2016 FEDERAL TRADE 

COMMISSION AGENCY FINANCIAL 

REPORT

FEDERAL TRADE C OMMISSION

Fiscal Year 2016

Agency Financial

Report
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Fiscal Year 2016 Agency Financial Report

Introduction
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Fiscal Year 2016 Agency Financial Report

ABOUT THIS REPORT

The Federal Trade Commission’s (FTC) fiscal year (FY) 2016 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

•	 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 

•	 Improper Payments Information Act of 2002, as amended by IPERIA 

•	 Government Performance and Results Modernization Act of 2010 

•	 Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

This is the third year the FTC is producing an AFR and an Annual Performance Report (APR) in lieu of a combined 

Performance and Accountability Report. The FY 2016 APR will be combined with the FY 2017-2018 Annual Performance 

Plan (APP) and included in the FY 2018 Congressional Budget Justification in 2017. The AFR and the combined APP and 

APR will be published at the FTC’s website.

Certificate of Excellence and Special Award

The FTC received the Association of Government Accountants’ Certificate of Excellence in Accountability Reporting for its 

FY 2015 AFR as well as a Special Recognition award for Best Media summary of Improper Payments.

 
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Fiscal Year 2016 Agency Financial Report

HOW THIS REPORT IS ORGANIZED

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

1. MANAGEMENT’S DISCUSSION AND ANALYSIS

This section provides an overview of the FTC’s mission and organization, an overview of key 

performance goals and efficiency measures, mission challenges, financial highlights, and 

management assurances on internal controls, financial systems, and compliance with laws 

and regulations.

2. FINANCIAL SECTION

This section provides financial details, including the independent auditor’s report and audited 

financial statements with accompanying notes.

3. OTHER INFORMATION

This section provides management and performance challenges identified by the Inspector 

General along with the Chairwoman’s response and a summary of financial statement audit 

and management assurances.

4. APPENDICES

Appendix A provides the data quality information for FTC’s key performance goals 

and efficiency measures; Appendix B lists the acronyms cited throughout this report; 

Appendix C lists useful links for references; Appendix D provides contact information and 

acknowledgements.

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Fiscal Year 2016 Agency Financial Report

Management’s

Discussion

and Analysis

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Financial

Section

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Other

Information

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Appendices
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Fiscal Year 2016 Agency Financial Report

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 also has been directed to enforce a wide variety of other consumer 

protection laws and regulations.

LAWS ENFORCED

The FTC is a 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 Clayton Act, Telemarking 

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 with seven regions across the United States. 

The agency utilized 1,165 full-time equivalent employees during FY 2016.

The FTC’s new budget authority in FY 2016 was comprised of $307 million of enacted authority and $4 million of 

reimbursable authority, for total new budget authority of $311 million.
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Fiscal Year 2016 Agency Financial Report

Edith Ramirez

Chairwoman

MESSAGE FROM THE CHAIRWOMAN

The Federal Trade Commission is a highly effective 

independent agency with the important dual mission 

of protecting consumers and promoting competition. 

In FY 2016, the FTC continued to exemplify good 

government by advancing consumer interests while 

encouraging innovation and competition in our economy. 

This Agency Financial Report highlights the FTC’s major 

accomplishments, illustrates how we manage our 

resources, and outlines our plans to address the challenges 

ahead.

FY 2016 PERFORMANCE 

HIGHLIGHTS

CONSUMER PROTECTION

The FTC’s consumer protection enforcement initiatives 

are primarily focused on addressing trends we see in 

the marketplace: stopping fraud in every community, 

protecting consumers on new technology platforms, 

safeguarding consumers’ privacy and data security, and 

prosecuting false or deceptive advertising claims. The 

FTC also engages in significant policy work and research 

through, for example, our Office of Technology Research 

and Investigation, and the numerous workshops and 

seminars we hold each year on consumer issues.

Stopping fraud is one of the FTC’s top consumer protection 

priorities, and for good reason: fraud causes enormous 

harm to consumers. In July, for example, the FTC obtained 

an order requiring multi-level marketing company 

Herbalife to restructure its U.S. business operations and 

pay $200 million in consumer redress to settle allegations 

that the company deceived consumers into believing 

they could earn substantial money selling the company’s 

nutritional supplements and personal care products. In its 

complaint against Herbalife, which has a large presence 

in the Latino community, the FTC also charged that the 

multi-level marketing company’s compensation structure 

was unfair because it rewarded distributors for recruiting 

others to join and purchase products in order to advance 

in the marketing program, rather than in response to actual 

retail demand for the products. We alleged that Herbalife’s 

marketing methods caused substantial economic injury to 

most of its distributors.

Protecting consumers as they use and benefit from new 

technologies and platforms has been another important 

priority for the agency. In April, a federal judge granted the 

FTC’s request for summary judgment against Amazon.com 

for billing consumers for unauthorized in-app charges 

incurred by children within otherwise “free” apps, finding 

that Amazon’s disclosures about the possibility of in-app 

charges were not sufficient to inform consumers about 

the charges. The FTC had also reached settlements with 

Apple, Inc. and Google, Inc. for similar unauthorized in-app 

charges incurred by children, resulting in refunds to 

consumers totaling over $50 million.

The FTC is the lead government agency in protecting 

consumer privacy through enforcement, policy, and 

business education initiatives. Earlier this year, the 

Commission secured its largest data security judgment 

to date when LifeLock agreed to pay $100 million in 

consumer redress to settle charges that it violated a 

2010 federal court order that required the company to 

secure consumers’ personal information and prohibited 

deceptive advertising of its services. The FTC also reached 

a settlement with Practice Fusion, a cloud-based company 
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Fiscal Year 2016 Agency Financial Report

that provides management services to physicians. The FTC 

alleged that the company deceived hundreds of thousands 

of consumers by soliciting reviews about their doctors with 

an online healthcare survey, without disclosing that the 

reviews – many of which included consumers’ full names, 

medications, health conditions and treatments – would be 

publicly posted on the internet. The settlement prohibits 

Practice Fusion from making deceptive statements about 

the extent to which it uses, maintains and protects the 

privacy or confidentiality of the information it collects. 

In the largest advertising case in FTC’s history, Volkswagen 

entered into a settlement that created a $10 billion 

consumer compensation fund to resolve allegations 

that the company unfairly sold 555,000 diesel cars with 

illegal defeat devices designed to defeat emissions tests 

and deceptively advertised these cars with claims that 

they were low-emission and environmentally friendly. 

The settlement will compensate consumers by either 

providing an all cash buyback for more than the car’s 

current replacement value, a no-penalty lease termination, 

or technical modifications to the car combined with a cash 

payment. 

The FTC has also focused on challenging deceptive online 

advertising. The FTC filed a complaint in federal court 

alleging that Roca Labs, Inc., a Florida-based marketer of 

a line of weight-loss supplements, made baseless claims 

for their products and then threatened to enforce “gag 

clause” provisions against consumers to stop them from 

posting negative reviews and testimonials online. In our 

case against LeadClick Media, LLC, an affiliate marketing 

network operator, the U.S. Court of Appeals for the Second 

Circuit upheld a lower court ruling requiring it to pay 

$11.9 million for its part in helping to promote LeanSpa 

weight-loss supplements. LeadClick’s network lured 

consumers to LeanSpa’s online store through fake news 

websites designed to trick consumers into believing that 

real, independent news outlets and genuine customers, 

rather than paid advertisers and actors, had reviewed and 

endorsed the products. 

PROMOTING COMPETITION

For more than 100 years, the Commission has actively 

enforced the antitrust laws in a range of industries of critical 

importance to American consumers, including health 

care, technology, energy, consumer goods and services, 

and manufacturing. The agency also conducts workshops, 

publishes studies and pursues advocacy opportunities to 

promote competition and educate policymakers about its 

benefits. 

In FY 2016, merger enforcement actions spanned 

numerous markets, including consumer goods, health care, 

pharmaceuticals, manufactured goods, and technology. In 

December 2015, the Commission filed suit to block Staples, 

Inc.’s proposed $6.3 billion acquisition of Office Depot, 

a merger that would eliminate beneficial competition 

that large companies rely on to reduce the cost of office 

supplies. Staples, the country’s largest seller of office 

products and services, and Office Depot are each other’s 

closest competitors in the sale of “consumable” office 

supplies to large business customers. In May, following 

a hearing, a federal court in Washington, DC granted the 

Commission’s request for a preliminary injunction blocking 

the merger, after which the parties abandoned the 

proposed transaction.

The Commission has long prioritized promoting 

competition in healthcare provider markets because it 

helps contain costs, improves quality and encourages 

innovation, filing three challenges to hospital mergers 

in FY 2016. For example, the Commission alleged that a 

proposed merger between Penn State Hershey Medical 

Center and Pinnacle Health System would substantially 

lessen competition in the market for general acute care 

services in four counties around Harrisburg, Pennsylvania. 

In September 2016, the United States Court of Appeals 

for the Third Circuit overturned a district court ruling and 

granted the Commission’s request to enjoin the merger. 

The appellate court found that the district court failed 

to correctly identify the relevant geographic market in 

the case. Following the appellate decision, the parties 

abandoned the proposed transaction. 

The FTC also maintains an active program to identify and 

stop anticompetitive business conduct. The Commission 

earned a significant appellate victory when the Eleventh 

Circuit affirmed its decision and order that McWane Inc. 

unlawfully maintained its monopoly in the market for 

domestically manufactured ductile iron pipe fittings. More 

recently, the Commission continued its commitment to 

challenging harmful exclusionary single-firm conduct, 

filing an administrative complaint against Invibio, a 

company that supplies some of the world’s largest medical 

device makers with a high-performance polymer used to 

make spinal and other medical implants. In July, the FTC 

approved a final order settling charges against Invibio, 

prohibiting the company from entering into exclusive 
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Fiscal Year 2016 Agency Financial Report

supply contracts and from preventing current customers 

from using an alternative source of the polymer.

The pharmaceutical sector has also experienced significant 

merger activity in recent years, and the Commission 

continues to carefully review mergers between 

pharmaceutical manufacturers and require divestitures 

where necessary to maintain competition. In July, Teva 

Parmaceutical Industries agreed to sell the rights and assets 

related to 79 pharmaceutical products to settle FTC charges 

that its proposed $40.5 billion acquisition of Allergan PLC’s 

generic pharmaceutical business would be anticompetitive. 

The remedy requires Teva to divest the drug portfolio to 11 

firms, marking the largest drug divestiture order in an FTC 

pharmaceutical merger case. Also in July, Mylan, Inc. agreed 

to divest the rights and assets related to two generic 

pharmaceutical products in order to settle FTC charges that 

its proposed $7.2 billion acquisition of Swedish drug maker 

Meda would be anticompetitive. The FTC order preserves 

competition in the markets for generic drugs that treat 

muscle spasms/stiffness and refractory epilepsy.

OUTREACH AND PARTNERSHIPS

Consumers, industry and our law enforcement partners 

keep us informed about real-world trends and challenges 

in the marketplace. Consumers can contact us online or via 

toll free phone numbers. Our public outreach also includes 

online resources, such as www.ftc.gov, much of which 

is also available in Spanish. We also provide updates on 

Facebook and Twitter, and host educational videos on the 

FTC’s YouTube channel. The FTC’s online Business Center 

offers extensive guidance to businesses. 

FINANCIAL MANAGEMENT

For the FY 2016 independent financial audit, we received 

our 20th consecutive unmodified opinion. During the 

course of performing a management control review, the 

FTC identified a material weakness in the design of our 

internal controls regarding accounts receivable balances 

held by receivers appointed by federal court judges in 

some of our law enforcement cases. As a result of this 

review, the FTC implemented compensating controls 

to correct the weakness as of September 30, 2016. I am 

pleased to report that the FTC financial management 

systems substantially conform with the Federal Financial 

Management Improvement Act of 1996 (FFMIA), applicable 

financial systems requirements, the Federal accounting 

standards and the U.S. Standard General Ledger at the 

transaction level. (see Statement of Assurance, p. 34) 

FUTURE CHALLENGES

In pursuing our strategic goals and objectives, many of 

the FTC’s challenges are defined by the conditions of 

the marketplace, and thus are ever changing. We work 

to stay informed about new technologies, which can 

bring tremendous benefits to consumers, but also pose 

challenges on both the competition and consumer 

protection fronts. For a more detailed description of our 

mission challenges that have been identified by senior 

management, see p. 27.

In addition, the IG identified four key management 

challenges this year as: (1) securing the agency’s 

information systems and networks from destruction, 

data loss or compromise; (2) accelerating maturity of the 

agency’s information technology governance process; (3) 

improving acquisition planning and contract management; 

and (4) the acquisition of employee suitability 

determinations. Agency management agrees that these are 

important challenges, and concurs with the IG’s assessment 

of our progress in addressing these challenges (see the 

“Other Information section”).

Working with our partners and colleagues in Congress, 

industry, and domestic and international law enforcement, 

we will continue to strive to protect American consumers 

and promote competition.

Edith Ramirez

November 10, 2016
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Fiscal Year 2016 Agency Financial Report

TABLE OF CONTENTS

INTRODUCTION......................................................................................................................................................................................................3

About This Report.............................................................................................................................................................................................................................................5

How This Report Is Organized...................................................................................................................................................................................................................6

The FTC AT-A-GLANCE....................................................................................................................................................................................................................................7

Message from the Chairwoman...............................................................................................................................................................................................................8

MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................................................................... 13

Agency and Mission Information.........................................................................................................................................................................................................15

Vision ...........................................................................................................................................................................................................................................................15

Mission .......................................................................................................................................................................................................................................................15

Our Purpose and History ................................................................................................................................................................................................................15

Our Organization .................................................................................................................................................................................................................................16

Our People ...............................................................................................................................................................................................................................................18

Performance Highlights.............................................................................................................................................................................................................................19

Strategic and Performance Planning Framework ...........................................................................................................................................................19

Performance Measurement Reporting Process ...............................................................................................................................................................20

Verification and Validation of Performance Data .............................................................................................................................................................20

Performance Goals Overview ......................................................................................................................................................................................................20

Agency Mission Challenges.....................................................................................................................................................................................................................27

Management Assurances..........................................................................................................................................................................................................................33

Statement of Assurance .................................................................................................................................................................................................................34

Financial Highlights ...........................................................................................................................................................................................................................37

FINANCIAL SECTION .................................................................................................................................................................................... 45

Message from the Chief Financial Officer .......................................................................................................................................................................................47

OIG Transmittal Letter..................................................................................................................................................................................................................................48

Report of Independent Auditors..........................................................................................................................................................................................................50

Management’s Response..........................................................................................................................................................................................................................55

Principal Financial Statements...............................................................................................................................................................................................................56

Notes to the Financial Statements.......................................................................................................................................................................................................62

OTHER INFORMATION.................................................................................................................................................................................. 81

Inspector General Identified Management and Performance Challenges ................................................................................................................83

Chairwoman’s Response to IG Challenges.................................................................................................................................................................................. 100

Summary of Financial Statement Audit and Management Assurances ................................................................................................................... 101

Combined Schedule of Spending.................................................................................................................................................................................................... 102

Improper Payments Elimination and Recovery Act Reporting Details ...................................................................................................................... 103

“Freeze the Footprint” Implementation......................................................................................................................................................................................... 104

Civil Monetary Penalty Adjustment for Inflation Implementation Reporting Act Details ............................................................................. 105

APPENDICES..........................................................................................................................................................................................................107

Appendix A: Data Quality Information........................................................................................................................................................................................... 109

Appendix B: Acronyms............................................................................................................................................................................................................................. 114

Appendix C: Other Useful Links.......................................................................................................................................................................................................... 117

Appendix D: Contact Information and Acknowledgements........................................................................................................................................... 120
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Management’s

Discussion

and Analysis
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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

Working to protect consumers by preventing 

anticompetitive, deceptive, and unfair business 

practices, enhancing informed consumer choice and 

public understanding of the competitive process, and 

accomplishing this 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 also are 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, the 

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.
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 The FTC Commission as of September 30, 2016: (left to right) Maureen Ohlhausen, Commissioner; Edith Ramirez, Chairwoman; 

Terrell McSweeny, Commissioner. 

OUR ORGANIZATION

The FTC is an independent Federal agency that reports 

to the President and to Congress on its actions. These 

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.

The FTC is headed by a Commission composed of five 

commissioners, nominated by the President and confirmed 

by the Senate, each serving a staggered seven-year term. 

No more than three commissioners may be from the same 

political party. The President designates one commissioner 

to act as Chair. The post is currently held by Edith Ramirez, 

a commissioner since 2010, who was confirmed as 

Chairwoman on March 4, 2013. Commissioners include 

Maureen K. Ohlhausen and Terrell McSweeny. 

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

Bureau of Consumer Protection, the Bureau of Competition, 

and the Bureau of Economics. Their work is aided by 

the Offices of the General Counsel, International Affairs, 

Policy Planning, the Secretary, the Executive Director, 

Congressional Relations, Public Affairs, Administrative Law 

Judges, Equal Employment Opportunity, Inspector General, 

and seven regional offices located throughout the country. 

For more information about the agency’s components, visit 

the FTC’s Bureaus and Offices webpage.
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Regions

Commissioner

Vacant

Office of the

Executive Director**

David B Robbins

Bureau of

Competition

Deborah L. Feinstein

Bureau of

Consumer Protection

Jessica L. Rich

Office of the

General Counsel

David Shonka

(Acting)

Bureau of

Economics

Ginger Zhe Zin

Commissioner

Terrell McSweeny

Commissioner

Maureen Ohlhausen

Office of

Congressional Relations

Jeanne Bumpus

Office of

Public Affairs

Justin Cole

Office of

International Affairs

Randolph W. Tritell

Office of

Policy Planning

Tara Isa Koslov (Acting)

Office of

the Secretary

Donald S. Clark

Commissioner

Vacant

Chairwoman

Edith Ramirez

Chief of Staff

Heather Hippsley

Chief Technologist

Lorrie Cranor

Office of

Inspector General*

Roslyn Mazer

Office of Equal

Employment Opportunity

Kevin D. Williams

Office of

Administrative Law Judges*

D. Michael Chappell

Privacy Office

Katherine Race Brin

* An independent organization within the FTC

 ** The Office of the Executive Director oversees FTC administrative support functions, including information technology, human 

resources, finance, acquisition, and other administrative support.

FEDERAL TRADE COMMISSION ORGANIZATION CHART
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The graphic below illustrates the locations of the FTC regions.

OUR PEOPLE

The FTC’s workforce is its greatest asset. The 

agency’s workforce consists of 1,161 civil 

service employees onboard at the end of 

the fiscal year. This chart shows the FTC’s 

workforce composition by major category.

FTC’s Workforce Composition
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Fiscal Year 2016 Agency Financial Report

PERFORMANCE HIGHLIGHTS

As stated in the introduction to this report, this is the 

third 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 2016 

APR will be combined with the FY 2017-2018 Annual 

Performance Plan (APP) and included in the FY 2018 

Congressional Budget Justification to be published in 2017. 

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 and efficiency 

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 performance planning framework originates from 

the FTC’s Strategic Plan for Fiscal Years 2014 to 2018 and 

is supported by the FTC’s Performance Plan. The FTC’s 

work is structured around three strategic goals and eight 

objectives. The following table shows the FTC’s net costs for 

its strategic goals.

STRATEGIC GOALS

(Dollars in millions) OBJECTIVES

GOAL 1: PROTECT CONSUMERS

Net Costs: $171

1.1 Identify and take actions to address deceptive or unfair 

practices that harm consumers.

1.2 Provide the public with knowledge and tools to prevent 

harm to consumers.

1.3 Collaborate with domestic and international partners to 

enhance consumer protection.

GOAL 2: MAINTAIN COMPETITION

Net Costs: $29

2.1 Identify and take actions to address anticompetitive mergers 

and practices that harm consumers.

2.2 Engage in effective research and stakeholder outreach to 

promote competition, advance its understanding, and create 

awareness of its benefits to consumers.

2.3 Collaborate with domestic and international partners to 

preserve and promote competition.

GOAL 3: ADVANCE ORGANIZATIONAL 

PERFORMANCE

Goal 3’s costs are distributed to Goal 1 and Goal 2 

predominately by Goal 1 and Goal 2’s 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.

Note: Net Costs represent the resources used to achieve strategic goals and signify the relative efficiency and costeffectiveness of agency program/operations. The FTC does not divide net costs by objective.
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Fiscal Year 2016 Agency Financial Report

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 to the Deputy 

Performance Improvement Officer (PIO) on a monthly, 

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 Chairwoman are briefed on the 

results and any significant variances in planned versus 

actual results. The PIO and Deputy PIO then coordinate 

with the PMROs on any adjustments to strategies and 

tactics based on the performance results.

VERIFICATION AND VALIDATION OF 

PERFORMANCE DATA

Appendix A: Data Quality Information contains definitions, 

calculation/formula information, data sources and 

limitations, and additional details on verification and 

validation for the performance goals included in this report. 

Additionally, the following steps outline how the agency 

ensures 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 senior 

management 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 holds program managers accountable 

to set meaningful and realistic targets that also 

challenge the agency to 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 quarterly performance 

measurement reviews with management as 

well as periodic reviews throughout the fiscal 

year with FTC Executives. This process includes 

substantiating that actual results reported are 

indeed correct whenever those results reveal 

significant discrepancies or variances from the 

target.

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 the 

general controls the FTC has in place, which ensure only 

authorized staff can access key systems, each application 

(system) incorporates internal validation edits to ensure 

the accuracy of data contained therein. These application 

edits include checks for reasonableness, consistency, and 

accuracy. Crosschecks between other internal automated 

systems also provide assurances of data accuracy and 

consistency. 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 

The FTC has established 29 performance goals for 

assessing program performance against strategic goals 

and objectives. Of the 29 total performance goals, 24 met 

or exceeded target, two did not meet target, and data 

was not available at the time of publication for three. The 

following table displays historical high-level performance 

trends for all of the FTC’s performance goals for the past 

three years.
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Fiscal Year 2016 Agency Financial Report

COunT Of PERfORmAnCE GOALS

FY 

2016

FY 

2015*

FY 

2014

GOAL 1: PROTECT 

CONSUMERS

Target Met/Exceeded 10 10 6

Target Not Met 1 1 3

Data Not Available at Time of 

Publication 1 0 0

Data Not Available 0 1 0

Baseline Data Year 0 0 3

GOAL 2: MAINTAIN 

COMPETITION

Target Met/Exceeded 8 10 8

Target Not Met 1 0 2

Data Not Available at Time of 

Publication 1 0 0

GOAL 3: ADVANCE 

ORGANIZATIONAL 

PERFORMANCE

Target Met/Exceeded 6 7 7

Target Not Met 0 0 0

Data Not Available at Time of 

Publication 1 0 0

TOTAL Target Met/Exceeded 24 27 21

Target Not Met 2 1 5

Data Not Available at Time of 

Publication 3 0 0

Data Not Available 0 1 0

Baseline Data Year 0 0 3

TOTAL MEASURES 29 29 29

*The FY 2015 count was updated after the publication of the FY 2015 AFR to account for one performance goal (3.2.1) for 

which the result became available after publication and one performance goal (2.2.2) for which the result was incorrectly 

counted as Not Met in the FY 2015 AFR. For more information, see the FY 2016-2017 Performance Plan and FY 2015 

Performance Report. 

Of the 29 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. Additionally, four 

performance goals are considered efficiency performance 

goals because either they are ratios of outcomes to 

inputs or they capture administrative timeliness. For each 

performance goal, the FTC has established a performance 

target.

The following tables summarize actual performance during 

FY 2016 against established targets for the FTC’s key and 

efficiency performance goals. The tables also include actual 

results from the prior two fiscal years. The FTC met or 

exceeded eight of the nine key performance goals and four 

of the four efficiency performance goals.

LEGEND FOR UPCOMING TABLES

✔ Signifies that the target is met or exceeded

✖ Signifies that the target is not met
22 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

Volkswagen to Provide Up to $10 Billion to Remedy 

False Ad Campaign 

The FTC announced its largest false advertising settlement in its history

with Volkswagen Group of America, which agreed to spend up to $10 

billion to settle charges that VW’s “clean diesel” claims deceived consumers. 

This settlement will offer car owners or leasees of nearly 500,000 model 

year 2009-2015 2.0 liter diesel vehicles either an all cash buyback for more 

than the car’s current replacement value or no penalty lease terminations, 

or the possibility of a technical modification to the car and a separate cash 

payment. 

STRATEGIC GOAL 1: PROTECT CONSUMERS

Objective 1.1: Identify and take actions to address deceptive or unfair practices that harm consumers.

Key/efficiency Performance Goal 1.1.3

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

(Efficiency measure)

2016 2015 2014

Target Actual Target Actual Target Actual

650.0% 1,083.8% 650.0% 723.4% Baseline Year 769.0%

✔ ✔

Key Performance Goal 1.1.4

Amount of money the FTC returned to consumers and forwarded to the U.S. Treasury. (Outcome measure)

2016 2015 2014

Target Actual Target Actual Target Actual

$60.0 million $57.6 million $60.0 million $76.2 million Baseline Year $66.9 million

✖ ✔

Note: This target was not met, because a major redress order for the AT&T case was not fulfilled in FY 2016 due to the 

complex nature of the refund process.

Objective 1.2: Provide the public with knowledge and tools to prevent harm to consumers.

Key Performance Goal 1.2.2

Number of federal, state, local, international, and private partnerships to maximize the reach of consumer and business 

education campaigns. (Output measure)

2016 2015 2014

Target Actual Target Actual Target Actual

11,500 36,691

✔

11,500 16,321

✔

11,250 12,205

✔
www.ftc.gov • Federal Trade Commission 23

Fiscal Year 2016 Agency Financial Report

Herbalife Restructuring its Multi-level Marketing Operations 

Herbalife International of America, Inc., and its related companies, 

agreed to fully restructure their U.S. business operations and pay 

$200 million to compensate consumers to settle FTC charges. 

The Commission alleged that Herbalife deceived consumers into 

believing they could earn a substantial income from retail sales of 

the company’s health products through participation in a multi-level 

marketing structure that the agency alleged was unfair. Under the 

settlement, Herbalife will implement a new compensation structure 

for participants, which is based on retail sales of products, not on 

recruitment of distributors to buy products. 

FTC Helps Develop International Guidelines for Electronic Commerce 

The FTC played a leading role in developing international guidelines on consumer 

protection in electronic commerce at the Organization for Economic Cooperation 

and Development (OECD). The OECD, an international forum of 35 countries with 

market economies, issued new best practice guidelines for governments and businesses 

in March 2016, updating its 1999 guidelines. The new guidelines address emerging 

trends and challenges consumers face in a variety of areas, including mobile applications 

and payment systems, digital content, Internet platforms that enable consumer-toconsumer transactions, and goods and services offered in exchange for personal data. 

The guidelines also address dispute resolution and redress, and the need for consumer 

protection authorities to improve their ability to cooperate in cross-border e-commerce 

matters. The original guidelines had a significant impact on the development of 

legislation and self-regulation around the world and the 2016 revision should have a 

similar influence. 

Objective 1.3: Collaborate with domestic and international partners to enhance consumer protection.

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. (Output measure)

2016 2015 2014

Target Actual Target Actual Target Actual

40 53

✔

40 58

✔

40 45

✔
24 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

STRATEGIC GOAL 2: MAINTAIN COMPETITION

Objective 2.1: Identify and take actions to address anticompetitive mergers and practices that harm consumers.

Key Performance Goal 2.1.1

Percentage of actions** taken to maintain competition in substantial merger and nonmerger investigations. (Outcome 

measure)

2016 2015 2014

Target Actual Target Actual Target Actual

40.0-60.0% 54.6%

✔

40.0-60.0% 57.7%

✔

40.0-60.0% 57.1%

✔

**This refers to the percentage of substantial investigations closed with a positive outcome. See Appendix A for more 

information.

Note: The FY 2015 results for performance goals 2.1.1 and 2.1.3 were updated after the publication of the FY 2015 AFR 

and Performance Report, because a merger action was unintentionally excluded from the original calculation. The results 

reported in the FY 2015 AFR were as follows: Performance Goal 2.1.1 55.8%; Performance Goal 2.1.3 5,129.1%

Key/efficiency Performance Goal 2.1.3

Total consumer savings compared to the amount of FTC resources allocated to the merger program. (Efficiency measure)

2016 2015 2014

Target Actual Target Actual Target Actual

2,600.0% 4,640.3%

✔

2,600.0% 5,131.6%

✔

2,600.0% 2,505.2%

✖

Note: See pp. 82 and 84 of the FY 2016-2017 Performance Plan and FY 2015 Performance Report for more information on 

why the results for performance goals 2.1.3 and 2.1.5 increased significantly in FY 2015 compared to FY 2014.

FTC Successfully Prevents Anticompetitive Staples/Office Depot 

Merger...Again 

In May 2016, the federal district court for the District of Columbia granted the Commission’s request for a preliminary 

injunction enjoining Staples’ proposed merger with Office Depot, which the Commission alleged would reduce competition 

in the market for the sale and distribution of core consumable office supplies and paper sold to large business-to-business 

customers for their own use. After the court’s decision, the parties abandoned their merger, marking the second time that 

the Commission successfully blocked a proposed merger between the rival office supply retailers. In 1997, the Commission 

successfully challenged the merger of Staples and Office Depot, charging 

that the proposed merger would likely reduce competition for retail sales of 

consumable office supplies by office supply superstores in several local markets. 

Fundamental changes in the retail office supply market driven in large part 

by increasing competition from online retailers has reduced the likelihood of 

competitive harm in retail office supply markets today, but the court nonetheless 

agreed that the dynamics for business customers were different. 
www.ftc.gov • Federal Trade Commission 25

Fiscal Year 2016 Agency Financial Report

Key/efficiency Performance Goal 2.1.5

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

measure)

2016 2015 2014

Target Actual Target Actual Target Actual

400.0% 5,228.6%

✔

400.0% 4,863.3%

✔

1,850.0% 2,028.3%

✔

Note: See p. 87 of the FY 2015-2016 Performance Plan and FY 2014 Performance Report for more information on the target 

change shown.

Objective 2.3: Collaborate with domestic and international partners to preserve and promote competition.

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. (Output measure)

2016 2015 2014

Target Actual Target Actual Target Actual

95.0% 100.0%

✔

95.0% 100.0%

✔

95.0% 100.0%

✔

FTC Ends Exclusive Dealing Scheme by Supplier of Polymer used in 

Medical Implants

Following on the Commission’s appellate victory ending ductile iron pipe fitting supplier 

McWane’s illegal monopolization through the use of exclusive dealing contracts in the domestic 

market for certain pipe fittings, the Commission continued its commitment to challenging 

harmful exclusionary single-firm conduct. This year, the Commission charged that Invibio 

engaged in illegal monopolization in the market for a high-performance polymer used to 

make spinal and other medical implants by using anticompetitive exclusionary contract terms 

to prevent rivals’ entry. The Commission issued a consent order prohibiting Invibio’s use 

of exclusionary supply contracts or otherwise preventing customers from using alternative 

suppliers for its products. 
26 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

STRATEGIC GOAL 3: ADVANCE ORGANIZATIONAL PERFORMANCE

Objective 3.1: Optimize resource management and infrastructure.

efficiency Performance Goal 3.1.4

Average number of days for the FTC to release information in response to a simple FOIA request. (Efficiency measure)

2016 2015 2014

Target Actual Target Actual Target Actual

6.0 days 5.9 days

✔

6.0 days 5.5 days

✔

6.0 days 5.4 days

✔

Note: Performance Goal 3.1.4 is one of four efficiency performance goals, and the only one that is not also a key 

performance goal. It is included here, because this report contains the agency’s key and efficiency performance goals.

Objective 3.2: Cultivate a high-performing, diverse, and engaged workforce.

Key Performance Goal 3.2.2

The extent employees believe the FTC has the talent necessary to achieve organizational goals. (Outcome measure)

2016 2015 2014

Target Actual Target Actual Target Actual

Exceed the 

governmentwide results 

of 58.0% on 

the Federal 

Employee 

Viewpoint 

Survey’s Talent 

Management 

Index.

74.0%

✔

57.0% 72.0%

✔

55.0% 70.0%

✔
www.ftc.gov • Federal Trade Commission 27

Fiscal Year 2016 Agency Financial Report

PrivacyCon 

In January 2016, the FTC hosted a full day conference – PrivacyCon – 

to examine cutting-edge research and trends in protecting consumer 

privacy and security. The event was the first of its kind and brought 

together leading stakeholders, including whitehat researchers, 

academics, industry representatives, federal policymakers, consumer 

advocates and others. The FTC called for research from a variety of 

disciplines, such as data analytics, computer security, marketing, and 

economics. The event opened up a dialogue between the research 

community and policymakers, helping ensure that privacy and data security policy is grounded in research. With over 300 

in-person attendees, 1,500 virtual attendees watching via webcast, and many more following PrivacyCon on Twitter, the 

event was a huge success. On January 12, 2017, the FTC will be hosting PrivacyCon 2. 

AGENCY MISSION CHALLENGES

The FTC stands prepared to face the challenges of 

today’s marketplace as a champion for competition and 

consumers. For example, as consumers and businesses 

encounter difficulties with financial scams, deceptive or 

fraudulent advertising, online privacy and data security, 

and anticompetitive business practices in the technology, 

health care and other industries, the FTC steps forward 

to promote competition and protect consumers. 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.

Management’s assessment was performed separately from 

the Inspector General’s (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

Under the goal of protecting consumers, the FTC will 

continue to give priority to addressing the following 

challenges: protecting Americans from fraud including in 

the financial services marketplace; protecting consumer 

privacy and improving data security including combating 

identity theft; stopping harmful practices that exploit new 

technology; and addressing emerging advertising issues 

and targeting deceptive advertising.

PROTECTING AMERICANS FROM FRAUD:

Fraud affects all consumers, and the FTC will continue its 

enforcement efforts to stop scams, focusing on those that 

cause the greatest consumer injury. The FTC continues 

to receive consumer complaints about imposter scams 

in which the perpetrators pose as government agencies, 

well-known companies, utility companies, or other 

organizations. Certain scams, such as those involving 

business and income opportunities, affect all consumers, 

but can pose even a greater risk to those from lower 

income or underserved communities. The FTC also will 

continue to use the tools and authorities available to it to 

protect consumers by taking enforcement actions to stop 

telemarketing and online frauds; deceptive mortgage, 

student loan debt relief and other debt services; deceptive 

motor vehicle sales, leasing, and financing; payday lending 

operations engaging in deceptive practices; and abusive 

debt collection practices. These practices can have severe 

consequences for consumers who can least afford it. 

The FTC will continue to closely coordinate with other 

federal agency partners to ensure that consumers are 

protected in the financial marketplace and to avoid any 

duplicative efforts between the agencies. The FTC also 
28 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

Financial Technology Series 

In the summer of 2016, the FTC launched a forum series exploring 

emerging financial technology and its implications for consumers 

bringing together researchers, industry representatives, law 

enforcement agencies, and consumer advocates for half-day 

discussion sessions. The first forum addressed marketplace lending 

which typically involves nonbank financial platforms that leverage 

technology to reach potential borrowers, evaluate creditworthiness, 

and facilitate loans. The second event in the FinTech series took 

place in October and focused on crowdfunding and peer-to-peer 

payment systems. Crowdfunding is the process by which companies 

and individuals raise money from the public to fund new products, 

projects or individual needs. The third event will examine peer-to-peer payment systems, which are online services often 

in the form of mobile apps that allow consumers to share money electronically. 

will combat frauds targeting seniors, service members, 

and non-English-speaking consumers, and evaluate the 

best education messages and outreach methods for these 

groups. (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 law 

enforcement efforts to protect consumers from unfair and 

deceptive practices related to the security and privacy 

of their personal information, while preserving the many 

benefits that technological advances offer. It will also 

promote stronger privacy and security protections through 

policy initiatives on a range of topics such as convening 

workshops on drones and smart TVs. The agency will 

bring enforcement actions as appropriate against entities 

that violate the Children’s Online Privacy Protection Act 

(COPPA) Rule. In addition, the FTC will educate businesses 

on privacy and security issues. The agency also will 

participate in interagency groups, promote self-regulatory 

efforts, provide technical assistance to Congress on 

draft legislation, and participate in international privacy 

initiatives.

In addition, identity theft exacts a heavy financial and 

emotional toll from its victims, and the FTC will continue 

to assist the millions of Americans who are 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. Our 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 agency also will train local law 

enforcement to spot and prosecute identity theft, and 

it will update educational materials. (Objectives 1.1, 1.2, 

and 1.3)

STOPPING HARMFUL PRACTICES THAT 

EXPLOIT NEW TECHNOLOGY:

Technology provides countless benefits to consumers, 

including choice, convenience, and increased access to 

goods, services, and information. It also enables, however, 

new vehicles for fraudulent, deceptive, and unfair practices 

in the marketplace. The FTC will continue to examine 

consumer protection issues in the mobile and connected 
www.ftc.gov • Federal Trade Commission 29

Fiscal Year 2016 Agency Financial Report

marketplace. The FTC will take enforcement actions against 

unfair and deceptive practices, including deceptive online 

marketing techniques as well as harmful practices that 

target or impact financial technologies used by consumers 

to store, share, and spend money. Consumers and law 

enforcers face challenges as a result of technological 

advances that facilitate the use of illegal robocalls and 

make it easier for fraudsters perpetrating telemarketing 

scams to hide their location. 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. In addition, the Office of 

Technology Research and Investigation is conducting 

research on emerging technologies to assist with 

enforcement actions, educate consumers, and inform 

policy on consumer protection matters involving emerging 

technologies. (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. 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 false 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 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 and seniors; 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”). (Objectives 1.1, 1.2, and 1.3)

STRATEGIC GOAL 2: MAINTAIN 

COMPETITION

Under the Maintain Competition goal, the FTC will 

continue to prioritize promoting competition and 

preventing anticompetitive conduct in 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 competition before federal courts, 

state legislatures, and other governmental agencies.

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 is a top priority for the Commission.

The FTC will continue to focus substantial resources on 

illegal reverse payment patent settlement agreements 

through which brand and generic drug manufacturers 

agree to delay generic competition. As the 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, used to delay generic 

entry into pharmaceutical markets. Such practices deny 

consumers access to lower priced generic drugs, leading 

to significantly higher drug costs. 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 
30 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

FTC Wins Appellate Victory in Regional Hospital Challenge 

In September, the United States Court of Appeals for the Third Circuit 

overturned a district court ruling and granted the Commission’s request

to enjoin the proposed merger of Penn State Hershey Medical Center and 

Pinnacle Health System. The Commission alleged that the deal would 

substantially lessen competition in the market for general acute care 

services in four counties around Harrisburg, Pennsylvania. The appellate 

court found that the district court failed to correctly identify the relevant 

geographic market in the case. Specifically, the lower court erred in relying 

on a discredited economic theory and disregarding the response of insurers 

to a proposed price increase, which more accurately reflects the role that 

insurers play in healthcare markets. After the appellate decision, the parties 

abandoned the proposed transaction. 

years, the FTC has required significant divestitures in a large 

number of pharmaceutical transactions. Additionally, since 

2007, the FTC has sought to promote competition in critical 

health care markets by challenging a growing number of 

health care service provider deals.

In health care markets in particular, the FTC is increasingly 

facing a challenging landscape in attempting to maintain 

competition as state and local communities adjust to 

recent Supreme Court rulings in FTC v. Phoebe Putney 

Health System, Inc., and in North Carolina State Board of 

Dental Examiners v. FTC. These rulings clarified the reach 

of the state action doctrine and require states to actively 

supervise state boards controlled by market participants 

when they act to suppress competition in violation of the 

federal antitrust laws.

Beyond enforcement, the FTC utilizes its full range of policy 

and advocacy tools to promote competition in health care 

markets. For example, the FTC increasingly 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. The 

antitrust laws already permit procompetitive collaboration 

that would benefit consumers; therefore, the main effect 

of these statutes would be to immunize conduct that likely 

would restrain competition and result in higher health 

care prices for consumers, without generating offsetting 

benefits.

The FTC also attempts to better understand the markets 

it monitors and to anticipate future antitrust law and 

policy developments through research and scholarship. 

(Objectives 2.1 and 2.2)

CONTINUING EMPHASIS ON TECHNOLOGY: 

The continuing importance of technology and the fast 

pace at which it evolves is a crucial marketplace challenge. 

FTC antitrust investigations involve increasingly complex 

high-technology sectors of the economy, such as 

devices used in manufacturing, electronic components, 

and computer hardware and software. In enforcing the 

antitrust laws, the FTC analyzes mergers and acquisitions 

filed under the Hart-Scott-Rodino (HSR) Act, and also 

monitors the marketplace for non-reportable transactions 

that might raise anticompetitive concerns. The FTC takes 

action against those mergers that are likely to reduce or 

eliminate competition. The FTC is vigilant where a firm 

may be illegally using a dominant market position to stifle 

competition in order to raise prices, reduce the quality 

or choice of goods and services, or reduce innovation; or 

where groups of competitors take collective action that 

threatens to increase prices or stifle innovation.

Antitrust and competition policy matters in the technology 

marketplace increasingly intersect with complex 

intellectual property (IP) concerns. IP concerns remain a 

Commission priority due to their widespread impact on 

competition and consumer protection. For example, the 

FTC conducted a study of approximately twenty-five patent 
www.ftc.gov • Federal Trade Commission 31

Fiscal Year 2016 Agency Financial Report

FTC Focuses on PAE Business Models and Activity 

In FY 2016, the agency worked on completing its report on patent 

assertion entities (PAEs), describing PAE business models and 

presenting recommendations for reform. PAEs are businesses 

that purchase patents and seek to generate revenue by asserting 

the patents against alleged infringers. Earlier government and 

academic studies of PAE activity have focused on publicly available 

litigation data. In order to enhance the quality of the policy 

dialogue, and gain a deeper understanding of the PAE business 

model, the FTC used its authority under the Federal Trade 

Commission Act to obtain nonpublic data directly from PAEs. 

This allowed the FTC to better understand how the PAEs structure 

and organize themselves, as well as view confidential acquisition and licensing terms and data. 

assertion entities (PAEs)—businesses that purchase patents 

and generate revenues by asserting them against alleged 

infringers—and fifteen other entities to better understand 

the PAE market. The FTC issued a report that made 

recommendations regarding patent litigation procedures 

and provides guidance to other government agencies, 

academics, and industry participants. Additionally, FTC 

staff provides guidance concerning competition issues in 

the technology industry to various entities at the national, 

state, and local levels. (Objectives 2.1 and 2.2)

PREVENTING ANTICOMPETITIVE ACTIVITY IN 

THE ENERGY INDUSTRY: 

The agency continues to closely monitor energy markets 

to identify and challenge anticompetitive mergers and 

conduct. FTC merger enforcement actions have resulted 

in multiple divestitures in the energy market during recent 

years, including Cumberland Gulf/ArcLight Capital Partners. 

The FTC also continuously examines price movements 

and other activity through its Gasoline and Diesel Price 

Monitoring Project in an effort to identify anticompetitive 

conduct such as illegal agreements among competitors, 

agreements between manufacturers and product dealers, 

and monopolization that may undermine the benefits of 

competition. 

To prepare and support agency staff in meeting 

these challenges, the FTC continues to study energy 

markets—often in response to congressionally mandated 

requirements—thus developing the professional expertise 

and body of knowledge needed to address emerging 

concerns. In FY 2016, the FTC sponsored a workshop 

entitled “Something New Under the Sun” which examined 

competition and consumer protection issues in the solar 

energy industry. The knowledge gained from the workshop 

will likely influence future advocacy efforts.

The FTC also issues reports on the factors that influence the 

prices that American consumers pay for gas. In compliance 

with the Energy Policy Act of 2005, the FTC issued its 

eleventh annual Ethanol Market report in 2015, which 

concluded that the market is less concentrated than it was 

eleven years ago. (Objectives 2.1 and 2.2)

MAINTAINING ROBUST COMPETITION IN 

RETAIL MARKETS:

Retail markets 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 for the benefit of consumers by 

keeping prices down, improving quality, and expanding 

innovation and consumer choices. In recent years, the 

Commission has successfully challenged several large retail 

mergers including Staples/Office Depot, Dollar Tree/Family 

Dollar, and several proposed supermarket acquisitions, 

which would likely have reduced competition in many 

geographic markets absent the Commission’s challenges. 

As in other sectors, the FTC also continues to study 

evolving competitive dynamics that affect how consumers 

shop for products they want to buy. In January of 2016, the 
32 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

FTC Hosts Workshops to Study Automobile Sales and Rooftop 

Solar Panels 

The FTC hosted two policy workshops this year to explore cuttingedge distribution issues in two different industries. In January 2016, 

the FTC hosted a workshop that examined how automobiles are sold. 

The sale of new automobiles is heavily regulated by state laws, and 

the workshop, brought together economists, attorneys, and industry 

representatives to discuss the competitive implications and consumer 

protection issues surrounding these regulations. In June 2016, the 

FTC hosted a workshop on solar distributed generation (DG), which 

involves solar panels 

installed on individual 

homes. State regulatory 

boards are debating the 

proper regulations and rate design for solar DG. At our workshop, experts 

discussed the development of the solar industry and solar panel technology, 

as well as current approaches to compensating owners of solar panels for 

the power they produce. The workshop also explored potential consumer 

confusion when purchasing rooftop solar panels, as well as deceptive and 

fraudulent activities by sellers of these products. 

Commission held a public workshop examining the current 

state and future trends in automotive distribution including 

direct sales to consumers, warranty reimbursement, the 

future of autonomous vehicles and connected cars. The 

workshop built upon advocacy efforts from previous years 

regarding the potentially anticompetitive effects of laws 

prohibiting direct-to-consumer auto sales. (Objectives 2.1 

and 2.2)
www.ftc.gov • Federal Trade Commission 33

Fiscal Year 2016 Agency Financial Report

MANAGEMENT ASSURANCES

IMPLEMENTATION OF THE FEDERAL 

MANAGERS’ FINANCIAL INTEGRITY 

ACT (FMFIA)

The FTC’s Enterprise Risk Management (ERM) and 

management controls are integral to daily management 

of operations and activities that achieve the FTC’s strategic 

goals and objectives. Internal controls are part of all agency 

systems and processes. Managers are held accountable 

for assessing and improving these controls and relevant 

performance risks in order to provide efficient and effective 

program operations as well as program compliance with 

applicable laws and regulations.

The FTC’s Senior Assessment Team (SAT) provides strategic 

direction and oversight over the agency’s internal 

control program. This includes assessing and improving 

compliance with applicable guidance (e.g., Office of 

Management and Budget Circular A-123, Management’s 

Responsibility for Enterprise Risk Management and Internal 

Control), and communicating the results of reviews to 

senior management and the head of the agency.

During FY 2016, the SAT activities 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, and monitoring corrective action plans and 

remediation progress.

This year, the FTC approved and implemented an ERM 

program plan, strategy, and pilot initiative. Resources were 

added to complete additional assessments, implement 

the internal control policy and corrective action plan 

guide, complete all assessable unit profiles, and begin 

the second year of a multi-year assessment plan for key 

financial processes. These results and other information 

from independent audits or reviews performed by the 

Office of Inspector General (OIG) and the Government 

Accountability Office (GAO) (e.g., Federal Information 

Security Management Act review), independent audits of 

service providers’ operations and financial systems (e.g., 

Statement on Standards for Attestation Engagements 

(SSAE) No. 16) and other relevant evaluations and 

control assessments were considered by the SAT and the 

agency head in determining if any management control 

deficiencies or nonconformances must be disclosed in the 

annual assurance statement.

The Chairwoman’s assurance statement that follows 

is supported by the processes and reviews described 

above, which were carried out in FY 2016. Management 

assurances tables appear in the Other Information section.
34 Federal Trade Commission • www.ftc.gov

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Chairwoman’s FMFIA Statement of Assurance
www.ftc.gov • Federal Trade Commission 35

Fiscal Year 2016 Agency Financial Report

SUMMARY OF MATERIAL WEAKNESS 

AND NONCONFORMANCES

As noted in the Chairwoman’s FMFIA Statement of 

Assurance, the FTC’s management detected a material 

weakness in the design of the internal controls regarding 

accounts receivable balances held by receivers 

appointed by Federal court judges in some of our law 

enforcement cases. During FY 2016, an updated policy 

was implemented, and compensating controls were 

implemented prior to September 30, 2016 to correct the 

process and sustain an unmodified assurance over the 

effectiveness and efficiency of operations, and reliable 

financial reporting.

The implementation of this policy resulted in the FTC 

reviewing active judgments for receiverships. As a result, 

there was a $29 million upward adjustment of the FY 2015 

Balance sheet, and a $33 million increase in FY 2016 to 

non-entity accounts receivable and offsetting liabilities. 

The adjustments are seen in the FY 2016 Agency Financial 

Report. The restatement was limited to the Balance Sheet, 

no other statements were affected. 

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 National Institute of 

Standards and Technology (NIST) requirements. During 

FY 2016, the FTC has performed four assessment and 

authorization efforts and currently has twelve systems 

authorized to operate. The FTC continues to leverage 

two Federal Risk and Authorization Management 

Program (FedRAMP) Joint Authorization Board provisional 

authorizations – one for the cloud hosting of our public 

web sites and one for the Sentinel Network Services 

systems.

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. All 

eligible, nonexempt debts more than 120 days old have 

been transferred to the U.S. Department of the Treasury 

for cross-servicing. In addition, recurring payments 

were processed by Electronic Funds Transfer (EFT) in 

accordance with the EFT 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 2016, the FTC 

processed 3,570 invoices totaling $188 million that were 

subject to prompt payment. Of these invoices, 98.29 

percent were paid on time. During FY 2016, the FTC paid a 

total of $2,579 in interest penalties, or .0014 percent of the 

total dollar amount invoiced.

IMPROPER PAYMENT ELIMINATION 

AND RECOVERY IMPROVEMENT ACT 

(IPERIA) 

The Improper Payments Elimination and Recovery 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 improper payment 

activities. In accordance with the OMB A-123 Appendix C

guidance, the FTC performed a FY 2015 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 using the eleven qualitative risk factors 

identified in OMB Circular A-123 Appendix C. 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, which define 

payment programs susceptible to improper payments.

As a result of the FY 2015 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. 

Per OMB’s guidance, a FY 2016 risk assessment was not 
36 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

conducted and the next is scheduled to be performed in 

FY 2018. Though no IPERIA risk assessment was conducted 

in FY 2016, scheduled internal control process reviews 

were conducted for payroll, benefits, and “procure to pay” 

processes. These processes execute 90 percent of the FTC’s 

payments and the reviews concluded that key controls 

that provide assurance for the propriety of payments were 

properly designed, in place and functioning properly. 

Additionally, the Interior Business Center, the FTC’s shared 

service provider, compares the FTC’s payee records in the 

financial system with payee records in the Do Not Pay 

database. In addition, the FTC reviews potential matches 

on an on-going basis to prevent improper payments and 

incorporates a pre-award check on potential contractors 

against the Do Not Pay database.

The FY 2015 IPERIA risk assessment performed and 

documented testing of statistical samples from larger 

payment processes that verified the FTC payment 

programs were not susceptible to significant improper 

payments. More information about the FTC’s IPERIA work 

can be found in the Other Information section of this 

report.

AGENCY FINANCIAL MANAGEMENT 

SYSTEMS STRATEGY 

The FTC’s overall strategy for its financial management 

systems framework is driven by the objectives of 

operational effectiveness and efficiency, reliability and 

timeliness of data, and support of requirements for the 

agency’s strategic goals. The FTC obtains hosting and 

application management services from the Department of 

the Interior Business Center (IBC), a Federal Shared Service 

Provider, and has been in the shared services environment, 

using Oracle Federal Financials (OFF), since FY 2008. The 

FTC currently has its core financial, personnel and payroll, 

travel management, and acquisition lifecycle systems 

hosted and supported by the IBC.

The core financial management system is based on OFF 

Release 12, and used for general ledger, accounts payable, 

accounts receivable, budget execution, requisition, contract 

writing, and reporting capabilities. The FTC also has been 

obtaining support from IBC for its Federal Personnel/Payroll 

System (FPPS) since 1998, and the financial data from FPPS 

is interfaced into OFF. 

The FTC, with IBC’s support, continues to modernize and 

integrate our portfolio of financial management systems. 

In FY 2016, with the successful implementation of a new 

requisition and contracting-writing tool, Contract Lifecycle 

Management (CLM) became an integrated module of OFF.

In FY 2017, we will continue to work with IBC to meet the 

May 2017 DATA Act requirements. The FTC is an active 

participant in supporting IBC’s enhancements and releases 

to OFF to establish the necessary configuration and extract 

functionality that will allow our timely reporting and 

submission of the required data files. Also in FY 2017, the 

FTC will further its capability of using business information 

analytics. The FTC will be part of IBC’s effort in migrating 

from the Oracle Discoverer reporting system to the Oracle 

Business Intelligence Enterprise Edition (OBIEE)/Oracle 

Business Intelligence Application (OBIA). This is a prebuilt 

business intelligence solution that will deliver information 

across the organization, from front line users to senior 

management. 

FEDERAL CIVIL PENALTIES INFLATION 

ADJUSTMENT ACT IMPROVEMENTS 

ACT OF 2015

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 the Federal Civil Penalties Inflation Adjustment 

Act Improvements 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.
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Fiscal Year 2016 Agency Financial Report

FINANCIAL HIGHLIGHTS

INTRODUCTION

The financial highlights that follow provide an overview 

of the FTC’s FY 2016 financial statements. An independent 

auditor audited the FTC’s Balance Sheet for the fiscal 

years ending September 30, 2016 and 2015, along with 

the Statement of Net Cost, Statement of Changes in Net 

Position, Statement of Budgetary Resources, Statement of 

Custodial Activity, and accompanying notes. For the 20th

straight year, the FTC received an unmodified opinion on its 

audited financial statements. A summary of the information 

contained in the financial statements is presented in 

the tables below. The complete financial statements, 

including the independent auditor’s reports, notes, and 

supplementary information, are presented in the Financial 

Section of this report.

The FY 2015 Balance Sheet on the FY 2016 Agency 

Financial Report is restated as a result of the FTC’s FY 

2016 implementation of a policy update regarding the 

recording of accounts receivable (and offsetting liability) 

related to the agency’s non-entity consumer redress 

program. The FTC was not recording accounts receivable 

and the offsetting liability for judgments requiring assets 

to be liquidated by a receiver. The implementation of this 

policy resulted in a $29 million upward adjustment in FY 

2015, and a $33 million increase in FY 2016 to non-entity 

consumer redress accounts receivable and liabilities. The 

net effect of the restatement on the Balance Sheet is zero 

and no other statements are affected. 

CONDENSED BALANCE SHEET 

AS OF SEPTEMBER 30, 2016 AND 2015

(Dollars in Millions) FY 2016

Restated

FY 2015 % Change

Fund balances with Treasury $ 930 $ 869 7%

Cash and other monetary assets 55 21 162%

Accounts receivable, net 99 43 130%

Property, plant, and equipment, net 57 63 (10%)

Total Assets $ 1,141 $ 996 15%

Liability for redress collected $ 852 $ 751 13%

Liability for redress to be collected 98 43 128%

Accounts payable and other 34 32 6%

Total Liabilities $ 984 $ 826 19%

Cumulative results of operations 157 170 (8%)

Total Net Position $ 157 $ 170 (8%)

Total Liabilities and Net Position $ 1,141 $ 996 15%
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BALANCE SHEET

COMPOSITION OF ASSETS

The FTC’s assets consist of both entity and non-entity 

assets. Entity assets, by law, are authorized for the FTC to 

use in its operations, i.e. Property, Plant, and Equipment 

(PP&E). Non-entity assets 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 consumer redress program.

Entity assets totaled $190 million, or 16 percent of all FTC 

assets as of September 30, 2016. The fund balance with 

Treasury of $133 million is the aggregate amount available 

to the FTC to make expenditures and pay liabilities. PP&E, 

net of accumulated depreciation, is $57 million, which is 

comprised of $34 million in leasehold improvements, $14 

million in equipment, and $9 million in software. Of the 

total PP&E, $37 million is associated with the relocation of 

staff to Constitution Center in FY 2014. 

Non-entity assets total $951 million, or 84 percent of all 

FTC assets as of September 30, 2016. Fund balance with 

Treasury (deposit fund) for consumer redress of $797 

million is held temporarily by the FTC until distributed 

to consumers, other harmed entities, third party agents 

pending distribution to consumers on behalf of the FTC, 

or if consumer redress is not practicable a disgorgement 

to Treasury. Cash and other monetary assets of $55 million 

represent consumer redress cash that has been transferred 

to third party agents pending distribution to consumers on 

behalf of the FTC. Net accounts receivable of $99 million 

is comprised of $98 million in net receivables arising from 

court ordered judgments with the consumer redress 

program, and $1 million net receivables for civil monetary 

penalties. 

COMPOSITION OF ASSETS (Dollars in millions)

Entity Assets FY 2016

Restated

FY 2015 Change

Fund balance with Treasury $ 133 $ 139 $ (6)

Property, plant, and equipment $ 57 $ 63 $ (6)

$ 190 $ 202 $ (12)

Non-entity Assets

Fund balance with Treasury $ 797 $ 730 $ 67

Accounts receivable $ 99 $ 43 $ 56

Cash and other monetary assets $ 55 $ 21 $ 34

$ 951 $ 794 $ 157

Total Assets $ 1,141 $ 996 $ 145
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Fiscal Year 2016 Agency Financial Report

ANALYSIS OF ASSETS

The FTC’s total assets were $1,141 million at the end of FY 

2016, an increase of $145 million or 15 percent over the FY 

2015 total of $996 million. 

Entity assets were $190 million at the end of FY 2016, a 

decrease of $12 million or 6 percent from the FY 2015 total 

of $202 million. A $6 million decrease in PP&E is due to the 

continued depreciation of assets placed into service related 

to the FY 2014 relocation of staff to Constitution Center. A 

$6 million decrease in fund balance with Treasury is due to 

an increase in payments for contracted goods and services 

that provided substantial legal support for several litigation 

cases, and payroll related expenditures.

Non-entity assets were $951 million at the end of FY 2016, 

an increase of $157 million or 20 percent over the FY 2015 

total of $794 million. This change is due to a $67 million 

increase in fund balance with Treasury, a $34 million 

increase in cash and other monetary assets, and a $56 

million increase in net accounts receivable.

The $67 million increase in fund balance with Treasury 

consists of $286 million in collections, offset by 

$219 million in disbursements. The majority of the 

collections is attributed to a $200 million collection from 

Herbalife International of America, Inc. to settle FTC charges 

that alleged Herbalife deceived consumers as part of a 

multi-level marketing operation. The $286 million in FY 

2016 collections is a $421 million reduction from the 

$707 million collected in FY 2015. This decrease in year 

to year collections is due to a $458 million collection in 

FY 2015 from a settlement resolving antitrust charges 

that Cephalon, Inc. illegally blocked generic competition, 

known as pay for delay, to its drug Provigil. During FY 2016, 

the FTC disbursed $120 million to claimants in accordance 

with the settlement with Cephalon, Inc.

The $34 million increase in cash and other monetary 

assets is a result of several large judgments where funds 

have been transferred to the third-party contractor, 

pending disbursement to harmed consumers. In the case 

of One Technologies, $20M was transferred to a thirdparty contractor in September for disbursement to more 

than 145,000 consumers who had been lured into an 

online scheme for “free” access to their credit scores, and 

then billed for a recurring $29.95 monthly fee for credit 

monitoring that was never ordered.

ANALYSIS OF ASSETS (Dollars in millions)
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Fiscal Year 2016 Agency Financial Report

The $56 million increase in net accounts receivable is 

largely the result of a net $46 million accounts receivable 

established in association with a payday lending scheme 

judgment ($1,329 million judgment, with $1,283 million 

uncollectible). This judgment represents the largest 

litigated judgment ever obtained by the FTC. It stems 

from a 2012 complaint filed by the FTC, which alleged 

that the operators of a payday lending firm falsely claimed 

they would charge borrowers the loan amount plus a 

one-time finance fee. Instead, the defendants made 

multiple withdrawals from consumer’s bank accounts 

and assessed a new finance fee each time a withdrawal 

was made, without disclosing the true costs of the loan. 

The judgment represents the difference between what 

consumers actually paid on the loans and what they were 

told they would pay. The large allowance is based on an 

analysis by the case manager who assessed the ability of 

the defendant to pay based on the probable recoverable 

value of assets.

COMPOSITION OF LIABILITIES

The FTC’s liabilities consist of both entity and nonentity liabilities. Entity liabilities consist of probable and 

measurable future outflows of FTC entity resources. Nonentity liabilities are the offset (and equal) to the non-entity 

assets.

Entity liabilities totaled $33 million, or 3 percent of all FTC 

liabilities as of September 30, 2016. Employee related 

liabilities of $22 million consist of accrued payroll, accrued 

annual leave wages earned by employees but not yet paid, 

and the Federal Employees Compensation Act (FECA) 

liability. Accounts payable totaling $11 million consists of 

the amounts owed for goods or services received but not 

yet paid.

Non-entity liabilities total $951 million or 97 percent of all 

the FTC liabilities as of September 30, 2016. The liability 

for amounts collected of $852 million is offset by the nonCOMPOSITION OF LIABILITIES (Dollars in millions)

Entity Liabilities FY 2016

Restated

FY 2015 Change

Other Liabilities $ 22 $ 19 $ 3

Accounts payable $ 11 $ 13 $ (2)

$ 33 $ 32 $ 1

Non-entity Liabilities

Liabilities for redress collected $ 852 $ 751 $ 101

Liability for amounts to be collected $ 99 $ 43 $ 56

$ 951 $ 794 $ 158

Total Liabilities $ 984 $ 826 $ 158
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Fiscal Year 2016 Agency Financial Report

entity Treasury deposit fund for consumer redress of $797 

million and the cash and monetary assets of $55 million. 

The liability for amounts to be collected is offset by the 

non-entity asset accounts receivable of $99 million.

ANALYSIS OF LIABILITIES

The FTC’s total liabilities were $984 million at the end of FY 

2016, an increase of $158 million or 19 percent over the FY 

2015 total of $826 million. 

Entity liabilities were $33 million at the end of FY 2016, an 

increase of $1 million or 3 percent over the FY 2015 total of 

$32 million. The increase is due to two additional workdays 

accrued in the year-end payroll accrual, and an increase 

in the number of unfunded annual leave hours accrued 

during FY 2016. 

Non-entity liabilities were $951 million at the end of FY 

2016, an increase of $157 million or 20 percent over the 

FY 2015 total of $794 million. The liability for amounts 

collected increased by $101 million, or 13 percent, and 

the liability for amounts to be collected increased by $56 

million or 130 percent. This is equal to the change seen in 

non-entity assets. 

SUMMARY OF NET POSITION

The FTC’s net position consists of the difference between 

total assets and liabilities. The FTC’s net position was $157 

million at the end of FY 2016, and is a decrease of $13 

million or 8 percent from the FY 2015 total of $170 million. 

STATEMENT OF NET COST

COMPOSITION OF THE NET COST OF 

OPERATIONS

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

less revenue earned for both of the FTC’s strategic goals, 

Protect Consumers and Maintain Competition. The third 

goal, Advance Organizational Performance, has its costs 

distributed to the two strategic goals based on FTE usage 

(unless a cost is clearly attributable to a specific goal). The 

FTC net cost of operations was $200 million in FY 2016, 

which consists of $329 million in gross costs and $129 

million in earned revenue.

In addition to the earned revenue, the FTC collected 

$286 million in non-entity collections in the Treasury 

deposit fund for consumer redress. These funds are not 

included in the Statement of Net Cost, but are important 

in determining the overall impact of the agency’s strategic 

goals. 

The net cost of operations for the Protect Consumers 

strategic goal is $171 million, which consists of $185 

million in gross costs and $14 million in earned revenue. 

The $14 million in earned revenue is from fees collected 

for the National Do Not Call 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. Fees are based on the number of area 

codes downloaded. 

STATEMENT OF NET COST SUMMARY 

FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015

(dOLLARS In mILLIOnS) FY 2016 FY 2015 % Change

Protecting Consumers:

Gross costs $ 185 $ 183 1%

Less: earned revenue (14) (13) 8%

Protecting Consumers 171 170 1%

Maintaining Competition:

Gross costs $ 144 $ 132 9%

Less: earned revenue (115) (116) (1%)

Maintaining Competition 29 16 77%

Net Cost of Operations $ 200 $ 186 8%
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Fiscal Year 2016 Agency Financial Report

The net cost of operations for the Maintain Competition 

strategic goal is $29 million, which consists of $144 million 

in gross costs and $115 million in earned revenue. The 

$115 million in revenue comes from fees collected for 

premerger notification filings under the Hart-Scott-Rodino 

(HSR) Antitrust Improvement Act of 1976. The HSR Act 

requires the filing of premerger notifications with the FTC 

and the Antitrust Division of the Department of Justice 

(DOJ). The filing fees are determined by the value and size 

of the merging parties. By law, the FTC retains one-half of 

all premerger filing fees collected and remits one-half to 

the DOJ Antitrust Division. 

The gross costs for Maintain Competition increased from 

$132 million in FY 2015 to $144 million, an increase of $12 

million or 9 percent. The increase is primarily due to several 

litigation cases that required substantial legal support. One 

such case using significant resources was the successful 

litigation challenging the Staples’ proposed merger with 

Office Depot. In May 2016, the federal district court for the 

District of Columbia granted the Commission’s request for a 

preliminary injunction enjoining Staples’ proposed merger 

with Office Depot. After the court’s decision, the parties 

abandoned their merger, marking the second time that 

the Commission successfully blocked a proposed merger 

between the rival office supply retailers.

BUDGET AUTHORITY

The FTC receives an annual appropriation that is available 

until expended, subject to the Office of Management 

and Budget (OMB) apportionment and Congressional 

provisions on the expenditure of funds (see FTC’s FY 2017 

Congressional Budget Justification, page 7, “Appropriations 

Language Provisions”). The FTC’s budget authority 

is derived from a direct appropriation and offsetting 

collections. 

The FTC’s new budget authority in FY 2016 was comprised 

of $307 million of enacted authority and $4 million of 

reimbursable authority, for total new budget authority 

of $311 million. This represents an increase of $18 million 

or 6 percent from the FY 2015 total of $293 million. The 

$18 million increase is a result of the FTC requesting and 

receiving an increased appropriation of $14 million for 

a planned increase in mandatory expenses attributed 

to pay adjustments, contract and other non-pay related 

inflation, and an increase in costs related to information 

technology modernization and increased expert witnesses. 

The FTC received in excess of $4 million in reimbursable 

authority, for which the FTC entered into agreements with 

other Federal agencies to continue the FTC’s mission of 

protecting consumers and maintaining competition. 

NEW BUDGET AUTHORITY (Dollars in millions)
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Fiscal Year 2016 Agency Financial Report

LIMITATIONS OF FINANCIAL STATEMENTS

FTC management has prepared the FY 2016 financial statements 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 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. One implication is that unfunded liabilities cannot be liquidated 

without legislation that provides resources to do so.

FINANCIAL MANAGEMENT INDICATORS

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

monitor agencies’ financial management practices.

financial manaGemenT inDicaTorS for fy 2016

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) 98.29%

Percentage interest penalties paid to total dollars invoiced .0014%

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%
44 Federal Trade Commission • www.ftc.gov
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Fiscal Year 2016 Agency Financial Report

Financial

Section
46 Federal Trade Commission • www.ftc.gov
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Fiscal Year 2016 Agency Financial Report

no changes to the other statements. This change provides the 

readers of the FTC’s financial statements with more accurate 

information on anticipated collections distributed to consumers 

or disgorged to Treasury. 

In 2016, we continued to strengthen our Enterprise 

Risk Management (ERM) efforts by submitting our ERM 

Implementation Plan to OMB. We also prepared an ERM Guide 

for internal use by the FTC’s Program Managers. The FTC has a 

robust Senior Assessment Team (SAT), which reviews all ERM 

documents, is fully apprised of the results of internal reviews, 

and approves the FTC’s multi-year assessment plan to ensure 

material processes are continuously reviewed and monitored. 

Looking ahead, we are focusing on several efforts to ensure that 

we are good stewards of taxpayer dollars. We are coordinating 

the efforts of our ERM program with the upcoming agency 

update to our Strategic Plan. We are working closely with our 

Shared Service Provider to implement improvements, including 

the needed enhancements to comply with the DATA Act, 

transition to electronic invoicing, and migrate to a business 

intelligence and analytics tool for our enterprise financial 

information.

These accomplishments and on-going projects demonstrate 

our commitment to effectively managing our resources, and 

I am proud of the progress we have made during the past 

couple of years to promote sound business practices in the 

conduct of our agency’s mission. 

On behalf of the Chairwoman and everyone in the Financial 

Management Office, I would like to extend our special thanks 

to the financial management and program professionals 

throughout the FTC. Your dedication and hard work has 

enabled the FTC to deliver efficient programs and provide 

accurate, transparent, and timely financial information to the 

public. Your service to the FTC and American consumers is 

greatly appreciated.

David Rebich

Chief Financial Officer

November 10, 2016

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

DAVID REBICH

CHIEF FINANCIAL OFFICER

I am pleased to present FTC’s Agency Financial Report (AFR) 

for Fiscal Year 2016. The AFR is a useful summary of the 

FTC’s use of resources, operating performance, and financial 

stewardship. It includes comparative Principal Financial 

Statements and Footnotes for FY 2016 and FY 2015. These 

financial statements, coupled with the agency’s Performance 

Highlights, demonstrate how the FTC optimizes the use of 

its financial resources to protect American consumers and 

maintain competition in the marketplace.

For the twentieth consecutive year, an independent 

auditor rendered an unmodified opinion on FTC’s Financial 

Statements. We are very proud of this accomplishment and 

worked very hard to achieve this result. Some of our efforts this 

year include: 

•	 Resolving and closing all FY 2015 and prior financial 

statement audit findings;

•	 Assessing our Entity-wide Controls;

•	 Conducting internal control reviews of identified 

assessable units;

•	 Monitoring the status of Corrective Action Plans (CAPs), 

which resulted in closing 52 recommendations from 

internal and external reviews;

•	 Implementing the integrated Contract Lifecycle 

Management (CLM) system on time and within budget; 

and

•	 Educating FTC’s Contracting Officer Representatives 

through supplemental in-house training and posting a 

wide variety of COR resources online, including acquisition 

process maps and sample acquisition documents.

We received a new material weakness in internal controls 

during FY 2016. During the course of performing 

management control reviews, we detected an improper 

design of controls and implemented compensating controls 

to correct the process and fairly present the FTC’s financial 

statements in all material aspects as of September 30, 2016. 

Due to our findings from the management control review, we 

reassessed and broadened our definition of non-entity assets 

to include receivables held by court appointed receivers, 

resulting in a restatement of the FY 2015 balance sheet, with 
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OIG Transmittal Letter
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Report of the Independent Auditors
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Fiscal Year 2016 Agency Financial Report

MANAGEMENT’S RESPONSE
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Fiscal Year 2016 Agency Financial Report

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 any 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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Fiscal Year 2016 Agency Financial Report

FEDERAL TRADE COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2016 AND 2015 (Restated)

(Dollars in Thousands)

2016

Restated 

2015

Assets (Notes 2 and 18):

Intragovernmental:

Fund balance with Treasury (Note 3) $ 929,693 $ 868,730

Accounts receivable, net (Note 5) 75 65

Total intragovernmental 929,768 868,795

Cash and other monetary assets (Note 4) 54,495 20,373

Accounts receivable, net (Notes 5 and 18) 98,996 43,105 

Property, plant, and equipment, net (Note 6) 57,368 63,310

Total Assets $ 1,140,627 $ 995,583

Liabilities (Notes 7 and 18): 

Intragovernmental:

Accounts payable $ 621 $ 1,118 

Other liabilities (Note 8) 4,973 3,400 

Total intragovernmental 5,594 4,518 

Accounts payable 10,353 11,508 

Accrued redress due to claimants (Note 18) 98,182 41,741

Undisbursed redress collections 850,890 750,177 

Other (Note 8) 19,275 18,141 

Total Liabilities $ 984,294 $ 826,085 

Net Position (Note 1(p)):

Unexpended appropriations - - 

Cumulative results of operations 156,333 169,498 

Total Net Position $ 156,333 $ 169,498 

Total Liabilities and Net Position (Note 18) $ 1,140,627 $ 995,583

The accompanying notes are an integral part of these statements.
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Fiscal Year 2016 Agency Financial Report

FEDERAL TRADE COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in Thousands)

2016 2015

Costs by Strategic Goal:

Strategic Goal 1: Protect Consumers:

Gross costs (Note 11) $ 184,670 $ 183,468 

Less: earned revenue (Note 11) (13,867) (13,458)

Net cost 170,803 170,010

Strategic Goal 2: Maintain Competition:

Gross costs (Note 11) 143,924 132,312 

Less: earned revenue (Note 11) (114,673) (115,814)

Net cost 29,251 16,498

Net Cost of Operations $ 200,054 $ 186,508

The accompanying notes are an integral part of these statements.
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Fiscal Year 2016 Agency Financial Report

FEDERAL TRADE COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in Thousands)

2016 2015

Cumulative Results of Operations:

Beginning balance $ 169,498 $ 168,132

Budgetary Financing Sources:

Appropriations used 179,804 179,675

Other Financing Sources (Non-Exchange):

Imputed financing 7,085 8,199

Total financing sources 186,889 187,874

Net cost of operations (200,054) (186,508)

Net change (13,165) 1,366

Cumulative Results of Operations $ 156,333 $ 169,498

Unexpended Appropriations:

Beginning balance $ - $ - 

Budgetary Financing Sources:

Appropriations received 179,804 179,675 

Appropriations used (179,804) (179,675)

Total budgetary financing sources - - 

Total Unexpended Appropriations - - 

Net Position (Note 1(p)) $ 156,333 $ 169,498

The accompanying notes are an integral part of these statements.
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Fiscal Year 2016 Agency Financial Report

FEDERAL TRADE COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in Thousands)

2016 2015

Budgetary Resources: 

 Unobligated balance, brought forward, October 1 $ 22,118 $ 27,447 

 Recoveries of unpaid prior year obligations 20,317 6,963

 Other changes in unobligated balance 28 4

 Unobligated balance from prior year budget authority, net 42,463 34,414

 Appropriations 179,804 179,675 

 Spending authority from offsetting collections 131,425 113,323 

Total Budgetary Resources $ 353,692 $ 327,412

Status of Budgetary Resources: 

 New obligations and upward adjustments (total) (Note 12) $ 327,742 $ 305,294 

 Unobligated balance, end of year: 

 Apportioned, unexpired accounts 10,346 11,747 

 Unapportioned, unexpired accounts 15,604 10,371

 Unexpired unobligated balance, end of year 25,950 22,118 

 Unobligated balance, end of year (total) 25,950 22,118 

Total Status of Budgetary Resources $ 353,692 $ 327,412

Change in Obligated Balance: 

 Unpaid Obligations: 

 Unpaid obligations, brought forward, October 1 $ 91,647 $ 96,624 

 New obligations and upward adjustments (Note 12) 327,742 305,294 

 Outlays, gross (315,721) (303,308)

 Recoveries of prior year unpaid obligations (20,317) (6,963)

 Unpaid obligations, end of year 83,351 91,647 

 Uncollected Payments: 

 Uncollected payments from Federal sources, brought forward, October 1 (577) (745)

 Change in uncollected payments from Federal sources, brought forward , October 1 (938) 168 

 Uncollected payments from Federal sources, end of year (1,515) (577)

 Memorandum (non-add) Entries: 

 Obligated balance, start of year 91,070 95,877 

 Obligated balance, end of year 81,836 91,070 

Budget Authority and Outlays, Net: 

 Budget authority, gross $ 311,229 $ 292,998 

 Actual offsetting collections (130,515) (129,173)

 Change in uncollected customer payments from Federal sources (938) 168

 Recoveries of prior year paid obligations 28 4

 Budget authority, net $ 179,804 $ 163,997 

 Outlays, gross $ 315,721 $ 303,308 

 Actual offsetting collections (130,515) (129,173)

 Outlays, net 185,206 174,135 

 Distributed offsetting receipts (6,825) (21,331)

 Agency outlays, net $ 178,381 $ 152,804 

The accompanying notes are an integral part of these statements.
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Fiscal Year 2016 Agency Financial Report

FEDERAL TRADE COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in Thousands)

Protect 

Consumers

Maintain 

Competition 2016 2015

Revenue Activity (Note 15):

Sources of collections:

Premerger filing fees (net of refunds) $ - $ 114,173 $ 114,173 $ 115,678 

Civil penalties and fines 6,291 - 6,291 5,411

Consumer redress 6,680 - 6,680 21,081 

Other miscellaneous receipts 145 - 145 250

Total cash collections 13,116 114,173 127,289 142,420

Accrual adjustments (554) - (554) (1,328)

Total Custodial Revenue $ 12,562 $ 114,173 $ 126,735 $ 141,092 

Disposition of Collections (Note 15):

Transferred to others:

Treasury general fund $ 13,116 $ - $ 13,116 $ 26,742

Department of Justice - 114,093 114,093 115,678 

Amounts yet to be transferred (554) 80 (474) (1,328) 

Total Disposition of Collections $ 12,562 $ 114,173 $ 126,735 $ 141,092 

Net Custodial Activity $ - $ - $ - $ -

The accompanying notes are an integral part of these statements.
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Fiscal Year 2016 Agency Financial Report

NOTES TO THE FINANCIAL 

STATEMENTS 

NOTE 1—SIGNIFICANT ACCOUNTING 

POLICIES 

(a) REPORTING ENTITY

The Federal Trade Commission (FTC) is an independent 

agency of the U.S. Government, established by the 

Federal Trade Commission Act of 1914. The FTC enforces 

a variety of Federal antitrust and consumer protection 

laws. Its mission is working to protect consumers by 

preventing anticompetitive, deceptive, and unfair business 

practices, enhancing informed consumer choice and 

public understanding of the competitive process, and 

accomplishing this without unduly burdening legitimate 

business activity. The FTC is headed by five Commissioners, 

nominated by the President and confirmed by the Senate, 

each serving a seven-year term. The President chooses one 

Commissioner to act as Chair. 

The FTC carries out its mission of protecting consumers 

and maintaining competition through three bureaus: 

The Bureau of Consumer Protection (BCP), the Bureau of 

Competition (BC), and the Bureau of Economics (BE), which 

supports both BCP and BC. Additionally, various offices 

within the FTC provide critical mission support to the 

bureaus. The FTC’s staff is located in Washington, D.C. and 

seven other geographic areas. 

The financial statements and notes include the financial 

activity recorded in all of the funds under the FTC’s control. 

As further described in Note 1(b), Fund Accounting 

Structure, 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. 

(b) FUND ACCOUNTING STRUCTURE

The FTC, like other Federal agencies, uses Treasury Account 

Symbols (TAS) to record and track financial activity. These 

TAS are described as: 

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 the 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 collections 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 included in the FTC’s unavailable – 

temporary reduction balance. (See Note 3, Fund Balance 

with Treasury) 

Deposit Fund 

Consumer Redress Escrow (TAS 29X6013): This account 

consists of amounts collected under the consumer redress 

program and held temporarily by the FTC until money is 

distributed to consumers or harmed entities (or to a third 

party agent that distributes money to consumers on the 

FTC’s behalf ), or transferred to the general fund of the 

Treasury. These funds, which are considered non-entity 

funds, do not affect the FTC’s Net Position and are not 

reported on the Statement of Changes in Net Position. 

(See Note 3, Fund Balance with Treasury and Note 16, 

Consumer Redress Activities) 

Clearing/Suspense Fund 

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 fund at the end of the fiscal year is 

transferred to the general fund of the Treasury. 
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Fiscal Year 2016 Agency Financial Report

General Fund Proprietary Receipts (TAS 29 3220): 

Miscellaneous receipts that by law are not available for the 

FTC’s use, and collections in connection with the consumer 

redress program for which redress to consumers is not 

practicable, are held in this account until the end of the 

fiscal year when they are transferred to the general fund of 

the Treasury.

(c) 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. 

The FTC’s financial statements are prepared in conformity 

with generally accepted accounting principles (GAAP) for 

Federal entities and with OMB Circular A-136, Financial 

Reporting Requirements (as revised October 2016). 

Accordingly, revenues are recognized when earned and 

expenses are recognized when incurred, without regard 

to the receipt or payment of cash. These principles differ 

from budgetary reporting principles. The differences relate 

primarily to the capitalization and depreciation of property 

and equipment, as well as the recognition of other longterm assets and liabilities.

As described in Note 1(b), Fund Accounting Structure, 

the FTC maintains a single fund to account for salaries 

and all necessary expenses. Further, there are limited 

intra-entity 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. 

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. 

(d) 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. 

(e) BUDGET AUTHORITY

The Congress passes appropriations annually that provide 

the FTC with authority to obligate funds for necessary 

expenses to carry out mandated program activities. These 

funds are available until expended, subject to the OMB 

apportionment and to Congressional provisions on the 

expenditure of funds (see FTC’s FY 2017 Congressional 

Budget Justification, page 7, “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 (29X0100), 

as reflected in the Statement of Budgetary Resources. 

(f) ENTITY AND NON-ENTITY ASSETS

The FTC accounts for and reports on both entity and nonentity 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 agency’s use are non-entity assets. Non-entity assets 

include collections and accounts receivable that arise from 

court-order 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 an offsetting non-entity 

liability of equal amount. (See Note 2, Entity and Non-Entity 
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Fiscal Year 2016 Agency Financial Report

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. General funds 

include 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) CASH AND OTHER MONETARY ASSETS

In connection with the consumer redress program (and 

described in Note 16, Consumer Redress Activities), 

amounts necessary to cover current disbursement 

schedules are transferred from the FTC’s deposit fund 

to third party redress administrators to be held as cash 

in accounts at financial institutions. Upon approval 

by the FTC’s Redress Administration Office, the redress 

administrators process claims and disburse redress 

proceeds to affected consumers and approved claimants. 

The cash held in these financial institutions is included in 

the FTC’s financial statements as a non-entity asset. (See 

Note 4, Cash and Other Monetary Assets)

(i) ACCOUNTS RECEIVABLE, NET

Accounts receivable, net of allowances, reflect the Federal 

Accounting Standards Advisory Board (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.

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 record, and 

the probable recovery amount including the value of 

assets. Based on the litigation and collection status, cases 

are referred to the Treasury for collection action. 

(j) 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 for 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 items based on the above thresholds and 

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. Additionally, assets under development, such 

as internal use software and leasehold improvements, 

with an estimated aggregate cost meeting 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 
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Fiscal Year 2016 Agency Financial Report

6, Property, Plant, and Equipment)

(k) 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 liabilities that are 

entity and non-entity. 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). (See 

Note 7, Liabilities Covered and Not Covered by Budgetary 

Resources) 

(l) 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. 

(m) 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 are covered by FERS-FRAE (Further Revised Annuity 

Employees). The FTC contribution is 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 and 50 percent of the next 2 percent. 

CSRS participating 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. The OPM reports this 

information. 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 Cost of Operations to Budget) 

(n) FECA AND OTHER POST-EMPLOYMENT 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 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 7, Liabilities Covered and 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 
66 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

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. 

(o) 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. It 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 7, Liabilities Covered and Not 

Covered by Budgetary Resources)

(p) NET POSITION

Cumulative results of operations represent the net results 

of operations since inception, the cumulative amount of 

prior period adjustments, the remaining book value of 

capitalized assets, and future funding requirements. 

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) 

(q) REVENUES AND OTHER FINANCING SOURCES

The FTC’s activities are financed through exchange revenue 

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 collections for the National Do Not Call 

Registry. Additionally, exchange revenues include a small 

amount of reimbursements for services performed under 

inter-agency agreements. 

(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 direct full-time 

equivalents used by each of these two goals. 
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Fiscal Year 2016 Agency Financial Report

NOTE 2—ENTITY AND NON-ENTITY 

ASSETS 

The FTC’s entity assets are comprised of undisbursed 

general funds, accounts receivable, and property, plant 

and equipment. Accounts receivable, net, represents 

amounts due from other Federal agencies, current and 

former employees, and vendors. 

The FTC’s non-entity assets are comprised of fund balances 

with Treasury, accounts receivable, and cash and other 

monetary assets. The fund balances 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 to the DOJ in a subsequent period. Cash and 

other monetary assets is cash held in financial institutions 

to meet current disbursement schedules for the consumer 

redress program. 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, 2016: 

(Dollars in thousands) 2016

Entity

2016 

Non-Entity

2016

Total

Intragovernmental:

 Fund balance with Treasury:

 General funds $ 132,875 $ - $ 132,875 

 Deposit funds - consumer redress - 796,395 796,395

 Clearing/Suspense funds - premerger filing fees - 423 423 

 Accounts receivable, net 75 - 75

Subtotal intragovernmental assets $ 132,950 $ 796,818 $ 929,768 

 Cash and other monetary assets - 54,495 54,495 

 Accounts receivable, net 79 98,917 98,996

 Property, plant, and equipment, net 57,368 - 57,368

Total Assets $ 190,397 $ 950,230 $ 1,140,627 

Entity and non-entity assets consisted of the following as of September 30, 2015 (Restated):

(Dollars in thousands) 2015

Entity

Restated 

2015

Non-Entity

Restated

2015

Total

Intragovernmental:

 Fund balance with Treasury:

 General funds $ 138,276 $ - $ 138,276 

 Deposit funds - consumer redress - 729,804 729,804 

 Clearing/Suspense funds - premerger filing fees - 650 650 

 Accounts receivable, net 65 - 65

Subtotal intragovernmental assets $ 138,341 $ 730,454 $ 868,795 

 Cash and other monetary assets - 20,373 20,373 

 Accounts receivable, net 74 43,031 43,105

 Property, plant, and equipment, net 63,310 - 63,310

Total Assets $ 201,725 $ 793,858 $ 995,583 
68 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

NOTE 3—FUND BALANCE WITH 

TREASURY 

The FTC’s fund balance with Treasury consists of 

undisbursed appropriated funds, which are either 

unobligated or obligated, as well as deposit funds arising 

from amounts collected for consumer redress and not yet 

disbursed to claimants. The fund balance also includes 

clearing/suspense funds for collections of premerger filing 

fees that will be distributed to the DOJ in a subsequent 

period. The unobligated balance includes available and 

unavailable balances. The unavailable balance is the result 

of recoveries that exceeded anticipated and apportioned 

amounts, the collection of fees above the authorized 

amount to spend in the current year and prior year, and 

$6,450 thousand of sequestered funds from FY 2013. 

Fund balance with Treasury consisted of the following as of September 30, 2016 and 2015:

(Dollars in thousands) 2016 2015

Fund Balance with Treasury:

 General funds $ 132,875 $ 138,276 

 Deposit funds - consumer redress 796,395 729,804 

 Clearing/Suspense funds - premerger filing fees 423 650 

Total Fund Balance with Treasury $ 929,693 $ 868,730

Status of Fund Balance with Treasury:

 Unobligated balance:

 Available - apportioned $ 10,346 $ 11,747 

 Unavailable - unapportioned 15,604 10,371

 Unavailable - temporary reduction 25,089 25,088

 Obligated balance not yet disbursed 81,836 91,070

 Non-budgetary fund balance with Treasury

 Deposit funds - consumer redress 796,395 729,804

 Clearing/Suspense funds - premerger filing fees 423 650

Total Status of Fund Balance with Treasury $ 929,693 $ 868,730

The FTC’s fund balance with Treasury, as reflected in the entity’s general ledger and the Treasury account balances, has no 

material discrepancy. 

NOTE 4—CASH AND OTHER 

MONETARY ASSETS 

Cash and other monetary assets consists of cash held 

in financial institutions necessary to cover current 

disbursement schedules in connection with the consumer 

redress program. (See Note 1(h), Cash and Other Monetary 

Assets and Note 16, Consumer Redress Activities) 

Cash and other monetary assets consisted of the following as of September 30, 2016 and 2015:

(Dollars in thousands) 2016 2015

Cash and Other Monetary Assets:

Consumer redress funds held in financial institutions $ 54,495 $ 20,373 

Total Cash and Other Monetary Assets $ 54,495 $ 20,373 
www.ftc.gov • Federal Trade Commission 69

Fiscal Year 2016 Agency Financial Report

NOTE 5—ACCOUNTS RECEIVABLE, NET 

The bulk of the FTC’s accounts receivable are non-entity 

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 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 record, and the probable 

recovery amount including the value of assets. These nonentity accounts receivable are included in the financial 

statements along with an offsetting non-entity liability. 

Non-entity redress gross accounts receivable is the court 

ordered judgment amount, usually a calculated amount 

of ill-gotten gains. The related allowance for uncollectible 

accounts is the estimate the FTC will not collect from the 

defendant(s), which many times is a large percentage of 

the judgment.

The major increase in redress gross receivables and 

allowance for uncollectible accounts results from one 

judgment of $1.3 billion with less than 2 percent estimated 

to be collectible. 

Currently, the FTC does not record interest as determined 

by 28 U.S.C. 1961 for court judgments. While significant 

progress toward calculating the accrued interest has been 

made, the finalized implementation process and procedure 

is not yet complete. Based upon open court judgment 

accounts receivable balances and their respective 

allowance accounts, the estimated net interest affect to the 

Balance Sheet is $33 thousand ($1,134 thousand interest 

accounts receivable less $1,101 thousand allowance) for 

the end of FY 2016. 

See Note 18, Restatement, regarding the effect on the 

redress accounts receivable for FY 2016 and the FY 2015 

restatement.

Accounts receivable, net consisted of the following as of September 30, 2016:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible

Accounts 

 2016 Net

Entity Accounts Receivable: 

 Intragovernmental $ 75 $ - $ 75

 With the public 79 - 79 

 Total entity accounts receivable $ 154 $ - $ 154

 Non-Entity Accounts Receivable: 

 Consumer redress $ 2,600,317 $ 2,502,135 $ 98,182 

 Civil penalties 35,075 34,340 735 

 Total non-entity accounts receivable $ 2,635,392 $ 2,536,475 $ 98,917 

Total Accounts Receivable $ 2,635,546 $ 2,536,475 $ 99,071 

Accounts receivable, net consisted of the following as of September 30, 2015 (Restated):

(Dollars in thousands)

Restated

 Gross

Receivables 

Allowance for

Uncollectible

Accounts 

 Restated

2015 Net

Entity Accounts Receivable: 

 Intragovernmental $ 65 $ - $ 65

 With the public 74 - 74 

 Total entity accounts receivable $ 139 $ - $ 139

 Non-Entity Accounts Receivable: 

 Consumer redress $ 1,608,214 $ 1,566,473 $ 41,741 

 Civil penalties 35,453 34,163 1,290 

 Total non-entity accounts receivable $ 1,643,667 $ 1,600,636 $ 43,031 

Total Accounts Receivable $ 1,643,806 $ 1,600,636 $ 43,170 
70 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

NOTE 6—PROPERTY, PLANT, AND EQUIPMENT, NET 

The following represents the FTC’s capital assets and accumulated depreciation as of September 30, 2016 and 2015. No 

impairment was recognized in either year. 

Property, plant, and equipment, net consisted of the following as of September 30, 2016:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition

Value

Accumulated 

Depreciation /

Amortization

Net 

Book Value

Equipment 5-20 years $ 24,425 $ 10,586 $ 13,839

Leasehold improvements 15 years 45,894 11,697 34,197 

Software 5 years 27,359 18,027 9,332

Total Property, Plant, and Equipment $ 97,678 $ 40,310 $ 57,368 

Property, plant, and equipment, net consisted of the following as of September 30, 2015:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition

Value

Accumulated 

Depreciation /

Amortization

Net 

Book Value

Equipment 5-20 years $ 22,228 $ 6,318 $ 15,910

Leasehold improvements 15 years 45,895 8,663 37,232 

Software 5 years 25,634 15,466 10,168

Total Property, Plant, and Equipment $ 93,757 $ 30,447 $ 63,310 
www.ftc.gov • Federal Trade Commission 71

Fiscal Year 2016 Agency Financial Report

NOTE 7—LIABILITIES COVERED 

AND NOT COVERED BY BUDGETARY 

RESOURCES

The FTC recognizes three categories of liabilities described 

below:

LIABILITIES COVERED BY BUDGETARY RESOURCES

Liabilities incurred that will be covered by available 

budgetary resources as of the Balance Sheet date. These 

include accounts payable for goods and services received, 

and accrued employee payroll and benefits payable.

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 and 

accrued annual leave. 

LIABILITIES NOT REqUIRING BUDGETARY RESOURCES

Non-entity liabilities that are covered by non-entity assets. 

These include:

Undisbursed Premerger Filing Fees - the offsetting liability 

to the non-entity clearing/suspense fund balance for 

premerger fees that are payable to the DOJ in a subsequent 

period.

Accrued Civil Penalties due to Treasury - the offsetting 

liability to non-entity accounts receivable for civil penalties, 

net, that upon collection will be payable to the general 

fund of the Treasury.

Undisbursed Redress Collections - the offsetting liability to 

the non-entity deposit fund balance for consumer redress 

that is payable to approved claimants. 

Accrued Redress due to Claimants - the offsetting liability 

to the non-entity accounts receivable for consumer redress 

that upon collection will be payable to approved claimants.

Liabilities consisted of the following as of September 30, 2016 and 2015 (Restated):

(Dollars in thousands)

2016 

Covered by 

Budgetary 

Resources

2016 

Not 

Covered by 

Budgetary 

Resources

2016 

Not 

Requiring 

Budgetary 

Resources

2016 

Total 

Liabilities

2015 

Covered by 

Budgetary 

Resources

2015 

Not 

Covered by 

Budgetary 

Resources

Restated 

2015 

Not 

Requiring 

Budgetary 

Resources

Restated 

2015 

Total 

Liabilities

Intragovernmental:

Accounts payable $ 621 $ - $ - $ 621 $ 1,118 $ - $ - $ 1,118 

Accrued employee benefits 1,413 - - 1,413 1,098 - - 1,098 

Other employment related liability - 13 - 13 - 3 - 3 

FECA liability - 354 - 354 - 359 - 359

Reimbursable advances 1,956 - - 1,956 - - - - 

Undisbursed premerger filing fees - - 502 502 - - 650 650 

Accrued civil penalties due to Treasury - - 735 735 - - 1,290 1,290 

Subtotal intragovernmental liabilities $ 3,990 $ 367 $ 1,237 $ 5,594 $ 2,216 $ 362 $ 1,940 $ 4,518 

Accounts payable 10,353 - - 10,353 11,508 - - 11,508

Accrued payroll and benefits 5,784 - - 5,784 4,898 - - 4,898 

Accrued leave - 11,431 - 11,431 - 11,230 - 11,230 

Actuarial FECA - 2,060 - 2,060 - 2,013 - 2,013 

Undisbursed redress collections - - 850,890 850,890 - - 750,177 750,177

Accrued redress due to claimants - - 98,182 98,182 - - 41,741 41,741 

Total Liabilities $ 20,127 $ 13,858 $ 950,309 $ 984,294 $ 18,622 $ 13,605 $ 793,858 $ 826,085 
72 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

NOTE 8—OTHER LIABILITIES

Other liabilities consisted of the following as of September 30, 2016:

(Dollars in thousands) 2016

Non-Current

2016

Current

2016

Total

Other intragovernmental:

Accrued employee benefits $ - $ 1,426 $ 1,426 

FECA liability 354 - 354 

Reimbursable advances - 1,956 1,956

Undisbursed premerger filing fees - 502 502

Accrued civil penalties due to Treasury - 735 735 

Subtotal other intragovernmental $ 354 $ 4,619 $ 4,973 

Accrued payroll and benefits 5,784 5,784

Accrued leave 11,431 - 11,431 

Actuarial FECA 2,060 - 2,060

Subtotal other $ 13,491 $ 5,784 $ 19,275 

Total Other Liabilities $ 13,845 $ 10,403 $ 24,248 

Other liabilities consisted of the following as of September 30, 2015:

(Dollars in thousands) 2015

Non-Current

2015

Current

2015

Total

Other intragovernmental:

Accrued employee benefits $ - $ 1,101 $ 1,101 

FECA liability 359 - 359 

Reimbursable advances - - - 

Undisbursed premerger filing fees - 650 650 

Accrued civil penalties due to Treasury - 1,290 1,290 

Subtotal other intragovernmental $ 359 $ 3,041 $ 3,400 

Accrued payroll and benefits - 4,898 4,898 

Accrued leave 11,230 - 11,230 

Actuarial FECA 2,013 - 2,013 

Subtotal other $ 13,243 $ 4,898 $ 18,141 

Total Other Liabilities $ 13,602 $ 7,939 $ 21,541 
www.ftc.gov • Federal Trade Commission 73

Fiscal Year 2016 Agency Financial Report

NOTE 9—OPERATING LEASES 

Leases of government and commercial property are made 

through and managed by the GSA. While the 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 has leases on three governmentowned properties and eight commercial properties totaling 

approximately 610 thousand square feet for use as offices, 

storage and parking. The FTC’s government leases expire at 

various dates through 2019, while the commercial leases 

expire at various dates through 2024. 

Future minimum lease payments due under leases of government-owned property for 

the fiscal year ended September 30, 2016:

Fiscal Year

(Dollars in thousands)

2017 $ 6,760 

2018 6,727 

2019 6,349 

2020 (-) 

2021 (-) 

Thereafter (-) 

Total Future Minimum Lease Payments $ 19,836 

Future minimum lease payments due under leases of commercial-owned property for 

the fiscal year ended September 30, 2016:

Fiscal Year

(Dollars in thousands)

2017 $ 14,442 

2018 13,492 

2019 13,996 

2020 14,303 

2021 14,294 

Thereafter 33,576

Total Future Minimum Lease Payments $ 104,103 

 

NOTE 10—COMMITMENTS AND 

CONTINGENCIES 

As of September 30, 2016, the FTC has no pending single 

or aggregate administrative proceedings, legal actions, and 

claims brought by or against it, including pending litigation 

where adverse decisions are considered by management 

and legal counsel as “reasonably possible.”
74 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

NOTE 11—INTRAGOVERNMENTAL 

COSTS AND EXCHANGE REVENUES 

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

exchange revenues for its two major strategic goals. 

The costs and exchange revenues reported can be 

further classified as either “intragovernmental” or “public.” 

Intragovernmental costs and exchange revenues arise from 

transactions with another Federal entity, whereas, public 

costs and exchange revenues arise from transactions with 

non-Federal entities. 

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 the buying agency to recover the full cost of services, 

primarily salaries, and recognizes the revenue at the time 

expenditures are incurred. 

The bulk 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 the filing of premerger 

notifications with the FTC and the Antitrust Division of 

the DOJ and establishes a waiting period before certain 

acquisitions may be consummated. The filing fees are 

determined by the value and size of the parties. By law, the 

FTC retains one-half of all premerger filing fees collected, 

and remits 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 provided 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 the revenue 

when collected and the telemarketer is given access to the 

requested data. 

Costs and revenues categorized as intragovernmental and public consisted of the following for the fiscal years 

ended September 30, 2016 and 2015:

(Dollars in thousands) 2016 2015

Strategic Goal 1: Protect Consumers

 Intragovernmental gross costs $ 45,417 $ 46,068 

 Public costs 139,253 137,400 

Gross costs, Protect Consumers 184,670 183,468 

 Intragovernmental earned revenue - reimbursements (945) (133)

 Public earned revenue - Do Not Call registry fees (12,922) (13,325)

Earned revenue, Protect Consumers (13,867) (13,458)

Net Cost, Protect Consumers $ 170,803 $ 170,010 

Strategic Goal 2: Maintain Competition

 Intragovernmental gross costs $ 35,396 $ 33,223 

 Public costs 108,528 99,089 

Gross costs, Maintain Competition 143,924 132,312 

 Intragovernmental earned revenue - reimbursements (500) (136)

 Public earned revenue - premerger filing fees (114,173) (115,678)

Earned revenue, Maintain Competition (114,673) (115,814)

Net Cost, Maintain Competition $ 29,251 $ 16,498 

Net Cost of Operations $ 200,054 $ 186,508 
www.ftc.gov • Federal Trade Commission 75

Fiscal Year 2016 Agency Financial Report

NOTE 12—APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED: 

DIRECT VS. REIMBURSABLE OBLIGATIONS 

Obligations incurred consisted of the following for the fiscal years ended September 30, 2016 and 2015:

(Dollars in thousands) 2016 2015

Obligations Incurred:

Category A - direct obligations $ 324,221 $ 302,093

Category B - direct obligations - 2,917

Category B - reimbursable obligations 3,521 284

Total Obligations Incurred $ 327,742 $ 305,294

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 – direct obligations represented amounts 

obligated for space replacement and the relocation of the 

FTC staff. As this project has been completed, there are no 

new obligations in this category.

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.

NOTE 13—EXPLANATION OF 

DIFFERENCES BETWEEN THE 

STATEMENT OF BUDGETARY 

RESOURCES AND THE BUDGET OF 

THE UNITED STATES GOVERNMENT 

There are no material differences between amounts 

reported in the FY 2015 Statement of Budgetary Resources 

and the FY 2015 actual amounts as reported in the FY 2017 

Budget of the United States Government. The FY 2018 

Budget of the United States is not available to compare 

FY 2016 actual amounts to the FY 2016 Statement of 

Budgetary Resources. 

NOTE 14—UNDELIVERED ORDERS AT 

THE END OF THE PERIOD 

The amount of budgetary resources obligated for 

undelivered orders as of September 30, 2016 and 2015, is 

$65,100 thousand and $73,021 thousand, respectively. 
76 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

NOTE 15—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, 

2016 and 2015, the FTC collected $228,346 thousand and 

$231,356 thousand respectively, 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 case. All civil penalties collected are 

transferred to the general fund of the Treasury at the end of 

the 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 $267 thousand 

as of September 30, 2016 and $21,081 thousand as of 

September 30, 2015. 

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 represents 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. 
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Fiscal Year 2016 Agency Financial Report

NOTE 16—CONSUMER REDRESS ACTIVITIES 

The FTC obtains consumer redress in connection with the settlement or litigation of both administrative proceedings 

and Federal court cases. The FTC attempts to distribute funds to injured parties whenever possible. In those cases 

where consumer redress is not practicable, the 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. 

The FTC holds redress funds in a deposit fund at Treasury until a determination is made on the practicability of redress. If 

redress is determined to be practicable, funds are either directly disbursed by the FTC to claimants, or, funds needed to 

cover immediate disbursements to injured parties are transferred to accounts at financial institutions from which redress 

third party administrators process claims and disburse proceeds to claimants. In FY 2016, the FTC disbursed $120,000 

thousand to claimants in accordance with a FY 2015 settlement resolving antitrust charges against Cephalon, Inc.

Redress fund activities consisted of the following for the fiscal years ended September 30, 2016 and 2015 

(Restated):

(Dollars in thousands) 2016

Restated 

2015

Consumer Redress:

Fund Balance with Treasury

Beginning balance $ 729,804 $ 105,091 

Collections 286,265 707,410

Disbursements to claimants, net (120,007) (0)

Disgorgements to Treasury, net (267) (21,081)

Transfers, expenses, refunds (99,400) (61,616)

Total Fund Balance with Treasury, Ending $ 796,395 $ 729,804 

Cash and Other Monetary Assets

Beginning balance $ 20,373 $ 28,797

Disbursements to claimants, net (56,614) (49,823)

Transfers and expenses 90,736 41,399

Total Cash and Other Monetary Assets, Ending $ 54,495 $ 20,373

Accounts Receivable, Net

Beginning balance $ 41,741 $ 85,054 

Net activity 56,441 (43,313)

Total Accounts Receivable, Ending $ 98,182 $ 41,741
78 Federal Trade Commission • www.ftc.gov

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NOTE 17—RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET

For the fiscal years ended September 30, 2016 and 2015:

(Dollars in thousands) 2016 2015

Resources Used to Finance Activities:

 Budgetary resources obligated:

 Obligations incurred $ 327,742 $ 305,294 

 Less: spending authority from offsetting collections and recoveries (151,770) (135,968)

 Total budgetary resources obligated 175,972 169,326

 Other resources:

 Imputed financing from costs absorbed by others 7,085 8,199

 Total other resources 7,085 8,199 

Total Resources Used to Finance Activities $ 183,057 $ 177,525

Resources Used to Finance Items not Part of the Net Cost of Operations:

 Change in budgetary resources obligated, but not yet provided $ 10,806 $ 6,765

 Resources that finance the acquisition of assets (4,328) (8,062)

 Total resources used to finance items not part of the net cost of operations 6,478 (1,297)

Total Resources Used to Finance the Net Cost of Operations $ 189,535 $ 176,228 

Components of the Net Cost of Operations that will not Require or Generate 

Resources in the Current Period:

 Components requiring or generating resources in future periods:

 Increase in annual leave liability $ 201 $ 1,493

 Other 47 (213)

 Total components requiring or generating resources in future period 248 1,280

 Components not requiring or generating resources:

 Depreciation and amortization 10,271 9,000

 Total components not requiring or generating resources 10,271 9,000 

Total Components of the Net Cost of Operations that will not Require or 

Generate Resources in the Current Period: $ 10,519 $ 10,280

Net Cost of Operations $ 200,054 $ 186,508
www.ftc.gov • Federal Trade Commission 79

Fiscal Year 2016 Agency Financial Report

NOTE 18—RESTATEMENT

In accordance with OMB Circular A-123, the FTC performed 

a review of its court ordered collection process. The review 

identified noncompliance with the Statement of Federal 

Financial Accounting Standard (SFFAS) 1, Accounting for 

Selected Assets and Liabilities. The SFFAS 1 defines the 

recognition of receivables as follows:

“A receivable should be recognized when a federal entity 

establishes a claim to cash or other assets against other 

entities, either based on legal provisions ... or goods 

or services provided. If the exact amount is unknown, a 

reasonable estimate should be made.”

To address this finding, the FTC updated the court order 

judgment policy at the end of FY 2016 to include nonentity accounts receivable held by a court appointed 

receiver. These are Federal court actions in a matter where 

a judgment has been entered requiring assets to be 

turned over to the FTC at the close of the receivership. The 

receivable is established for the net cash value (liquidation 

of assets being held by the receiver less estimated 

expenses) that the FTC expects to receive. Upon receipt, 

the FTC deposits the funds into a Treasury deposit fund 

(Consumer Redress Escrow (TAS 29X6013)), until proper 

disposition. 

As a result of the corrections, the FTC restated the FY 2015 

financial statements. The restatements are presented in 

the FY 2016 and FY 2015 comparative financial statements. 

The FTC redress program is non-entity in nature, and all 

assets are offset by an equal liability. There is no net effect 

to the restatement beyond the lines presented below on 

the Balance Sheet, and as reflected on the following notes: 

Note 2 Entity and Non-Entity Assets, Note 5 Accounts 

Receivable, Net, Note 7 Liabilities Covered and Not Covered 

by Budgetary Resources, and Note 16 Consumer Redress 

Activities. 

CONDENSED BALANCE SHEET

Balanced as of September 30, 2015 (Restated):

(Dollars in thousands) FY 2015

as Stated Adjustment

FY 2015

Restated

Assets:

 Accounts Receivable, net $ 14,148 $ 28,957 $ 43,105

Total Assets $ 966,626 $ 28,957 $ 995,583 

Liabilities:

 Accrued redress due to claimants $ 12,784 $ 28,957 $ 41,741 

Total Liabilities $ 797,128 $ 28,957 $ 826,085 

 

Net Position: $ 169,498 $ 169,498

 

Total Liabilities and Net Position $ 966,626 $ 28,957 $ 995,583 
80 Federal Trade Commission • www.ftc.gov
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Other

Information
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INSPECTOR GENERAL-IDENTIFIED MANAGEMENT AND 

PERFORMANCE CHALLENGES
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CHAIRWOMAN’S RESPONSE TO IG-IDENTIFIED CHALLENGES
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SUMMARY OF FINANCIAL STATEMENT AUDIT AND MANAGEMENT 

ASSURANCES 

TABLE 1: SUMMARY OF FINANCIAL STATEMENT AUDIT

Audit Opinion Unmodified

Restatement Yes

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

The FTC did not record interim 

receivership accounts receivable 0 1 0 0 1

Total Material Weaknesses 0 1 0 0 1

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

Recognition of receivership 

receivables 0 1 1 0 0 0

Total Material Weaknesses 0 1 1 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

Recognition of receivership 

receivables 0 1 1 0 0 0

Total Material Weaknesses 0 1 1 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

Recognition of receivership 

receivables 0 1 1 0 0 0

Total Non-Conformances 0 1 1 0 0 0
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COMBINED SCHEDULE OF SPENDING

The Combined Schedule of Spending (SOS) provides an overview of how and on what the FTC spent money during FY 

2016 and FY 2015. The data used for this schedule is the same data used for the Statement of Budgetary Resources (SBR). 

The term “spend,” as used in this report, means obligated. As such, this data does not equate to expenses as reported on 

the Statement of Net Cost. The SOS provides summary level information by mission for the “New obligations and upward 

adjustments (total)” line on the SBR. The FTC has two primary missions – Protect Consumers and Maintain Competition.

(Dollars in thousands) 2016 2015

What Money is Available to Spend?

Total Resources $ 353,692 $ 327,412

 Less amount available but not agreed to be spent 10,346 11,747 

 Less amount not available to be spent 15,604 10,371

Total Amounts Agreed to be Spent $ 327,742 $ 305,294

How was the Money Spent/Issued 

 Consumer Protection 

 Personnel compensation and benefits $ 109,917 $ 109,290

 Contractual services 53,239 42,733

 Rent, communications, and utilities 15,535 16,306

 Acquisition of assets 3,758 7,012

 Other 1,742 2,035

 Total Consumer Protection 184,191 177,376

 Maintain Competition

 Personnel compensation and benefits 85,665 78,816

 Contractual services 41,492 30,819

 Rent, communications, and utilities 12,108 11,759

 Acquisition of assets 2,929 5,057

 Other 1,357 1,467

 Total Maintain Competition 143,551 127,918

Total Amounts Agreed to be Spent $ 327,742 $ 305,294

 

Who did the Money go to?

 Federal entities $ 73,814 $ 72,776

 Non-Federal entities 253,928 232,518

Total Amounts Agreed to be Spent $ 327,742 $ 305,294

In accordance with OMB Circular A-136, Section II.5.1, the Schedule of Spending is not a required part of the Financial 

Statements and, therefore, it is not audited.
www.ftc.gov • Federal Trade Commission 103

Fiscal Year 2016 Agency Financial Report

THE IMPROPER PAYMENTS ELIMINATION AND RECOVERY 

IMPROVEMENT ACT REPORTING DETAILS

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 2015 risk assessment for nine payment processes 

including payroll, procurement, redress payments to 

consumers, travel, purchase card, pre-merger 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 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 program or activity was recently initiated at 

the agency

•	 The volume of payments made annually

•	 Results from prior improper payment work

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. Additionally, the FTC 

reviews potential matches on an on-going basis to prevent 

improper payments and incorporates a pre-award check 

on potential contractors against the Do Not Pay databases. 

In FY 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 2015 IPERIA risk assessments, no assessment 

was conducted during FY 2016 and the next is scheduled 

for FY 2018.
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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

9,215 $ 194.1M 0 $ 0.00 0 $ 0.00

Reviews with 

databases not 

listed in IPERIA

0 $ 0.00 0 $ 0.00 0 $ 0.00

All payments are screened by the Do Not Pay databases including the Death Master File, the System for Award 

Management, the Debt Check Database of the Department of the Treasury (Debt Check), the Credit Alert System or Credit 

Alert Interactive Voice Response System of the Department of Housing and Urban Development, the List of Excluded 

Individuals/Entities of the Office of the Inspector General of the Department of Health and Human Services, and the 

Prisoner Update Processing System of the Social Security Administration.

“FREEZE THE FOOTPRINT” IMPLEMENTATION

FY 2012

Baseline FY 2015 FY 2016

Change

(FY 2012 Baseline - 

FY 2016)

Rentable Square Footage 638,877 610,662 610,317 28,560 

The FTC’s decrease in rentable square footage from FY 2015 to FY 2016 is due to a reduction of an existing lease in Seattle, 

Washington. The agency’s total square footage did not increase above the FY 2012 baseline, which is consistent with 

Section 3, OMB M-12-12. 

The FTC will continue efforts to reduce the office footprint each time a lease is renewed with the GSA.

The FTC has no buildings that meet the requirements to report operations and maintenance costs. 
www.ftc.gov • Federal Trade Commission 105

Fiscal Year 2016 Agency Financial Report

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, as amended, requires agencies to make 

regular and consistent inflationary adjustments of civil monetary penalties to maintain their deterrent effect. This table 

reports the most recent inflationary adjustments to civil monetary penalties.

Penalty Authority 

(Statute)

Date of Previous 

Adjustment

Date of Current 

Adjustment

Current Penalty 

Level ($Amount)

Violations of cease and desist 

orders

The Clayton Act 

Section 7A(g)(1) 

15 U.S.C 

February 2009 August 2016 $ 40,000

The Clayton Act 

Section 11(l)

April 2014 August 2016 $ 21,250

Failure to file reports required by 

the FTC Act

The FTC Act 

Section 5(l) 

February 2009 August 2016 $ 40,000

The FTC Act 

Section 5(m)(1)(A) 

February 2009 August 2016 $ 40,000

The FTC Act 

Section 5(m)(1)(B) 

February 2009 August 2016 $ 40,000

Failure to file reports required by 

the FTC Act

The FTC Act 

Section 10 

April 2014 August 2016 $ 525

Failure to file required business 

information with the Commission

The Webb-Pomerene 

(Export Trade) Act 

Section 5 

April 2014 August 2016 $ 525

Failure to maintain proper 

records of fiber content

The Wool Products Labeling Act 

Section 6(b) 

April 2014 August 2016 $ 525

Failure to maintain records The Fur Products Labeling Act 

Section 3(e)

April 2014 August 2016 $ 525

The Fur Products Labeling Act 

Section 8(d)(2) 

April 2014 August 2016 $ 525

FTC enforcement of knowing 

violations

The Energy Policy and 

Conservation Act 

Section 333(a) 

42 U.S.C. 6303(a)

April 2014 August 2016 $ 433

Recycled oil labeling violations The Energy Policy and 

Conservation Act 

Section 525(a) 

42 U.S.C. 6395(a)

April 2014 August 2016 $ 21,250

The Energy Policy and 

Conservation Act 

Section 525(b) 

42 U.S.C. 6395(b)

February 2009 August 2016 $ 40,000

FTC enforcement of knowing 

violations

The Fair Credit Reporting Act 

Section 621(a)(2) 

15 U.S.C. 1681s(a)(2)

February 2009 August 2016 $ 3,756
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Penalty Authority 

(Statute)

Date of Previous 

Adjustment

Date of Current 

Adjustment

Current Penalty 

Level ($Amount)

Failure to comply with filing 

requirements

The Medicare Prescription 

Drug Improvement and 

Modernization Act of 2003 

Public Law 108-173 

Section 1115(a) 

April 2014 August 2016 $ 14,142

Violations of prohibitions on 

market manipulation and 

provision of false information to 

federal agencies

The Energy Independence and 

Security Act of 2007 

Section 814(a) 

42 U.S.C. 17304

April 2014 August 2016 $ 1,138,330

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION 

(CONTINUED)
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Appendices
108 Federal Trade Commission • www.ftc.gov
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Fiscal Year 2016 Agency Financial Report

APPENDIX A: DATA QUALITY INFORMATION

dollar value of consumer loss in the Debrief in the Redress 

and Enforcement Database. If staff has not completed 

the Debrief or provided the required information, staff is 

surveyed by email. See goal 1.1.4 for more information 

about the total amount of money returned to consumers.

Verification and validation: The consumer savings by 

case are maintained in a spreadsheet by BCP staff in DCRO. 

The spreadsheet is reviewed quarterly by headquarters and 

regional office management to verify the accuracy of the 

report and to ensure that all applicable cases are included 

in the report.

Data limitations: The calculation does not perfectly 

estimate the agency’s impact because it assumes that the 

challenged business practices would have continued for 

only one more year and it ignores the deterrent effect of 

FTC enforcement.

Performance Goal 1.1.4: Amount of money the FTC 

returned to consumers and forwarded to the U.S. Treasury.

Definition and background: The amount of money 

includes the sum of redress checks cashed by consumers 

and all other amounts of money collected from defendants 

that is forwarded to the U.S. Treasury.

Calculation/Formula: Sum of redress checks cashed 

by consumers, the amount of residual redress money or 

defendants’ disgorged profits that are forwarded to the U.S. 

Treasury, and the amount of civil penalties collected that 

are also forwarded to the U.S. Treasury.

Data sources: The redress data is based on sub-ledger 

reports from the agency’s Financial Management Office 

(FMO), redress contractor reports, and matter bank 

statements. The civil penalty data is summarized in a 

spreadsheet maintained by BCP staff in DCRO.

Verification and validation: 

1. The Redress Administration Office (RAO) in DCRO 

reconciles monthly activity reports submitted by 

the redress contractors and FMO with matter bank 

statements.

2. RAO reconciles the monthly FMO sub-ledger with 

the redress status of each individual matter.

STRATEGIC GOAL 1 – PROTECT 

CONSUMERS

OBJECTIVE 1.1 – IDENTIFY AND TAKE 

ACTIONS TO ADDRESS DECEPTIVE 

OR UNFAIR PRACTICES THAT HARM 

CONSUMERS.

Performance Goal 1.1.3: Total consumer savings 

compared to the amount of FTC resources allocated to 

consumer protection law enforcement.

Definition and background: This measure tracks how 

much money the FTC’s law enforcement efforts save 

consumers each year. The FTC has found that typically 

when it files a complaint in federal district court and 

obtains a court order, the defendants stop their practices. 

If they fail to comply with an order, they are subject to 

contempt proceedings. By stopping these practices, the 

agency directly prevents further consumer losses caused 

by these defendants.

Calculation/Formula: The sum of the estimated consumer 

savings generated and the amount of money the FTC 

returned to consumers, divided by the amount of resources 

spent on consumer protection law enforcement for the 

current fiscal year. Resources spent on the Consumer and 

Business Education and Economics and Consumer Policy 

functions are excluded from the base.

Data sources: To make dollar value assessments, staff uses 

company sales and other records, as well as information 

from employees and customers, where applicable. BCP 

case managers derive the amount of economic injury 

to consumers 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 staff action directed specifically at a business, that 

business stops its allegedly unfair or deceptive practices. 

After the completion of a case, staff reports the estimated 
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Fiscal Year 2016 Agency Financial Report

3. BCP budget staff reconciles the civil penalty 

spreadsheet with a separately maintained 

spreadsheet that includes a list of all civil penalty 

orders in the current fiscal year. BCP budget staff 

also reconciles the civil penalty spreadsheet with 

data maintained by FMO and with memos received 

by the Department of Justice, which contain 

copies of the checks and electronic fund transfers 

for civil penalty disgorgements.

Data limitations: The amount of money is not a perfect 

measure of the effectiveness of the agency’s work 

protecting consumers. If the FTC steps in and stops 

scams in their incipiency, there is less injury and therefore 

less redress provided in those situations but consumers 

are undoubtedly better off. Also, the amount of money 

returned/forwarded to the U.S. Treasury may depend on 

the amount of money the defendants have to satisfy the 

judgment.

OBJECTIVE 1.2 – PROVIDE THE PUBLIC 

WITH KNOWLEDGE AND TOOLS TO 

PREVENT HARM TO CONSUMERS.

Performance Goal 1.2.2: Number of federal, state, local, 

international, and private partnerships to maximize the 

reach of consumer and business education campaigns.

Definition and background: This measure helps 

determine the extent to which the FTC’s education tools 

reach consumers through partnerships with federal, 

state, local, international, and private organizations. 

These organizations work as partners with the FTC by 

distributing these materials to their clients and customers. 

BCP maximizes its reach to consumers and businesses by 

providing free bulk quantities of education materials via an 

online order system.

Data sources: The data is compiled from the number 

of organizations ordering consumer and/or business 

education materials for distribution. This data comes from 

the database of customer orders.

Verification and validation: The data for organizations 

disseminating materials is obtained from the data file 

generated by the FTC’s online order site for bulk quantities 

of publications. That information is filtered to include only 

orders by organizations – not individuals – and duplicates 

are excluded. The result is a list of unique organizations that 

ordered the FTC’s education publications for dissemination 

to consumers and businesses.

Data limitations: The data is compiled from customer 

input via the online order website. If customers fail to 

enter an organization name, they are not included in this 

measure, which could result in under reporting. There is no 

feasible workaround to mitigate this limitation.

OBJECTIVE 1.3 – COLLABORATE WITH 

DOMESTIC AND INTERNATIONAL 

PARTNERS TO ENHANCE CONSUMER 

PROTECTION.

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.

Definition and background: This measure tracks 

investigations or cases in which the FTC obtains foreignbased evidence; engages in mutual assistance that 

contributes to FTC law enforcement actions; or in 

which the FTC cooperates with foreign agencies and/or 

multilateral organizations on enforcement matters.

Data sources: Office of International Affairs (OIA) weekly 

reports and internal tracking sheets.

Verification and validation: Consumer protection 

team members report matters they worked on in which 

information was shared. Staff reviews and compiles the 

matters reported. Managers review these matters to ensure 

that they qualify as part of the measure and have not been 

previously counted.

Data limitations: Review is necessary to avoid double 

counting of particular matters.
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STRATEGIC GOAL 2: MAINTAIN 

COMPETITION

OBJECTIVE 2.1 – IDENTIFY AND 

TAKE ACTIONS TO ADDRESS 

ANTICOMPETITIVE MERGERS AND 

PRACTICES THAT HARM CONSUMERS.

Performance Goal 2.1.1: Percentage of actions taken 

to maintain competition in substantial merger and 

nonmerger investigations.

Definition and background: This measure ensures that 

FTC actions promote vigorous competition by preventing 

anticompetitive mergers and stopping business practices 

that diminish competition. This measure reflects actions 

to promote competition, including litigated victories, 

consent orders, abandoned transactions, or restructured 

transactions (either through a fix-it-first approach or 

through restructuring) in a significant percentage of 

substantial merger and nonmerger investigations.

Calculation/Formula: The measure is calculated by taking 

the number of substantial investigations concluded with an 

action (as described in the definition above) divided by the 

total number of substantial investigations closed.

Data sources: To ensure consistent reporting within the 

Bureau of Competition (BC), the FTC’s press releases are 

the primary source of information for public actions, such 

as consent orders and judicial review outcomes. Internal 

communications from staff attorneys are used to identify 

those investigations that were closed because parties 

abandoned a transaction or because staff did not find the 

transaction likely to harm competition. This information 

is then used to populate BC’s enforcement database. It 

is cross-referenced with both the list of known second 

request and compulsory process merger investigations as 

recorded in the agency’s matter tracking database and the 

list of nonmerger investigations with more than 150 hours, 

as identified using the agency’s staff time reporting system.

Verification and validation: The data is entered into a 

BC database by staff and reviewed monthly by analysts, 

attorneys, economists, and senior management.

Data limitations: This measure does not include actions 

that are still in litigation or on appeal.

Performance Goal 2.1.3: Total consumer savings 

compared to the amount of FTC resources allocated to the 

merger program.

Definition and background: This measure ensures that 

the FTC’s actions are in part guided by the requirement that 

estimated consumer savings exceed how much is spent on 

the merger program.

Calculation/Formula: Estimated consumer savings are 

divided by the amount of resources spent on the merger 

program for the current fiscal year. When available, casespecific data is 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.

Data sources: The lead attorney estimates consumer 

savings for a particular case using the applicable estimation 

formula and submits it to BE for concurrence. The FTC’s 

financial system provides the amount of resources 

expended on the merger program.

Verification and validation: See goal 2.1.1.

Data limitations: The data is dependent on the estimates 

of consumer savings made by staff in accordance with the 

applicable estimation formulas. Additionally, a five-year 

average is used because an individual year may be heavily 

influenced by significant cases in that year.

Performance Goal 2.1.5: Total consumer savings 

compared to the amount of FTC resources allocated to the 

nonmerger program.

Definition and background: This measure ensures that 

the FTC’s actions are in part guided by the requirement that 

estimated consumer savings exceed how much is spent on 

the nonmerger program.

Calculation/Formula: This measure is calculated by 

taking the estimated consumer savings divided by the 

amount of resources spent on the nonmerger program. 

When available, case-specific data is used to generate 

the estimate of consumer savings. Otherwise, staff uses a 

formula of one percent of the volume of commerce of the 

relevant product market(s) for one year.

Data sources: The lead attorney estimates consumer 

savings for a case using the applicable estimation formula 

and submits it to BE for concurrence. The FTC’s financial 
112 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

system provides the amount of resources expended on the 

nonmerger program.

Verification and validation: See goal 2.1.1.

Data limitations: The data is dependent on the estimates 

of consumer savings made by staff in accordance with the 

applicable estimation formulas. Additionally, a five-year 

average is used because an individual year may be heavily 

influenced by significant cases in that year.

OBJECTIVE 2.3 – COLLABORATE WITH 

DOMESTIC AND INTERNATIONAL 

PARTNERS TO PRESERVE AND 

PROMOTE COMPETITION.

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.

Definition and background: This measure tracks 

the number of cases in which at least one substantive 

contact has taken place and where, in the judgment of 

OIA management, consistent analytical approaches were 

observed, compared with the total number of cases. The 

phrase “reached compatible outcomes” means that the 

reviewing agencies’ remedial measures are not inconsistent; 

professional judgment from OIA senior management is 

used to make a final decision on compatibility for FTC 

measurement purposes.

Calculation/Formula: Number of cases where a foreign 

antitrust authority or agency followed consistent analytical 

approaches and reached compatible outcomes as a 

percentage of the total number of cases the FTC has at 

least one substantive contact.

Data sources: OIA weekly reports and internal logs.

Verification and validation: International antitrust 

team members report matters they worked on in which 

substantial contact took place. Staff reviews and compiles 

the matters reported, as overseen by an international 

antitrust attorney. Managers review and ensure that the 

matters reported qualify for the measure.

Data limitations: Review is necessary to ensure that the 

matters reported included substantive contact with a 

foreign antitrust authority.

STRATEGIC GOAL 3: 

ADVANCE ORGANIZATIONAL 

PERFORMANCE

OBJECTIVE 3.1 – OPTIMIZE 

RESOURCE MANAGEMENT AND 

INFRASTRUCTURE.

Performance Goal 3.1.4: Average number of days for the 

FTC to release information in response to a simple FOIA 

request.

Definition and background: The FTC receives a number 

of FOIA requests that upon initial review appear to be 

requests the agency can fulfill quickly. For example, a 

number of consumers file identity theft complaints or a 

complaint against a company they believe has engaged in 

bad acts and then request copies of what they submitted 

to the FTC. Responding to these requests is fairly simple 

and straightforward, and the requests represent a 

significant percentage of the types of requests the agency 

fills. This measure tracks the agency’s response time in 

processing a simple FOIA request for access to public 

records. The agency also keeps track of a number of other 

measures on an annual basis, including: the FTC’s response 

time for simple and complex requests; steps that the FTC 

has taken to make its response system effective; steps taken 

to increase proactive disclosures; steps taken to decrease 

the FTC’s backlog and improve timeliness in responding to 

requests, and other measures. 

Calculation/Formula: Sum of the number of days to 

process each request divided by the total number of 

requests processed.

Data sources: All of the FOIA requests that the FTC 

receives are logged into and processed through a system 

called FOIAxpress. FOIAxpress is one of the electronic 

systems that various agencies use to track their FOIA 

requests and responses.

Verification and validation: Generally, under the Freedom 

of Information Act an agency has 20 business days to 

respond to each request. When the FOIA Unit receives 

a FOIA request, it logs the request into the FOIAxpress 

system, scans it, and assigns a number to each request. 
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Fiscal Year 2016 Agency Financial Report

These steps, once completed, trigger the clock to run for 

processing each request. FOIAxpress automatically counts 

the number of days it takes for the agency to process all 

FOIA requests.

Data limitations: Occasionally, when the agency upgrades 

FOIAxpress, the upgrade does not proceed smoothly 

and the agency has to repeat processing steps that have 

already occurred.

OBJECTIVE 3.2 – CULTIVATE A 

HIGH-PERFORMING, DIVERSE, AND 

ENGAGED WORKFORCE.

Performance Goal 3.2.2: The extent employees believe 

the FTC has the talent necessary to achieve organizational 

goals.

Definition and background: This measure gauges the 

extent employees think the organization has the talent 

necessary to achieve organizational goals so that the FTC 

has a strong foundation of organizational, individual, and 

management excellence driving mission success.

Data sources: The Federal Employee Viewpoint Survey

(FEVS) Talent Management Index is the data source. 

The FEVS is administered annually by the U.S. Office of 

Personnel Management (OPM). It is a tool that measures 

employees’ perceptions of whether, and to what extent, 

conditions that characterize successful organizations are 

present. The survey was conducted for the first time in 

2002 as the Federal Human Capital Survey.

Originally, OPM administered the survey in even years 

and agencies administered their own equivalent survey in 

odd years. In 2010 it was renamed the “Federal Employee 

Viewpoint Survey,” which is now administered each year. 

The FEVS is a tool that measures employees’ perceptions 

of whether, and to what extent, conditions characterizing 

successful organizations are present in their agencies. 

Survey results provide valuable insight into the challenges 

agency leaders face in ensuring the Federal Government 

has an effective civilian workforce. The most recent survey 

was conducted in 2015 and OPM transmits the agency 

results to the FTC’s Human Capital Management Office.

Verification and validation: Data collected is weighted 

by statisticians to produce survey estimates that accurately 

represent the survey population and adjust for differences 

between the characteristics of the survey respondents and 

the population of federal employees surveyed. The weights 

developed take into account the variable probabilities of 

selection across sample domains, nonresponse, and known 

demographic characteristics of the survey population.

Data limitations: The survey results represent a 

snapshot in time of the perceptions of the workforce. The 

government-wide results have a plus or minus 1 percent 

margin of error.
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APPENDIX B: ACRONYMS

ACRONYMS DEFINITIONS

AFR Agency Financial Report 

APP Annual Performance Plan 

APR Annual Performance Report 

ASO Administrative Services Office

BC Bureau of Competition 

BCA Business Case Analysis

BCP Bureau of Consumer Protection 

BE Bureau of Economics 

BPA Blanket Purchase Agreement

CAO Chief Acquisitions Officer 

CAP Cross-Agency Priority 

CFR Code of Federal Regulations 

CICOM Check In Check Out Moves

CIGIE Counsel of the Inspectors General on Integrity and Efficiency 

CIO Chief Information Officer

CLM Contract Lifecycle Management 

CO Contracting Officer 

COPPA Children’s Online Privacy Protection Act 

COR Contracting Officer’s Representative 

CPIC Capital Planning and Investment Control

CSAM Cyber Security Assessment and Management 

CSRS Civil Service Retirement System 

CUI Controlled Unclassified Information

DCRO Division of Consumer Response and Operations 

DG Distributed Generation 

DHS Department of Homeland Security 

DNC Do Not Call 

DOJ Department of Justice 

DOL Department of Labor 

eDSS eDiscovery Support System 

EFT Electronic Funds Transfer 

EODS Entrance on Duty System 

ERM Enterprise Risk Management 

FAR Federal Acquisition Regulations 

FASAB Federal Accounting Standards Advisory Board 

FBwT Fund Balance with Treasury 

FECA Federal Employees’ Compensation Act 

FEVS Federal Employee Viewpoint Survey
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ACRONYMS DEFINITIONS

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-RAE Federal Employees’ Retirement System – Revised Annuity Employees

FERS-FRAE Federal Employees’ Retirement System – Further Revised Annuity Employees

FFMIA Federal Financial Management Improvement Act of 1996

FISMA Federal Information Security Management Act 

FMFIA Federal Managers’ Financial Integrity Act 

FMO Financial Management Office 

FOIA Freedom of Information Act 

FPPS Federal Personnel/Payroll System 

FTC Federal Trade Commission 

FTE Full-Time Equivalent 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GPRA Government Performance and Results Act 

GSA General Services Administration 

HSR Hart-Scott-Rodino Act 

IBC Department of the Interior Business Center 

IG Inspector General 

IP Intellectual Property 

IPERIA Improper Payments Elimination and Recovery Improvement Act 

ISCM Information Security Continuous Monitoring 

ISSO Information System Security Officer

IT Information Technology 

ITA Information Technology Architecture

ITC Information Technology Council

ITBC Information Technology Business Council

ITGB Information Technology Governance Board

ITP Insider Threat Program

N/A Not Applicable or Not Available 

NARA National Archives and Records Administration 

NIST National Institute of Standards and Technology 

OBIA Oracle Business Intelligence Application 

OBIEE Oracle Business Intelligence Enterprise Edition 

OCIO Office of the Chief Information Officer 

OECD Organization for Economic Cooperation and Development 
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ACRONYMS DEFINITIONS

OFF Oracle Federal Financials 

OIA Office of International Affairs 

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

PAE Patent Assertion Entity 

PALT Procurement Administrative Lead Time

PIO Performance Improvement Officer 

PIV Personal Identity Verification

PMRO Performance Measure Reporting Official 

POAM Plans of Actions and Milestones

PP&E Property, Plant, and Equipment 

RAO Redress Administration Office 

RFO Records and Filings Office 

ROI Return on Investment

SAT Senior Assessment Team 

SBR Statement of Budgetary Resources 

SCM Service Category Manager

SFFAS Statement of Federal Financial Accounting Standard

SOS Schedule of Spending 

SSAE Statement on Standards for Attestation Engagements 

SSP System Security Plan

TAS Treasury Account Symbol 

TSP Thrift Savings Plan

VPM Vendor and Program Management 

WTTS Workforce Transformation Tracking System
www.ftc.gov • Federal Trade Commission 117

Fiscal Year 2016 Agency Financial Report

APPENDIX C: OTHER USEFUL LINKS

INTRODUCTION

p.5

•	 This report: https://www.ftc.gov/reports/agency-financial-report-fy2016

•	 Federal Managers’ Financial Integrity Act of 1982: https://www.whitehouse.gov/omb/financial_fmfia1982

•	 Government Performance and Results Act of 1993: https://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m

•	 Government Management Reform Act of 1994: https://www.congress.gov/bill/103rd-congress/senate-bill/02170

•	 Federal Financial Management Improvement Act of 1996: https://www.whitehouse.gov/omb/financial_ffs_ffmia

•	 Reports Consolidation Act of 2000: https://www.gpo.gov/fdsys/pkg/PLAW-106publ531/pdf/PLAW-106publ531.pdf

•	 Accountability of Tax Dollars Act of 2002: https://www.whitehouse.gov/sites/default/files/omb/assets/about_

omb/107-2891.pdf

•	 Improper Payments Information Act of 2002, as amended by IPERIA: https://www.whitehouse.gov/omb/financial_

fia_improper

•	 Government Performance and Results Modernization Act of 2010: https://www.gpo.gov/fdsys/pkg/PLAW111publ352/pdf/PLAW-111publ352.pdf

•	 Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015: https://www.whitehouse.gov/sites/

default/files/omb/memoranda/2016/m-16-06.pdf

•	 FY 2017-2018 Annual Performance Plan (APP): http://www.ftc.gov/about-ftc/performance

•	 Association of Government Accountants’ Certificate of Excellence in Accountability Reporting: https://www.

agacgfm.org/Tools-Resources/CEAR-Program.aspx

p.7

•	 FTC Enforcement Statutes: http://www.ftc.gov/enforcement/statutes

MANAGEMENT’S DISCUSSION AND ANALYSIS

p. 16

•	 FTC Bureaus and Offices: https://www.ftc.gov/about-ftc/bureaus-offices

p. 19

•	 FTC’s Strategic Plan for Fiscal Years 2014 to 2018: http://www.ftc.gov/reports/2014-2018-strategic-plan

p. 22

•	 Volkswagen to Provide Up to $10 Billion to Remedy False Ad Campaign: https://www.ftc.gov/news-events/pressreleases/2016/06/volkswagen-spend-147-billion-settle-allegations-cheating

p. 23

•	 Herbalife Restructuring its Multi-level Marketing Operations: https://www.ftc.gov/news-events/pressreleases/2016/07/herbalife-will-restructure-its-multi-level-marketing-operations

•	 FTC Helps Develop International Guidelines for Electronic Commerce: https://www.ftc.gov/news-events/pressreleases/2016/04/%20ftc-welcomes-revised-oecd-guidelines-e-commerce

p. 24

•	 FY 2016-2017 Performance Plan and FY 2015 Performance Report: https://www.ftc.gov/reports/fy-2016-2017-

performance-plan-fy-2015-performance-report-0

•	 FTC Successfully Prevents Anticompetitive Staples/Office Depot Merger...Again: https://www.ftc.gov/news-events/

press-releases/2016/05/after-staples-office-depot-abandon-proposed-merger-ftc-dismisses

p. 25

•	 FTC Ends Exclusive Dealing Scheme by Supplier of Polymer used in Medical Implants: https://www.ftc.gov/newsevents/press-releases/2016/04/supplier-high-performance-polymer-medical-implants-settles-ftc

p. 27

•	 PrivacyCon: https://www.ftc.gov/news-events/events-calendar/2017/01/privacycon

https://www.ftc.gov/news-events/blogs/business-blog/2016/04/announcing-next-privacycon
118 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

p. 28

•	 Children’s Online Privacy Protection Act (COPPA) Rule: https://www.ftc.gov/enforcement/rules/rulemakingregulatory-reform-proceedings/childrens-online-privacy-protection-rule

•	 Financial Technology Series: https://www.ftc.gov/news-events/events-calendar/2016/06/fintech-series-marketplacelending

https://www.ftc.gov/news-events/events-calendar/2016/10/fintech-series-crowdfunding-peer-peer-payments

p. 29 

•	 Telemarketing Sales Rule: https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/

telemarketing-sales-rule

•	 FTC’s Guides for the Use of Environmental Marketing Claims: https://www.ftc.gov/enforcement/rules/rulemakingregulatory-reform-proceedings/green-guides

p. 30

•	 FTC Wins Appellate Victory in Regional Hospital Challenge: https://www.ftc.gov/news-events/pressreleases/2016/10/statement-ftcs-bureau-competition-director-debbie-feinstein

•	 FTC v. Phoebe Putney Health System, Inc.: https://www.ftc.gov/enforcement/cases-proceedings/111-0067/phoebeputney-health-system-inc-phoebe-putney-memorial

•	 North Carolina State Board of Dental Examiners v. FTC: https://www.ftc.gov/enforcement/cases-proceedings/northcarolina-state-board-dental-examiners

•	 Hart-Scott-Rodino (HSR) Act: https://www.ftc.gov/enforcement/statutes/hart-scott-rodino-antitrust-improvementsact-1976

p. 31

•	 FTC Focuses on PAE Business Models and Activity: https://www.ftc.gov/news-events/press-releases/2016/10/ftcreport-sheds-new-light-how-patent-assertion-entities-operate

•	 “Something New Under the Sun” Workshop: https://www.ftc.gov/news-events/events-calendar/2016/06/

something-new-under-sun-competition-consumer-protection-issues

•	 Energy Policy Act of 2005: https://www.epa.gov/laws-regulations/summary-energy-policy-act

•	 Ethanol Market report: https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-reportcongress-ethanol-market-concentration-december-2015/2015ethanolreport.pdf

p. 32

•	 FTC Hosts Workshops to Study Automobile Sales and Rooftop Solar Panels: https://www.ftc.gov/news-events/

events-calendar/2016/01/auto

https://www.ftc.gov/news-events/events-calendar/2016/06/something-new-under-suncompetition-consumerprotection-issues

p. 33

•	 Federal Managers Financial Integrity Act: https://www.whitehouse.gov/omb/financial_fmfia1982

•	 OMB Circular A-123 - Management’s Responsibility for Internal Control: https://www.whitehouse.gov/omb/

circulars_a123_rev

•	 Federal Information Security Management Act: http://csrc.nist.gov/drivers/documents/FISMA-final.pdf 

p. 35

•	 Federal Risk and Authorization Management Program (FedRAMP): https://www.fedramp.gov/

•	 The Debt Collection Improvement Act of 1996: https://fiscal.treasury.gov/fsservices/gov/debtColl/pdf/dca/dmdcia.

txt

•	 Prompt Payment Act: https://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPayment/5cfr1315.pdf

•	 Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 2012: https://www.congress.gov/112/

plaws/publ248/PLAW-112publ248.pdf

•	 OMB A-123 Appendix C: https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-02.pdf
www.ftc.gov • Federal Trade Commission 119

Fiscal Year 2016 Agency Financial Report

p. 36

•	 Interior Business Center: https://www.doi.gov/ibc

•	 DATA Act: https://www.usaspending.gov/Pages/Data-Act.aspx

p. 42

•	 FTC’s FY 2017 Congressional Budget Justification, page 7, “Appropriations Language Provisions: https://www.ftc.gov/

system/files/documents/reports/fy-2017-congressional-budget-justification/2017-cbj.pdf#page=13

p. 43

•	 OMB Circular A-136: https://www.whitehouse.gov/sites/default/files/omb/assets/OMB/circulars/a136/a136_

revised_2016.pdf

•	 Chapter 31 of the U.S. Code Section 3515(b): https://www.law.cornell.edu/uscode/text/31/3515

FINANCIAL SECTION

p. 62

•	 Federal Trade Commission Act of 1914: https://www.ftc.gov/enforcement/statutes/federal-trade-commission-act

•	 National Do Not Call Registry: https://www.donotcall.gov

p. 65

•	 Federal Employees’ Compensation Act (FECA): https://www.dol.gov/owcp/dfec/regs/statutes/feca.htm

p. 69

•	 28 U.S.C. 1961: https://www.law.cornell.edu/uscode/text/28/1961

p. 74

•	 Do Not Call (DNC) Registry Fee Extension Act of 2007: https://www.gpo.gov/fdsys/pkg/PLAW-110publ188/html/

PLAW-110publ188.htm

•	 Do Not Call Implementation Act: https://www.law.cornell.edu/uscode/text/15/6151

p. 79

•	 Statement of Federal Financial Accounting Standard (SFFAS) 1, Accounting for Selected Assets and Liabilities: www.

fasab.gov/pdffiles/codification_report2007.pdf

OTHER INFORMATION

APPENDIX A: DATA qUALITY INFORMATION

p. 114

•	 Other FOIA measures: http://www.ftc.gov/foia/chiefreports.shtm

p. 115

•	 The Federal Employee Viewpoint Survey (FEVS) Talent Management Index: http://www.fedview.opm.gov/
120 Federal Trade Commission • www.ftc.gov

Fiscal Year 2016 Agency Financial Report

APPENDIX D: 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/strategicplan

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 https://www.ftc.gov/reports/agency-financial-report-fy2016

Performance Internet Site http://www.ftc.gov/about-ftc/performance

AFR Contact Joseph O’Leska

AFR Telephone 202-326-2716

Performance Contact Valerie Green 

Performance Telephone 202-326-2901

AFR Email Address AFR@ftc.gov

AFR Fax Number 202-326-3529

AFR Mailing Address Federal Trade Commission

Attn: AFR, M/D H-774

600 Pennsylvania Avenue, NW

Washington, D.C. 20580

REGIONS

East Central (Cleveland, OH) 216-263-3455

Midwest (Chicago, IL) 312-960-5634

Northeast (New York, NY) 212-607-2829

Northwest (Seattle, WA) 206-220-6350

Southeast (Atlanta, GA) 404-656-1390

Southwest (Dallas, TX) 214-979-9350

Western (San Francisco, CA) 415-848-5100

Western (Los Angeles, CA) 310-824-4343
www.ftc.gov • Federal Trade Commission 121

Fiscal Year 2016 Agency Financial Report

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 https://www.identitytheft.gov/

National Do Not Call Registry www.donotcall.gov

ACKNOWLEDGEMENTS

The FTC offer our sincerest thanks and acknowledges the following individuals who made significant contribution in 

producing this report: Katia Barron and Heather Hippsley of the Office of the Chairwoman; George Adam, Vicki Barber, 

David Burgman, Michelle Carter, Tony Carter, Paula Chandler, Darren Chubbs, Doug Craig, Chloe Collins, Valerie Green, 

James Hale, Tonia Hill, Kimberly Mayo, Joseph O’Leska, Mark Oemler, Karen Overmier, David Rebich, David Robbins, Randall 

Salzer, Vi Truong, Lori Walsh-Van Wey, Linda Wilson, and Katie Wurtz-Brodfuehrer of the Office of the Executive Director; 

Nathan Hawthorne, Andria Jones, and Kelly Signs of the Bureau of Competition; Jenny Kellogg, and Spencer Scoville of the 

Bureau of Consumer Protection, Jeanne Bumpus and Philip Runco of the Office of Congressional Relations, Sarah Mackey 

and Dione Stearns of the Office of the General Counsel; Mary Harmison of the Office of the Inspector General; and Rich 

Custer, Christine Noonan Sturm of the Office of Public Affairs. Finally, we offer thanks to AOC Solutions and Graphic Visions 

for their contributions in the design and production of this report.
FEDERAL TRADE C OMMISSION

WWW.FTC.GOV

/federaltradecommission

@FTC

ftc.gov

/FTCvideos

The Work of the Federal Trade Commission

is Critical to Protecting and Strengthening Free

 and Open Markets and Promoting Informed

Consumer Choice, Both in the United States

and Around the World