts, the FTC will continue to offer educational 

materials to help consumers and businesses—especially 

small businesses—understand and comply with 

consumer protection laws and avoid becoming victims of 

fraud (Objectives 1 1, 1 2, and 1 3) 

PROTECTING CONSUMERS AS 

TECHNOLOGY EVOLVES:

Technology provides many benefits to consumers, 

including choice, convenience, and increased access 

to goods, services, and information However, it also 

enables new vehicles for fraudulent, deceptive, and unfair 

practices in the marketplace The FTC will continue 

its focus on the consumer protection issues associated 

with the use of emerging technology, including a careful 

consideration of the costs and benefits of new business 

practices and the importance of fostering innovation 

The FTC will take enforcement actions against 

deceptive practices that appear in new formats and new 

media (e g , apps, games, streaming videos, and social 

networks) In August 2019, the FTC held a workshop 

examining consumer protection issues related to video 

game “loot boxes”—in-game rewards players can buy 

while playing a video game The workshop brought 

together a variety of stakeholders, including industry 

representatives, consumer advocates, trade associations, 

academics, and government officials to discuss concerns 

regarding the marketing and use of loot boxes and 

other in-game purchases, and the potential behavioral 

impact of these virtual rewards on young consumers In 

addition, the FTC will continue to monitor consumer 

complaints about Internet Service Providers (ISPs) 

and will take appropriate action against deceptive ISP 

advertising or other unfair or deceptive ISP practices 

The FTC will continue to conduct research on emerging 

technologies to assist with enforcement actions, inform 

policy, and educate consumers 

Consumers and law enforcers face challenges resulting 

from technological advances that facilitate the use 

of illegal robocalls and make it easier for fraudsters 

perpetrating telemarketing scams to hide their location 

The FTC and its law enforcement partners announced 

“Operation Call it Quits,” a major crackdown on illegal 

robocalls, including 94 actions targeting operations 

around the country that are responsible for more than 

one billion calls pitching a variety of products and 

services including credit card interest rate reduction 

Operation Call It Quits

The FTC and its law enforcement partners announced a major crackdown on illegal robocalls, including 94 

actions targeting operations around the country that are responsible for more than one billion calls pitching 

a variety of products and services, including credit card interest rate reduction services, money-making 

opportunities, and medical alert systems The joint crackdown, “Operation Call 

it Quits,” is part of the FTC’s ongoing effort to help stem the tide of universally 

loathed pre-recorded telemarketing calls “Operation Call it Quits” includes four 

new FTC cases and three new FTC settlements It also includes new information 

to help educate consumers about illegal robocalls In addition, the FTC continues 

to promote the development of technology-based solutions to block robocalls and 

combat caller ID spoofing 
30 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

services, money-making opportunities, and medical alert 

systems The FTC will continue to work with consumer 

groups, telecommunications industry representatives, 

technologists, policymakers, and other stakeholders 

to develop solutions to halt illegal robocalls and other 

telemarketing practices that violate the Telemarketing 

Sales Rule The FTC and FCC will continue their 

coordinated efforts to combat illegal robocalls and 

promote innovative solutions to protect consumers 

(Objectives 1 1, 1 2, and 1 3) 

PROTECTING CONSUMER PRIVACY AND 

IMPROVING DATA SECURITY:

The FTC will continue to take a leading role in efforts 

to protect consumers from unfair or deceptive practices 

related to the security and privacy of their personal 

information, while preserving the many benefits that 

technological advances offer The agency will stop 

unfair and deceptive consumer privacy and data 

security practices through law enforcement and will 

promote strong and balanced privacy and security 

protections through policy initiatives on a range of 

topics The FTC hosted its fourth annual PrivacyCon 

event to highlight research that explores the privacy and 

security implications of emerging technologies The 

event featured panels addressing: (1) Privacy Policies, 

Disclosures, and Permissions; (2) Consumer Preferences, 

Expectations, and Behaviors; (3) Tracking and Online 

Advertising; and (4) Vulnerabilities, Leaks, and Breach 

Notifications 

The agency will bring appropriate enforcement actions 

against entities that violate the Children’s Online 

Privacy Protection Act (COPPA) Rule The agency will 

continue to participate in interagency groups, promote 

self-regulatory efforts, provide technical assistance 

to Congress on draft legislation, and participate in 

international privacy initiatives In addition, the agency 

will continue to support the development of the digital 

economy through cross-border data flows, executing 

with diligence its enforcement role in the Privacy Shield 

framework, and the Asia-Pacific Economic Cooperation/

Cross Border Privacy Rules 

Identity theft exacts a heavy financial and emotional 

toll from its victims The FTC will continue to assist 

the millions of Americans victimized each year 

through data security breaches and other means The 

FTC will continue to be the repository for identity 

theft complaints and make them available to federal 

criminal law enforcement agencies The agency’s 

trained counselors will continue to advise identity 

theft victims who call our toll-free number about 

rights and remedies available to them under federal 

law The FTC’s website IdentityTheft gov is the federal 

government’s one-stop resource to help consumers 

report and recover from identity theft IdentityTheft 

gov highlights useful resources and connects identity 

theft victims to federal agencies and other organizations 

that are critical to the recovery process IdentityTheft 

gov allows visitors to create a customized plan based 

on their specific experiences The Internal Revenue 

Service (IRS) continues to allow consumers to report 

Equifax Data Breach Settlement

Equifax agreed to pay at least $575 million, and potentially up to $700 million, as part of a global settlement with 

the FTC, the Consumer Financial Protection Bureau (CFPB), and 50 U S states and territories The FTC alleged 

that the credit reporting company’s failure to take reasonable steps to secure its network led to a data breach in 2017 

that affected approximately 147 million people As part of the proposed settlement, Equifax will pay $300 million to 

supply affected consumers with credit monitoring services or direct 

compensation Equifax will add up to $125 million to the fund 

if the initial payment is not enough to compensate consumers 

The company also has agreed to pay $175 million to 48 states, the 

District of Columbia, and Puerto Rico, as well as $100 million to 

the CFPB in civil penalties In addition to the monetary relief to 

consumers, Equifax is also required to implement a comprehensive 

information security program and obtain third-party assessments 

of its information security program every two years 
FY 2019 Agency Financial Report 31

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

identity theft to the IRS electronically through the FTC’s 

IdentityTheft gov website In addition, the Bureau of 

Consumer Protection’s Office of Technology Research 

and Investigation is monitoring and conducting research 

on emerging technologies That research assists with 

the Commission’s consumer protection efforts on 

enforcement, consumer education, and policymaking 

The agency also will continue to train local law 

enforcement to spot and prosecute identity theft, and will 

update educational materials (Objectives 1 1, 1 2, and 1 3) 

ADDRESSING EMERGING ADVERTISING 

ISSUES AND TARGETING DECEPTIVE 

ADVERTISING:

Digital media has opened new avenues for companies 

to communicate with consumers, and the format of 

advertisements continues to evolve Like all advertising, 

digital marketing must comply with the law, including 

deceptive advertising that appears in new formats (e g , 

apps, games, videos, and social networks) The FTC will 

take enforcement action against deceptive advertisements 

that appear in new formats and new media (e g , apps, 

games, videos, and social networks) The FTC also will 

evaluate the use of online reviews of products or services, 

including the use of fabricated reviews, undisclosed 

material connections with reviewers, prohibitions on 

negative reviews, or unsubstantiated testimonials, and 

take action as appropriate Companies are increasingly 

blending advertising with news, entertainment, or 

editorial content in digital media If consumers do not 

recognize and understand the difference between the 

advertising and other content, they may be deceived 

The FTC, therefore, will continue to examine consumer 

protection issues raised by sponsored content, “native” 

advertising that looks like surrounding non-commercial 

content, and endorsements 

The FTC will host a series of Green Lights & Red Flags 

workshops with its regional partners in cities across 

the country Rebooting an earlier series of business 

seminars, the all-new workshops will address social 

media marketing, data security, and other trending topics 

on marketers’ minds The first public workshop was held 

in Atlanta in August and focused on truth-in-advertising 

basics and data security compliance 

The online event-ticket marketplace has been a frequent 

topic of consumer and competitor complaints The 

FTC held a workshop to discuss the current state of the 

online event ticket marketplace, shed light on industrywide advertising and pricing issues, and explore ways to 

address deception beyond traditional law enforcement 

The FTC will continue to address deceptive advertising 

of health products, such as homeopathic products and 

dietary supplements The agency will focus on disease 

prevention and treatment claims; claims aimed at baby 

boomers, seniors, and military members; and claims 

exploiting emerging health threats The FTC also 

will continue to focus its law enforcement efforts on 

misleading environmental marketing claims and will 

educate businesses about the FTC’s Guides for the Use 

of Environmental Marketing Claims (“Green Guides”) 

Additionally, the FTC will continue to focus its law 

enforcement efforts on companies that falsely claim their 

products were made in the United States and will educate 

businesses about how to comply with the Made in USA 

standard (Objectives 1 1, 1 2, and 1 3) 

Explore Do Not Call (DNC) Data

The FTC announced the debut of a new interactive public web page

containing a wealth of information about the National DNC Registry 

and unwanted telemarketing robocalls Using a Tableau Public interface, 

consumers can now access reports about the number of DNC and robocall 

complaints filed from their state and see how that information compares with complaints filed by consumers 

in other states or nationally Users also can search by the types of telemarketing calls reported, such as live calls 

versus robocalls and by topic The information is updated quarterly Users can explore all of the FTC’s interactive 

data pages at www.ftc.gov/exploredata 
32 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

STRATEGIC GOAL 2: MAINTAIN 

COMPETITION

Pursuant to the agency’s Maintain Competition goal, the 

FTC will continue to prioritize promoting competition 

and preventing anticompetitive conduct in many 

areas of the economy, including the health care and 

pharmaceutical sectors, technology and retail markets, 

and the energy industry The agency will also work to 

promote sound competition policy at the international 

level and will continue advocating for procompetitive 

outcomes before federal courts, state legislatures, and 

other governmental agencies 

In enforcing the antitrust laws, the FTC analyzes mergers 

and acquisitions filed under the Hart-Scott-Rodino 

(HSR) premerger notification program, and monitors the 

marketplace for non-reportable transactions that might 

raise competitive concerns The FTC takes action against 

those mergers that are likely to reduce or eliminate 

competition, and that are unlikely to generate sufficient 

benefits to consumers to outweigh the competitive harm 

The FTC is vigilant in identifying instances of unlawful 

monopolization or attempted monopolization, or 

instances in which two or more firms seek to coordinate 

in an attempt to stifle competition in order to raise 

prices, reduce the quality or choice of goods and services, 

or reduce innovation 

REINVIGORATED EMPHASIS ON 

TECHNOLOGY: 

The ubiquity of technology, and the fast pace at 

which it evolves, are crucial marketplace challenges 

The FTC antitrust investigations involve increasingly 

complicated high-technology markets, such as online 

platforms, computer hardware and software, electronic 

components, and devices used in manufacturing 

Accordingly, the Commission launched a new 

Technology Task Force in 2019 to bolster and focus the 

agency’s efforts to maintain competition given the unique 

antitrust issues raised by these dynamic markets 

Antitrust and competition policy matters in the 

technology marketplace were a primary focus of the 

recently concluded 21st Century Hearings, which 

covered topics such as the intersection between privacy, 

big data, and competition; competition and consumer 

protection issues in communication, information, and 

media technology networks; and the consumer welfare 

implications of algorithmic decision tools, artificial 

intelligence, and predictive analytics The Commission 

will use what it learns from the Hearings to inform its 

policy and enforcement priorities in the technology 

space in the future (Objectives 2 1 and 2 2) 

PROMOTING COMPETITION IN HEALTH 

CARE AND PHARMACEUTICAL MARKETS:

The high cost of health care, which continues to account 

for a significant share of the gross domestic product, 

is a matter of concern for consumers, businesses, and 

taxpayers To ensure that consumers receive the benefits 

of competitive health care markets, antitrust enforcement 

and advocacy in this sector are top priorities for the 

Commission 

The FTC will continue to focus resources on 

anticompetitive reverse payment patent settlement 

Protecting Competition for Key Cell Phone Technology 

In May 2019, the U S District Court for the Northern District of California ruled that Qualcomm’s baseband 

processor licensing practices violated the antitrust laws and allowed the firm to secure higher royalties than 

it could obtain based solely on the value of its patents The case started in 

FY 2017 when the FTC sought to permanently block Qualcomm’s use of 

these anticompetitive tactics to maintain its monopoly in the supply of two 

modem chips, key semiconductor devices used in cell phones and other 

consumer products The FTC alleged that Qualcomm violated the antitrust 

laws by unlawfully using its monopoly position in two chip markets to impose 

anticompetitive licensing and supply terms on cell phone manufacturers, thereby 

excluding chip competitors The trial on these charges occurred in January 2019 

This matter is pending on appeal in federal court 
FY 2019 Agency Financial Report 33

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

agreements Branded and generic drug manufacturers 

use these agreements to delay generic competition As 

the U S Supreme Court explained in FTC v Actavis, 

“there is reason for concern that settlements taking 

this form tend to have significant adverse effects on 

competition ” Similarly, the Commission will continue 

to investigate other anticompetitive conduct, such as 

sham litigation or the abuse of government regulatory 

processes to delay generic entry into pharmaceutical 

markets Such practices deny consumers access to lower 

priced generic drugs The FTC reviews, investigates, and 

challenges these harmful practices where appropriate 

The FTC also prioritizes stopping anticompetitive health 

care mergers that could lead to higher costs or reduced 

quality, including those involving health care providers 

and pharmaceutical and medical device companies In 

recent years, the FTC has required significant divestitures 

in a large number of pharmaceutical transactions and has 

challenged in court several health care provider mergers 

Beyond enforcement, the FTC utilizes its full range of 

policy and advocacy tools to promote competition in 

health care markets For example, the FTC has advocated 

against state legislation that attempts to immunize 

competing hospitals and other health care providers 

from federal antitrust laws when they merge or engage 

in certain forms of collaboration In the FTC’s view, 

state efforts to immunize such conduct are unnecessary 

because procompetitive collaboration that would benefit 

consumers is permitted already under federal antitrust 

law Therefore, these statutes effectively immunize 

conduct that likely would restrain competition and result 

in higher health care prices for consumers, without 

generating offsetting benefits 

Challenging Monopolization in E-Prescription Markets 

In April 2019, the Commission authorized staff to seek a permanent 

injunction in federal court against Surescripts for employing threats and 

other exclusionary tactics, including loyalty and exclusivity agreements, to 

maintain its monopolies in two e-prescribing markets: routing and eligibility 

E-prescription routing enables healthcare providers to transmit prescriptions 

directly to pharmacies, whereas eligibility services enable healthcare providers 

to determine electronically patient eligibility for prescription coverage 

According to the complaint, Surescripts monopolized these e-prescription 

markets by preventing customers on both sides of each market from using additional platforms (a practice known 

as multihoming), effectively thwarting competitors’ success, and maintaining its roughly 95 percent share, in each 

market This matter is pending in federal court 

The FTC also attempts to better understand the health 

care and pharmaceutical markets it monitors and to 

anticipate future antitrust law and policy developments 

through research and scholarship To that end, the FTC 

convenes hearings, workshops, and conferences, to 

keep apprised of current market dynamics and trends 

(Objectives 2 1 and 2 2) 

PREVENTING ANTICOMPETITIVE ACTIVITY 

IN THE ENERGY INDUSTRY: 

The agency continues to monitor closely energy markets 

to identify and challenge anticompetitive mergers and 

conduct In recent years, the Commission has brought 

several merger and conduct enforcement actions in 

the energy sector, resulting in multiple divestitures and 

other relief to maintain competition The FTC also 

continuously examines price movements and other 

activity through its Gasoline and Diesel Price Monitoring 

Project, a tool that can help identify anticompetitive 

conduct such as illegal agreements among competitors, 

agreements between manufacturers and product dealers, 

and monopolization that may undermine the benefits of 

competition 

The FTC regularly issues reports on the factors that 

influence the prices American consumers pay for gas 

In compliance with the Energy Policy Act of 2005, 

the FTC issued its fourteenth annual Ethanol Market 

report in 2018, which concluded that the market is less 

concentrated than it was fourteen years ago (Objectives 

2 1 and 2 2) 
34 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

MAINTAINING ROBUST COMPETITION IN 

RETAIL MARKETS:

Retail markets, perhaps more than any others, directly 

impact the wallet of every American consumer The 

FTC focuses significant resources on identifying 

and challenging mergers and conduct likely to harm 

competition in the retail sector These actions preserve 

competition, which benefits consumers by keeping prices 

down, improving quality and service, and expanding 

innovation and consumer choice In recent years, the 

Commission has successfully challenged several large 

retail mergers, including proposed transactions in the 

retail pharmacy and consumer goods markets, as well as 

several supermarket acquisitions 

As in other sectors, the FTC also continues to study 

evolving competitive dynamics that affect how 

consumers shop for products they want to buy The 

retail sector, perhaps more than most, has been 

reshaped through advances in technology, including 

behavioral advertising, predictive analytics, and big 

data—three transformative innovations discussed in the 

Commission’s recently concluded 21st Century Hearings 

(Objectives 2 1 and 2 2) 

FTC Challenges Merger of Two Hydrogen Peroxide Producers 

In August 2019, the Commission authorized staff to take action to block in federal court Evonik Industries’s $625 

million proposed acquisition of PeroxyChem Holding Company, alleging that the merger would substantially 

reduce competition for the production and sale of hydrogen peroxide in the Pacific Northwest and Southern 

and Central United States Hydrogen peroxide, a commodity chemical with few if any substitutes, is used for 

oxidation, disinfection, and bleaching, among other applications Most 

hydrogen peroxide produced in the North America is used by paper 

customers for bleaching pulp and de-inking recycled paper According to the 

complaint, the proposed merger would eliminate head-to-head competition 

between the firms, increasing the likelihood of coordination in a highly 

concentrated market that is “already vulnerable to coordination, functioning 

as an oligopoly, and with a long history of price fixing ” This matter is 

currently pending in federal court 

FTC Hosts Workshop to Assess the Impact of Certificates of Public Advantage 

in Healthcare Markets 

In June 2019, the FTC hosted a public workshop to assess the impact of certificates of public advantage 

(COPAs) on prices, quality, access, and innovation for healthcare services The workshop, A Health Check 

on COPAs: Assessing the Impact of Certificates of Public Advantage in Healthcare Markets, is part of a broader 

COPA Assessment Project announced in November 2017 COPAs are regulatory regimes adopted by state 

governments to displace competition among healthcare providers and immunize mergers and collaborations 

from antitrust scrutiny Academics, health policy experts, healthcare industry stakeholders, state regulators 

and law enforcers, and staff from the FTC’s Bureau of 

Economics discussed research regarding the effects 

of COPAs, as well as practical experiences with these 

regulatory regimes 
FY 2019 Agency Financial Report 35

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

MANAGEMENT ASSURANCES 

IMPLEMENTATION OF THE 

FEDERAL MANAGERS’ FINANCIAL 

INTEGRITY ACT (FMFIA) 

The FTC’s Enterprise Risk Management (ERM) 

and internal controls are integral to managing daily 

operations and to carrying out activities that achieve 

strategic goals and objectives Internal controls are part 

of all agency systems and processes Senior management 

holds managers accountable for documenting, assessing, 

and improving these controls in order to provide 

efficient and effective risk management, program 

operations, high-quality data, and accurate reporting as 

well as program compliance with applicable laws and 

regulations 

The FTC’s Senior Management Council (SMC) provides 

oversight to the Senior Assessment Team (SAT) activities 

and is instrumental in the strategic direction and 

mitigation strategies for the Agency’s most significant 

risks The SAT plans and executes the Agency’s 

enterprise risk and internal control program activities 

This includes assessing and improving compliance with 

applicable guidance (e g , Office of Management and 

Budget Circular A-123, Management Responsibilities 

for Enterprise Risk Management and Internal Controls), 

monitoring and remediation of identified risk, and 

communicating the results of reviews to senior 

management and the head of the agency 

SAT activities in FY 2019 included planning the 

annual internal controls assessments; identifying key 

processes and related control activities; documenting 

the scope, design, and methodology of risk and internal 

control assessments; testing of internal controls, and 

monitoring corrective action plans and the remediation 

progress In addition, the SMC updated the agency risk 

profile, including risks related to successful mission 

performance Specifically, FTC’s profile listed risks of 

escalating expert witness costs in cases involving market 

competition, impacts of budget constraints as they 

influence litigation options for the consumer protection 

mission and the schedule risk and cost risk associated 

with FTC’s technology modernization initiative FTC 

leadership uses the risk profile to monitor agency 

operations, to make budget and resource decisions, and 

to assess mitigation strategies and activities 

This year, the FTC continued with the implementation 

of an ERM program plan and strategy Activities for 

FY 2019 included implementing new risk registers 

with programs, monitoring of existing risk registers, 

executing an annual segment of the multi-year internal 

control assessment plan, identifying and analyzing 

risk, assessing entity level control, and monitoring 

corrective actions Additionally, the FTC began planning 

and implementing DATA Act control assessments 

and OMB-directed Internal Control Over Reporting 

(ICOR) assessments In determining if there were any 

management control deficiencies or nonconformances 

that must be disclosed in the annual assurance statement, 

the SAT and the Chairman evaluated several sources of 

information These included results of ERM activities, 

other information from independent audits or reviews 

performed by the Office of Inspector General (OIG), 

the Government Accountability Office (GAO) (e g , 

Federal Information Security Management Act review), 

independent audits of service providers’ operations 

and financial systems (e g , reviews conducted in 

accordance with Statement on Standards for Attestation 

Engagements (SSAE No 18)), and other relevant 

evaluations and control assessments 

The Chairman’s assurance statement is supported by 

the processes and reviews described above, which were 

performed in FY 2019 Management assurance tables 

appear in the Other Information section 
36 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov
FY 2019 Agency Financial Report 37

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

SUMMARY OF MATERIAL 

WEAKNESS AND 

NONCONFORMANCES 

As noted in the Chairman’s FMFIA Statement of 

Assurance, the FTC has no material weaknesses or 

nonconformances to report for FY 2019 No new 

material weaknesses or significant nonconformances 

have been identified, nor any existing unresolved 

weaknesses requiring corrective action 

FEDERAL INFORMATION SECURITY 

MANAGEMENT ACT (FISMA) 

As mandated by FISMA, the agency continues to 

maintain an information security program to manage 

information technology in accordance with OMB 

Circular A-130 requirements and National Institute of 

Standards and Technology (NIST) guidance During 

FY 2019, FTC executed the retirement of one system, 

the conversion of two systems to Authorization to Use 

(ATU), and the performance of two assessment and 

authorization efforts The FTC currently has eight 

systems authorized to operate (ATO) The FTC leverages 

fifteen Federal Risk and Authorization Management 

Program (FedRAMP) cloud service providers 

DIGITAL ACCOUNTABILITY AND 

TRANSPARENCY ACT OF 2014 

(DATA ACT) 

The DATA Act expands the Federal Funding 

Accountability and Transparency Act of 2006 to increase 

accountability and transparency in federal spending, 

making federal expenditure information more accessible 

to the public; improve the quality of the information on 

USASpending.gov, as verified through regular audits of 

the posted data; and streamline and simplify reporting 

requirements through clear data standards The FTC 

successfully transmitted the data files, and certified the 

quarterly submissions as required by the governmentwide requirements set by OMB and the U S Department 

of Treasury 

DEBT COLLECTION 

IMPROVEMENT ACT 

The Debt Collection Improvement Act of 1996 prescribes 

standards for the administrative collection, compromise, 

suspension, and termination of Federal agency collection 

actions and referrals to the proper agency for litigation 

The FTC monitors, administers, and collects on debts 

less than 120 days delinquent The FTC also monitors, 

administers, and collects on debts more than 120 days 

delinquent Eligible, nonexempt debts more than 120 

days old are transferred to the U S Department of the 

Treasury for cross-servicing In addition, recurring 

payments were processed by electronic funds transfer in 

accordance with the provisions of the Debt Collection 

Improvement Act 

PROMPT PAYMENT ACT 

The Prompt Payment Act requires Federal agencies to 

make timely payments to vendors, including any interest 

penalties for late invoice payments In FY 2019, the 

FTC processed 2,875 invoices totaling $156 5 million 

that were subject to prompt payment Of these invoices, 

93 77 percent were paid on time During FY 2019, the 

FTC paid a total of $9,544 in interest penalties, or 0061 

percent of the total dollar amount invoiced 

AGENCY FINANCIAL 

MANAGEMENT SYSTEMS 

STRATEGY 

The FTC’s overall strategy for its financial management 

systems is to ensure that the systems provide accurate, 

reliable, and timely information for management 

decision making, maintain effective internal controls, 

and comply with applicable laws and regulations It 

is also critical that the financial management systems 

support both operational efficiency and effectiveness 

in meeting the agency’s strategic goals The FTC uses 

Oracle Federal Financials (OFF) as its core financial 

system and has relied on the Department of the Interior’s 

Interior Business Center (IBC), a Federal Shared Service 

Provider, to host and support OFF operations The IBC 

core financial system is delivered using OFF Release 

12 2, and provides general ledger, accounts payable, 

accounts receivable, budget execution, requisition, 

contract writing (Contract Lifecycle Management), 

and reporting capabilities The FTC has been receiving 
38 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

financial management and systems services since 2008, 

additionally the FTC has been receiving personnel and 

payroll support services from IBC since 1998 

As part of the FTC’s Financial Management Office’s 

(FMO) ongoing self-assessment of financial management 

discipline, effectiveness and efficiency, the agency 

identified opportunities to improve existing capabilities 

and resolve gaps in existing services, enhancing the 

value of financial management services at the FTC 

Using the evaluation of existing services as its base, 

FMO conducted an analysis of the effectiveness and 

efficiency of other federal shared service providers’ 

capabilities The analysis identified an opportunity to 

significantly enhance existing financial operations and 

expand operational support, coupled with the potential 

for meaningful cost reductions Based on that analysis, 

FMO developed a sound business case recommending 

the migration of agency financial systems and operations 

to Treasury’s Administrative Resource Center (ARC), 

effective October 2019 The FTC leadership approved 

the recommendation and FMO and ARC dedicated 

resources developed and implemented a comprehensive 

migration project plan, adhering to GSA’s Unified 

Shared Services Management (USSM) Modernization 

and Migration Management (M3) Playbook Key 

activities included: 

• Defining the scope of migration services and 

developing the governance structure and processes 

• Developing and implementing a robust change 

management, communications and training plan 

• Modifying policies and procedures required to align 

the FTC operations with ARC systems and standards 

• Developing and implementing data cleansing, data 

conversion and data testing plans and procedures 

• Migrating OFF general ledger, accounts payable, 

accounts receivable, budget execution and reporting 

capabilities from IBC to ARC 

• Migrating IBC Contract Lifecycle Management 

(CLM) to ARC Procurement Information System for 

Management (PRISM) 

• Migrating IBC E2 Solutions travel management system 

to ARC ConcurGov travel management system 

• Implementation of the ARC Oracle Fixed Asset Module 

• Implementation of the ARC Oracle Project Module 

During FY 2020, the FTC and ARC will work together 

to refine the processes and procedures to optimize the 

effectiveness and efficiency of our operations 

In addition, the FTC will work with Treasury to 

implement G-Invoicing as a long-term, sustainable 

solution to improve the quality of intragovernmental 

transactions 

These efforts comply with both the Federal Financial 

Management Improvement Act Section 803(a) 

requirements and OMB Memorandum M-13-08 on the 

use of shared service solutions and automation to save 

costs and improve the quality and performance of the 

Federal Government 

FEDERAL CIVIL PENALTIES 

INFLATION ADJUSTMENT ACT 

OF 1990 

As established by statutory civil penalty provisions, 

the FTC has jurisdiction to charge civil penalties for 

violations specified in the FTC Act and other laws 

the Commission is responsible for administering and 

enforcing The FTC adjusts these civil penalty amounts 

for cost of living, as required by Federal Civil Penalties 

Inflation Adjustment Act of 2015 

Details about the FTC’s types of civil penalties, the 

authority for the penalty, adjustment dates, and current 

penalty amount can be found in the Other Information 

section of this report 

FRAUD REDUCTION AND DATA 

ANALYTICS ACT 

The Fraud Reduction and Data Analytics Act of 2015 

was passed to improve federal agency financial and 

administrative controls and procedures to assess and 

mitigate fraud risks, and to improve Federal agencies’ 

development and use of data analytics for the purpose 

of identifying, preventing, and responding to fraud, 

including improper payments 

During FY 2019, the FTC expanded its fraud risk 

program, strengthened the agency’s processes, and 

improved internal controls to prevent, detect, and 

mitigate fraud risks Please see the Fraud Reduction 

Report in the Other Information section of this report 

for additional information 
FY 2019 Agency Financial Report 39

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FINANCIAL HIGHLIGHTS

INTRODUCTION

The FTC’s accounting practices continue to be accurate 

and transparent, which directly supports the agency’s 

dual mission to protect consumers and promote 

competition, and consistently demonstrates the FTC’s 

commitment to responsible stewardship of resources and 

sound financial operations For the 23rd straight year, 

the FTC received a “clean” or unmodified opinion on 

its audited financial statements Independent auditors 

issue an unmodified opinion when an entity’s financial 

statements are presented fairly, in all material aspects, 

in accordance with U S Generally Accepted Accounting 

Principles (GAAP) 

The following discussion provides an overview of the 

agency’s financial position and results of operations 

The complete audited financial statements with 

accompanying notes, including the independent auditor’s 

report, are presented in the Financial Section of this 

report 

BALANCE SHEET

The FTC’s Balance Sheet includes both entity and 

non-entity assets and liabilities Entity assets, by law, 

are authorized by the Congress for the FTC to use in its 

operations, i e , Property, Plant, and Equipment (PP&E) 

Entity liabilities consist of probable and measurable 

future outflows of FTC entity resources 

Non-entity assets (which are not available for the 

FTC’s use) are those assets held on behalf of others, 

i e , collections and accounts receivable that arise from 

civil monetary penalties and court-ordered judgments 

for monetary relief in the agency’s consumer redress 

program Non-entity assets are equal to, and offset by, 

non-entity liabilities 

CONDENSED BALANCE SHEET 

AS OF SEPTEMBER 30, 2019 AND 2018

(Dollars in Millions) FY 2019 FY 2018 % Change

Entity Assets

Fund balance with Treasury $ 122 $ 129 -5%

General property, plant, and equipment 30 39 -23%

Total Entity Assets 152 168 -10%

Non-Entity Assets

Fund balance with Treasury 266 359 -26%

Accounts receivable 616 599 3%

Total Non-Entity Assets 882 958 -8%

Total Assets $ 1,034 $ 1,126 -8%

Entity Liabilities

Employee related liabilities 24 22 9%

Accounts payable and other 14 11 27%

Total Entity Liabilities 38 33 15%

Non-Entity Liabilities

Redress collections not yet disbursed 266 359 -26%

Liability for amounts to be collected 616 599 3%

Total Non-Entity Liabilities 882 958 -8%

Total Liabilities $ 920 $ 991 -7%

Cumulative results of operations 114 135 -16%

Total Net Position 114 135 -16%

Total Liabilities and Net Position $ 1,034 $ 1,126 -8%
40 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

64 63 57

51

30

39

BALANCE SHEET

ENTITY

Entity assets totaled $152 million, or 15 percent of all 

FTC assets, as of September 30, 2019, a decrease of $16 

million, or 10 percent, from the FY 2018 total of $168 

million 

The Fund Balance with Treasury (FBwT) of $122 million 

comprises $40 million that is temporarily unavailable 

for expenditure and $82 million available to the FTC 

to make expenditures and pay liabilities, for a total 

decrease of $7 million, or 5 percent, from the FY 2018 

total of $129 million At the end of FY 2019, the FTC’s 

FBwT contained $32 million in temporarily unavailable 

offsetting collections (fees from the FTC’s National Do 

Not Call Registry and premerger notification filings) 

that exceeded the amount authorized to offset the 

FTC’s appropriation Of the $32 million, $6 million was 

temporarily reduced by the FY 2013 sequestration 

PP&E, net of accumulated depreciation/amortization, is 

$30 million, which consists of $26 million in leasehold 

improvements, $3 million in equipment, and $1 million 

in software Of the total PP&E, $22 million in leasehold 

improvements is associated with the FY 2014 relocation 

of staff to office space at the Constitution Center The 

$9 million decrease in PP&E is primarily due to asset 

disposals and the continued depreciation/amortization 

of assets related to the FY 2014 staff relocation 

The annual trend in the FTC’s total assets reflects the 

Office of Management and Budget (OMB) Category B 

apportionment between FY 2010 and 2013 of more than 

$74 million for the relocation of staff to office space at 

Constitution Center The move was completed in FY 

2014, with over $46 million being spent on capitalized 

assets Since these assets were placed in service, the 

FTC’s PP&E balance has decreased, primarily due to 

continual depreciation and amortization FBwT has 

declined over the past two years as the FTC has incurred 

higher than normal costs associated with expert witness 

contracts in addition to non-recurring expenditures 

associated with upgrading the agency’s information 

technology infrastructure 

 
FY 2019 Agency Financial Report 41

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

Entity liabilities totaled $38 million, or 4 percent of all 

FTC liabilities as of September 30, 2019, and represent a 

15 percent increase in liabilities from FY 2018 to 

FY 2019 

Employee-related liabilities of $24 million consist of 

accrued payroll and benefits, accrued annual leave 

wages earned by employees but not yet paid, and 

Federal Employees Compensation Act (FECA) liability 

Accounts payable and other totaling $14 million consists 

of amounts owed, but not yet paid, for goods or services 

the FTC has received as well as a probable contingent 

liability that is new for FY 2019 

Entity liabilities have a smaller range of fluctuation in 

comparison to entity assets Accounts payable balances 

fluctuate more significantly when capitalized purchases 

are involved This is evident in FY 2011 when purchases 

of information technology hardware and software were 

accrued near the end of the fiscal year Employee-related 

liabilities fluctuate based on the FTE count and the 

timing of the payroll disbursement cycle For example, 

at the end of FY 2014, the payroll and benefit liability 

included 7 days of unpaid wages while the FY 2019 

year-end payroll accrual included 11 days of unpaid 

wages The uptick in both employee-related liabilities 

and accounts payable and other liabilities in FY 2019 is 

attributable to an earlier month-end cutoff for invoice 

payments in relation to the FTC’s transition to a new 

shared-service provider 

BALANCE SHEET

NON-ENTITY

Non-entity assets totaled $882 million, or 85 percent of 

all FTC assets, as of September 30, 2019 This represents 

a decrease of $76 million, or 8 percent, from the FY 2018 

total of $958 million 

Non-entity assets are equal to, and offset by, non-entity 

liabilities The $616 million net accounts receivable 

balance is offset by the $616 million liability for amounts 

to be collected, while the $266 million FBwT is offset by 

the $266 million liability for redress collections 

The FY 2019 ending net accounts receivable of $616 

million reflects amounts to be paid to the FTC from 

court-ordered judgments in the consumer redress 

program This represents a $17 million increase in net 

accounts receivable from the FY 2018 total of $599 

million The majority of the receivables balance for both 

fiscal years consists of a 2018 judgment against AbbVie, 

Inc for $494 million (80 percent of the ending FY 2019 

balance) A federal district court ruled that AbbVie 

used sham litigation to illegally maintain its monopoly 

over the testosterone replacement drug Androgel, and 

the court ordered $494 million in monetary relief to 

consumers who were overcharged for Androgel as a 

result of AbbVie’s conduct This court order represents 

the largest monetary award ever in a litigated FTC 

antitrust case 

The remaining ending net accounts receivable balance 

of $122 million primarily consists of amounts to be paid 

to the FTC from the following cases: AMG Services
42 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

for a payday lending scheme that deceived consumers; 

Helping America Group for allegedly selling phony 

debt relief and credit repair services, including fake 

loans; I Works for deceptive “trial” memberships for 

bogus government-grant and money-making schemes; 

and Liberty Publishers for a deceptive newspaper 

subscription scheme Thirty-five additional matters 

account for the remainder of the balance 

The FY 2019 ending FBwT for consumer redress of 

$266 million is being held temporarily by the FTC until 

it is distributed to consumers, other harmed parties, 

or redress third party administrators (for distribution 

to consumers on behalf of the FTC), or disgorged to 

Treasury (if consumer redress is not practicable) The 

decrease of $93 million in FBwT consists of $259 million 

in collections offset by $352 million in disbursements 

Coincidentally, the largest collection and disbursement 

during FY 2019 each relate to allegations that a 

pharmaceutical company violated antitrust laws by 

stifling competition from lower priced generic drugs 

In August 2019, the FTC collected $50 million from 

Reckitt Benckiser Group PLC to settle allegations that 

Reckitt prevented generic drugs from competing with its 

branded drug Suboxone Also during FY 2019, the FTC 

disbursed more than $194 million to harmed parties 

from a 2015 settlement with Cephalon, Inc , which 

allegedly used “pay for delay” practices to illegally block 

generic drug competition to its drug Provigil 

Five large judgments account for almost two-thirds of the 

FY 2019 ending FBwT of $265 million The graphic on 

the following page illustrates the major collections and 

disbursements that occurred throughout the fiscal year 

Historic trends of FBwT for consumer redress are 

primarily driven by a few select cases 

• In FY 2015, the FTC collected $458 million from a 

settlement resolving antitrust charges that Cephalon 

illegally blocked generic competition to its drug 

Provigil by engaging in “pay for delay” conduct 

• In FY 2016, the FTC collected $200 million from 

Herbalife International of America, Inc to settle FTC 

charges that Herbalife deceived consumers as part of a 

multi-level marketing operation This large collection 

was primarily offset by a $120 million disbursement to 

harmed parties as a result of the Cephalon settlement 

• In FY 2017, the FTC disbursed $200 million from the 

Herbalife settlement to claimants Additionally, the 

FTC disbursed $125 million to harmed parties as a 

result of the Cephalon settlement 

• In FY 2018, the FTC collected $471 million from AMG 

Services from a 2016 judgment for a payday lending 

scheme that deceived consumers across the country 

and illegally charged them inflated and undisclosed 

fees The FTC disbursed $505 million to consumers 

harmed by this scheme during FY 2018 ($47 million 

had been collected prior to FY 2018) 

• In FY 2019, the FTC disbursed $194 million to harmed 

parties as a result of the 2015 settlement agreement 

with Cephalon 
FY 2019 Agency Financial Report 43

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FY 2019 Non-Entity Fund Balance with Treasury Timeline Activity

ref Dollars Activity Description

$358.8M Beginning Balance - FY 2019 Non-Entity Fund Balance with Treasury

A $5.2M Alliance Document 

Preparation

Collected $5.2M from a 2018 settlement against a student loan debt relief scam 

that bilked millions from consumers by falsely claiming to enroll consumers in 

loan forgiveness programs.

B ($3.6M) Universal City Nissan, 

Inc./Sage Auto Group

Disbursed $3.6M (43,456 refund checks) to consumers subjected to deceptive 

and unfair sales and financing tactics. Refunds are from a 2017 settlement with 

Sage Auto Group.

C $29.9M AMG Services Inc.

Collected $29.9M from a 2016 judgment related to a payday lending scheme 

that violated the FTC Act and Truth in Lending Act where consumers were 

illegally charged undisclosed and inflated fees.

D ($6.2M) Tarr, Inc.

Disbursed $6.2M (227,995 refund checks) to consumers from a 2017 settlement

against defendant for selling weight-loss, muscle-building, and wrinklereduction products using unsubstantiated health claims, fake magazine and 

news sites, bogus celebrity endorsements, and phony consumer testimonials.

E $2.4M J. William Enterprises, 

LLC

Collected $2.4M from a 2018 settlement against Florida-based operators behind 

a deceptive timeshare resale scheme.

F ($3.5M)

Direct Alternatives 

and Original Organics, 

LLC

Disbursed $3.5M (104,612 refund checks) to consumers who bought weight-loss 

supplements from a 2016 settlement. The defendants claimed that users of 

their products would lose weight quickly and easily and results were scientifically 

proven. Further, “risk-free” trials enrolled consumers in programs without their 

consent and charged them for additional products.

G $11.6M Standard Industries, 

LLC

Collected $11.6M from a 2014 settlement against a Maryland-based office 

supply operation. The FTC alleges that the operation tricked companies and 

non-profits into paying for light bulbs and cleaning supplies they never ordered.

H ($7.1M) Advertising 

Strategies, LLC

Disbursed $7.1M (10,365 refund checks) as part of a 2016 settlement to 

consumers who lost money to bogus online investment opportunities which 

were marketed to seniors living on a fixed income.
44 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

FY 2019 Non-Entity Fund Balance with Treasury Timeline Activity

ref Dollars Activity Description

I $21.6M Next-Gen, Inc.

Collected $21.6M from a 2019 settlement involving operators of a sweepstakes 

scam that tricked millions of people, including many senior citizens, into paying 

money to collect prizes that never materialized.

J $35.0M Office Depot, Inc.

Collected $25M from Office Depot and $10M from its software supplier Support.

com, Inc. from a 2019 settlement agreement. The FTC alleged that these 

companies tricked consumers into buying computer repair and technical 

services by deceptively claiming their software had found malware symptoms on 

customers’ computers.

K $2.7M A1 Janitorial Supply 

Corp.

Collected $2.7M from a 2019 judgment where FTC alleged defendants targeted 

small businesses and charged them for supposedly free samples of cleaning 

supplies and other products; and that defendants tricked small businesses into 

paying for products they did not order.

L ($77.3M) Cephalon, Inc.

Disbursed $77.3M to harmed parties as part of a 2015 settlement resolving 

antitrust charges that Cephalon engaged in “pay for delay” conduct to illegally 

block generic competition of the drug Provigil.

M $3.9M Avant, LLC

Collected $3.9M from a 2019 settlement against Avant, LLC for engaging in 

deceptive and unfair loan servicing practices, such as imposing unauthorized 

charges on consumers’ accounts and unlawfully requiring consumers to consent 

to automatic payments from their bank accounts.

N $7.5M Triangle Media, Corp.

Collected $7.5M from a 2019 judgment where defendant deceptively advertised 

risk free trial offers for only costs of shipping and handling. Consumers were 

charged full price for trial products and enrolled in expensive, ongoing continuity 

plans without their knowledge or consent.

O $50.0M Reckitt Benckiser 

Group PLC

Collected $50M from a 2019 settlement against Reckitt Benckiser Group, PLC 

for violating antitrust laws through a deceptive scheme to thwart lower-priced 

generic competition to its branded drug Suboxone.

P ($11.6M) Standard Industries, 

LLC

Disbursed $11.6M (29,333 refund checks) to small businesses and other 

organizations defrauded by a Maryland-based office supply operation, pursuant 

to a 2014 settlement. The FTC alleges that the operation tricked companies and 

non-profits into paying for light bulbs and cleaning supplies they never ordered.

Q ($3.3M) Cardinal Health, Inc.

Disbursed $3.3M from a 2015 settlement against Cardinal Health, which 

unlawfully monopolized the market for low-energy radiopharmaceuticals in 25 

geographic areas throughout the United States.

R ($31.3M) Lifelock, Inc.

Disbursed $31.3M related to a 2015 settlement to resolve FTC’s contempt 

charges that Lifelock violated the terms of a 2010 federal court order that 

requires it to secure consumers’ personal information and prohibits Lifelock from 

deceptive advertising.

S $3.0M Strategic Student 

Solutions, LLC

Collected $3M from a 2018 settlement as part of a coordinated federal-state law 

enforcement initiative targeting deceptive student loan debt relief scams.

T ($5.4M) Alliance Document 

Preparation

Disbursed $5.4M to nearly 40,000 consumers who lost money to a student loan 

debt relief scam. Refunds are a result of a 2018 settlement.

U ($117M) Cephalon, Inc.

Disbursed $117M to harmed parties as part of a 2015 settlement resolving 

antitrust charges that Cephalon, Inc. engaged in “pay for delay” conduct to 

illegally block generic competition of the drug Provigil.

$0.1M Net of other collections $85.7M and disbursing ($85.6M) activities, related to over 158 additional matters.

$265.4M Ending Balance – FY 2019 Non-Entity Fund Balance with Treasury 
FY 2019 Agency Financial Report 45

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

Significant Contributors to the FY 2019 Non-Entity Fund Balance with 

Treasury Ending Balance

$50.0M Reckitt Benckiser 

Group PLC

$50M held by the FTC from a 2019 settlement of allegations it violated antitrust laws 

through a deceptive scheme to thwart lower-priced generic competition to its branded 

drug Suboxone.

$40.8M AMG Services Inc.

$40.8M held by the FTC from a 2016 judgment (and earlier settlements) against a payday 

lending scheme that deceived consumers across the country and illegally charged them 

undisclosed and inflated fees. As of the end of FY 2019, the FTC has collected $548.3M 

from the defendants and disbursed $507.5M to harmed consumers.

$35.0M Office Depot, Inc.

$35M held by the FTC from a 2019 settlement of allegations it tricked consumers into 

buying computer repair and technical services by deceptively claiming their software had 

found malware symptoms on customers’ computers.

$21.6M Next-Gen, Inc.

$21.6M held by the FTC from a 2019 settlement involving operators of a sweepstakes 

scam that tricked millions of people, including many senior citizens, into paying money to 

collect prizes that never materialized.

$18.5M Cephalon, Inc.

$18.5M held by the FTC from a 2015 settlement resolving antitrust charges that 

Cephalon, Inc. engaged in “pay for delay” conduct to illegally block generic competition 

to its drug Provigil. The settlement made available $1.2 billion to harmed parties. The FTC 

collected $458M from the settlement, with the remaining $742M directly paid to harmed 

parties. Of the $458M the FTC collected, a total of $439.5M was disbursed between FY 

2016 and FY 2019. The remaining funds will be used to pay future claims. At the end of the 

settlement term, any remaining funds will be disgorged to the U.S. Treasury General Fund.

$99.5M The remaining FBWT balance consists of funds held by the FTC from 139 separate matters.

$265.4M Ending Balance - FY 2019 Non-Entity Fund Balance with Treasury
46 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

STATEMENT OF NET COST

STATEMENT OF NET COST SUMMARY

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(Dollars in Millions) FY 2019 FY 2018 % Change

Protecting Consumers:

Gross costs $ 194 $ 184 5%

Less: earned revenue (12) (12) 0%

Protecting Consumers 182 172 6%

Maintain Competition:

Gross costs $ 151 $ 156 -3%

Less: earned revenue (131) (133) -2%

Maintaining Competition 20 23 -13%

Net Cost of Operations $ 202 $ 195 4%

The Statement of Net Cost presents the FTC’s gross costs 

less revenue earned for two of the FTC’s strategic goals: 

Protect Consumers and Maintain Competition The 

third goal, Advance Organizational Performance, has its 

costs distributed to the other two strategic goals based 

on the percentage of dollars directly traceable to each of 

these two goals The FTC net cost of operations was $202 

million in FY 2019, which consists of $345 million in 

gross costs offset by $143 million in earned revenue 

The FY 2019 net cost of operations for the Protect 

Consumers strategic goal is $182 million, consisting 

of $194 million in gross costs offset by $12 million in 

earned revenue, which is mostly revenue from fees 

collected for the National Do Not Call (DNC) Registry 

The FTC receives fees from telemarketers who pay an 

annual subscription fee to download telephone numbers 

of consumers who do not wish to receive calls The 

DNC fees are based on the number of area codes that a 

telemarketer downloads 

The FY 2019 net cost of operations for the Maintain 

Competition strategic goal is $20 million, consisting 

of $151 million in gross costs offset by $131 million 

in earned revenue, which is mostly revenue from fees 

collected for premerger notification filings, with a small 

portion (about $1 million) from multiple reimbursable 

agreements with other federal agencies Premerger 

notification filings are made under the Hart-ScottRodino (HSR) Antitrust Improvement Act of 1976, 

which gives the federal government the opportunity to 

investigate and challenge certain mergers that are likely 

to harm consumers before injury occurs The HSR Act 

requires the filing of premerger notifications with the 

FTC and the DOJ Antitrust Division The filing fees 

are determined by the size of the merging parties and 

the value of the proposed transaction By law, the FTC 

retains one-half of all premerger filing fees collected and 

remits one-half to the DOJ Antitrust Division 

The increase in the overall gross costs is primarily 

attributable to higher expenses for personnel salaries 

and benefits Total payroll expenses have increased from 

$198 million in FY 2018 to $204 million in FY 2019 This 

results from a 1 4 percent general schedule increase in 

employee salaries, a rise in pension and post-retirement 

benefit expenses, and higher cost factors for employee 

benefit programs Rent expense has increased by nearly 

$1 million in FY 2019 from the prior year due to higher 

property taxes on commercially-owned space Finally, 

revenues for premerger notification filings have declined 

slightly from the prior year, which ultimately has the 

effect of raising the net cost of operations 
FY 2019 Agency Financial Report 47

MANAGEMENT’S DISCUSSION AND ANALYSIS

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FTC NET COST OF OPERATIONS 

VS. BENEFIT TO CONSUMERS

The FTC had gross costs of $345 million in FY 2019, 

offset by $143 million in earned revenue, resulting in a 

total net cost of operations of $202 million However, a 

large portion of the FTC’s operations result in activity 

whose benefits are not reflected on the Statement of 

Net Cost These important benefits to the public should 

be considered in determining the overall impact of the 

agency’s strategic goals 

The Statement of Net Cost includes only entity activity 

During FY 2019, the FTC returned $499 million in nonentity collections to consumers and the U S Treasury 

General Fund Redress disbursements to harmed 

consumers during FY 2019 totaled $350 million with an 

additional $2 million in disgorgements to Treasury Civil 

Penalty collections returned to Treasury totaled $147 

million This figure includes $136 million received from 

Google and YouTube as part of a settlement agreement 

for allegedly violating the Children’s Online Privacy 

Protection Act (COPPA) Throughout FY 2019, the FTC 

saved consumers an estimated $6 2 billion* through its 

merger and non-merger competition law enforcement 

actions and an estimated $900 million* through its 

consumer protection law enforcement actions 

The FTC’s cost to protect consumers and maintain 

competition is a small fraction of the amount the FTC 

has saved consumers For FY 2019, the FTC provided an 

estimated total of $7 6 billion in benefits to consumers 

When this benefit is compared to the $202 million in net 

costs, it equates to every $1 of the FTC’s cost returning an 

estimated $38 in FTC-provided benefits to consumers 

*These estimates were calculated based on performance measures 1 1 3 (consumer savings from consumer protection law enforcement), 2 1 3 

(consumer savings from merger enforcement), and 2 1 5 (consumer savings from non-merger enforcement) See Appendix A – Data quality 

information on these measures and how these estimates were calculated While the performance measures are based on 3-5 year rolling averages, 

the statistics presented above are based on only the FY 2019 activity 
48 FY 2019 Agency Financial Report

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STATEMENT OF CUSTODIAL ACTIVITY

CONDENSED STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(Dollars in Millions) FY 2019 FY 2018 % Change

Revenue Activity:

Sources of collections:

Premerger filing fees (net of refunds) $ 129 $ 133 -3%

Civil penalties and fines 147 3 4153%

Consumer redress 2 8 -77%

Total Custodial revenue $ 278 $ 144 93%

Disposition of Collections:

Transferred to others:

Treasury general fund $ 149 $ 11 1220%

Department of Justice 129 133 -3%

Total Disposition of Collections $ 278 $ 144 93%

Net Custodial Activity $ - $ - 0%

The Statement of Custodial Activity displays the 

custodial revenue recognized during the fiscal year in 

comparison to the disposition or transfer out of cash held 

on behalf of other entities Fees collected under the HartScott-Rodino (HSR) premerger notification program 

are distributed equally to the FTC and the Antitrust 

Division of the Department of Justice (DOJ) Premerger 

filing fees are determined by the value and size of 

parties contemplating a merger The FTC’s revenue of 

$129 million for premerger filing fees is reported on the 

Statement of Net Cost under the Maintain Competition 

strategic goal Civil penalties and fines are collected in 

connection with the settlement or litigation of the FTC’s 

administrative or federal court cases At the end of each 

fiscal year, all civil penalties collected are transferred 

to the Treasury General Fund Collections held for 

consumer redress will also be transferred, or disgorged, 

to the Treasury General Fund in the event redress is 

determined to be not practicable 

Overall custodial revenues and transfers have nearly 

doubled from the previous fiscal year due to a large 

increase in civil penalty collections Civil penalties 

and fines returned to the Treasury General Fund have 

increased from $3 million in FY 2018 to $147 million 

in FY 2019 In September 2019, Google LLC and its 

subsidiary YouTube LLC agreed to pay a record $170 

million to settle allegations by the FTC and the New York 

Attorney General that the YouTube video sharing service 

illegally collected personal information from children 

without their parents’ consent The settlement required 

Google and YouTube to pay $136 million to the FTC 

and $34 million to New York for alleged violations of 

the Children’s Online Privacy Protection Act (COPPA) 

The COPPA rule requires that child-directed websites 

and online services provide notice of their information 

practices and obtain parental consent prior to collecting 

personal information from children under the age of 13 

Since 1998 when the law was enacted by Congress, the 

$136 million penalty is by far the largest amount the FTC 

has obtained in a COPPA case The previous record of 

$5 7 million occurred earlier in FY 2019 in a settlement

against the operators of the video social networking app 

Musical.ly, Inc. which is now known as TikTok 
FY 2019 Agency Financial Report 49

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www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

BUDGETARY RESOURCES AND HOW THEY WERE USED

BUDGET AUTHORITY

The FTC receives an annual appropriation that is 

available until expended, subject to OMB apportionment 

and Congressional restrictions on the expenditure 

of funds (see FTC’s FY 2019 Congressional Budget 

Justification, pages 3-4, “Appropriations Language 

Provisions”) The FTC’s budget authority is derived from 

a direct appropriation and offsetting collections 

In FY 2019, the FTC received $311 million in new 

budget authority, representing a $5 million increase from 

the FY 2018 amount The FY 2019 budget authority 

comprised $168 million in general fund appropriations 

plus $143 million in spending authority from offsetting 

collections, consisting of $130 million from fees collected 

for premerger notification filings under the Hart-ScottRodino Antitrust Improvements Act of 1976, $12 million 

from fees collected for the National Do Not Call Registry, 

and $1 million from reimbursable work on behalf of 

other federal agencies 

Because current year offsetting collections up to the 

congressionally authorized amount are deducted from 

gross budget authority and outlays, only 54 percent of the 

FTC’s net budget authority comes from Treasury General 

Fund appropriations This reduces the burden the FTC 

places on the federal budget to $168 million, which 

is less than 1/10 of 1 percent of the total non-defense 

discretionary spending for FY 2019 
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Historically, the FTC’s budget authority has been relatively 

static From FY 2010 through FY 2014, the FTC received 

an OMB category B apportionment for the relocation of 

staff to office space at the Constitution Center Excluding 

the category B funding, the FTC had a 13 percent or $35 

million change from FY 2010 ($276 million) to FY 2019 

($311 million) As shown in the figure below, the agency’s 

FY 2019 budget authority would have had to increase a 

total of $49 million (or 17 percent) just to keep pace with 

OMB’s annual escalation factors 

The constraints from stagnant financial resources 

are further magnified by increasing costs and rising 

expectations from the American public During this 

same time period, for example, consumer complaints to 

the FTC rose by over 100 percent, and premerger filings 

rose by over 75 percent, among other measures of the 

FTC’s increased workload While the FTC continues to 

do more with less, the gap between the actual budget 

authority that the FTC has received and the inflationadjusted amount is apparent, and continues to widen 

as the agency’s competition and consumer protection 

workloads increase 

The FTC’s increasing costs are also reflected in expert 

witness costs As a direct result of the FTC’s highly 

regarded law enforcement activities, the agency is 

engaged in a larger number of complex investigations 

and litigation matters related to both the competition 

and consumer protection missions, and many of these 

matters require the retention of experts For example, the 

services of expert witnesses are critical to the successful 

investigation and litigation of merger cases, as experts 

provide insight on proper definition of product and 

geographic markets, assess the likelihood of entry by 

new competitors, and develop models to evaluate merger 

efficiencies as compared to potential competitive harm 

While overall spending on expert witnesses declined 

in FY 2019 from the previous year, costs for experts in 

litigation matters continue to pose significant challenges 

on the FTC’s limited budgetary resources The FTC is 

currently exploring ways to reduce expert witness costs 

without compromising its core missions or jeopardizing 

the success of its litigation program 
FY 2019 Agency Financial Report 51

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www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

THE FTC’S FY 2019 OBLIGATIONS:

In FY 2019, the FTC received $311 million in new budget 

authority, as well as authority to obligate $23 million in 

its unobligated balance brought forward and $5 million 

in recoveries of prior-year obligations Pursuant to 

this authority, the FTC obligated $331 million in FY 

2019 This was an increase of $4 8 million, or 1 percent, 

compared to new obligations in FY 2018 The increase in 

obligations incurred in FY2019 was mainly attributable 

to higher payroll costs as well as higher spending for 

rent, communications, and utilities Payroll spending 

has increased by 2 5 percent to $204 million in FY 2019 

from $199 million in FY 2018 This is the result of the 

1 4 percent pay raise for FY 2019, a rise in pension and 

post-retirement benefit expenses and higher cost factors 

associated with employee benefits Rent expenses paid 

to GSA have increased over the past few years due to 

inflation and a rise in property taxes on commerciallyleased space Higher obligations for communications 

and utilities are related to software licenses and wireless 

communications Finally, the FTC incurred higher 

obligations in FY 2019 for information technology 

(IT) support services as part of the agency’s initiative 

to transition its IT infrastructure to a cloud-based 

environment 
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Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

Historically the FTC’s obligations by category have 

remained relatively steady when expressed as a 

percentage of all obligations during a particular fiscal 

year Between FY 2015 and FY 2019, however, there were 

several notable changes 

• Expert witness obligations increased from $14 2 

million in FY 2015 to $18 4 million in FY 2018 before 

declining to $8 6 million in FY 2019 

• Property, Plant, and Equipment obligations decreased 

from $11 1 million in FY 2015 to $2 8 million in FY 

2019, or a decrease from 3 5 percent of total obligations 

in FY 2015 to 0 9 percent in FY 2019 

• Payroll costs have increased steadily each year over the 

past five years, starting at $188 1 million in FY 2015 to 

$204 3 million in FY 2019, representing an increase of 

8 6 percent over five years 

*Excludes obligations from the OMB category B apportionment for the relocation of staff to office space at Constitution Center
FY 2019 Agency Financial Report 53

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www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FTC PROFILE ON USA SPENDING: 

The FTC has been granted $346 million in budget authority to carryout its mission in FY 2019 The agency obligated 

$331 million as of the end of FY 2019 Additional details of agency spending are captured on usaspending.gov where 

beginning in FY 2017, federal agencies have certified to the accuracy of data Federal spending information is available 

to the public to ensure taxpayers can see how their money is being used in communities across America 
54 FY 2019 Agency Financial Report

MANAGEMENT’S DISCUSSION AND ANALYSIS

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

SUBSEQUENT EVENTS

Three significant litigation cases are not included in 

the FTC’s FY 2019 financial statements as the final 

judgments were unsigned as of September 30, 2019 

To settle allegations that Facebook, Inc. violated a 

2012 FTC order by deceiving users about their ability 

to safeguard the privacy of personal information, 

the Department of Justice filed a proposed order in 

the United States District Court for the District of 

Columbia on July 24, 2019 The FTC negotiated a 

settlement, pursuant to which Facebook, Inc will pay 

a record-breaking $5 billion penalty, and submit to 

new restrictions and implement a modified corporate 

structure The settlement is currently pending final 

ruling of the district court 

A permanent injunction and monetary judgment was 

filed on October 9, 2019 by the FTC with the United 

States District Court, Eastern District of Texas, against 

multi-level marketer AdvoCare International, L.P. along 

with its former CEO and top promoters regarding an 

illegal pyramid scheme that mislead consumers about 

their income potential AdvoCare and its former CEO 

have agreed to pay $150 million and will be banned 

from the multi-level marketing business In addition, 

two promoters have agreed to a $4 million suspended 

judgment upon the surrender of substantial assets as 

equitable monetary relief The promoters are also banned 

from the multi-level marketing business 

Also occurring on October 9, 2019, a judgment was 

signed by the United States District Court, Northern 

District of Illinois Eastern Division, against Career 

Education Corporation and its subsidiaries, operators 

of several post-secondary schools Under the settlement, 

$30 million will be paid for consumer redress to settle 

FTC charges that the operators used sales leads from lead 

generators that falsely told consumers they were affiliated 

with or recommended by the U S military, and that 

consumers’ personal information would not be shared 
FY 2019 Agency Financial Report 55

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www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

FINANCIAL MANAGEMENT INDICATORS FOR FY 2019

The following table shows standard indicators developed by the Chief Financial Officers Council and used by the OMB 

to monitor agencies’ financial management practices 

DEBT MANAGEMENT

Eligible debt transferred to Treasury 100%

FUNDS MANAGEMENT

Fund balance with Treasury (identifies the difference between the fund balance reported in 

Treasury reports and the agency fund balance with Treasury recorded in its general ledger) 100% reconciled

PAYMENT MANAGEMENT

Percentage invoices paid on time (per Prompt Payment Act) 93.77%

Percentage interest penalties paid to total dollars invoiced .0061%

Percentage of total dollars outstanding in current status (good standing) for individually billed 

travel account holders 100%

Percentage of total dollars outstanding in current status (good standing) for centrally billed 

travel accounts 100%

Percentage of total dollars outstanding in current status (good standing) for purchase cards 100%

LIMITATIONS OF FINANCIAL 

STATEMENTS

The FY 2019 financial statements have been 

prepared from the books and records of the agency 

in accordance with OMB Circular A-136, financial 

reporting requirements, as amended The financial 

statements represent the financial position and results of 

operations of the agency pursuant to the requirements 

of Chapter 31 of the U.S. Code Section 3515(b) While 

these statements have been prepared from the agency’s 

books in accordance with GAAP for federal entities 

and the formats prescribed by the OMB, the statements 

are in addition to the financial reports used to monitor 

and control budgetary resources, which are prepared 

from the same books and records These statements 

should be read with the understanding that they are for a 

component of the U S government, a sovereign entity 

Financial Section

FY2019 Agency Financial Report 57

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58 FY 2019 Agency Financial Report

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MESSAGE FROM THE CHIEF FINANCIAL OFFICER

David Rebich

Chief Financial Officer

T

he Federal Trade Commission (FTC) is proud to present its Fiscal Year (FY) 2019 

Agency Financial Report (AFR) The AFR presents a combination of the FTC’s 

financial and programmatic performance for FY 2019, relative to its mission 

and goals as set forth in its Strategic Plan for FYs 2018 - 2022 and the Addendum 

thereto for FYs 2019 - 2022 Insofar as the AFR also includes the Agency’s performance 

highlights, it integrates the agency’s financial and program performance to demonstrate 

stewardship and accountability, highlighting FY 2019 achievements and challenges 

As a good steward of the American taxpayers’ money, the FTC is committed to 

transparency and the reporting of tested data and credible information in support of its 

fiscal operations We take this commitment seriously, and are proud of the recognition 

we have received from the Association of Government Accountants over the years, 

which once again awarded the FTC with a Certificate of Excellence in Accountability 

Reporting (CEAR) Award and a “Best In Class” CEAR Award for the “Creative and 

Effective Use of Graphics” for our FY 2018 AFR The FTC further demonstrates 

stewardship of its resources and accountability for results through compliance with the 

Government Performance and Results Act Modernization Act of 2010 and accounting 

of its business operations in accordance with U S Generally Accepted Accounting 

Principles for federal agencies, as prescribed by the Federal Accounting Standards 

Advisory Board The AFR highlights the FTC’s efficient and effective management 

of the taxpayer dollars entrusted to it to accomplish the agency’s mission The FTC’s 

operational effectiveness, financial stewardship, and use of internal controls, as set 

forth in the AFR, demonstrate the substantial value the FTC delivered to the American 

public in FY 2019 The financial statements and corresponding financial analysis, 

coupled with the Agency’s Performance Highlights, show how the FTC optimizes use of 

its financial resources to meet its mission to protect American consumers and maintain 

competition in the marketplace 

The FTC has jurisdiction in broad sectors of the economy By taking law enforcement 

action against anticompetitive mergers and business conduct, fraud, deception and 

unfair acts and practices, and through study, advocacy, and consumer and business 

education, the FTC protects consumers by ensuring that markets work well, providing 

lower prices, more choice, and more innovation for the future The FTC’s greatest asset 

is its employees, who work tirelessly on behalf of the American public to achieve the 

agency’s mission Their dedication and commitment are evident in the FTC’s Employee 

Viewpoint Survey Scores For the third year in a row, in 2019, the FTC ranked the 

highest among 36 departments and large agencies for Employee Engagement, with an 

Employee Engagement Score of 84 percent in 2019 

The FTC could not accomplish its mission without strong management practices 

To ensure we have the trust of the American consumers we serve, the agency places 

particular emphasis on sound financial management practices to ensure that our 

resources are well managed and wisely used For the 23rd consecutive year, an 

independent auditor issued an unmodified opinion on the FTC’s Financial Statements, 

with no material weaknesses or significant deficiencies This sustained achievement 

is due to the efforts of the Financial Management Office (FMO) staff, as supported 
FY 2019 Agency Financial Report 59

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by fund managers and a cadre of Contracting Officer 

Representatives throughout the agency This past year, 

the FTC has demonstrated its commitment to continuous 

improvement with the following accomplishments:

• Successfully changed Shared Service Providers (SSP) 

from the Department of the Interior’s Business Center 

to the Department of the Treasury’s Administrative 

Resource Center for the agency’s financial, travel, and 

acquisition systems and services;

• Updated the FTC risk profile to include additional 

program areas and the monitoring of high severity risks;

• Increased the use of the FTC risk profile in strategic 

and resource decision-making;

• Monitored the Fraud Risk Register by collecting and 

analyzing related fraud control data; 

• Revised the FTC Strategic Plan, replacing one of 

the performance measures with two new measures 

meant to better track progress in records management 

(Addendum FY 2019 - 2022);

• Focused resources on closing four Corrective Action 

Plans (CAPs) in FMO, and encouraged collaboration 

throughout the agency to close an additional 15 CAPs 

identified from previous internal and external audits 

and reviews 

At the end of FY 2018, FMO leadership determined 

that the FTC had to become more efficient when 

implementing OMB and Treasury mandated financial 

systems FMO leadership also determined that the FTC 

needed to offer more user friendly and efficient financial 

management systems to customers The FTC decided to 

change SSP, and the transition was complete by the end 

of FY 2019 Beginning in FY 2020, the FTC will work 

with its new SSP to refine the processes and procedures 

to optimize the effectiveness and efficiency of the 

operations and reporting systems In addition, the FTC 

will work with Treasury to implement G-invoicing, the 

long-term sustainable solution to improve the quality of 

Intragovernmental Transactions 

The FTC’s Enterprise Risk Management (ERM) program 

identifies the highest risks to achievement of the agency’s 

mission, along with strategies to mitigate those risks 

Increased demands on the FTC Budget for both IT 

modernization and expert witness contracts are on the 

FTC’s Risk Profile, and both issues are noted in the 

FY 2019 OIG Report on the FTC’s Top Management 

Challenges, dated September 27, 2019, issued by the 

FTC Inspector General Current technologies and 

the economy make the cases that the FTC pursues 

more complex and costly to bring relief to American 

consumers These cases involve anticompetitive practices 

and fraud, as well as cases in emerging technologies, 

privacy and data security, and deceptive advertising 

in new media channels All of these factors require 

better and increased data storage and analytic capacity, 

in addition to an ever-increasing need for additional 

resources for expert witnesses The FTC has taken action 

to make more efficient use of its budget resources with 

regard to these two issues by: 

• Awarding a Blanket Purchase Agreement to more 

efficiently procure IT products and services that address 

modernization and secure IT systems and networks; 

• Awarding a new contract for litigation data 

management; and 

• Undergoing a multi-office review, led by the 

Chairman’s Office, to identify cost savings and/or 

efficiencies that might be gained with respect to expert 

witnesses: in the procurement process; through the use 

of internal expert witness resources; and through other 

cost reduction efforts 

While these efforts are making the FTC more efficient, 

these issues will continue to pose risks to the FTC for 

a number of reasons The cost of experts has risen 

substantially and continues to rise With the rapidity with 

which technology changes, new security threats emerge, 

and new tools are created to address those threats, the 

cost of technology will also increase Nonetheless, the 

agency remains vigilant in its ERM efforts and continues 

to explore risk mitigation strategies 

The accomplishments outlined in this report are 

the result of the FTC employees’ hard work and 

dedication The unmodified audit opinion and financial 

accomplishments reflect an organizational commitment 

to sound financial management and accountability 

that the agency hopes earns the trust of the American 

public This agency is steadfastly committed to its 

mission, returning substantial value to the American 

consumer, and being an exemplary steward of the 

funds entrusted to it 

David Rebich, Chief Financial Officer

November 19, 2019
60 FY 2019 Agency Financial Report

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INDEPENDENT AUDITOR’S REPORT 

Inspector General 

Federal Trade Commission 

Washington, D.C. 

In our audits of the fiscal years 2019 and 2018 financial statements of the Federal Trade Commission 

(FTC), we found

• FTC’s financial statements as of and for the fiscal years ended September 30, 2019, and

2018, are presented fairly, in all material respects, in accordance with U.S. generally accepted 

accounting principles; 

• no material weaknesses in internal control over financial reporting based on the limited

procedures we performed; and 

• no reportable noncompliance for fiscal year 2019 with provisions of applicable laws,

regulations, contracts, and grant agreements we tested.

The following sections discuss inmore detail (1) our report on the financial statements, which includes 

required supplementary information (RSI) and other information included with the financial

statements; (2) our report on internal control overfinancial reporting; and (3) our report on compliance 

with laws, regulations, contracts, and grant agreements. 

Report on the Financial Statements

In accordance with the provisions of Accountability of Tax Dollars Act of 2002 (ATDA) (Pub. L. No.

107-289), we have audited FTC’s financial statements. FTC’s financial statements comprise the 

balance sheets as of September 30, 2019, and 2018; the related statements of net cost, changesin net 

position, budgetary resources, and custodial activity for the fiscal years then ended; and the related 

notes to the financial statements. 

We conducted our audits in accordance with U.S. generally accepted government auditing standards and 

the provisions of OMB Bulletin No. 19-03, Audit Requirements for Federal Financial Statements. We

believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for our audit 

opinions. 

Management’s Responsibility 

Report of the Independent Auditors
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PRINCIPAL FINANCIAL STATEMENTS

FINANCIAL STATEMENT DESCRIPTIONS

A brief description of the five principal financial statements presented on the following pages is provided: 

Balance Sheet – Presents the combined amounts the agency had to use or distribute (assets) versus the amounts the 

agency owed (liabilities), and the difference between the two (net position) 

Statement of Net Cost – Presents the annual cost of agency operations The gross cost less offsetting revenue is used to 

determine the net cost 

Statement of Changes in Net Position – Reports the accounting activities that caused the change in net position 

during the reporting period 

Statement of Budgetary Resources – Reports how budgetary resources were made available and the status of those 

resources at fiscal year-end 

Statement of Custodial Activity – Reports collections and their disposition by the agency on behalf of the Treasury 

General Fund and one other Federal agency The FTC acts as custodian and does not have use of these funds 

The accompanying Notes to the Financial Statements describe significant accounting policies as well as detailed 

information on select statement lines. 
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BALANCE SHEET

As of september 30, 2019 And 2018

(Dollars in thousands)

2019 2018

Assets (Note 2):

Intragovernmental:

Fund balance with Treasury (Note 3) $ 387,310 $ 487,600

Accounts receivable, net (Note 4) 85 18 

Advances and prepayments 205 232 

Total intragovernmental 387,600 487,850 

Accounts receivable, net (Note 4) 616,549 598,971 

Property, plant, and equipment, net (Note 5) 30,053 38,529 

Total Assets $ 1,034,202 $ 1,125,350 

Liabilities (Notes 6 and 7):

Intragovernmental:

Accounts payable $ 737 $ 560 

Other liabilities (Note 7) 2,395 2,296 

Total intragovernmental 3,132 2,856 

Accounts payable 12,529 10,169 

Accrued redress due to claimants 616,306 598,515 

Undisbursed redress collections (Note 15) 265,432 358,776 

Other (Note 7) 23,087 19,673 

Total Liabilities 920,486 989,989 

Net Position (Note 1(p)):

Unexpended appropriations - - 

Cumulative results of operations 113,716 135,361 

Total Net Position 113,716 135,361 

Total Liabilities and Net Position $ 1,034,202 $ 1,125,350

The accompanying notes are an integral part of these statements.
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STATEMENT OF NET COST

for the YeArs ended september 30, 2019 And 2018

(Dollars in thousands)

2019 2018

Costs by Strategic Goal (Note 10):

Strategic Goal 1: Protect Consumers:

Gross costs $ 194,138 $ 184,553 

Less: earned revenue (12,031) (12,311)

Net cost 182,107 172,242

Strategic Goal 2: Maintain Competition:

Gross costs 150,689 156,580 

Less: earned revenue (130,548) (133,481)

Net cost 20,141 23,099

Net Cost of Operations $ 202,248 $ 195,341

The accompanying notes are an integral part of these statements.
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STATEMENT OF CHANGES IN NET POSITION

for the YeArs ended september 30, 2019 And 2018

(Dollars in thousands)

2019 2018

Unexpended Appropriations:

Beginning balance $ - $ - 

Budgetary Financing Sources:

Appropriations received 168,228 168,023

Appropriations used (168,228) (168,023)

Total budgetary financing sources - - 

Total Unexpended Appropriations - - 

Cumulative Results of Operations:

Beginning balance $ 135,361 $ 152,168

Budgetary Financing Sources:

Appropriations used 168,228 168,023

Other Financing Sources (Non-Exchange): 

Imputed financing 12,375 10,511 

Total financing sources 180,603 178,534

Net cost of operations (Note 10) (202,248) (195,341) 

Net change (21,645) (16,807)

Cumulative Results of Operations 113,716 135,361 

Net Position (Note 1(p)) $ 113,716 $ 135,361

The accompanying notes are an integral part of these statements.
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STATEMENT OF BUDGETARY RESOURCES

for the YeArs ended september 30, 2019 And 2018

(Dollars in thousands)

2019 2018

Budgetary Resources: 

 Unobligated balance, brought forward, October 1 $ 22,817 $ 33,167 

 Recoveries of unpaid prior year obligations 12,241 9,454 

 Other changes in unobligated balance 177 94 

 Unobligated balance from prior year budget authority, net 35,235 42,715 

 Appropriations 168,228 168,023 

 Spending authority from offsetting collections 142,566 138,317 

Total Budgetary Resources $ 346,029 $ 349,055 

Status of Budgetary Resources: 

 New obligations and upward adjustments (total) (Note 11) $ 331,002 $ 326,238 

 Unobligated balance, end of year: 

 Apportioned, unexpired accounts 7,455 18,285 

 Unapportioned, unexpired accounts 7,572 4,532 

 Unexpired unobligated balance, end of year 15,027 22,817 

 Unobligated balance, end of year (total) 15,027 22,817 

Total Budgetary Resources $ 346,029 $ 349,055 

Outlays, Net: 

 Outlays, gross $ 318,179 $ 318,589 

 Actual offsetting collections (142,690) (145,907)

 Outlays, net 175,489 172,682 

 Distributed offsetting receipts (2,283) (7,816)

 Agency outlays, net $ 173,206 $ 164,866

The accompanying notes are an integral part of these statements.
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STATEMENT OF CUSTODIAL ACTIVITY

for the YeArs ended september 30, 2019 And 2018

(Dollars in thousands)

Protect 

Consumers

Maintain 

Competition 2019 2018

Revenue Activity (Note 14):

Sources of collections:

Premerger filing fees (net of refunds) $ - $ 129,585 $ 129,585 $ 132,923 

Civil penalties and fines 146,745 - 146,745 2,450 

Consumer redress 1,778 - 1,778 7,612 

Other miscellaneous receipts 190 - 190 204 

Total cash collections 148,713 129,585 278,298 143,189 

Accrual adjustments (202) - (202) 434 

Total Custodial Revenue $ 148,511 $ 129,585 $ 278,096 $ 143,623 

Disposition of Collections (Note 14):

Transferred to others:

Treasury general fund $ 148,713 $ - $ 148,713 $ 10,266 

Department of Justice - 129,585 129,585 132,923 

Amounts yet to be transferred (202) - (202) 434 

Total Disposition of Collections $ 148,511 $ 129,585 $ 278,096 $ 143,623 

Net Custodial Activity $ - $ - $ - $ -

The accompanying notes are an integral part of these statements.
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NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1—Significant Accounting Policies

(A) REPORTING ENTITY 

The accompanying financial statements and notes of 

the Federal Trade Commission (FTC) include financial 

activity recorded in all funds under the FTC’s control 

The FTC maintains these funds including appropriations 

received for salaries and necessary expenses, as well as 

non-entity funds that are primarily collections derived 

from court ordered judgments and settlements held for 

subsequent distribution to approved claimants 

The FTC records and tracks financial activities using 

Treasury Account Symbols (TAS) Each TAS included in 

the agency’s fund accounting structure is described below: 

GENERAL FUND 

Salaries and Expenses (TAS 29X0100): Each year, this 

account receives budget authority from an appropriation 

and offsetting collections, up to a limit set by Congress, 

to fund necessary expenses of the agency Offsetting 

collections include fees collected for premerger 

notification filings under the Hart-Scott-Rodino (HSR) 

Antitrust Improvement Act of 1976, and fees collected 

for the National Do Not Call Registry, which operates 

under Section 5 of the FTC Act Collections in excess 

of congressional limits are unavailable by law and are 

included in the FTC’s unavailable – excess offsetting 

collections (See Note 3, Fund Balance with Treasury ) 

DEPOSIT FUND 

Consumer Redress Escrow (TAS 29X6013): This 

account consists of money collected as a result of 

court ordered judgments related to the consumer 

redress program and held temporarily by the FTC 

until distributed (either directly by the FTC or 

through a third-party agent) to consumers or harmed 

entities, or transferred to the General Fund of the U S 

Government Judgments imposed but not yet collected 

are accrued as accounts receivable and recorded in this 

account Accrued receivables and funds collected are 

considered non-entity assets under the FTC’s custody or 

management They do not affect the FTC’s net position 

and are not reported on the agency’s Statement of 

Changes in Net Position (See Note 3, Fund Balance with 

Treasury and Note 15, Consumer Redress Activities ) 

Funds held by redress third party administrators outside 

of the U S Treasury on behalf of harmed consumers are 

not part of the FTC reporting entity 

CLEARING/SUSPENSE ACCOUNT 

Budget Clearing and Suspense (TAS 29F3875): Fees 

collected for premerger notification filings under the 

HSR Act are deposited, initially, into the Budget Clearing 

and Suspense account, then distributed equally to the 

FTC (as an offsetting collection in the general fund) 

and the Department of Justice (DOJ) (See Note 1(q), 

Revenues and Other Financing Sources ) 

RECEIPT ACCOUNTS 

Fines, Penalties, and Forfeitures, Customs, Commerce, 

and Antitrust Laws (TAS 29 1040): Collections of 

civil penalties imposed in court actions for violations 

of antitrust acts and FTC orders are deposited into this 

account Penalties imposed but not yet collected are 

accrued as accounts receivable and recorded in this 

account The cash balance in the account is transferred to 

the General Fund of the U S Government at the end of 

each fiscal year 

General Fund Proprietary Receipts (TAS 29 3220):

Miscellaneous receipts that by law are not available 

for the FTC’s use and collections for the consumer 

redress program for which redress to consumers is not 

practicable are transferred to the General Fund of the 

U S Government at the end of each fiscal year 

(B) BASIS OF PRESENTATION AND 

ACCOUNTING

The accompanying financial statements present the 

financial position, net cost of operations, changes in net 

position, budgetary resources, and custodial activities of 

the FTC, and have been prepared from the accounting 

records of the FTC These financial statements may differ 

from other financial reports submitted pursuant to the 

Office of Management and Budget (OMB) directives for 

the purpose of monitoring and controlling the use of the 

FTC’s budgetary resources 
74 FY 2019 Agency Financial Report

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The FTC’s financial statements are prepared in 

conformity with U S Generally Accepted Accounting 

Principles (GAAP) for federal entities, as promulgated 

by the Federal Accounting Standards Advisory Board 

(FASAB), and with OMB Circular A-136, Financial 

Reporting Requirements (as revised in June 2019) 

Transactions are recorded on both an accrual and 

budgetary basis Accordingly, revenues are recognized 

when earned and expenses are recognized when 

incurred, without regard to the receipt or payment of 

cash Accrual methods of accounting may differ from 

budgetary accounting principles, which are designed 

to facilitate compliance with legal requirements and 

controls over the use of Federal funds The differences 

relate primarily to the capitalization and depreciation 

of property and equipment, as well as the recognition of 

other long-term assets and liabilities 

As described in Note 1(a), Reporting Entity, the FTC 

maintains a single fund to account for salaries and all 

necessary expenses Further, there are limited intraentity transactions with any other fund (e g , deposit 

fund) that would require eliminating entries to present 

consolidated statements Accordingly, the statements 

are not labeled consolidated nor is the Statement of 

Budgetary Resources (SBR) presented as combined 

FTC reconciles its intragovernmental activity and works 

with agency trading partners to reduce significant 

or material differences in conformance with U S 

Treasury intragovernmental reporting guidelines and 

requirements of OMB Circular A-136 

Assets, liabilities, revenues, and costs are classified 

in these financial statements according to the type 

of entity associated with the transactions Balances 

classified as intragovernmental arise from transactions 

with other federal entities Balances not classified 

as intragovernmental arise from transactions with 

individuals or organizations outside of the Federal 

Government (i e , with the public) 

The FTC presents net cost of operations by its two 

major strategic goals: Protect Consumers and Maintain 

Competition These goals are described in the agency’s 

strategic and performance plan and align with the 

agency’s major programs 

(C) USE OF ESTIMATES 

The preparation of financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets 

and liabilities at the date of the financial statements and 

the reported amounts of revenues and expenses during 

the reporting period For example, estimates are used in 

computing accounts payable for vendor service contracts, 

the allowance for uncollectible accounts, and the 

allocation of costs to strategic goals in the Statement of 

Net Cost Actual results could differ from the estimated 

amounts The vendor accounts payable accrual is an 

estimate, and is accrued separately from the accounts 

payable accrual for travel and interagency agreements In 

FY 2018, the FTC enhanced its approach to estimating 

the accrual for vendor accounts payable The agency 

uses statistical techniques to evaluate vendor accounts 

payable balances for previous fiscal years, averages 

the balances to obtain an accrual estimate, and then 

adjusts the estimate using a factor that represents the 

proportional change in obligations between the current 

and the previous fiscal year Every year, the agency 

statistically validates that the year-end vendor accounts 

payable accrual was reasonable The validated amount 

is subsequently used in calculating the following year’s 

estimate, which also considers any changes to invoice 

payment timeframes that may affect the vendor accounts 

payable statistical assumptions 

(D) BUDGET AUTHORITY 

The Congress passes appropriations annually that 

provide the FTC with authority to obligate funds for 

necessary expenses to carry out program activities These 

funds are available until expended, subject to the OMB 

apportionment and to congressional restrictions on the 

expenditure of funds (see FTC’s FY 2019 Congressional 

Budget Justification, pages 3-4, “Appropriations Language 

Provisions”) In addition, the FTC places internal 

restrictions on fund expenditures to ensure the efficient 

and proper use of all funds The FTC’s budget authority 

is derived from a direct appropriation and offsetting 

collections The FTC accounts for budget authority in 

its General Fund account (29X0100) as reflected in the 

Statement of Budgetary Resources 

(E) CLASSIFIED ACTIVITIES

Accounting standards require all reporting entities 

to disclose that accounting standards allow certain 

presentations and disclosures to be modified, if needed, to 

prevent the disclosure of classified information For fiscal 

years 2019 and 2018, FTC had no classified activities 
FY 2019 Agency Financial Report 75

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(F) ENTITY AND NON-ENTITY ASSETS

The FTC reports on both entity and non-entity assets 

in the financial statements Assets that the agency is 

authorized to use in its operations are entity assets 

Assets that the agency holds on behalf of another federal 

agency or a third party and are not available for the 

FTC’s use are non-entity assets Non-entity assets include 

collections and accounts receivable that arise from courtorder judgments for monetary relief, civil monetary 

penalties, and the portion of fees collected for premerger 

notification filings that are distributed to the DOJ in a 

subsequent period These non-entity assets are included 

in the financial statements along with offsetting nonentity liabilities of equal amount (See Note 2, Entity and 

Non-Entity Assets )

(G) FUND BALANCE WITH TREASURY 

The Fund Balance with Treasury (FBwT) is the aggregate 

amount of undisbursed funds in the FTC’s general fund, 

deposit fund, and clearing/suspense fund The General 

fund cash balance includes a portion that is available to 

the FTC to make expenditures and pay liabilities and a 

portion that is unavailable Deposit fund and clearing/

suspense fund balances are non-entity funds that are 

temporarily held by the FTC until transferred to another 

federal agency (Treasury or DOJ), or distributed to 

a third party Fund balances are carried forward into 

subsequent fiscal years until disbursements are made 

(See Note 3, Fund Balance with Treasury ) 

(H) ACCOUNTS RECEIVABLE, NET 

Accounts receivable, net of allowances, reflect the FASAB 

standard for the recognition of losses using the collection 

criterion of “more likely than not ” This criterion results 

in receivable balances that are more conservatively 

stated than those valued by the private sector under 

GAAP FASAB states that it is appropriate to recognize 

the nature of federal receivables, which, unlike trade 

accounts of private firms or loans made by banks, are 

not created through credit screening procedures Rather, 

these receivables arise because of the assessment of 

fines from regulatory violations In these circumstances, 

historical experience and economic realities indicate that 

these types of claims are frequently not fully collectible 

Accounts receivable includes estimates of the net cash 

value from court appointed receivers for which the 

FTC anticipates the proceeds will be deposited in the 

Consumer Redress Escrow account (29X6013) 

The method used to estimate the allowance for 

uncollectible accounts consists of individual case analysis 

by a case manager who assesses the debtor’s ability and 

willingness to pay, the defendant’s payment history, and 

the probable recovery amount including the value of 

assets Based on the litigation and collection status, cases 

may be referred to the Treasury for collection action 

(See Note 4, Accounts Receivable, Net )

(I) GENERAL PROPERTY, PLANT, AND 

EQUIPMENT 

The FTC’s property, plant, and equipment (PP&E) 

consists of general-purpose equipment used by the 

agency and capital improvements made to buildings 

leased from the General Services Administration (GSA) 

by the FTC for office space, as well as software leased 

and purchased from vendors The FTC’s capitalization 

policy, Accounting for Property, Plant, and Equipment, 

was updated with an effective date on or after October 1, 

2014 PP&E placed in service prior to October 1, 2014, 

will continue to be accounted based on the capitalization 

policy in effect at the time acquired, until fully 

depreciated or removed from service 

Effective October 1, 2014, capitalization thresholds are as 

follows:

Asset Type Capitalization 

Threshold

Furniture $ 50,000

General Equipment $ 50,000

IT Equipment $ 150,000

Leasehold Improvements $ 150,000

Internal Use Software $ 200,000

The FTC reports property and equipment at historical 

cost and capitalizes acquisitions based on the above 

thresholds for items with a useful life of two or more 

years Property and equipment that meet these criteria 

are depreciated or amortized using the straight-line 

method over the estimated useful life of the asset 

An exception applies to leasehold improvements, 

which are amortized over the lesser of the useful life 

of the asset or the remaining lease term Assets under 

development, such as internal use software and leasehold 

improvements with an estimated aggregate cost meeting 
76 FY 2019 Agency Financial Report

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the threshold criteria, are capitalized and then amortized 

once completed and placed into service Normal repairs 

and maintenance, and PP&E that do not meet the 

capitalization criteria, are recognized as an expense in the 

current period (See Note 5, General Property, Plant, and 

Equipment, Net )

(J) ACCRUED LIABILITIES AND 

ACCOUNTS PAYABLE 

Accrued liabilities and accounts payable represent a 

probable future outflow or other sacrifice of resources 

from past transactions or events Liabilities are 

recognized when they are incurred, regardless of whether 

they are covered by budgetary resources The FTC has 

both entity and non-entity liabilities Entity liabilities 

cannot be liquidated without legislation that provides the 

resources to do so In addition, the government, acting 

in its sovereign capacity, can abrogate the FTC’s liabilities 

(other than contracts) 

(K) EMPLOYEE HEALTH BENEFITS AND 

LIFE INSURANCE 

FTC employees are eligible to participate in the 

contributory Federal Employees’ Health Benefit Program 

(FEHBP) and the Federal Employees’ Group Life 

Insurance Program (FEGLIP) administered by the Office 

of Personnel Management (OPM) The FTC contributes 

a percentage to each program to pay for current benefits 

(L) EMPLOYEE RETIREMENT BENEFITS 

FTC employees participate in either the Civil Service 

Retirement System (CSRS) or the Federal Employees’ 

Retirement System (FERS) administered by the OPM 

Employees hired after December 31, 1983, are covered 

by FERS and Social Security, while employees hired prior 

to January 1, 1984, were allowed to elect joining FERS or 

remaining in CSRS For employees participating in CSRS, 

the FTC contributes 7 percent of the employee’s basic pay 

to the Civil Service Retirement and Disability Fund For 

employees participating in FERS, the FTC contributes 

13 2 percent to the Federal Employees’ Retirement 

Fund New employees hired between January 1 and 

December 31, 2013, participate in FERS-RAE (Revised 

Annuity Employees) New employees hired on or after 

January 1, 2014, participate in FERS-FRAE (Further 

Revised Annuity Employees) The FTC contributes 

11 1 percent for both FERS-RAE and FERS-FRAE In 

addition, the FTC contributes the employer’s matching 

share to the Social Security Administration under the 

Federal Insurance Contributions Act, which fully covers 

FERS participating employees FTC contributions are 

recognized as current operating expenses 

The Thrift Savings Plan (TSP) is a defined contribution 

retirement savings and investment plan for employees 

covered by either CSRS or FERS Participating employees 

may contribute any dollar amount or percentage of basic 

salary to the TSP, not to exceed an annual dollar limit 

set by law For those employees participating in FERS, 

the FTC makes a mandatory 1 percent contribution to 

this plan and, in addition, matches 100 percent of the 

first 3 percent contributed by employees and 50 percent 

of the next 2 percent of employee contributions CSRSparticipating employees do not receive a matching 

contribution from the FTC The FTC contributions to 

the TSP are recognized as current operating expenses 

The FTC does not report CSRS and FERS assets, 

accumulated plan benefits, or unfunded liabilities, if any, 

applicable to its employees This information is reported 

by the OPM; however, the FTC recognizes the full cost of 

providing future pension benefits to covered employees 

at the time the employees’ services are rendered using 

cost factors provided by the OPM that estimate the 

true service cost of providing the pension benefits The 

FTC recognizes the excess of the true service cost over 

amounts contributed as an imputed cost This additional 

cost is financed by the OPM and recognized as an 

imputed financing source by the FTC (See Note 17, 

Reconciliation of Net Operating Cost and Net Budgetary 

Outlays )

(M) FECA AND OTHER POSTEMPLOYMENT BENEFITS 

The Federal Employees’ Compensation Act (FECA) 

administered by the U S Department of Labor (DOL) 

provides income and medical cost protection to covered 

Federal civilian employees injured on the job, and 

employees who have incurred a work-related injury or 

occupational disease The DOL bills the FTC annually 

for the claims paid and the FTC recognizes the FECA 

liability for future payment Payment is deferred for two 

years to allow for funding through the budget The FTC 

also recognizes a FECA actuarial liability, which is an 

estimate for the future workers compensation as a result 
FY 2019 Agency Financial Report 77

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of past events using procedures developed by the DOL to 

estimate the liability FECA liabilities are reported as not 

covered by budgetary resources (See Note 6, Liabilities 

Not Covered by Budgetary Resources )

FTC employees eligible to participate in the FEHBP 

and the FEGLIP may continue to participate in these 

programs after their retirement The FTC recognizes a 

current cost of providing post-retirement benefits using 

cost factors provided by the OPM that estimate the true 

cost of providing these benefits to current employees 

The cost of providing post-retirement benefits for 

the FEHBP and FEGLIP is financed by the OPM and 

recognized as an imputed financing source by the FTC 

(See Note 17, Reconciliation of Net Operating Cost and 

Net Budgetary Outlays )

(N) ANNUAL AND SICK LEAVE

The FTC accrues an annual leave liability when 

employees earn leave and reduces the liability when 

employees take leave The balance in this account reflects 

the current leave balances and pay rates of the FTC 

employees Budget execution rules do not allow this 

liability to be funded as earned The liability is funded 

when leave is taken or when paid out as a lump sum at 

the end of employment As a result, accrued annual leave 

is reported as not covered by budgetary resources Sick 

leave is non-vested and expensed as used (See Note 6, 

Liabilities Not Covered by Budgetary Resources )

(O) CONTINGENT LIABILITIES

Contingent liabilities are liabilities that may be incurred 

by the FTC depending on the outcome of an uncertain 

future event, such as pending or threatened litigation 

Contingencies are classified into three categories: 

probable, reasonably possible, and remote A contingency 

is considered probable when the future confirming 

events are likely to occur Probable contingent liabilities 

are recognized in the financial statements provided the 

amount can reasonably be estimated Contingencies 

are reasonably possible when the chance of the future 

confirming event occurring is more than remote but 

less than probable Reasonably possible contingencies 

are disclosed in the notes to the financial statements, as 

well as probable contingencies that cannot reasonably 

be estimated Remote contingencies are not recognized 

in the financial statements or disclosed in the notes to 

the financial statements (See Note 9, Commitments and 

Contingencies )

(P) NET POSITION 

The portion of the FTC’s budget authority funded by a 

direct appropriation is fully expended during the year 

Therefore, there is no unexpended appropriation balance 

in net position at the end of the year (See Statement of 

Changes in Net Position ) 

Cumulative results of operations represent the net results 

of operations since the agency’s inception, the cumulative 

amount of prior period adjustments, the remaining book 

value of capitalized assets, and future funding requirements 

(Q) REVENUES AND OTHER FINANCING 

SOURCES

The FTC’s activities are financed through exchange 

revenues it receives from others and through an 

appropriation provided by the Congress Exchange 

revenues consist of fees collected for premerger 

notification filings under the HSR Act and fees collected 

for the National Do Not Call Registry Fees are payable 

to the FTC upon filing under premerger notifications 

and National Do Not Call Registry Revenue is 

recognized as fees are collected Additionally, exchange 

revenues include a small amount of reimbursements for 

services performed under inter-agency agreements The 

FTC provides consulting and technical assistance aimed 

at developing sound competition policies Reimbursable 

revenue is recognized as expenses are incurred 

(R) METHODOLOGY FOR ASSIGNING 

COSTS AND EXCHANGE REVENUES 

The FTC allocates costs and exchange revenues on the 

Statement of Net Cost to its two major strategic goals: 

Protect Consumers and Maintain Competition Costs 

and exchange revenues that are identified specifically 

with each of these two strategic goals are charged or 

credited directly Costs not directly attributable to these 

two goals, including costs related to the FTC’s third 

goal, Advance Performance, are allocated based on the 

percentage of dollars directly traceable to each of these 

two goals (See Statement of Net Cost and Note 10, 

Exchange Revenues )
78 FY 2019 Agency Financial Report

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NOTE 2—Entity and Non-Entity Assets

The FTC’s non-entity assets include fund balance with 

Treasury and accounts receivable The fund balance with 

Treasury consist of amounts held temporarily in deposit 

funds for the consumer redress program and collections 

of premerger filing fees held in clearing/suspense funds 

that will be transferred out in a subsequent period 

Accounts receivable, net, is the estimated amount 

collectible on consumer redress judgments and civil 

penalties 

Entity and non-entity assets consisted of the following as of September 30, 2019: 

(Dollars in thousands) 2019

Entity

2019 

Non-Entity

2019

Total

Intragovernmental:

 Fund balance with Treasury:

 General funds $ 121,563 $ - $ 121,563 

 Deposit funds - consumer redress - 265,432 265,432

 Clearing/Suspense funds - premerger filing fees - 315 315

 Accounts receivable, net 85 - 85

 Advances and Prepayments 205 - 205

Total intragovernmental assets 121,853 265,747 387,600 

 Accounts receivable, net 7 616,542 616,549

 Property, plant and equipment, net 30,053 - 30,053

Total Assets $ 151,913 $ 882,289 $ 1,034,202 

Entity and non-entity assets consisted of the following as of September 30, 2018: 

(Dollars in thousands) 2018 

Entity

2018 

Non-Entity

2018 

Total

Intragovernmental:

Fund balance with Treasury:

General funds $ 128,824 $ - $ 128,824 

Deposit funds - consumer redress - 358,776 358,776

Clearing/Suspense funds - premerger filing fees - - - 

Accounts receivable, net 18 - 18

Advances and Prepayments 232 - 232

Total intragovernmental assets 129,074 358,776 487,850 

Accounts receivable, net 18 598,953 598,971

Property, plant and equipment, net 38,529 - 38,529

Total Assets $ 167,621 $ 957,729 $ 1,125,350 

The FTC’s entity assets are comprised of undisbursed 

general funds; accounts receivable; advances and 

prepayments; and property, plant, and equipment 

Accounts receivable, net, represents amounts due from 

other Federal agencies, current and former employees, 

and vendors Advances and prepayments include 

amounts paid to the Department of Transportation 

(DOT) for transit subsidies on behalf of FTC employees 
FY 2019 Agency Financial Report 79

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NOTE 3—Fund Balance with Treasury 

excess offsetting collections balance of $26,004 thousand 

are HSR fees collected above the yearly congressional 

authorized amount to collect and spend from prior fiscal 

years and comprises of $6,924 thousand in fiscal year 

2018 collections and $19,080 thousand from fiscal years 

prior to 2018 The unavailable - temporary reduction 

of $6,450 thousand consists of $5,418 thousand HSR 

Premerger and $1,032 thousand National Do Not Call 

Registry offsetting collections sequestered from FY 2013 

The difference of $32,454 thousand between the SBR 

unobligated balance, end of year of $15,027 thousand 

and the FBwT total unobligated balance of $47,481 

thousand is the $26,004 thousand unavailable - excess 

offsetting collections and unavailable – temporary 

reduction of $6,450 thousand 

Fund balance with Treasury consisted of the following as of September 30, 2019 and 2018:

(Dollars in thousands) 2019 2018

Status of Fund Balance with Treasury:

 Unobligated balance:

 Available - apportioned $ 7,455 $ 18,285

 Unavailable - unapportioned 7,572 4,532 

 Unavailable - excess offsetting collections 26,004 26,004 

 Unavailable - temporary reduction 6,450 6,450 

 Total Unobligated balance: 47,481 55,271 

 Obligated balance not yet disbursed 74,082 73,553 

 Non-budgetary fund balance with Treasury 265,747 358,776 

Total Status of Fund Balance with Treasury $ 387,310 $ 487,600

There are no differences between amounts reported 

by the FTC and those reported to U S Treasury as 

of September 30, 2019, and 2018 In terms of the 

relationship to the budget, the FTC’s Fund balance with 

Treasury (FBwT) consists of undisbursed appropriated 

funds, which are either unobligated or obligated, as well 

as non-budgetary deposit funds arising from amounts 

collected for consumer redress and not yet disbursed to 

disbursing agents or directly to claimants The FY 2019 

FBwT includes premerger fees in a clearing fund pending 

distribution The unobligated balance includes both 

available and unavailable balances 

The unavailable - unapportioned balance of $7,572 

thousand is the result of recoveries that exceeded 

anticipated and apportioned amounts The unavailable - 
80 FY 2019 Agency Financial Report

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NOTE 4—Accounts Receivable, Net 

Non-entity redress gross accounts receivable is the court 

ordered judgment amount, usually a calculated amount 

of ill-gotten gains by the defendant(s) The related 

allowance for uncollectible accounts is the estimate the 

FTC will not collect from the defendant(s), which often 

is a large percentage of the judgment The majority of the 

net accounts receivable balance for both FY 2019 and FY 

2018 is comprised of a judgment for $493,716 thousand 

against AbbVie, Inc This judgment, recorded in the 4th

quarter of FY 2018, currently has no allowance as a bond 

for the full amount of the judgment is with the court 

while the defendant’s appeal is decided by the Court of 

Appeals 

Net interest and the related allowance for doubtful 

accounts balance was recorded as of September 30, 

2019 Accumulated unrecognized interest on receivables 

deemed uncollectible totaled $11,655 thousand and $6,412 

thousand as of September 30, 2019, and 2018, respectively 

Accounts receivable, net consisted of the following as of September 30, 2019:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible

Accounts 

 2019 Net

 Entity Accounts Receivable: 

 Intragovernmental $ 85 $ - $ 85

 With the public 9 2 7 

 Total entity accounts receivable 94 2 92 

 Non-Entity Accounts Receivable: 

 Consumer redress 2,556,346 1,940,040 616,306 

 Civil penalties 1,029 793 236 

 Total non-entity accounts receivable 2,557,375 1,940,833 616,542 

Total Accounts Receivable $ 2,557,469 $ 1,940,835 $ 616,634 

Accounts receivable, net consisted of the following as of September 30, 2018:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible

Accounts 

 2018 Net

 Entity Accounts Receivable: 

 Intragovernmental $ 18 $ - $ 18

 With the public 57 39 18 

 Total entity accounts receivable 75 39 36 

 Non-Entity Accounts Receivable: 

 Consumer redress 2,674,249 2,075,734 598,515 

 Civil penalties 39,826 39,388 438 

 Total non-entity accounts receivable 2,714,075 2,115,122 598,953 

Total Accounts Receivable $ 2,714,150 $ 2,115,161 $ 598,989 

The majority of the FTC’s accounts receivable are nonentity accounts receivable arising from the settlement 

or litigation of administrative and federal court cases 

in connection with the consumer redress program, and 

from civil monetary penalties imposed for violation of an 

FTC order and/or antitrust acts Because of the nature of 

these receivables, they are frequently not fully collectible 

and are offset with a significant allowance The allowance 

for uncollectible accounts is based on an analysis by 

a case manager who assesses the debtor’s ability and 

willingness to pay, the defendant’s payment history, and 

the probable recovery amount including the value of 

assets These non-entity accounts receivable are included 

in the financial statements along with offsetting nonentity liabilities Agency accounts receivable balances for 

both FY 2019 and FY 2018 do not include any amounts 

associated with criminal restitution 
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NOTE 5—General Property, Plant, 

and Equipment, Net

The following represents the FTC’s capital assets and 

accumulated depreciation as of September 30, 2019, and 

2018 No asset impairments were recognized in either 

year The accumulated depreciation has increased by 

$2,548 thousand while the current year depreciation and 

amortization expense is $8,435 thousand (See Note 17, 

Reconciliation of Net Operating Cost and Net Budgetary 

Outlays ) Asset disposals during FY 2019 resulted in the 

removal of $6,396 thousand in capitalized acquisition 

costs and $5,887 thousand of accumulated depreciation 

and amortization A loss of $509 thousand on asset 

disposition was recorded in FY 2019 Assets disposed of 

included desktops, laptops, wide-area network (WAN) 

circuits, data storage devices, and switching equipment, 

among others In FY 2018, the FTC recorded asset 

disposals resulting in the removal of $4,386 thousand 

in capitalized acquisition costs and $4,286 thousand in 

accumulated depreciation and amortization 

Property, plant, and equipment, net consisted of the following as of September 30, 2019:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation/

Amortization

Net 

Book Value

Equipment 5-20 years $ 21,298 $ 18,249 $ 3,049

Leasehold improvements 15 years 46,301 20,563 25,738 

Software 5 years 21,367 20,101 1,266 

Total Property, Plant, and Equipment $ 88,966 $ 58,913 $ 30,053 

Property, plant, and equipment, net consisted of the following as of September 30, 2018:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation/

Amortization

Net 

Book Value

Equipment 5-20 years $ 25,802 $ 18,837 $ 6,965

Leasehold improvements 15 years 46,301 17,564 28,737 

Software 5 years 22,791 19,964 2,827 

Total Property, Plant, and Equipment $ 94,894 $ 56,365 $ 38,529 
82 FY 2019 Agency Financial Report

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NOTE 6—Liabilities Not Covered by Budgetary Resources

 

 

The FTC recognizes two categories of liabilities not 

covered by budgetary resources described below:

LIABILITIES NOT COVERED BY BUDGETARY 

RESOURCES

Liabilities incurred for which revenues or other sources 

of funds necessary to pay the liabilities have not been 

made available through Congressional appropriations 

or current earnings These include unfunded FECA 

liabilities, accrued annual leave, and contingencies 

LIABILITIES NOT REQUIRING BUDGETARY 

RESOURCES

Non-entity liabilities that are covered by non-entity 

assets These include:

Accrued Civil Penalties due to Treasury - offsetting 

liability to non-entity accounts receivable for civil 

penalties, net, that upon collection will be payable to the 

General Fund of the U S Government 

Undisbursed Redress Collections - offsetting liability to 

the non-entity deposit fund balance for consumer redress 

that is payable to approved claimants 

Accrued Redress due to Claimants - offsetting liability to 

the non-entity accounts receivable for consumer redress 

that upon collection will be payable to approved claimants 

Deposits in Clearing Funds – refunds of premerger fees 

due to vendors not processed by the end of the reporting 

period 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 2019 and 

September 2018:

(Dollars in thousands) Not Covered by Budgetary 

Resources

Not Requiring Budgetary 

Resources FY 2019 Total

Intragovernmental Liabilities:

FECA liability $ 449 $ - $ 449

Other employment related liability - - - 

Accrued civil penalties due to Treasury - 236 236 

Total Intragovernmental Liabilities 449 236 685 

Non-Federal Liabilities:

Accrued leave 12,617 - 12,617 

Actuarial FECA 2,548 - 2,548 

Undisbursed redress collections - 265,432 265,432

Accrued redress due to claimants - 616,306 616,306

Contingencies 843 - 843 

Deposits in Clearing Funds - 315 315 

Total Non-Federal Liabilities 16,008 882,053 898,061 

Total Unfunded Liabilities 16,457 882,289 898,746

Liabilities Covered by Budgetary Resources 21,740 

Total Liabilities $ 920,486

(Dollars in thousands) Not Covered by Budgetary 

Resources

Not Requiring Budgetary 

Resources FY 2018 Total

Intragovernmental Liabilities:

FECA liability $ 358 $ - $ 358

Other employment related liability 3 - 3 

Accrued civil penalties due to Treasury - 438 438 

Total Intragovernmental Liabilities 361 438 799 

Non-Federal Liabilities:

Accrued leave 11,455 - 11,455 

Actuarial FECA 2,146 - 2,146 

Undisbursed redress collections - 358,776 358,776 

Accrued redress due to claimants - 598,515 598,515 

Contingencies - - - 

Deposits in Clearing Funds - - - 

Total Non-Federal Liabilities 13,601 957,291 970,892 

Total Unfunded Liabilities 13,962 957,729 971,691 

Liabilities Covered by Budgetary Resources 18,298 

Total Liabilities $ 989,989
FY 2019 Agency Financial Report 83

FINANCIAL SECTION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

NOTE 7—Other Liabilities

As of September 30, 2019, and 2018, components of amounts reported on the Balance Sheet as Other 

Intragovernmental Liabilities and Other Liabilities along with a categorization of current versus non-current are as 

follows:

Other liabilities consisted of the following as of September 30, 2019:

(Dollars in thousands) 2019

Non-Current

2019

Current

2019

Total

Other intragovernmental liabilities:

Accrued employee benefits $ - $ 1,710 $ 1,710

FECA liability 449 - 449 

Accrued civil penalties due to Treasury - 236 236 

Total Other Intragovernmental Liabilities: 449 1,946 2,395 

Other Non-Federal liabilities:

Accrued payroll and benefits - 6,764 6,764

Accrued leave 12,617 - 12,617 

Actuarial FECA 2,548 - 2,548

Contingencies 843 - 843

Deposits in clearing funds - 315 315

Total Other Non-Federal Liabilities 16,008 7,079 23,087 

Total Other Liabilities $ 16,457 $ 9,025 $ 25,482 

Other liabilities consisted of the following as of September 30, 2018:

(Dollars in thousands) 2018

Non-Current

2018

Current

2018

Total

Other intragovernmental liabilities:

Accrued employee benefits $ - $ 1,500 $ 1,500 

FECA liability 358 - 358 

Accrued civil penalties due to Treasury - 438 438 

Total Other Intragovernmental Liabilities: 358 1,938 2,296 

Other Non-Federal liabilities:

Accrued payroll and benefits - 6,072 6,072

Accrued leave 11,455 - 11,455 

Actuarial FECA 2,146 - 2,146

Contingencies - - - 

Deposits in clearing funds - - - 

Total Other Non-Federal Liabilities 13,601 6,072 19,673 

Total Other Liabilities $ 13,959 $ 8,010 $ 21,969 
84 FY 2019 Agency Financial Report

FINANCIAL SECTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

NOTE 8—Operating Leases 

Leases of government-owned and commercial-owned 

property are made through and managed by the GSA 

The FTC does not have any lease agreements with 

non-federal entities While leases with the GSA are 

cancellable, the FTC’s intention is to stay in the GSA 

leased space and disclose the amounts that will be paid 

in the future to the GSA under signed lease agreements 

The FTC currently leases spaces from four governmentowned properties and six commercial properties totaling 

approximately 590 thousand square feet for use as 

offices, storage, and parking The FTC’s government 

leases expire on various dates through 2029, while the 

commercial leases expire at various dates through 2031 

Future minimum lease payments are presented in the 

table below 

Future minimum lease payments due under leases of government-owned property 

for the fiscal year ended September 30, 2019:

Fiscal Year 2019

(Dollars in thousands)

2020 $ 8,262 

2021 8,274 

2022 8,232 

2023 8,084 

2024 8,096 

Thereafter 39,542 

Total Future Minimum Lease Payments $ 80,490 

Future minimum lease payments due under leases of commercial-owned property 

for the fiscal year ended September 30, 2019:

Fiscal Year 2019

(Dollars in thousands)

2020 $ 14,542

2021 14,864 

2022 15,727 

2023 15,719 

2024 7,507 

Thereafter 10,845

Total Future Minimum Lease Payments $ 79,204
FY 2019 Agency Financial Report 85

FINANCIAL SECTION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

NOTE 9—Commitments and 

Contingencies 

The FTC is subject to potential liabilities in various 

administrative proceedings, legal actions, and claims 

brought against the agency In the opinion of legal 

counsel and the FTC management, there are no 

“probable” or “reasonably possible” contingencies as of 

September 30, 2019, and 2018 that will require funding 

through the FTC’s budget Furthermore, there are no 

pending probable or reasonably possible claims where 

the probable loss cannot be estimated Accordingly, 

no obligations are recorded in the agency’s financial 

statements in relation to contingent liabilities 

Tort claims against federal agencies are administered 

and resolved by the DOJ with amounts necessary for 

resolution funded through the U S Treasury Judgment 

Fund The Judgment Fund was enacted by Congress 

in 1956 as a permanent, indefinite appropriation 

for the payment of claims that did not have another 

funding source The FTC recorded $843 thousand as 

of September 30, 2019 for probable contingencies that 

will require funding through the Judgment Fund No 

probable contingencies were recorded on September 30, 

2018 The recognition of claims to be funded through 

the Judgment Fund represents a claim against the federal 

government as a whole and should not be interpreted 

as claims against the assets of the FTC The range 

for contingent liabilities subject to funding from the 

Judgment Fund where the risk of loss is either probable 

or reasonably possible is presented below: 

Contingent Liabilities as of September 30, 2019: 

(Dollars in thousands) Accrued 

Liabilities

Estimated Range of Loss

Lower End Upper End

FY 2019:

Legal Contingencies:

Probable 843 843 1,700 

Reasonably Possible - - - 

Contingent Liabilities as of September 30, 2018:

(Dollars in thousands) Accrued 

Liabilities

Estimated Range of Loss

Lower End Upper End

FY 2018:

Legal Contingencies:

Probable - - - 

Reasonably Possible - - -
86 FY 2019 Agency Financial Report

FINANCIAL SECTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

NOTE 10—Exchange Revenues

The Statement of Net Cost presents the FTC’s costs and 

exchange revenues for its two major strategic goals 

The exchange revenues and related costs are presented 

by the major strategic goals they support and are 

further classified as “intragovernmental” or “public ” 

Intragovernmental costs and exchange revenues arise 

from transactions with another federal entity and public 

costs and exchange revenues arise from transactions with 

non-federal entities 

The FTC’s intragovernmental costs are for services 

received from other federal agencies under reimbursable 

agreements to carry out its programs The federal 

agencies providing the services bill the FTC based on full 

cost recovery The FTC recognizes costs based on the 

services it receives from other agencies 

FEDERAL EXCHANGE REVENUES

A small portion of the FTC’s overall exchange revenue 

is intragovernmental arising from services provided to 

other federal agencies under interagency agreements 

The FTC bills requesting agencies to recover the full cost 

of services, primarily employee salaries, and recognizes 

revenue at the time expenditures are incurred The 

reimbursable revenue and costs are $965 thousand for FY 

2019 and $575 thousand for FY 2018 

The majority of the FTC’s exchange revenue is “public” 

and derived from two primary sources:

Fees collected for premerger notification filings under 

the HSR Act - The HSR Act requires entities to file 

premerger notifications with the FTC and the Antitrust 

Division of the DOJ and establishes a waiting period 

before certain mergers, acquisitions, or transfers of assets 

may be completed The filing fees are determined by 

the values and sizes of involved parties By law, the FTC 

retains one-half of all premerger filing fees collected and 

remits the other one-half to the DOJ’s Antitrust Division 

Subscription fees collected for the National Do Not 

Call Registry - The Do Not Call (DNC) Registry Fee 

Extension Act of 2007, which amended the Do Not 

Call Implementation Act, established a permanent 

fee structure for the DNC registry and provides that 

fees be reviewed annually and adjusted for inflation, 

as appropriate Telemarketers must pay an annual 

subscription fee and download a list of telephone 

numbers of consumers who do not wish to receive calls 

Fees are based on the number of area codes downloaded 

The FTC recognizes revenue when collected and the 

telemarketers are given access to the requested data 

The HSR and DNC fees are determined based on their 

respective congressional authorities Each year, language 

in the appropriations bill specifies the amount of fees 

collected that the FTC can use to offset its annual 

appropriation While the fees relate to major strategic 

goals, the fees are not related to specific costs incurred 

As a result, the information below presents the full cost 

of operations with related exchange revenues by the 

FTCs two primary strategic goals 

Exchange revenues and related costs by strategic goal for the fiscal years ended September 30, 2019 

and 2018:

(Dollars in thousands) 2019 2018

Strategic Goal 1: Protect Consumers

 Intragovernmental gross costs $ 49,532 $ 44,845 

 Public costs 144,606 139,708 

Gross costs, Protect Consumers 194,138 184,553 

 Intragovernmental earned revenue - reimbursements (2) (17)

 Public earned revenue - Do Not Call registry fees (12,029) (12,294)

Earned revenue, Protect Consumers (12,031) (12,311)

Net Cost, Protect Consumers 182,107 172,242 

Strategic Goal 2: Maintain Competition

 Intragovernmental gross costs 38,447 38,048 

 Public costs 112,242 118,532 

Gross costs, Maintain Competition 150,689 156,580 

 Intragovernmental earned revenue - reimbursements (963) (558)

 Public earned revenue - premerger filing fees (129,585) (132,923)

Earned revenue, Maintain Competition (130,548) (133,481)

Net Cost, Maintain Competition 20,141 23,099 

Net Cost of Operations $ 202,248 $ 195,341 
FY 2019 Agency Financial Report 87

FINANCIAL SECTION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

NOTE 11—Apportionment Categories of Obligations Incurred: Direct vs. 

Reimbursable Obligations

Obligations incurred consisted of the following for the fiscal years ended September 30, 2019 and 2018:

(Dollars in thousands) 2019 2018

Obligations Incurred:

Category A - direct obligations $ 330,033 $ 325,871

Category B - reimbursable obligations 969 367

Total Obligations Incurred $ 331,002 $ 326,238

Category A – direct obligations represent amounts 

obligated in carrying out the FTC’s normal on-going 

operations The source of funding for these obligations 

is an annual appropriation, offsetting collections, and 

unobligated funds brought forward from previous years 

These funds are made available by the OMB through 

quarterly (Category A) apportionments 

Category B – reimbursable obligations represent 

amounts obligated in fulfilling interagency agreements 

when the FTC is the provider of services The source of 

funding for these obligations is reimbursements collected 

from other federal agencies to cover the FTC’s costs in 

fulfilling the agreement 

The FTC does not have any activity exempt from 

apportionment or apportioned under Category AB 

NOTE 12—EXPLANATION OF 

DIFFERENCES BETWEEN THE 

STATEMENT OF BUDGETARY 

RESOURCES AND THE BUDGET OF 

THE UNITED STATES GOVERNMENT 

The Budget of the United States Government (President’s 

Budget) contains budget proposals for the upcoming 

fiscal year along with forecasted results for the current 

fiscal year and actual results for the previous fiscal year 

The most current version of the President’s Budget is 

the FY 2020 President’s Budget, which contains FY 2018 

actual results There are no material differences between 

amounts reported in the FY 2018 Statement of Budgetary 

Resources and the FY 2018 actual amounts as reported in 

the FY 2020 President’s Budget; however, the Statement 

of Budgetary Resources includes Distributed Offsetting 

Receipts, which are excluded from the President’s Budget 

The FY 2021 Budget of the United States Government 

is not available to compare FY 2019 actual amounts to 

the FY 2019 Statement of Budgetary Resources The 

expected availability for this report is February 2020 on 

the OMB’s website 
88 FY 2019 Agency Financial Report

FINANCIAL SECTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

NOTE 13—Undelivered Orders at the End of the Period

Undelivered obligations consisted of the following as of September 30, 2019 and 2018:

(Dollars in thousands) 2019 2018

Non-Federal Undelivered Orders Unpaid $ 46,393 $ 46,116

 

Federal Undelivered Orders Unpaid 6,329 9,463 

Federal Undelivered Orders Paid 205 232 

Total Federal Undelivered Orders 6,534 9,695 

Total Undelivered Orders $ 52,927 $ 55,811

NOTE 14—CUSTODIAL ACTIVITIES 

The primary custodial activities of the FTC are: 

PREMERGER FILING FEES 

Fees collected for premerger notification filings under 

the HSR Act are divided evenly between the FTC and the 

DOJ The portion of collections designated for the DOJ 

is reported as a custodial activity As of September 30, 

2019 and 2018, the FTC collected $259,170 and $265,846 

thousand in HSR premerger filing fees One-half of the 

amounts collected in each year was distributed to the 

DOJ, as shown on the Statement of Custodial Activity 

CIVIL PENALTIES 

Civil monetary penalties and antitrust violations 

collected in connection with the settlement or litigation 

of the FTC’s administrative or Federal court cases are 

collected by either the FTC or the DOJ as provided 

by law In those situations where the FTC collects the 

penalties, the funds are deposited in a receipt account 

with the Treasury Civil penalties collected also include 

amounts collected for undecided civil penalty cases 

that are held until final disposition of the cases All civil 

penalties collected are transferred to the General Fund of 

the U S Government at the end of the fiscal year 

CONSUMER REDRESS 

Collections for consumer redress reported on the 

Statement of Custodial Activity are limited to those 

collections that have been disgorged to the Treasury Net 

disgorgements to the Treasury were $1,778 thousand 

as of September 30, 2019 and $7,612 thousand as of 

September 30, 2018 

Other line items on the Statement of Custodial Activity 

include: 

ACCRUAL ADJUSTMENTS 

Accrual adjustments represent the change in accounts 

receivable, net of allowances for uncollectible accounts, 

for civil penalties assessed in court actions 

AMOUNTS YET TO BE TRANSFERRED 

Amounts yet to be transferred represent the change in 

the offsetting liability for civil penalties due to Treasury 

that is established at the time an accounts receivable for 

civil penalties is recorded 
FY 2019 Agency Financial Report 89

FINANCIAL SECTION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

NOTE 15—Consumer Redress Activities

The FTC obtains funds for consumer redress in connection with the settlement or litigation of both administrative 

proceedings and Federal court cases The FTC holds redress funds in a deposit fund at Treasury until a determination 

is made on the practicability of redress The FTC attempts to distribute funds to injured parties whenever possible If 

redress is determined to be practicable, funds are either directly disbursed by the FTC to claimants or are transferred 

to accounts at financial institutions from which redress third party administrators process claims and disburse 

proceeds to injured parties Disbursements to claimants and third party administrators totaled $350,058 thousand and 

$591,345 thousand as of September 30, 2019, and 2018 

In those cases where consumer redress is not practicable, funds are transferred (disgorged) to the Treasury, or on 

occasion, used for consumer education or another purpose as directed by the final order issued by the court Major 

components of the redress program include eligibility determination, claimant notification, and administration of 

redress to claimants 

Redress fund activities consisted of the following for the fiscal years ended September 30, 2019 and 2018:

(Dollars in thousands) 2019 2018

Consumer Redress:

Fund Balance with Treasury

Beginning balance $ 358,776 $ 431,573

Collections 258,492 526,160 

Disbursements to claimants and third party administrators for 

redress, net (350,058) (591,345)

Disgorgements to Treasury, net (1,778) (7,612)

Total Fund Balance with Treasury, Ending $ 265,432 $ 358,776

Accounts Receivable, Net

Beginning balance $ 598,515 $ 69,887 

Net activity 17,791 528,628

Total Accounts Receivable, Ending $ 616,306 $ 598,515

NOTE 16—Inter-Entity Costs

Goods and services may be received from other federal 

entities at no cost or at a cost less than the full cost to the 

providing federal entity In accordance with accounting 

standards, certain costs of the providing federal entity 

that are not fully reimbursed are recognized as imputed 

costs in the Statement of Net Cost and are offset by 

imputed financing sources in the Statement of Changes 

in Net Position Such imputed costs and financing 

sources relate to employee benefits paid by the OPM 

No other unreimbursed costs of goods and services are 

included in the FTC’s financial statements as imputed 

costs and imputed financing sources 
FINANCIAL SECTION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

90 FY 2019 Agency Financial Report

NOTE 17—Reconciliation of Net Operating Cost and 

Net Budgetary Outlays

The reconciliation schedules presented below bridge the gap between the net operating costs presented on the 

Statement of Net Cost and the net outlays presented on the Statement of Budgetary Resources for the fiscal years ended 

September 30, 2019, and 2018 The increase in agency outlays is primarily due to the reduction in redress amounts 

disgorged to the Treasury, which are displayed as distributed offsetting receipts 

Reconciliation of Net Operating Cost and Net Budgetary Outlays for the Years Ended 

September 30, 2019 and 2018:

FY 2019

Intragovernmental With the Public Total

Net Operating Cost (SNC) $ 87,014 $ 115,234 $ 202,248

Components of Net Operating Cost Not Part of the Budgetary Outlays

Depreciation and Amortization - (8,435) (8,435)

Losses on Asset Dispositions - (509) (509)

Increase/(Decrease) in Assets 40 (11) 29

(Increase)/Decrease in Liabilities (881) (5,056) (5,937) 

Imputed Costs (12,375) - (12,375)

Expense Offsets for Capitalized Costs - - - 

Total Components of Net Operating Cost Not Part of the Budgetary Outlays (13,216) (14,011) (27,227)

Components of Budgetary Outlays Not Part of Net Operating Cost

Purchases of Assets - 468 468

Deposits in Clearing Funds - Pre-Merger Refunds Due - (315) (315) 

Miscellaneous Receipts - (1,968) (1,968)

Total Components of Budgetary Outlays Not Part of Net Operating Cost - (1,815) (1,815)

Net Outlays (Calculated) $ 73,798 $ 99,408 $ 173,206 

Related Amounts on the Statement of Budgetary Resources (SBR)

Outlays, Gross $ 318,179

Actual Offsetting Collections (142,690)

Outlays, Net (SBR) $ 175,489 

Distributed Offsetting Receipts (2,283)

Agency Outlays, Net (SBR) $ 173,206 

FY 2018

Intragovernmental With the Public Total

Net Operating Cost (SNC) $ 82,318 $ 113,023 $ 195,341

Components of Net Operating Cost Not Part of the Budgetary Outlays

Depreciation and Amortization - (9,907) (9,907)

Losses on Asset Dispositions - (1,540) (1,540)

Increase/(Decrease) in Assets (55) (63) (118)

(Increase)/Decrease in Liabilities 557 (403) 154 

Imputed Costs (10,510) - (10,510)

Expense Offsets for Capitalized Costs - (629) (629)

Total Components of Net Operating Cost Not Part of the Budgetary Outlays (10,008) (12,542) (22,550)

Components of Budgetary Outlays Not Part of Net Operating Cost

Purchases of Assets - (109) (109)

Deposits in Clearing Funds - Pre-Merger Refunds Due - - - 

Miscellaneous Receipts - (7,816) (7,816)

Total Components of Budgetary Outlays Not Part of Net Operating Cost - (7,925) (7,925)

Net Outlays (Calculated) $ 72,310 $ 92,556 $ 164,866 

Related Amounts on the Statement of Budgetary Resources (SBR)

Outlays, Gross $ 318,589 

Actual Offsetting Collections (145,907)

Outlays, Net (SBR) $ 172,682 

Distributed Offsetting Receipts (7,816)

Agency Outlays, Net (SBR) $ 164,866 
Other Information

FY2019 Agency Financial Report 91

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission
92 FY 2019 Agency Financial Report

OTHER INFORMATION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

 Summary of the Top Management Challenges

 Identified by the Office of Inspector Genera

Summary of the Top Management Challenges Identified by the Office of Inspector General
FY 2019 Agency Financial Report 93

OTHER INFORMATION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

SUMMARY OF FINANCIAL STATEMENT AUDIT AND 

MANAGEMENT ASSURANCES

TABLE 1: SUMMARY OF FINANCIAL STATEMENT AUDIT

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

TABLE 2: SUMMARY OF MANAGEMENT ASSURANCES

Effectiveness of Internal Control Over Financial Reporting 

(Federal Managers’ Financial Integrity Act (FMFIA) Para. 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control Over Operations (FMFIA Para. 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA Para. 4)

Statement of Assurance Systems conform to financial management system requirements

Non-Conformances Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Non-Conformances 0 0 0 0 0 0

Compliance with Section 803(a) of the Federal Financial Management Improvement Act (FFMIA) 

Federal Trade Commission Auditor

1. Federal Financial Management System 

Requirements No lack of compliance noted No lack of compliance noted

2. Applicable Federal Accounting Standards No lack of compliance noted No lack of compliance noted

3. USSGL at Transaction Level No lack of compliance noted No lack of compliance noted
94 FY 2019 Agency Financial Report

OTHER INFORMATION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

PAYMENT INTEGRITY

The Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012 requires agencies to 

annually report on all programs and activities, identify 

those that may be susceptible to significant improper 

payments, estimate annual improper payments in the 

susceptible programs and activities, and report the results 

of their improper payment activities In accordance 

with the OMB A-123 Appendix C guidance, the FTC 

performed a FY 2018 risk assessment for nine payment 

processes including payroll, procurement, redress 

payments to consumers, travel, purchase card, premerger 

filing fee refunds, training, and two miscellaneous 

payment processes Each payment program was defined 

by its own internal control framework The FTC 

evaluated each payment program over $1 million using 

the following qualitative risk factors identified in OMB 

Circular A-123 Appendix C: 

• The relative complexity of the program or activity 

operation 

• The extent and significance of recent changes in the 

program that may be reason for improper payment in 

funding, authorities, practices and procedure 

• The level, experience, and quality of training for 

personnel responsible for program eligibility 

determination or certifying that payments are accurate 

• The inherent risks of improper payments due to the 

nature of programs or operation 

• Known control deficiencies (i e , reported by OIG, or 

GAO) that might hinder accurate payment certification 

The FTC also performed a quantitative risk assessment 

and assessed risks related to the amounts of payments 

processed relative to the OMB specified threshold 

amounts that define payment programs susceptible to 

improper payments As a result of the risk assessment, 

the FTC determined that the agency’s programs and 

activities presented low risk of improper payments and 

that none of the agency’s programs or activities were 

determined to be susceptible to significant improper 

payments 

In addition to the risk assessment of all payment 

processes, the Interior Business Center (IBC), the FTC’s 

shared service provider, compares the FTC’s payee 

records in the financial system with payee records in the 

Do Not Pay databases To prevent improper payments, 

the FTC reviews potential matches on an on-going 

basis and incorporates a pre-award check on potential 

contractors against the Do Not Pay databases In 2015, 

the FTC performed and documented testing of statistical 

samples from larger payment processes to verify that the 

FTC payment programs are not susceptible to significant 

improper payments Per OMB guidance and the result 

of FY 2018 IPERIA risk assessments, no assessment was 

conducted during FY 2019 and the next is scheduled for 

FY 2021 

For programs with more than $1 million of expenditures, 

the FTC determined and documented that performing 

recapture audits were not cost effective FTC’s analysis 

had two parts The first was the error rates determined 

during the FY 2015 quantitative risk assessment and the 

second was the documented management assessments 

of the effective operation of controls within the payment 

processes The 2015 test work used statistical methods to 

project error rates to the population of payments for the 

larger payment processes These larger payment amounts 

could have produced errors classifying the process as 

‘Significant’ This test work did not detect errors within 

the population of payments and, therefore, did not 

identify payments subject to recapture As a result, the 

Office of the Chief Financial Officer determined and 

documented that projected amounts subject to recapture 

audits are “de minimis” and recapture audits are not costeffective 
FY 2019 Agency Financial Report 95

OTHER INFORMATION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

PAYMENT INTEGRITY (CONTINUED) 

Number (#) 

of Payments 

Reviewed 

for Possible 

Improper 

Payments

Dollars ($) 

of Payments 

Reviewed 

for Possible 

Improper 

Payments

Number 

(#) of 

Payments 

Stopped

Dollars ($) 

of Payments 

Stopped

Number (#) of 

Potential Improper 

Payments Reviewed 

and Determined 

Accurate

Dollars ($)

of Potential 

Improper 

Payments 

Determined 

Accurate

Reviews with the 

IPERIA specified 

databases

7,886 $ 552.6M 0 $ 0.00 0 $ 0.00

Reviews with 

databases not listed in 

IPERIA

0 $ 0.00 0 $ 0.00 0 $ 0.00

More information on Improper Payments can be found at https://paymentaccuracy.gov/ 

“REDUCE THE FOOTPRINT” IMPLEMENTATION 

The Federal Trade Commission is committed to reducing the total square footage of its office and warehouse inventory 

relative to the established FY 2015 baseline in accordance with Section 3 of the Office of Management and Budget 

(OMB) Memorandum 12-12, Promoting Efficient Spending to Support Agency Operations: Reduce the Footprint.

Reduce the Footprint Baseline Comparison FY 2015

Baseline FY 2019 Change (FY 2015 Baseline - FY 2019)

Rentable Square Footage 611,407 590,427 (20,980) 

Total square footage decreased more than 3% in FY 2019 from the FY 2015 baseline year The reduction in FY 2019 is 

due to relinquishing the warehouse in Landover, Maryland, which is consistent with Section 3, OMB M-12-12 

The FTC renovations aim to utilize space and energy in the most efficient manner possible in all buildings it occupies 

The FTC continues to identify opportunities to reduce total square footage for consideration in future budget years 

while carrying out its mission 

The FTC currently has no buildings that meet the requirements to report operations and maintenance costs 
96 FY 2019 Agency Financial Report

OTHER INFORMATION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

FRAUD REDUCTION REPORT

During 2019, the FTC directed several efforts to 

implement the Fraud Reduction Data Analytics Act 

(FRDAA) of 2015 and made progress in implementing 

effective controls in financial and administrative 

processes, in implementing GAO’s principles for 

addressing fraud risk, and in implementing OMB’s 

Circular A123 leading practices for agencies 

This year, the FTC implemented several strategies and 

procedures, and took steps to prevent and detect fraud 

within the agency These actions included:

• Implementing OMB’s best practice to integrate fraud 

risk reduction activities within the agency’s Enterprise 

Risk Management (ERM) Program This included 

the CFO’s written designation of the ERM program 

manager as the agency official Fraud Risk Coordinator 

Responsibilities of the Fraud Risk Coordinator include: 

1) coordinating agency-wide efforts to identify, assess 

and respond to fraud risks; 2) implementing the 

collection and analysis of available data to support 

managers’ efforts to prevent, detect and respond to 

fraud risks; 3) conducting ongoing monitoring, audit 

and evaluations over fraud prevention, detection and 

response activities; and 4) incorporating fraud risk 

management into the broader ERM framework 

• The Fraud Risk Coordinator leading the chartered 

Fraud Risk Register Work Group to collect and analyze 

fraud risk measures to monitor select higher severity 

fraud risks identified by the work group in the agency’s 

fraud risk register This included monitoring:

• the frequency of management over-ride of 

timekeeper certifications for payroll, 

• recipient eligibility for transit benefits, 

• traveler eligibility for travel benefits requiring special 

authorization and payments, 

• the delivery of ethics training to required employees, 

and 

• the effectiveness of controls intended to prevent and 

detect the misappropriation of agency property 

• The Fraud Risk Coordinator leading three fraud risk 

reduction activities during the year to achieve fraud 

reduction objectives As part of a multi-year process 

review program, several financial process reviews 

were conducted, which identified fraud vulnerabilities 

within processes Each year several special reviews 

are conducted which target specific processes where 

control weaknesses are suspected In 2019, the interest 

payment process and reimbursable travel benefit 

payments were assessed for control weaknesses The 

third activity is the agency-wide Fraud Risk Register 

Work Group, to identify and assess risks, select data 

to collect and analyze to monitor fraud risks, and 

the inclusion of fraud risks within the agency’s risk 

registers 

During 2020, FTC plans to strengthen and extend 

agency level fraud risk management and monitoring by 

leveraging its cross-programmatic Fraud Risk Register 

Work Group, increasing data collection and analysis, 

conducting additional audit and evaluations to identify 

vulnerabilities and coordinating all of these activities 

within the overall ERM framework 
FY 2019 Agency Financial Report 97

OTHER INFORMATION

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015, requires agencies to make regular and consistent inflationary adjustments 

of civil monetary penalties to improve the effectiveness of civil monetary penalties and to maintain their deterrent 

effect The 2015 Act requires agencies to: (1) adjust the level of civil monetary penalties with an initial “catch-up” 

adjustment; and (2) make subsequent annual adjustments for inflation Accordingly, the Federal Trade Commission 

increased its maximum civil penalty amounts to address inflation since the initial catch-up adjustment 

The following table are the civil monetary penalties that the FTC may impose, the authority for imposing the penalty, 

penalty description, year enacted, latest year of adjustment, current penalty level, the Bureau that administers the 

penalty, and location for penalty update details Additional information about these penalties and the latest adjustment 

is available in the Federal Register 

Statutory 

Authority 

Penalty 

(Name or 

Description)

Year 

Enacted

Latest year of 

adjustment 

(via statute or 

regulation)

Current 

Penalty Level 

($ Amount or 

Range)

SubAgency/ 

Bureau/

Unit

Location 

for Penalty 

Update 

Details

The Clayton Act Section 

7A(g)(1) 15 U.S.C. 18a(g)(1)

Premerger filing 

notification 

violations

1976 February 14, 2019 $ 42,530 BC Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Clayton Act Section 11(l)

15 U.S.C. 21(l)

Violations of 

cease and desist 

orders

1959 February 14, 2019 $ 22,595 BC Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The FTC Act Section 5(l)

15 U.S.C. 45(l)

Unfair or 

deceptive acts or 

practices

1973 February 14, 2019 $ 42,530 BC and 

BCP

Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The FTC Act Section 5(m)(1)(A)

15 U.S.C. 45(m)(1)(A)

Unfair or 

deceptive acts or 

practices

1975 February 14, 2019 $ 42,530 BC and 

BCP

Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The FTC Act Section 5(m)(1)(B)

15 U.S.C. 45(m)(1)(B)

Unfair or 

deceptive acts or 

practices

1975 February 14, 2019 $ 42,530 BC and 

BCP

Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The FTC Act Section 10 15 U.S.C. 50 Failure to file 

required reports

1914 February 14, 2019 $ 559 BC and 

BCP

Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Webb-Pomerene (Export Trade) 

Act Section 5 15 U.S.C. 65

Failure to 

file required 

statements

1918 February 14, 2019 $ 559 BC Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Wool Products Labeling Act 

Section 6(b) 15 U.S.C. 68d(b)

Failure to 

maintain 

required records 

1940 February 14, 2019 $ 559 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982
98 FY 2019 Agency Financial Report

OTHER INFORMATION

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

Statutory 

Authority 

Penalty 

(Name or 

Description)

Year 

Enacted

Latest year of 

adjustment 

(via statute or 

regulation)

Current 

Penalty Level 

($ Amount or 

Range)

SubAgency/ 

Bureau/

Unit

Location 

for Penalty 

Update 

Details

The Fur Products Labeling Act 

Section 3(e) 15 U.S.C. 69a(e)

Failure to 

maintain 

required records 

1951 February 14, 2019 $ 559 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Fur Products Labeling Act 

Section 8(d)(2) 15 U.S.C. 69f(d)(2)

Failure to 

maintain 

required records 

1951 February 14, 2019 $ 559 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Energy Policy and Conservation 

Act Section 333(a) 42 U.S.C. 6303(a)

Knowing 

violations

1975 February 14, 2019 $ 460 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Energy Policy and Conservation 

Act Section 525(a) 42 U.S.C. 6395(a)

Recycled 

oil labeling 

violations

1975 February 14, 2019 $ 22,595 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Energy Policy and Conservation 

Act Section 525(b) 42 U.S.C. 6395(b)

Willful violations 1975 February 14, 2019 $ 42,530 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Fair Credit Reporting Act Section 

621(a)(2) 15 U.S.C. 1681s(a)(2)

Knowing 

violations

1996 February 14, 2019 $ 3,993 BCP Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Medicare Prescription Drug 

Inprovement and Modernization Act 

of 2003 Public Law 108-173 Section 

1115(a) 21 U.S.C. 355 note

Non-compliance 

with filing 

requirements

2003 February 14, 2019 $ 15,036 BC Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

The Energy Independence and 

Security Act of 2007 Section 814(a) 

42 U.S.C. 17304

Market 

manipulation or 

provision of false 

information to 

federal agencies

2007 February 14, 2019 $ 1,210,340 BC Federal Register 

Vol.84, February 

14, 2019, pages 

3980-3982

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

(CONTINUED)
FY 2019 Agency Financial Report 99

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

Appendices
100 FY 2019 Agency Financial Report

APPENDICES

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

APPENDIX A: ACRONYMS

Acronym Definition

AFR Agency Financial Report 

AIBL Atlantic International Bank Limited 

APP Annual Performance Plan 

APR Annual Performance Report 

ARC Administrative Resource Center

ATO Authorized To Operate

ATU Authorization to Use

BC Bureau of Competition 

BCP Bureau of Consumer Protection 

CAP Corrective Action Plan

CEAR Certificate of Excellence in Accountability Reporting

CFO Chief Financial Officer

CFPB Consumer Financial Protection Bureau

COPA Certificates of Public Advantage

COPPA Children’s Online Privacy Protection Act 

CSRS Civil Service Retirement System 

DEB Drug Eluting Beads

DNC Do Not Call 

DOJ Department of Justice 

DOL Department of Labor 

DOT Department of Transportation

EEI Employee Engagement Index 

EFT Electronic Funds Transfer 

ERM Enterprise Risk Management 

FASAB Federal Accounting Standards Advisory Board 

FBwT Fund Balance with Treasury 

FCC Federal Communications Commission

FECA Federal Employees’ Compensation Act 

FEVS Federal Employee Viewpoint Survey

FedRAMP Federal Risk and Authorization Management Program 

FEGLIP Federal Employees’ Group Life Insurance Program 

FEHBP Federal Employees’ Health Benefit Program 

FERS Federal Employees’ Retirement System 

FERS-FRAE Federal Employees’ Retirement System – Further Revised Annuity Employees

FERS-RAE Federal Employees’ Retirement System – Revised Annuity Employees

FISMA Federal Information Security Management Act 

FMFIA Federal Managers’ Financial Integrity Act 

FMO Financial Management Office 

FRDAA Fraud Reduction Data Analytics Act

FTC Federal Trade Commission 

FTE Full-Time Equivalent 
FY 2019 Agency Financial Report 101

APPENDICES

www.ftc.gov | Fiscal Year 2019 | Federal Trade Commission

Acronym Definition

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GSA General Services Administration 

HSR Hart-Scott-Rodino Act 

IBC Department of the Interior Business Center

ICN International Competition Network

ICOR Internal Control Over Reporting

IG Inspector General 

IPERIA Improper Payments Elimination and Recovery Improvement Act 

IRS Internal Revenue Service

ISP Internet Service Provider

IT Information Technology 

N/A Not Applicable or Not Available 

NIST National Institute of Standards and Technology 

OFF Oracle Federal Financials 

OIA Office of International Affairs 

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPA Office of Public Affairs

OPM Office of Personnel Management 

PIO Performance Improvement Officer 

PMRO Performance Measure Reporting Official 

PP&E Property, Plant, and Equipment 

SAT Senior Assessment Team 

SBR Statement of Budgetary Resources 

SMC Senior Management Council

SSAE Statement on Standards for Attestation Engagements 

SSP Shared Service Provider

TAS Treasury Account Symbol 

TED Technology Enforcement Division

TSP Thrift Savings Plan

WAN Wide-Area Network
102 FY 2019 Agency Financial Report

APPENDICES

Federal Trade Commission | Fiscal Year 2019 | www.ftc.gov

APPENDIX B: CONTACT INFORMATION AND ACKNOWLEDGEMENTS

FEDERAL TRADE COMMISSION 600 Pennsylvania Avenue, NW

Washington, D C 20580

General Information Number 202-326-2222

Internet Home Page www ftc gov

FTC Spanish Home Page www ftc gov/espanol

Strategic Plan Internet Site www ftc gov/about-ftc/performance

FTC Press Releases www ftc gov/news-events/press-releases

AGENCY FINANCIAL REPORT (AFR) SPECIFIC

The FTC welcomes comments or suggestions for improvement of its AFR Please contact the agency to provide 

feedback or to request additional copies 

AFR Internet Site www ftc gov/about-ftc/performance

AFR Contact Randall Salzer

AFR Telephone 202-326-2028

AFR Email Address gpra@ftc gov

AFR Fax Number 202-326-3529

AFR Mailing Address Federal Trade Commission

Attn: AFR, M/D H-701 

600 Pennsylvania Avenue, NW

Washington, D C 20580

CONSUMER RESPONSE CENTER

General Complaints 877-FTC-HELP (877-382-4357) 

Identity Theft Complaints 877-ID-THEFT (877-438-4338) 

TTY (Teletype Consumer Response Center) 866-653-4261 

FTC Complaint Assistant www ftc gov/complaint 

Identity Theft Education, Complaints, and Recovery Plan www identitytheft gov 

National Do Not Call Registry www donotcall gov 

ACKNOWLEDGEMENTS

The FTC offers our sincerest thanks and acknowledges the following individuals who made significant contributions 

in producing this report: Tara Koslov of the Office of the Chairman; George Adam, Patricia Bak, Chris Bryan, Holly 

Frost, Kathryn Gillis, James Hale, Tonia Hill, Lonnie Johnson, Qi Li, Leonard Nadybal, Joseph O’Leska, David Rebich, 

David Robbins, Randall Salzer, Lori Walsh-Van Wey, and Michael Ward of the Office of the Executive Director; Nathan 

Hawthorne, Andria Jones and Kelly Signs of the Bureau of Competition; Frank Gorman and Jenny Kellogg of the 

Bureau of Consumer Protection; Philip Runco and Catherine Wayne of the Office of Congressional Relations; Mary 

Harmison and Andrew Katsaros of the Office of the Inspector General; Russell Damtoft and Kristina Mulligan of the 

Office of International Affairs; Jacob Hamburger of the Office of Policy Planning; and Rich Custer, Betsy Lordan, 

and Jason Wolf of the Office of Public Affairs Finally, we offer thanks to AOC Solutions, Heartland Consulting, and 

Graphic Visions for their contributions in the design and production of this report 

WWW.FTC.GOV 

/federaltrade 

commission @FTC ftc.gov /FTCvideos