FEDERAL TRADE COMMISSION FISCAL YEAR 2014 AGENCY FINANCIAL REPORT

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission I

INTRODUCTION

ABOUT THIS REPORT

CERTIFICATE OF

EXCELLENCE IN

ACCOUNTABILITY

REPORTING®

BEST-IN-CLASS AWARD

Presented to the

In recognition for Providing the

Most Comprehensive and Candid 

Presentation of Forward Looking Information 

and Future Challenges

in your FY13 Performance and Accountability Report

Federal Trade Commission

Relmond P. Van Daniker, DBA, CPA 

Executive Director, AGA

Robert F. Dacey, CGFM, CPA 

Chair, Certificate of Excellence 

in Accountability Reporting Board

Robert F. Dacey, CGFM, CPA

Chair, Certificate of Excellence

 CERTIFICATE OF 

 EXCELLENCE IN 

ACCOUNTABILITY

 REPORTING®

Presented to the

In reFoJnLtLon oI \oXr oXtstDndLnJ e;orts Ln

preparing the agency’s Performance and

AccoXntaEiOity Report for the ÀscaO year 

ended September 30, 2013.

A &HUWLÀFDWHRI([FHOOHQFHLQ$FFRXQWDELOLW\5HSRUWLQJ is presented 

by AGA to federal government agencies whose Performance and 

Accountability Reports achieve the highest standards demonstrating 

accountability and communicating results.

Federal Trade 

Commission

Relmond P. Van Daniker, DBA, CPA 

Executive Director, AGA

Robert F. Dacey, CGFM, CPA 

Chair, Certificate of Excellence 

in Accountability Reporting Board

Robert F. Dacey, CGFM, CPA

Chair, Certificate of Excellence

CERTIFICATE OF EXCELLENCE AND SPECIAL AWARD 

The Federal Trade Commission’s (FTC) fiscal year (FY) 2014 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 (http://www.ftc.gov/reports/agency-financial-report-fy2014), 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 IPERA

	 •	 Government Performance and Results Modernization Act of 2010

	 •	 Office of Management and Budget [OMB] Circular No. A-123, Management’s Responsibility 

for Internal Control

	 •	 OMB Circular No. A-136, Financial Reporting Requirements

This is the first year the FTC has chosen to produce an AFR, with a primary focus on financial results, and an 

Annual Performance Report (APR), which focuses on strategic goals and performance results, in lieu of a combined 

Performance and Accountability Report (PAR). The FY 2014 APR will be combined with the FY 2016 Annual 

Performance Plan (APP) and included in the FY 2016 Congressional Budget Justification in February 2015. In 

addition, the FTC will produce a Summary of Performance and Financial Information (SPFI) in February 2015. Prior 

year FTC PARs are available electronically at www.ftc.gov/about-ftc/performance.

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

Reporting for its FY 2013 PAR as well as a Special Recognition award for Best Presentation of 

Forward Looking Information and Future Challenges.
INTRODUCTION

II Federal Trade Commission Fiscal Year 2014 www.ftc.gov

HOW THIS REPORT IS ORGANIZED

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

appendices.

1. Management’s Discussion and Analysis Section

 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 Section

 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 used throughout this report; 

Appendix C provides contact information and acknowledgements.

MANAGEMENT’S DISCUSSION 

AND ANALYSIS

FINANCIAL SECTION

OTHER INFORMATION

APPENDICES
INTRODUCTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission III

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 trusts.” 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, 

Telemarketing Sales Rule, Fair Credit Reporting Act, Identity Theft Act and the Equal Credit Opportunity Act.

In total, the Commission has enforcement or administrative responsibilities under more than 70 laws (see “Statutes 

Enforced or Administered by the Commission” for a complete listing).

Profile

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

	 •	 The agency had 1,164 full-time equivalent employees at the end of FY 2014.

	 •	 Total new budget authority for FY 2014 was $298 million.
INTRODUCTION

IV Federal Trade Commission Fiscal Year 2014 www.ftc.gov

MESSAGE FROM THE CHAIRWOMAN

Edith Ramirez

Chairwoman

The Federal Trade Commission has a unique dual 

mission to protect consumers and promote competition 

in broad sectors of our economy. In FY 2014, the FTC 

continued to exemplify good government, effective law 

enforcement, and outstanding outreach to consumers, 

businesses, and our law enforcement partners around 

the world. This Agency Financial Report illustrates 

how we managed our resources, highlights our major 

accomplishments, and outlines our plans to address the 

challenges ahead.

FY 2014 PERFORMANCE 

HIGHLIGHTS

CONSUMER PROTECTION

This fiscal year, the FTC has focused on stopping a 

wide range of fraudulent practices, protecting consumer 

privacy and improving data security, combating unfair 

or deceptive conduct in the mobile marketplace, and 

prosecuting false or deceptive health and environmental 

claims. 

The FTC has taken enforcement action to stop a 

variety of fraudulent practices, such as phony business 

opportunities and investment schemes. The FTC also 

has stopped scams that target specific communities, 

such as seniors or non-English speaking consumers. In 

one such case, at the request of the FTC, a federal court 

temporarily halted Oro Marketing, a telemarketing 

operation that allegedly targeted Spanish-speaking 

consumers with false promises that they could make 

money by reselling high-end goods such as Gucci and 

Ralph Lauren merchandise, and then charged them 

between $400 and $490 up-front for shoddy, off-brand

products. The Agency also alleged that the telemarketers 

threatened consumers who refused to pay with arrest and 

phony lawsuits.

In the financial sector, the FTC announced “Operation 

Steer Clear,” a nationwide sweep focusing on the 

sale, financing, and leasing of motor vehicles. The 

FTC charged ten auto dealers with making a variety 

of misrepresentations in their advertisements, falsely 

leading consumers to believe they could purchase 

vehicles for low prices, finance vehicles with low monthly 

payments, or make no upfront payment to lease vehicles.

The FTC has employed a multi-pronged approach to 

protect the privacy of consumers’ personal information, 

including both policy efforts and law enforcement. 

Aaron’s, a national rent-to-own retailer, agreed to settle 

FTC charges that it knowingly played a role in its 

franchisees’ installation and use of software on rental 

computers that secretly monitored consumers, including 

taking webcam pictures of them in their homes. Credit 

Karma and Fandango agreed to settle FTC charges 

that they misrepresented the security of their mobile 

apps and failed to secure the transmission of millions 

of consumers’ sensitive personal information from their 

mobile apps. Snapchat, the developer of a popular 

mobile messaging app, agreed to settle FTC charges 

that it deceived consumers with promises about the 

disappearing nature of messages sent through the service. 

These settlements are part of the FTC’s ongoing effort 

to ensure that companies secure the applications they 

develop and keep their privacy promises to consumers.
INTRODUCTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission V

In the technology sector, Apple Inc. and Google Inc. 

agreed to pay a minimum of $32.5 million and $19

million respectively, to settle FTC charges that the 

companies billed consumers for millions of dollars 

of charges incurred by children in kids’ mobile apps 

without their parents’ consent. Under the terms of the 

settlement agreements, the companies are required to 

change their billing practices to ensure that they have 

obtained express, informed consent from consumers 

before charging them for purchases made in mobile apps. 

The FTC also charged Amazon.com, Inc. with allegedly 

billing parents and other account holders for millions 

of dollars in unauthorized in-app charges incurred by 

children. The FTC’s lawsuit seeks a court order requiring 

refunds to consumers for the unauthorized charges and 

requiring the company to obtain consent before billing 

for in-app charges. 

The FTC continues to take action to fight mobile 

cramming to deter third parties from placing 

unauthorized charges on consumers’ phone bills. The 

operators of Bullroarer, a massive mobile cramming 

scheme, agreed to surrender more than $10 million

in assets to settle FTC charges they allegedly placed 

charges on consumers’ mobile phone bills without their 

permission. The assets include the contents of numerous 

bank accounts; real estate in Los Angeles, Beverly 

Hills, and Chicago; and a number of cars and pieces 

of jewelry. The FTC charged mobile phone service 

provider T-Mobile USA, Inc. with making hundreds of 

millions of dollars by placing charges on mobile phone 

bills for purported “premium” SMS subscriptions that, 

in many cases, were bogus charges that were never 

authorized by its customers. According to the FTC’s 

complaint, T-Mobile in some cases continued to bill its 

customers for these services offered by scammers years 

after becoming aware of signs that the charges were 

fraudulent.

The FTC continues to take action to stop false and 

unsubstantiated health claims. The FTC works to ensure 

that energy-efficient and environmentally-friendly 

product claims are truthful and based on solid evidence.

PROMOTING COMPETITION

The FTC actively enforces 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 has pursued new competition law enforcement 

actions (merger and non-merger), conducted several 

important workshops, published reports, and pursued 

advocacy opportunities to promote competition and 

educate stakeholders about its benefits. The FTC also 

continued to vigorously monitor and enforce compliance 

with consent orders as well as with merger and 

acquisition reporting obligations under the Hart-ScottRodino (HSR) Act.

In FY 2014, merger enforcement actions spanned 

numerous markets, including pharmaceuticals, 

hospitals, funeral homes and cemeteries, high tech 

goods, professional services, and supermarkets. The 

FTC brought four new non-merger actions including 

challenges to illegal coordination by competitors to 

increase prices, to restrict solicitation of competitors’ 

clients, and to eliminate competition for endorsers of 

their products and for employees.

For the third time in two terms, the Supreme Court has 

granted certiorari in a case brought by the FTC. In May 

2013, the U.S. Court of Appeals for the Fourth Circuit 

upheld a Commission ruling that the North Carolina 

State Board of Dental Examiners illegally thwarted 

lower-priced competition by engaging in anticompetitive 

conduct to prevent non-dentists from providing teeth 

whitening services to consumers in the state. Specifically, 

the Fourth Circuit agreed with the Commission that 

a state regulatory board dominated by self-interested 

private actors cannot shield its anticompetitive conduct 

from antitrust review using the state action doctrine. 

After an administrative trial, the Commission had 

upheld an FTC administrative law judge’s decision 

that the Dental Board’s conduct had a clear tendency 

to suppress competition and lacked any countervailing 

precompetitive justification, and also that there was 

direct evidence of anticompetitive effects. In March 

2014, the Supreme Court granted the North Carolina 

State Board of Dental Examiners’ petition for certiorari; 

the case was heard this fall. 

The health care and pharmaceutical industries were 

again a priority area for competition enforcement. In 

general, the agency works to promote competition in 

health care by preventing anticompetitive health care 

mergers and acquisitions, stopping harmful joint conduct 

by health care providers, and eliminating impediments 

to entry by generic drug producers. The FTC devotes 
INTRODUCTION

VI Federal Trade Commission Fiscal Year 2014 www.ftc.gov

significant resources to energy markets as well. The FTC 

continues to review proposed acquisitions involving 

energy products under the HSR Act and to monitor the 

industry for transactions that were not subject to filings 

under HSR.

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

Being diligent and responsible stewards of the public 

resources that the American taxpayers and Congress 

provide to us is one of our most important jobs. For the 

FY 2014 independent financial audit, we received our 

18th consecutive unmodified opinion, the highest audit 

opinion available. The independent auditors did not 

identify any material weaknesses, significant deficiencies, 

or instances of non-compliance with laws and 

regulations. I am pleased to report that management’s 

assessment of risks and review of controls also disclosed 

no material weaknesses (see Statement of Assurance, 

p. 21) and that the financial and performance data 

presented here is reliable and complete. 

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. 14.

Additionally, the Reports Consolidation Act of 2000 

requires the Inspector General (IG) to determine key 

management and performance challenges facing the 

agency, and to assess our progress in addressing them. 

The IG identified securing the agency’s information 

systems and networks from destruction, data loss, or 

compromise; leveraging the value of investments and 

work performed; recruitment, retention, and staff 

size; and ensuring compliance with digital records 

management requirements as the most significant 

challenges facing the FTC. Agency management agrees 

that these are critical challenges, and with the IG’s 

assessment of our progress in addressing the challenges, 

as discussed in the Other Information Section of this 

report at p. 59.

All of us at the FTC look forward to continuing our 

work to protect American consumers and promote 

competition along with our partners and colleagues in 

Congress, industry, and domestic and international law 

enforcement.

Edith Ramirez

November 17, 2014
INTRODUCTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission VII

TABLE OF CONTENTS

INTRODUCTION .................................................................................................................................. i

About This Report ....................................................................................................................................................i

How This Report Is Organized................................................................................................................................ii

The FTC AT-A-GLANCE...................................................................................................................................iii

Message from the Chairwoman .............................................................................................................................. iv

MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................................. 1

Agency and Mission Information.............................................................................................................................3

Vision...............................................................................................................................................................3

Mission.............................................................................................................................................................3

Our Purpose and History.................................................................................................................................3

Our Organization ............................................................................................................................................4

Our People .......................................................................................................................................................6

Performance Highlights ...........................................................................................................................................7

Strategic and Performance Planning Framework.............................................................................................7

Performance Measurement Process..................................................................................................................7

Verification and Validation of Performance Data.............................................................................................7

Performance Goals and Efficiency Measures Overview...................................................................................8

Agency Mission Challenges ...................................................................................................................................14

Management Assurances........................................................................................................................................20

Statement of Assurance..................................................................................................................................21

Financial Highlights...............................................................................................................................................24

FINANCIAL SECTION ........................................................................................................................29

Message from the Chief Financial Officer .............................................................................................................31

Inspector General’s Transmittal Letter for Audit Report.......................................................................................32

Report of Independent Auditors............................................................................................................................33

Principal Financial Statements...............................................................................................................................36

Notes to the Financial Statements .........................................................................................................................42

OTHER INFORMATION.....................................................................................................................59

Inspector General Identified Management and Performance Challenges..............................................................60

Chairwoman’s Response to IG Challenges.............................................................................................................68

Summary of Financial Statement Audit and Management Assurances.................................................................69

Improper Payments Elimination and Recovery Act Reporting Details..................................................................70

“Freeze the Footprint” Implementation..................................................................................................................71

APPENDICES .......................................................................................................................................73

Appendix A: Data Quality Information.................................................................................................................74

Appendix B: Acronyms ..........................................................................................................................................79

Appendix C: Contact Information and Acknowledgements..................................................................................81
MANAGEMENT’S DISCUSSION AND ANALYSIS

VIII Federal Trade Commission Fiscal Year 2014 www.ftc.gov
AGENCY FINANCIAL REPORT

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 1

MANAGEMENT’S DISCUSSION AND 

ANALYSIS
MANAGEMENT’S DISCUSSION AND ANALYSIS

2 Federal Trade Commission Fiscal Year 2014 www.ftc.gov
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 3

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 U.S. economy characterized by vigorous competition 

among producers and consumer access to accurate 

information, yielding high-quality products at low prices 

and encouraging efficiency, innovation, and consumer 

choice.

MISSION

Working to protect consumers by preventing 

anticompetitive, deceptive, and unfair business 

practices, enhancing informed consumer choice and 

public understanding of the competitive process, all 

accomplished 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 costs 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS

4 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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, 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 sevenyear 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 

 The FTC Commission as of September 30, 2014: (left to right) Joshua D. Wright, Commissioner; Julie Brill, Commissioner; 

Edith Ramirez, Chairwoman; Maureen Ohlhausen, Commissioner; Terrell McSweeny, Commissioner.

held by Chairwoman Edith Ramirez, a commissioner 

since 2010, who was confirmed as Chairwoman on 

March 4, 2013. Commissioners include Julie Brill, 

Maureen K. Ohlhausen, Joshua D. Wright, 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 5

FEDERAL TRADE COMMISSION 

ORGANIZATION CHART

Office of the

Executive Director

David B Robbins

Regions

Bureau of

Competition

Deborah L. Feinstein

Bureau of

Consumer Protection

Jessica L. Rich

Chairwoman

Edith Ramirez

Chief of Staff

Heather Hippsley

Commissioner

Maureen Ohlhausen

Office of the

General Counsel

Jonathan E.

Nuechterlein

Bureau of

Economics

M ichael G. Vita

(Acting)

Commissioner

Joshua D. Wright

Commissioner

Julie Brill

Office of

Congressional Relations

Jean Bumpus

Office of

Public Affairs

Justin Cole

Office of

Inspector General*

Kelly Tshibaka (Acting)

Office of

International Affairs

Randolph W. Tritell

Office of

Policy Planning

Andrew I. Gavil

Office of Equal

Employment Opportunity

Kevin D. Williams

Office of

the Secretary

Donald S. Clark

Office of

Administrative Law Judges*

D. Michael Chappell

Commissioner

Terell McSweeny

*An independent organization within the FTC
MANAGEMENT’S DISCUSSION AND ANALYSIS

6 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

OUR PEOPLE FTC’S WORKFORCE COMPOSITION

The Federal Trade Commission workforce 

is it’s greatest asset. The agency’s 

workforce consists of 1,164 civil service 

employees dedicated to addressing the 

major concerns of the American 

consumers. This chart shows workforce 

composition by category.

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

illustrates the locations of the FTC regions.

NORTHWEST

(includes Alaska)

EAST 

CENTRAL

Washington, D.C.

(Headquarters)

NORTHEAST

(includes Puerto Rico

and U.S. Virgin Islands

SOUTHWEST

MIDWEST

SOUTHEAST

WESTERN

(includes Hawaii)

• Seattle, WA

• Dallas, TX

Chicago, IL • • Cleveland, OH

• Atlanta, GA

New York, NY

•

• Los Angeles, CA

• San Francisco, CA

85

654

Attorneys

142

Program/

Mgmt

Analysis

82

64

49

47

41

Economist

Paralegals

Investigative/

Enforcement

Information

Technology

Legal/Administrative

Support

Other
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 7

PERFORMANCE

HIGHLIGHTS

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

first 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 2014 APR will be combined with the FY 2016 

Annual Performance Plan (APP) and included in the 

FY 2016 Congressional Budget Justification in February 

2015. Also available in February 2015 will be the 

Summary of Performance and Financial Information. 

The AFR, combined APP and APR, and Summary 

of Performance and Financial Information will be 

published at the FTC’s website (http://www.ftc.gov/aboutftc/performance).

This section explains the FTC’s strategic and 

performance planning framework and summarizes the 

key performance goals and efficiency measures. 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 FY 2014 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 table 

below shows the FTC’s net costs for its strategic goals 

and objectives.

PERFORMANCE 

MEASUREMENT 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 measures. 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 measure 

reviews in coordination with budget execution reviews. 

The CFO/PIO, the Executive Director/Chief Operating 

Officer, and the Chief of Staff/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

The FTC ensures that the performance data presented 

in this report is complete, reliable and accurate based 

upon the following steps:

•	 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 of performance targets 

so they are updated to reflect changes in key factors 

that impact the agency’s ability to achieve such 

results. 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 senior management review throughout the 

fiscal year. 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 
MANAGEMENT’S DISCUSSION AND ANALYSIS

8 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

STRATEGIC GOALS

(Dollars in millions) OBJECTIVES

PROTECT CONSUMERS

Net Costs: $157

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.

MAINTAIN COMPETITION

Net Costs: $18

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.

ADVANCE ORGANIZATIONAL 

PERFORMANCE

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

2 predominately by Goal 1’s 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 goals and objectives and signify the relative efficiency and cost-effectiveness of agency 

program/operations.

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 AND 

EFFICIENCY MEASURES 

OVERVIEW 

The FTC has established 29 performance goals for 

assessing program performance against strategic goals 

and objectives in FY 2014. Of the 29 total performance 

goals, 20 met or exceeded target, five did not meet target, 

three established baselines, and data was not available at 

the time of publication for one. The table below displays 

historical high-level performance trends for all of the 

FTC’s performance goals for the past three years.

Of the 29 performance goals, nine are considered “key” 

performance goals because they best indicate whether 

agency activities are achieving the desired outcome 
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 9

associated with the related objective. Additionally, 

four performance goals are considered efficiency 

measures 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 table summarizes actual performance 

during FY 2014 against established targets for the 

FTC’s key performance goals and efficiency measures. 

The table also includes actual results from the past two 

fiscal years. The FTC met or exceeded six of the nine 

 Count of Performance Goals FY 2014 FY 2013 FY 2012

Goal 1 Target Met/Exceeded 6 12 11

Target Not Met 3 3 2

Data Not Available 0 1 3

Baseline Data Year 3 0 0

Goal 2 Target Met/Exceeded 8 14 10

Target Not Met 2 2 6

Goal 3 Target Met/Exceeded 6 8 8

Target Not Met 0 0 0

Data Not Available at Time of Publication 1 0 0

Total Target Met/Exceeded 20 34 29

Target Not Met 5 5 8

Data Not Available at Time of Publication 1 0 0

Data Not Available 0 1 3

Baseline Data Year 3 0 0

Total Measures 29* 40 40

*The FTC updated its strategic plan effective in FY 2014.

key performance goals and two of the four efficiency 

measures, while establishing baselines for two new key 

performance goals, one of which is also an efficiency 

measure.

LEGEND FOR UPCOMING 

TABLES

✔ Signifies that the target is met or exceeded

✖ Signifies that the target is not met
MANAGEMENT’S DISCUSSION AND ANALYSIS

10 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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)

2014 2013 2012

Target Actual Target Actual Target Actual

Baseline Year 772% N/A N/A N/A N/A

Key Performance Goal 1.1.4

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

2014 2013 2012

Target Actual Target Actual Target Actual

Baseline Year $66.9 million N/A N/A N/A N/A

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)

2014 2013 2012

Target Actual Target Actual Target Actual

11,250 12,205

✔

12,300 11,236

✖

12,000 11,298

✖

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)

2014 2013 2012

Target Actual Target Actual Target Actual

40 45

✔

30 61

✔

30 56

✔
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 11

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)

2014 2013 2012

Target Actual Target Actual Target Actual

40.0-60.0% 57.1%

✔

40.0-60.0% 42.2%

✔

40.0-60.0% 43.1%

✔

TOP CONSUMER COMPLAINTS IN CALENDAR YEAR 2013

For the 14th year in a row, identity theft is the top category in the FTC’s list 

of complaints that consumers submitted to the agency (excluding Do Not Call 

complaints, which are reported separately). Fourteen percent – 290,056 complaints 

– related to identity theft; of these complaints, 30 percent involved tax- or wagerelated identity theft. Of the more than 1.1 million other complaints, 61 percent of 

consumers reported losses totaling more than $1.6 billion. Other categories in the 

top ten include debt collection and imposter scams. The report is available on the 

FTC’s website at http://www.ftc.gov/system/files/documents/reports/consumersentinel-network-data-book-january-december-2013/sentinel-cy2013.pdf

RANK CATEGORY NUMBER OF 

COMPLAINTS PERCENTAGE COMPARED TO 2012

1 Identity Theft 290,056 14% ↓ from 18%

2 Debt Collection 204,644 10% ← →

3 Banks and Lenders 152,707 7% ↑ from 6%

4 Impostor Scams 121,720 6% ↑ from 4%

5 Telephone and Mobile Services 116,261 6% ↑ from 4%

6 Prizes, Sweepstakes and Lotteries 89,944 4% ↓ from 5%

7 Auto Related Complaints 82,701 4% ← →

8 Shop-at-Home and Catalog Sales 66,024 3% ↓ from 6%

9 Television and Electronic Media 53,087 3% ↑ from 2%

10 Advance Payments for Credit Services 50,422 2% ← →
MANAGEMENT’S DISCUSSION AND ANALYSIS

12 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

Key/Efficiency Performance Goal 2.1.3

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

(Efficiency measure)

2014 2013 2012

Target Actual Target Actual Target Actual

2,600.0% 2,505.2%

✖

1,300.0% 1,382.2%

✔

1,300.0% 1,492.4%

✔

Key/Efficiency Performance Goal 2.1.5

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

(Efficiency measure)

2014 2013 2012

Target Actual Target Actual Target Actual

1,850.0% 2,028.3%

✔

2,000.0% 2,296.0%

✔

2,000.0% 1,831.7%

✖

KEY RULING IN PHYSICIAN PRACTICE GROUP MERGER

In January 2014, a federal district court issued a permanent injunction, 

finding that St. Luke’s Health System’s 2012 acquisition of Idaho’s largest 

independent, multi-specialty physician practice group, Saltzer Medical 

Group, violated Section 7 of the Clayton Act. In 2013, the FTC, together 

with the Idaho Attorney General, filed a complaint in federal district court 

seeking to block the proposed transaction. The FTC argued, and the 

court agreed, that the combination created a dominant single provider 

of adult primary care services and gave the combined entity the market 

power to demand higher rates for those health care services in Nampa, 

Idaho, ultimately leading to higher costs for health care consumers. Following the favorable court decision, FTC 

Chairwoman Edith Ramirez said:

“The district court’s ruling is an important victory that will benefit both competition and consumers in Nampa, 

Idaho, and the surrounding areas. The combination of St. Luke’s and Saltzer would have given the merged 

hospital system the market power to demand higher rates for health care services, ultimately leading to higher 

costs for both employers and consumers.”

This case is on appeal. For more information, visit: http://www.ftc.gov/enforcement/casesproceedings/121-0069/st-lukes-health-system-ltd-saltzer-medical-group-pa.
MANAGEMENT’S DISCUSSION AND ANALYSIS

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

Key Performance Goal 2.3.1

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

agencies followed consistent analytical approaches and reached compatible outcomes. (Output measure)

2014 2013 2012

Target Actual Target Actual Target Actual

95.0% 100.0%

✔

90.0% 100.0%

✔

90.0% 100.0%

✔

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)

2014 2013 2012

Target Actual Target Actual Target Actual

6 days 5.4 days

✔

N/A N/A N/A N/A

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)

2014 2013 2012

Target Actual Target Actual Target Actual

Exceed the 

governmentwide results 

of 55.0% on 

the Federal 

Employee 

Viewpoint 

Survey’s Talent 

Management 

Index.

70.0%

✔

56.0% 69.0%

✔

59.0% 70.0%

✔

Appendix A provides details on the data quality of each of the key performance goals and efficiency measures.
MANAGEMENT’S DISCUSSION AND ANALYSIS

14 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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 Acting Inspector General’s (IG) identified 

management and performance challenges (see Other 

Information Section). Management concurs with the 

IG identified challenges and her 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. 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 deceptive 

mortgage 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 the 

Consumer Financial Protection Bureau to ensure that 

consumers are protected in the financial marketplace and 

to avoid any duplicative efforts between the agencies. 

The FTC also 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 efforts 

to protect consumers from unfair, deceptive, or other 

illegal practices related to the privacy of their personal 

information, while preserving the many benefits that 

technological advances offer. The agency will stop 

unfair and deceptive consumer privacy and data security 

practices through law enforcement. It will promote 

stronger privacy protections through policy initiatives 

on a range of topics such as studying the collection 

and use of big data. The agency will educate businesses 

about their obligations pursuant to the revised Children’s 

Online Privacy Protection Act (COPPA) Rule, and 

bring enforcement actions as appropriate against entities 

that violate the Rule. The FTC 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 
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 15

PRIVACY WORKSHOPS

In November, the FTC held an Internet of Things workshop focusing on 

privacy and security issues related to increased connectivity for consumers, 

both in the home through home automation, smart home appliances, and 

connected devices, and on the move through health and fitness devices, 

personal devices, and cars. It brought together academics, business and 

industry representatives, and consumer advocates to explore the security and 

privacy issues in our increasingly connected world. For more information, 

visit: http://www.ftc.gov/news-events/press-releases/2013/12/ftc-seekscomment-issues-raised-internet-things-workshop

In the spring of 2014, the FTC hosted a series of seminars to examine the privacy implications of three new areas 

of technology that have garnered considerable attention for both their potential benefits and the possible privacy 

concerns they raise for consumers. The seminars focused on (1) mobile device tracking – tracking consumers 

in retail and other businesses using signals from their mobile devices; (2) alternative scoring products – using 

predictive scoring to determine consumers’ access to products and offers; and (3) consumer-generated and 

controlled health data – information provided by consumers to non-HIPAA covered websites, health apps, and 

devices. For more information, visit: http://www.ftc.gov/news-events/press-releases/2013/12/ftc-host-springseminars-emerging-consumer-privacy-issues

The FTC hosted a public workshop entitled “Big Data: A Tool for Inclusion or Exclusion?” in September, to further 

explore the use of “big data” and its impact on American consumers, including low income and underserved 

consumers. The workshop built on the FTC’s Spring Privacy Seminar Series exploring how the use of big data may 

affect diverse and underserved populations. For more information, visit: http://www.ftc.gov/news-events/pressreleases/2014/04/ftc-examine-effects-big-data-low-income-underserved-consumers

theft victims who call our toll free number about rights 

and remedies available to them under federal law. The 

agency also will publicize its victim assistance guide for 

pro-bono attorneys, train local law enforcement to spot 

and prosecute identity theft, and update educational 

materials to address new and emerging issues, such as 

medical and children’s identity theft. (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 marketplace. The FTC will take enforcement 

actions against unfair and deceptive practices, including 

mobile cramming, text message spam, and misleading 

representations about mobile apps. Technological 

advances also have created law enforcement challenges 

such as making it difficult for consumers and law 

enforcers to identify the location of fraudsters pitching 

scams over the telephone and to combat illegal robocalls. 

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 calls that violate the National Do Not Call 

Registry. (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 
MANAGEMENT’S DISCUSSION AND ANALYSIS

16 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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, prohibited 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 two, they may be deceived. The 

FTC, therefore, will continue to examine consumers’ 

recognition and understanding of sponsored content 

online and in mobile apps.

The FTC will continue to address deceptive advertising 

of health products, such as dietary supplements. The 

agency will focus on disease prevention and treatment 

claims; claims aimed at baby boomers, seniors, and the 

uninsured; and claims exploiting emerging health threats. 

The FTC also will continue to focus on environmental 

marketing claims (such as “made with recycled content” 

or “biodegradable”) that while useful when truthful, 

can also create the potential for consumer harm when 

misleading. The FTC will educate businesses about the 

FTC’s Guides for the Use of Environmental Marketing 

Claims (“Green Guides”), and will bring enforcement 

actions to stop deceptive environmental marketing 

claims. (Objectives 1.1, 1.2, and 1.3)

STRATEGIC GOAL 2: 

MAINTAIN COMPETITION

Under the Maintain Competition goal, because of its 

importance to all Americans, the FTC will continue 

to prioritize promoting competition and preventing 

anticompetitive conduct in the health care and 

pharmaceutical sectors, technology markets, and energy 

industry. The agency will also work on promoting 

sound competition policy at the international level 

and will continue advocating for competition before 

federal courts, state legislatures, and other governmental 

agencies.

THE FTC TAKES ACTION AGAINST COMPANIES FOR 

UNAUTHORIZED IN-APP CHARGES BY CHILDREN

Apple Inc. and Google Inc. agreed to provide full refunds to consumers, with Apple paying a minimum of $32.5 

million and Google a minimum of $19 million, to settle FTC complaints that the companies billed consumers for 

millions of dollars of charges incurred by children in kids’ mobile apps without their parents’ consent. Under 

the terms of the settlement agreements, Apple and Google were required to change their billing practices to 

ensure that they have obtained expressed, informed consent from consumers before charging them for items sold 

in mobile apps. The FTC is suing Amazon and seeking 

refunds for parents and other account holders who were 

billed for unauthorized in-app charges. According to 

the FTC, many of the “free” games on the Kindle Fire

encouraged kids to buy virtual goods — like coins, stars, 

and pet food — that they could charge to their parents’ 

accounts without entering a password. Parents complained 

that they did not know, and their kids did not understand, 

that kids could spend real money for these extras —

anywhere from 99 cents to $99 each. Even when Amazon 

finally began requiring a password for certain in-app 

charges, the company allegedly did not make it clear that 

entering a password once could allow children to incur 

unlimited charges for 15 minutes to an hour.

For more information, visit: http://www.ftc.gov/news-events/press-releases/2014/01/apple-inc-will-provide-fullconsumer-refunds-least-325-million (Apple), http://www.ftc.gov/news-events/press-releases/2014/09/googlerefund-consumers-least-19-million-settle-ftc-complaint-it (Google), and http://www.ftc.gov/news-events/pressreleases/2014/07/ftc-alleges-amazon-unlawfully-billed-parents-millions-dollars (Amazon).
MANAGEMENT’S DISCUSSION AND ANALYSIS

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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, employers, and 

insurers. To ensure that consumers receive the benefits of 

competitive healthcare markets, antitrust enforcement in 

this sector is a top priority for the Commission.

A particular FTC focus has been illegal reverse payment 

patent settlement agreements between brand and generic 

drug manufacturers that delay generic competition. As 

the Supreme Court recently explained in FTC v. Actavis, 

“there is reason for concern that settlements taking 

this form tend to have significant adverse effects on 

competition.” These agreements deprive consumers of 

access to lower cost generic drugs, leading to significantly 

higher drug costs. The FTC reviews, investigates and 

challenges patent settlements between brand and generic 

companies where appropriate.

The FTC also prioritizes stopping anticompetitive 

healthcare mergers that threaten higher costs, including 

those involving pharmaceutical and medical device 

companies as well as health care providers. In recent 

years, the FTC has required significant divestitures 

in a large number of pharmaceutical transactions. 

Additionally, since 2007, FTC enforcement against 

anticompetitive provider transactions has resulted in four 

successfully-litigated merger challenges and a growing 

number of provider deals abandoned or modified after 

the FTC threatened a challenge.

The agency also provides guidance to healthcare 

providers to help them avoid transactions and conduct 

that would be anticompetitive. For example, the FTC 

worked with the other relevant U.S. agencies, including 

the Antitrust Division of the Department of Justice 

and the Centers for Medicare and Medicaid Services, 

to develop a Joint Statement of Antitrust Enforcement 

Policy for Accountable Care Organizations, which 

provides guidance to health care providers and makes 

clear that the antitrust laws are not a barrier to bona fide 

collaboration to improve healthcare and reduce costs. 

As part of the ACO process, the agencies established a 

program to review certain proposed ACOs upon request, 

and retains the ability to challenge anticompetitive 

collaborations.

THE FTC HOSTS WORKSHOP ON HEALTH CARE COMPETITION

Health care spending accounts for a large part of federal, 

state, and consumer budgets and the FTC is committed to using 

its resources to ensure that health care markets benefit from 

competition and innovation, both of which can reduce costs 

and increase the quality and accessibility of healthcare for 

consumers. The health care industry has evolved significantly 

in recent years. While some changes have come from 

implementation of health care reform legislation, many other 

developments are the outcome of general and long-standing 

concerns about cost, quality, access, and care coordination.

In March, the FTC held a public workshop, Examining Health Care Competition, to discuss certain activities 

and trends that may affect competition in the evolving health care industry. The workshop explored current 

developments related to professional regulation of health care providers, innovations in health care delivery, 

advancements in health care technology, measuring and assessing health care quality, and price transparency of 

health care services.

The workshop served to enhance the Commission’s expertise and knowledge base regarding competitive 

dynamics in this critical sector of the economy, in support of the Commission’s enforcement, advocacy, 

and consumer education efforts. For more information, visit: http://www.ftc.gov/news-events/eventscalendar/2014/03/examining-health-care-competition.
MANAGEMENT’S DISCUSSION AND ANALYSIS

18 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

The FTC also attempts to better understand the 

markets it monitors and anticipate future competitive 

developments through research and scholarship. In FY 

2014, the FTC sponsored workshops examining various 

competition issues facing follow-on biologics as well as 

healthcare provider markets. The learning from these 

workshops informs both our enforcement and policy 

objectives. (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. Furthermore, issues in antitrust and 

competition policy matters increasingly intersect with 

intellectual property. The FTC works to advance a 

greater understanding of the impact of patent assertion 

entities (also known as PAEs) on competition and 

consumers and will take enforcement action where 

appropriate to curb anticompetitive and deceptive 

conduct. (Objectives 2.1 and 2.2)

PREVENTING ANTICOMPETITIVE 

ACTIVITY IN THE ENERGY 

INDUSTRY: 

The price of gasoline and other energy sources 

continues to be a great concern for consumers, 

businesses, and governments. The agency meets this 

challenge by closely monitoring gasoline markets and 

addressing any anticompetitive merger or nonmerger 

activity. Through its review of HSR merger filings 

and investigation of non-reportable transactions, the 

FTC promotes competition and protects consumers in 

these markets. The FTC also continuously examines 

price movements and other activity through its 

MOBILE CRAMMING

The operators of Bullroarer, a massive mobile cramming scheme, agreed 

to surrender more than $11.2 million in assets to settle FTC charges that 

they allegedly charged fees on consumers’ mobile phone bills without their 

permission. The assets include the contents of numerous bank accounts, real 

estate in Los Angeles, Beverly Hills and Chicago, shares in a number of startup 

companies, and a number of cars and pieces of jewelry. The FTC charged 

mobile phone service provider T-Mobile USA, Inc. with making hundreds 

of millions of dollars by charging fees on mobile phone bills for purported 

“premium” SMS subscriptions that, in many cases, were unwarranted and never 

authorized by its customers. The FTC alleges T-Mobile received anywhere from 

35 to 40 percent of the total amount charged to consumers for subscriptions 

for content such as flirting tips, horoscope information or celebrity gossip that 

typically cost $9.99 per month. According to the FTC’s complaint, T-Mobile in 

some cases continued to bill its customers for these services offered by scammers 

years after becoming aware of signs that the charges were fraudulent. For more 

information, visit: http://www.ftc.gov/news-events/press-releases/2014/06/

operators-massive-mobile-cramming-scheme-will-surrender-more-10m and http://

www.ftc.gov/news-events/press-releases/2014/08/operator-mobile-crammingscheme-will-pay-more-12-million-ftc (Bullroarer) and http://www.ftc.gov/news-events/press-releases/2014/07/ftcalleges-t-mobile-crammed-bogus-charges-customers-phone-bills (T-Mobile)
MANAGEMENT’S DISCUSSION AND ANALYSIS

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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. The FTC investigates whether certain 

oil producers, refiners, transporters, marketers, physical 

or financial traders, or others (1) have engaged in 

practices, including manipulation, that have lessened 

or may lessen competition in the production, refining, 

transportation, distribution, or wholesale supply of crude 

oil or petroleum products; or (2) have provided false or 

misleading information related to the wholesale price of 

crude oil or petroleum products to a federal department 

or agency. Such actions could violate Section 5 of the 

FTC Act, the Commission’s Prohibition of Energy 

Market Manipulation Rule, or Section 811 or Section 

812 of the Energy Independence and Security Act of 

2007. To prepare and support agency staff in meeting 

these challenges, the FTC devotes considerable resources 

to monitoring and studying energy markets—often in 

response to congressionally mandated requirements—

thus developing the professional expertise and body 

of knowledge needed to address emerging concerns. 

The FTC issues reports on the factors that influence 

the prices that American consumers pay for gas. These 

reports, the most recent of which was released in 2011, 

show that the price of oil is still the most important 

factor in gas prices. (Objectives 2.1 and 2.2)
MANAGEMENT’S DISCUSSION AND ANALYSIS

20 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

MANAGEMENT ASSURANCES

IMPLEMENTATION OF 

THE FEDERAL MANAGERS’ 

FINANCIAL INTEGRITY ACT 

(FMFIA)

The FTC considers internal controls to be an integral 

component of effective agency management which 

helps the FTC to provide reasonable assurance that 

the following objectives are achieved: effectiveness and 

efficiency of operations, reliability of financial reporting, 

and compliance with laws and regulations. In FY 2014, 

the FTC has continued its commitment to maintaining 

strong internal controls. 

The FTC’s Senior Assessment Team (SAT) provides 

strategic direction and oversight over the agency’s 

internal control program, to promote and facilitate 

compliance with applicable guidance (e.g., Office 

of Management and Budget Circular A-123, 

Management’s Responsibility for Internal Control), 

and communicates the results of reviews to senior 

management and the head of the agency.

The SAT is responsible for developing and documenting 

an internal control review plan, identifying key processes 

and related control activities, performing a preliminary 

risk assessment of such processes, reviewing and 

assessing the overall control environment, ensuring 

timely implementation of any corrective actions needed 

to address identified weaknesses, and establishing 

guidance for program managers in monitoring and 

assessing management controls within their areas of 

responsibility.

In FY 2014, the SAT updated guidance for program 

managers to use in completing self-assessments of the 

processes and controls within their areas of responsibility. 

Senior managers throughout the agency completed 

self-assessments that disclosed no significant control 

weaknesses. The SAT evaluated the results of the 

managers’ assessments and concurred that no material 

weaknesses or nonconformances were identified. The 

results of these evaluations and other information—

such as independent audits or reviews performed by the 

Office of Inspector General (OIG) and the Government 

Accountability Office (GAO), independent audits of 

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

reviews conducted in accordance with Statement on 

Standards for Attestation Engagements (SSAE) No. 

16), internal analyses, and other relevant evaluations and 

control assessments—were considered by the SAT and 

the agency head in determining whether there are any 

management control deficiencies or nonconformances 

that must be disclosed in the annual assurance statement.

For FY 2014, the FTC continued to follow its Internal 

Control Review Plan. The objective of the reviews is to 

evaluate the adequacy of controls in place for designated 

areas and to assist management in strengthening controls 

where necessary. Two reviews were completed during the 

year. The Chairwoman’s assurance statement that follows 

is supported by the processes and reviews described 

above, which were carried out in FY 2014. Management 

assurances tables appear in the Other Information 

Section.
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 21
MANAGEMENT’S DISCUSSION AND ANALYSIS

22 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

MANAGEMENT ASSURANCES

SUMMARY OF MATERIAL 

WEAKNESS AND 

NONCONFORMANCES

As noted in the Chairwoman’s FMFIA Statement 

of Assurance, the FTC has no material weaknesses 

or nonconformances to report for FY 2014. No new 

material weaknesses or significant nonconformances 

were identified for the past ten years, nor were there 

any existing unresolved weaknesses requiring corrective 

action.

FEDERAL INFORMATION 

SECURITY MANAGEMENT 

ACT (FISMA)

As mandated by FISMA, the agency continues to 

maintain an information security program to manage 

information technology in accordance with National 

Institute of Standards and Technology (NIST) 

requirements. During FY 2014, the FTC has performed 

one Assessment and Authorization effort and currently 

has twenty-five systems authorized to operate. The 

FTC has also updated the System Security Plans, 

Security Assessment Reports and Contingency plans 

for three systems, and has created new security program 

implementation procedures and templates for our 

System Security Plans and Security Assessment Reports.

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 180 days delinquent. The 

FTC also monitors, administers and collects on debts 

more than 180 days delinquent. All eligible, nonexempt 

debts more than 120 days old have been transferred 

to the U.S. Department of the Treasury for crossservicing (the Digital Accountability and Transparency 

Act reduced the timeframe from 180 days to 120 days, 

effective May 19, 2014). 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 2014, the 

FTC processed 7,700 invoices totaling $135 million

that were subject to prompt payment. Of these invoices, 

98.3 percent were paid on time. During FY 2014, the 

FTC paid a total of $3,325 in interest penalties, or

.002 percent of the total dollar amount invoiced.

IMPROPER PAYMENT 

ELIMINATION AND 

RECOVERY ACT (IPERA)

The Improper Payments Elimination and Recovery 

Act (IPERA) of 2010 requires agencies to annually 

review 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 guidance, the FTC performed a risk assessment 

and determined that none of the agency’s programs 

or activities were susceptible to significant improper 

payments. The Interior Business Center, FTC’s shared 

service provider, compares the FTC’s payee records in 

the financial system with payee records in the Do Not 

Pay database. Potential matches are reviewed by FTC 

on an on-going basis to prevent improper payments. 

Additionally, the FTC has incorporated a pre-award 

check on potential contractors against the Do Not Pay 

database. FTC’s review of all payments made in FY 2014 

confirmed that the FTC did not make any improper 

payments in FY 2014. More information about FTC’s 

IPERA work can be in found in the Other Information 

section of this report.
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 23

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, maximum integration of business 

systems and processes, and support of requirements of 

the agency’s strategic goals. 

The FTC obtains hosting and application management 

services for its core financial system from the 

Department of the Interior Business Center (IBC), a 

Federal Shared Service Provider. The core financial 

management system is based on Oracle Federal 

Financials, Release 12, and the FTC uses the general 

ledger, accounts payable, accounts receivable, budget 

execution, and reporting capabilities of the system. The 

FTC has been in the shared services environment with 

the IBC, using Oracle Federal Financials, since FY 2008. 

The FTC also has been obtaining support from the IBC 

for its Federal Personnel/Payroll System (FPPS) since 

1998. FPPS is an Oracle mainframe-based, integrated, 

on-line personnel and payroll system, which creates 

and generates the full life cycle of personnel and payroll 

transactions. FPPS is hosted by the IBC and financial 

data from FPPS is interfaced into the core financial 

management system on a daily basis. 

The FTC continues to work with its Federal 

Shared Service Provider in enhancing its existing 

systems, Oracle Federal Financials and FPPS, and in 

implementing additional financial and mixed systems, 

including a web-based travel management system. The 

FTC recently transitioned to IBC for support with 

implementation of GSA’s government wide E-Gov 

Travel Service program through Carlson Wagonlit’s 

E2 Solutions. The IBC is now providing operations 

and maintenance support to the FTC for E2 Solutions, 

including interfacing financial data into the core 

financial management system on a daily basis.

The FTC’s current acquisition system, ComprizonSuite, 

is a stand-alone system that is not integrated with the 

core system. Currently, the FTC must employ manual 

processes to record financial data from the acquisition 

system in the core financial management system. The 

FTC plans to transition to a new acquisition system 

in FY 2015 to replace ComprizonSuite with a modern 

Federal-compliant acquisition system that can be fully 

integrated with Oracle Federal Financials. 

FTC has conducted market research to identify qualified 

companies and agencies that provide hosting and 

application management of a modern acquisition system 

that meets the FTC’s requirements and that can be 

integrated with the FTC’s core financial management 

system. Guided by the FTC’s strategy for its financial 

management systems framework, the FTC is currently 

evaluating the identified alternative solutions for a 

modern Federal-compliant acquisition management 

solution that supports the end-to-end procurement 

process driven by automated workflow processes in an 

integrated environment.
MANAGEMENT’S DISCUSSION AND ANALYSIS

24 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

FINANCIAL HIGHLIGHTS 

INTRODUCTION

The financial highlights that follow provide an overview 

of the FY 2014 financial statements of the FTC. An 

independent auditor audited the FTC’s Balance Sheet 

for the fiscal years ending September 30, 2014 and 

2013, along with the Statement of Net Cost, Changes 

in Net Position, Statement of Budgetary Resources, and 

Statement of Custodial Activity. For the 18th straight 

year, the FTC received an unmodified (previously called 

unqualified) audit 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.

CONDENSED BALANCE SHEET 

AS OF SEPTEMBER 30, 2014 AND 2013

(dollars in millions) 

FY 2014 FY 2013 % Change

Fund balances with Treasury $	 239 $	 207 16%

Cash and other monetary assets 29 18 58%

Accounts receivable, net 65 25 164%

General property and equipment, net 64 22 190%

Total Assets $	 397 $	 272 46%

Liability for redress collected $	 134 $	 66 103%

Liability for redress to be collected 63 24 165%

Accounts payable and other 32 29 12%

Total Liabilities $	 229 $	 119 92%

Cumulative results of operations 168 153 10%

Total Net Position $	 168 $	 153 10%

Total Liabilities and Net Position $	 397 $	 272 46%

STATEMENT OF NET COST SUMMARY 

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(dollars in millions)

FY 2014 FY 2013 % Change

Protecting Consumers:

Gross costs $	 171 $	 165 4%

Less: earned revenue (14) (14) 0%

Net Cost - Protecting Consumers 157 151 4%

Maintaining Competition:

Gross costs $	 124 $	 122 2%

Less: earned revenue (106) (81) 32%

Net Cost - Maintaining Competition 18 41 -56%

Net Cost of Operations $	 175 $	 192 -9%
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 25

7%

17%

16%

33%

Non-Entity 

Assets

Entity Assets

FY 2014

27%

Accounts Receivable, 

$65M

General property and

equipment, $64M

Fund balance with

Treasury, $133M

Cash and other

monetary assets, $29M

Fund balance with

Treasury, $106M

7%

9%

8%

58%

Non-Entity 

Assets

Entity Assets

FY 2013

18%

Accounts Receivable, 

$25M

General property and

equipment, $22M

Fund balance with

Treasury, $159M

Cash and other

monetary assets, $18M

Fund balance with

Treasury, $48M

BALANCE SHEET – OVERVIEW

ASSETS

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

assets. The assets that the FTC is authorized to use in 

its operations are entity assets; the assets held on behalf 

of others are non-entity assets. The FTC’s total assets 

were $397 million at September 30, 2014, an increase

of $125 million, or 46 percent, over the FY 2013 total.

The largest increase occurred in non-entity assets, which 

comprised half ($200 million) of the total assets on the

FTC’s Balance Sheet. 

Non-entity assets include collections and accounts 

receivable that arise from court-ordered judgments for 

monetary relief in the consumer redress program and 

civil monetary penalties. Non-entity assets increased 

by $109 million, or 120 percent, in FY 2014 due to a

$58 million increase in the fund balance with Treasury

(deposit fund) for consumer redress, an $11 million

increase in cash held for consumer redress, and a 

$40 million increase in accounts receivable, of which

$39 million, is for consumer redress and $1 million is for

civil penalties. (Civil penalty collections are transferred 

to Treasury at year-end, and therefore, are not included in 

the FTC’s fund balance with Treasury.) 

Entity assets increased by $16 million, or 9 percent, in

FY 2014. This increase is due, in part, to an increase 

of $42 million in property and equipment consisting of

leasehold improvements, equipment, and technology 

infrastructure for the new FTC facility at Constitution 

Center, in Washington, D.C. This increase was partially 

offset by a decrease of $26 million in the fund balance

with Treasury, due to the liquidation of obligations and 

payments related to the occupancy of Constitution 

Center. 

ENTITY AND NON-ENTITY ASSETS

Assets FY14 FY13 Change

Entity Assets

Fund balance with Treasury $	 133 $	 159 $	 (26)

General property and equipment 64 22 42 

 $ 197 $ 181 $ 16 

Non-Entity Assets

Fund balance with Treasury $	 106 $	 48 $	 58

Accounts receivable 65 25 40 

Cash and other monetary assets 29 18 11 

$ 200 $ 91 $ 109 

Total Assets $ 397 $ 272 $ 125
MANAGEMENT’S DISCUSSION AND ANALYSIS

26 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

ENTITY AND NON-ENTITY LIABILITIES

LIABILITIES

The FTC’s total liabilities were $229 million at

September 30, 2014, an increase of $110 million, or

92 percent, over the FY 2013 total. The FTC’s nonentity liabilities accounted for the largest increase. The 

non-entity liabilities, which are an offset (and equal) 

to the non-entity assets on the FTC’s Balance Sheet, 

represent amounts collected or to be collected that will 

be distributed as consumer redress or transferred to the 

general fund of the Treasury in a subsequent period. 

Non-entity liabilities increased by $109 million, or

120 percent, due to a $69 million increase in consumer

redress funds collected and held either in the fund 

balance with Treasury deposit fund or as cash and other 

monetary assets in financial institutions, and a $40

million increase in amounts to be collected (accounts 

receivable) for consumer redress ($39 million) and civil

penalties ($1 million).

29%

12%

Non-Entity 

Liabilities

Entity 

Liabilities

Entity 

Liabilities

FY 2014 

Accounts payable 59%

and other, $29M

Liability for amounts to

be collected, $65M

Liability for Redress

collected, $135M

21%

24%

Non-Entity 

Liabilities

FY 2013 

55%

Liability for amounts to

be collected, $25M

Accounts payable

and other, $28M

Liability for Redress

collected, $66M

Liabilities FY14 FY13 Change

Entity Liabilities

Accounts Payable, and other $	 29 $	 28 $	 1

$ 29 $ 28 $ 1

Non-Entity Liabilities

Liability for redress collected $	 135 $	 66 $	 69

Liability for amounts to be collected 65 25 40 

$ 200 $ 91 $ 109 

Total Liabilities $ 229 $ 119 $ 110
MANAGEMENT’S DISCUSSION AND ANALYSIS

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 27

NEW BUDGET AUTHORITY

NET POSITION

The FTC’s net position was $168 million at the end

of FY 2014, an increase of $15 million, or 10 percent,

over the FY 2013 total. Net position is comprised of 

cumulative results of operations. 

Financing sources from appropriations used during 

the year were $181 million and imputed financing

sources totaled $9 million for a total of $190 million.

The imputed financing sources are the estimated postemployment benefits accrued in FY 2014, which will be 

paid by entities other than the FTC.

The financing sources of $190 million exceed the net

cost of operations totaling $175 million (gross costs of

$295 million less revenues from fees of $120 million),

resulting in the $15 million increase in net position.

RESULTS OF OPERATIONS

The FTC’s net cost of operations was $175 million, a

decrease of $17 million or 9 percent from FY 2013. Th

decrease can be attributed to a small increase in gross 

costs ($8 million) offset by a large increase in earned

revenues ($25 million).

The small increase in gross costs was primarily due 

to an increase in personnel and related benefit costs. 

The increase in earned revenue is due to an increase of 

$25 million in fees collected for premerger notification

filings under the Hart-Scott-Rodino Antitrust 

Improvement Act of 1976. These fees partially offset 

the FTC’s mission costs related to maintaining and 

promoting competition. 

BUDGETARY RESOURCES

New budgetary authority (total budgetary resources 

excluding unobligated balances brought forward and 

prior year recoveries) was $298 million in FY 2014.

The $298 million is comprised of $181 million in

general fund appropriations and $117 million in

spending authority from offsetting collections. Overall, 

this represents an increase of $2 million, or less than

1 percent, from FY 2013. In FY 2014, the general 

fund appropriations comprised 61 percent of new 

budget authority and offsetting collections comprised 

39 percent. By comparison, in FY 2013, general fund 

appropriations comprised 70 percent and offsetting 

collections comprised 30 percent.

61%

FY 2014 

39%

General fund

appropriations, $181M

Spending authority

from offsetting

collections, $117M

70%

30%

General fund

appropriations, $207M

Spending authority

from offsetting

collections, $89M

FY 2013
MANAGEMENT’S DISCUSSION AND ANALYSIS

28 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

LIMITATIONS OF FINANCIAL 

STATEMENTS

FTC management has prepared its FY 2014 financial 

statements from the books and records of the agency 

in accordance with the requirements of 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 2014 

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) 98.3%

Percentage Interest Penalties Paid to Total Dollars Invoiced .002%

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

for Individually Billed Travel Account holders 92%

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%
 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 29

FINANCIAL SECTION
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30 Federal Trade Commission Fiscal Year 2014 www.ftc.gov
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 31

MESSAGE FROM THE 

CHIEF FINANCIAL OFFICER

David Rebich

Chief Financial Officer

I am pleased to join Chairwoman Ramirez in presenting 

the FTC’s Agency Financial Report (AFR) for Fiscal 

Year 2014. 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 2014 and FY 2013, 

respectively. These financial statements, coupled with 

the agency’s Performance Highlights, demonstrate how 

the FTC optimizes the use of its financial resources to 

protect consumers and maintain competition. 

Our independent auditor, Brown and Company, has 

issued an unmodified (clean) opinion on the agency’s 

financial statements. This marks the 18th consecutive 

year that the FTC has received an unmodified opinion 

on its financial statements. The FTC is proud to report 

that the auditors reported no material weaknesses or 

significant deficiencies. We achieved these results by:

	 •	 Closing 16 internal control/OIG

recommendations from previous financial 

statement audits and other internal and external 

reviews;

	 •	 Conducting regular reconciliations between

financial subsidiary ledgers and the general 

ledger;

	 •	 Instituting the Standard General Ledger posting

logic and tie point analysis necessary to meet 

Treasury reporting requirements;

	 •	 Ensuring that all new contracts have the proper

documentation as required by the FAR; and

	 •	 Enhancing the documentation of our financial

management business cycles.

These accomplishments provide the foundation for 

sound financial management. To ensure our continued 

success, we need to continue to improve our processes, 

serve our customers, and address other challenges. The 

FTC is committed to implementing processes that 

improve internal controls and optimize the use of our 

financial resources. 

On behalf of the Chairwoman and all of us 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 accurate, transparent, and timely financial 

information to the public. Your service to the FTC and 

the American public is greatly appreciated.

David Rebich

Chief Financial Officer

November 17, 2014
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32 Federal Trade Commission Fiscal Year 2014 www.ftc.gov
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 33

1101 MERCANTILE LANE, SUITE 122 ● LARGO, MD 20774

PHONE: (240) 770-4900 ● FAX: (301) 773-2090 ● mail@brownco-cpas.com ● www.brownco-cpas.com

INDEPENDENT AUDITOR'S REPORT 

Inspector General

Federal Trade Commission

Washington, D.C.

Report on the Financial Statements

We have audited the accompanying balance sheet of the Federal Trade Commission (FTC) as of 

September 30, 2014 and 2013, and the related statements of net cost, changes in net position, budgetary 

resources, and custodial activity for the years then ended (collectively referred to as the financial 

statements), and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with accounting principles generally accepted in the United States of America; this includes 

the design, implementation, and maintenance of internal control relevant to the preparation and fair 

presentation of financial statements that are free from material misstatement, whether due to fraud or 

error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We 

conducted our audit in accordance with auditing standards generally accepted in the United States of 

America and the standards applicable to financial audits contained in Government Auditing Standards,

issued by the Comptroller General of the United States; and the Office of Management and Budget 

(OMB) Bulletin No. 14-02, Audit Requirements for Federal Financial Statements. Those standards and 

OMB Bulletin No. 14-02 require that we plan and perform the audit to obtain reasonable assurance about 

whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 

the financial statements. The procedures selected depend on the auditor’s judgment, including the 

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation 

and fair presentation of the financial statements in order to design audit procedures that are appropriate in 

the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s 

internal control. Accordingly, we express no such opinion. An audit also includes evaluating the 

appropriateness of accounting policies used and the reasonableness of significant accounting estimates 

made by management, as well as evaluating the overall presentation of the financial statements.

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

our audit opinion.
FINANCIAL SECTION

34 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

Opinion on the Financial Statements

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of FTC as of September 30, 2014 and 2013, and its net costs, changes in net position, 

budgetary resources, and custodial activity for the year then ended, in accordance with accounting 

principles generally accepted in the United States of America. 

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the information in 

the Management’s Discussion and Analysis (MD&A) and Required Supplementary Information (RSI) 

sections be presented to supplement the basic financial statements. Such information, although not a part 

of the basic financial statements, is required by the Federal Accounting Standards Advisory Board, who

considers it to be an essential part of financial reporting for placing the basic financial statements in an 

appropriate operational, economic, or historical context. We have applied certain limited procedures to 

the required supplementary information in accordance with auditing standards generally accepted in the 

United States of America, which consisted of inquiries of management about the methods of preparing the 

information and comparing the information for consistency with management’s responses to our 

inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic 

financial statements. We do not express an opinion or provide any assurance on the information because 

the limited procedures do not provide us with sufficient evidence to express an opinion or provide any 

assurance.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered FTC’s internal control 

over financial reporting (internal control) to design audit procedures that are appropriate in the 

circumstances for the purpose of expressing an opinion on the financial statements, but not for the 

purpose of expressing an opinion on the effectiveness of FTC’s internal control. Accordingly, we do not 

express an opinion on the effectiveness of FTC’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, or 

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination 

of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement 

of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A 

significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less 

severe than a material weakness, yet important enough to merit attention by those charged with 

governance.

Our consideration of the internal control was for the limited purpose described in the first paragraph of 

this section and was not designed to identify all deficiencies in internal control that might be deficiencies,

significant deficiencies or material weaknesses. Given these limitations, during our audit we did not 

identify any deficiencies in internal control that we consider to be a material weakness. However, 

material weaknesses may exist that have not been identified.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether FTC’s financial statements are free from 

material misstatement, we performed tests of its compliance with applicable provisions of laws, 

regulations, contracts and grant agreements, noncompliance with which could have a direct and material 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 35

effect on the determination of financial statement amounts. However, providing an opinion on 

compliance with those provisions was not an objective of our audit, and accordingly, we do not express 

such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that 

are required to be reported under Government Auditing Standards or OMB Bulletin No. 14-02. 

Management’s Responsibility for Internal Control and Compliance

FTC’s management is responsible for (1) evaluating effectiveness of internal control based on criteria 

established under the Federal Managers Financial Integrity Act (FMFIA), (2) providing a statement of 

assurance on the overall effectiveness of internal control, and (3) ensuring compliance with other 

applicable laws and regulations.

Auditor’s Responsibilities

We are responsible for: (1) obtaining a sufficient understanding of internal controls to plan the audit, (2) 

testing compliance with certain provisions of laws and regulations that have a direct and material effect 

on the financial statements and applicable laws for which OMB Bulletin No. 14-02 requires testing, and 

(3) applying certain limited procedures with respect to the MD&A and other RSI.

We did not evaluate all internal controls relevant to operating objectives as broadly established by the 

FMFIA, such as those controls relevant to preparing statistical reports and ensuring efficient operations. 

We limited our internal control testing to testing controls over financial reporting. Because of inherent 

limitations in internal control, misstatements due to error or fraud, losses, or noncompliance may 

nevertheless occur and not be detected. We also caution that projecting our audit results to future periods 

is subject to risk that controls may become inadequate because of changes in conditions or that the degree 

of compliance with controls may deteriorate. In addition, we caution that our internal control testing may 

not be sufficient for other purposes.

We did not test compliance with all laws and regulations applicable to FTC. We limited our tests of 

compliance to certain provisions of laws and regulations that have a direct and material effect on the 

financial statements and those required by OMB Bulletin No. 14-02 that we deemed applicable to FTC’s 

financial statements for the fiscal year ended September 30, 2014. We caution that noncompliance with 

laws and regulations may occur and not be detected by these tests and that such testing may not be 

sufficient for other purposes. 

Purpose of the Report on Internal Control over Financial Reporting and the Report on Compliance 

and Other Matters

The purpose of the Report on Internal Control over Financial Reporting and the Report on Compliance 

and Other Matters sections of this report is solely to describe the scope of our testing of internal control 

and compliance and the result of that testing, and not to provide an opinion on the effectiveness of FTC’s 

internal control or on compliance. These reports are an integral part of an audit performed in accordance 

with Government Auditing Standards in considering FTC’s internal control and compliance. 

Accordingly, these reports are not suitable for any other purpose.

This report is intended solely for the information and use of the management of FTC, OMB, OIG and 

Congress, and is not intended to be and should not be used by anyone other than these specified parties.

Largo, Maryland

November 13, 2014
FINANCIAL SECTION

36 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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.
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 37

FEDERAL TRADE COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)

2014 2013

Assets (Note 2):

Intragovernmental:

Fund balance with Treasury (Note 3) $	 238,443 $	 206,638

Accounts receivable, net (Note 5) 6 47 

Total intragovernmental 238,449 206,685 

Cash and other monetary assets (Note 4) 28,797 18,239 

Accounts receivable, net (Note 5) 65,447 24,791 

General property and equipment, net (Note 6) 64,247 22,042 

Total Assets $	 396,940 $	 271,757

Liabilities (Note 7): 

Intragovernmental:

Accounts payable $	 823 $	 1,555

Other (Note 8) 4,427 2,314 

Total intragovernmental 5,250 3,869 

Accounts payable 10,805 8,591 

Accrued consumer redress due to claimants 62,776 23,693 

Undisbursed redress collections 133,888 65,848 

Other (Note 8) 16,089 17,265 

Total Liabilities $	 228,808 $	 119,266

Net Position (Note 1(o)):

Unexpended appropriations - - 

Cumulative results of operations 168,132 152,491 

Total Net Position $	 168,132 $	 152,491

Total Liabilities and Net Position $	 396,940 $	 271,757

The accompanying notes are an integral part of these statements.
FINANCIAL SECTION

38 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

FEDERAL TRADE COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)

2014 2013

Costs by Strategic Goal:

Strategic Goal 1: Protect Consumers:

Gross costs (Note 11) $	 170,494 $	 165,566

Less: earned revenue (Note 11) (13,521) (14,118)

Net cost 156,973 151,448 

Strategic Goal 2: Maintain Competition:

Gross costs (Note 11) 124,479 122,375 

Less: earned revenue (Note 11) (106,477) (81,693)

Net cost 18,002 40,682 

Net Cost of Operations $	 174,975 $	 192,130

The accompanying notes are an integral part of these statements.
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 39

2014 2013

Cumulative Results of Operations:

Beginning balance $	 152,491 $	 128,754

Budgetary Financing Sources:

Appropriations used 181,182 206,660 

Other Financing Sources (Non-Exchange):

Imputed financing 9,434 9,207 

Total financing sources 190,616 215,867 

Net cost of operations (174,975) (192,130)

Net change 15,641 23,737 

Cumulative Results of Operations $	 168,132 $	 152,491

Unexpended Appropriations:

Beginning balance $	 - $	 -

Budgetary Financing Sources:

Appropriations received 181,182 216,249 

Other adjustments (rescissions) - (9,589)

Appropriations used (181,182) (206,660)

Total budgetary financing sources - - 

Total Unexpended Appropriations - - 

Net Position (Note 1(o)) $	 168,132 $	 152,491

The accompanying notes are an integral part of these statements.

FEDERAL TRADE COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)
FINANCIAL SECTION

40 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

2014 2013

Budgetary Resources: 

Unobligated balance, brought forward, October 1 $	 57,159 $	 57,778

Recoveries of prior year unpaid obligations 6,519 2,999 

Unobligated balance from prior year budget authority, net 63,678 60,777 

Appropriations 181,182 206,660 

Spending authority from offsetting collections 116,725 89,420 

Total Budgetary Resources $	 361,585 $	 356,857

Status of Budgetary Resources: 

Obligations incurred (Note 12): $	 334,138 $	 299,698

Unobligated balance, end of period: 

 Apportioned 23,893 52,778 

 Unapportioned 3,554 4,381 

Total unobligated balance, end of period 27,447 57,159 

Total Status of Budgetary Resources $	 361,585 $	 356,857

Change in Obligated Balance: 

Unpaid Obligations: 

Unpaid obligations, brought forward, October 1 $	 96,445 $	 79,576

Obligations incurred (Note 12): 334,138 299,698 

Outlays, gross (327,440) (279,830)

Recoveries of prior year unpaid obligations (6,519) (2,999)

Unpaid obligations, end of period 96,624 96,445 

Uncollected Payments: 

Uncollected payments from Federal sources, brought forward, October 1 (1,297) (1,098)

Change in uncollected payments from Federal sources, brought forward , October 1 552 (199)

Uncollected payments from Federal sources, end of period (745) (1,297)

Memorandum (non-add) Entries: 

Obligated balance, start of year, net 95,147 78,478 

Obligated balance, end of period, net $	 95,877 $	 95,147

Budget Authority and Outlays, Net: 

Budget authority, gross $	 297,907 $	 302,530

Actual offsetting collections (120,239) (95,671)

Change in uncollected customer payments from Federal sources 552 (199)

Budget authority, net $	 178,220 $	 206,660

Outlays, gross $	 327,440 $	 279,830

Actual offsetting collections (120,239) (95,671)

Outlays, net 207,201 184,159 

Distributed offsetting receipts (16,398) (14,645)

Agency outlays, net $	 190,803 $	 169,514

The accompanying notes are an integral part of these statements.

FEDERAL TRADE COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 41

Protect 

Consumers

Maintain 

Competition 2014 2013

Revenue Activity (Note 15):

Sources of collections:

Premerger filing fees (net of refunds) $	 - $	 106,263 $	 106,263 $	 81,202

Civil penalties and fines 11,802 - 11,802 42,545 

Consumer redress (Note 16) 16,157 - 16,157 14,518 

Other miscellaneous receipts 240 - 240 127 

Total cash collections 28,199 106,263 134,462 138,392 

Accrual adjustments 1,567 - 1,567 (2,675)

Total Custodial Revenue $	 29,766 $	 106,263 $	 136,029 $	 135,717

Disposition of Collections (Note 15):

Transferred to others:

Treasury general fund $	 28,199 $	 - $	 28,199 $	 57,190

Department of Justice - 106,263 106,263 81,202 

Increase/(decrease) in amounts yet to be transferred 1,567 - 1,567 (2,675)

Total Disposition of Collections $	 29,766 $	 106,263 $	 136,029 $	 135,717

Net Custodial Activity $	 - $	 - $	 - $	 -

The accompanying notes are an integral part of these statements.

FEDERAL TRADE COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)
FINANCIAL SECTION

42 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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 the BCP and BC. Additionally, various 

offices within FTC provide 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), these funds 

include appropriations received for salaries and necessary 

expenses, as well as non-entity funds that are primarily 

proceeds 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 various 

Treasury Account Symbols (TAS) to record and track 

financial activity. These TAS are described below: 

General Fund 

Salaries and Expenses (TAS 29X0100): This account 

receives budget authority from an appropriation and 

offsetting collections, up to a limit set by Congress, 

each year to fund the necessary expenses of the agency. 

Offsetting collections include the fees collected for 

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

the collections for the National DNC Registry, which 

operates under Section 5 of the FTC Act. Collections in 

excess of Congressional limits are unavailable by law and 

included in 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 FTC 

until money is distributed to consumers (or to a third 

party agent that distributes money to consumers on 

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(p), 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 

NOTES TO THE FINANCIAL STATEMENTS 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 43

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. 

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. They 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 

September 2014). 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 long-term assets and liabilities.

As described in Note 1(b), 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 uncollectable 

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 restrictions on the expenditure of funds. 

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. 

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 

non-entity assets in the financial statements. Assets 

that the agency is authorized to use in its operations 

are entity assets. Assets that the agency holds on behalf 

of another federal agency or a third party and are not 

available for the agency’s use are non-entity assets. Nonentity assets include collections and accounts receivable 
FINANCIAL SECTION

44 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

that arise from court-ordered judgments for monetary 

relief in the consumer redress program, 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 nonentity liability of equal amount. (See Note 2, Entity and 

Non-Entity Assets.)

(g) Fund Balance with Treasury 

The fund balance with Treasury (FBWT) is the 

aggregate amount of undisbursed funds in the FTC’s 

general fund, deposit fund, and clearing/suspense fund. 

General funds include a portion that is available to the 

FTC to make expenditures and pay liabilities, and a 

portion that is unavailable. Deposit funds 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), 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 interest bearing 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. 

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 status of litigation and collection 

status, cases are referred to the Treasury for collection 

action. 

(j) Accrued Liabilities and Accounts 

Payable 

Accrued liabilities and accounts payable represent a 

probable future outflow or other sacrifice of resources 

because of past transactions or events. Liabilities are 

recognized when they are incurred, regardless of whether 

they are covered by budgetary resources. 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 liabilities 

(other than contracts). (See Note 7, Liabilities Covered 

and Not Covered by Budgetary Resources.) 

(k) Employee Health Benefits and Life 

Insurance 

FTC employees are eligible to participate in the 

contributory Federal Employees’ Health Benefit 

Program (FEHBP) and the Federal Employees’ Group 

Life Insurance Program (FEGLIP) administered by the 

Office of Personnel Management (OPM). The FTC 

contributes a percentage to each program to pay for 

current benefits. 

(l) Employee Retirement Benefits 

FTC employees participate in either the Civil Service 

Retirement System (CSRS) or the Federal Employees’ 

Retirement System (FERS) administered by 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 seven 

percent of the employee’s basic pay to the Civil Service 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 45

Retirement and Disability Fund. For employees 

participating in FERS, the FTC contributes 11.9 

percent to the Federal Employees’ Retirement Fund. 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 set by law. For those 

employees participating in FERS, the FTC makes a 

mandatory one percent contribution to this plan and in 

addition, matches 100 percent of the first three percent 

contributed and 50 percent of the next two percent. 

CSRS participating employees do not receive a matching 

contribution from the FTC. 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. 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 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 OPM, and 

recognized as an imputed financing source by FTC. 

(m) FECA and Other PostEmployment Benefits 

The Federal Employees’ Compensation Act (FECA) 

administered by the U.S. Department of Labor (DOL) 

provides income and medical cost protection to covered 

federal civilian employees injured on the job, and 

employees who have incurred a work-related injury or 

occupational disease. The DOL bills FTC annually 

for the claims paid and FTC recognizes the FECA 

liability for future payment. Payment is deferred for two 

years to allow for funding through the budget. 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 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 OPM that estimate the true cost 

of providing these benefit to current employees. The cost 

of providing post-retirement benefits for the FEHBP 

and FEGLIP is financed by OPM, and recognized as an 

imputed financing source by FTC. 

(n) Annual and Sick Leave

The FTC accrues an annual leave liability when 

employees earn leave and reduces the liability when 

employees take leave. The balance in this account 

reflects the current leave balances and pay rates of 

FTC employees. Budget execution rules do not allow 

this liability to be funded as earned. It is funded when 

taken or when paid out as a lump sum at the end of 

employment. As a result, accrued 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.) 

(o) 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 that is 

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.) 
FINANCIAL SECTION

46 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

(p) 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 interagency agreements. 

(q) 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. 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 47

NOTE 2—ENTITY AND NONENTITY ASSETS 

The FTC’s entity assets are comprised of undisbursed 

General funds, accounts receivable, and property 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 

consists of amounts held temporarily in deposit funds 

for the consumer redress program and collections of 

premerger filing fees that are held in clearing/suspense 

funds that will be transferred to 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, 2014:

(Dollars in thousands) 2014

Entity

2014 

Non-Entity

2014

Total

Intragovernmental:

Fund balance with Treasury:

 General funds $	 132,737 $	 - $	 132,737

 Deposit funds - consumer redress - 105,091 105,091 

 Clearing/Suspense funds - premerger filing fees - 615 615 

Accounts receivable, net 6 - 6 

Subtotal intragovernmental assets $	 132,743 $ 	 105,706 $	 238,449

Cash and other monetary assets - 28,797 28,797 

Accounts receivable, net 54 65,393 65,447 

General property and equipment, net 64,247 - 64,247 

Total Assets $	 197,044 $	 199,896 $	 396,940

Entity and non-entity assets consisted of the following as of September 30, 2013:

(Dollars in thousands) 2013

Entity

2013 

Non-Entity

2013

Total

Intragovernmental:

Fund balance with Treasury:

 General funds $	 158,756 $	 - $	 158,756

 Deposit funds - consumer redress - 47,609 47,609 

 Clearing/Suspense funds - premerger filing fees 137 136 273 

Accounts receivable, net 47 - 47 

Subtotal intragovernmental assets $	 158,940 $	 47,745 $	 206,685

Cash and other monetary assets - 18,239 18,239 

Accounts receivable, net 48 24,743 24,791 

General property and equipment, net 22,042 - 22,042 

Total Assets $	 181,030 $	 90,727 $	 271,757
FINANCIAL SECTION

48 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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 available 

balance consists of $15,015 thousand allocated for space

replacement and the relocation of staff to Constitution 

Center and $8,878 thousand from operations.The

unavailable balance is the result of prior year recoveries 

that exceeded anticipated and apportioned amounts, 

the collection of fees ($2,963 thousand) above the

authorized amount to spend in the current year, and 

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

Fund balance with Treasury consisted of the following as of September 30, 2014 and 2013:

(Dollars in thousands) 2014 2013

Fund Balance with Treasury:

General funds $	 132,737 $	 158,756

Deposit funds - consumer redress 105,091 47,609 

Clearing/suspense funds - premerger filing fees 615 273 

Total Fund Balance with Treasury $	 238,443 $	 206,638

Status of Fund Balance with Treasury:

Unobligated balance:

 Available - apportioned $	 23,893 $	 52,778

 Unavailable - unapportioned 3,554 4,381 

 Unavailable - temporary reduction 9,413 6,450 

Obligated balance not yet disbursed 95,877 95,147 

Non-budgetary Fund Balance with Treasury

 Deposit funds - consumer redress 105,091 47,609 

 Clearing/suspense funds - premerger filing fees 615 273 

Total Status of Fund Balance with Treasury $	 238,443 $	 206,638

The FTC’s fund balance with Treasury, as reflected in the entity’s general ledger and the Treasury account balances 

have no material discrepancies. 

NOTE 4—CASH AND OTHER 

MONETARY ASSETS 

Cash and other monetary assets consists of cash 

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, 2014 and 2013:

(Dollars in thousands) 2014 2013

Cash and Other Monetary Assets:

Consumer redress funds held in financial institutions $	 28,797 $	 18,239

Total Cash and Other Monetary Assets $	 28,797 $	 18,239
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 49

NOTE 5—ACCOUNTS 

RECEIVABLE, NET 

The bulk of the FTC’s accounts receivable are nonentity accounts receivable arising from the settlement 

or litigation of administrative and federal court cases in 

connection with the consumer redress program, and from 

civil monetary penalties imposed for violation of an FTC 

order. Because of the nature of these receivables, they are 

frequently not fully collectible and are offset with a large 

allowance. The allowance for uncollectible accounts is 

based on 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. These nonentity accounts receivable are included in the financial 

statements along with an offsetting non-entity liability. 

Accounts receivable, net consisted of the following as of September 30, 2014:

(Dollars in thousands) Gross

Receivables 

 Allowance for

Uncollectible

Accounts 

 2014 Net 

 Entity Accounts Receivable: 

 Intragovernmental $	 6 $	 - $	 6

 With the public 54 - 54 

 Total entity accounts receivable $	 60 $	 - $	 60

 Non-Entity Accounts Receivable: 

 Consumer redress $	 1,178,746 $	 1,115,970 $	 62,776

 Civil penalties 32,912 30,295 2,617 

 Total non-entity accounts receivable $	 1,211,658 $	 1,146,265 $	 65,393

 Total Accounts Receivable $	 1,211,718 $	 1,146,265 $	 65,453

Accounts receivable, net consisted of the following as of September 30, 2013:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible 

Accounts 

 2013 Net 

 Entity Accounts Receivable: 

 Intragovernmental $	 47 $	 - $	 47

 With the public 48 - 48 

 Total entity accounts receivable $	 95 $	 - $	 95

Non-Entity Accounts Receivable: 

Consumer redress $	 994,781 $	 971,088 $	 23,693

Civil penalties 31,345 30,295 1,050 

Total non-entity accounts receivable $	 1,026,126 $	 1,001,383 $	 24,743

Total Accounts Receivable $	 1,026,221 $	 1,001,383 $	 24,838
FINANCIAL SECTION

50 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

NOTE 6—GENERAL PROPERTY 

AND EQUIPMENT, NET 

The FTC’s property and equipment consists of generalpurpose equipment used by the agency and capital 

improvements made to buildings leased by the FTC for 

office space and software. The FTC reports property and 

equipment at historical cost and capitalizes items with 

an initial cost of $100 thousand or greater and a useful

life of over two years. Property and equipment that 

meets these criteria is depreciated or amortized using 

the straight-line method over the estimated useful life of 

the asset. Leasehold improvements are amortized over 

15 years as all leasehold improvements are in General 

Services Administration (GSA) leased space and FTC 

has no intent of vacating its’ current space. Additionally, 

assets under development, such as internal use software 

and leasehold improvements with an estimated aggregate 

cost of over $100 thousand are capitalized and then

amortized once complete and placed into service. 

Normal repairs and maintenance, and property and 

equipment that does not meet the capitalization criteria, 

is recognized as an expense in the current period.

General property and equipment, net consisted of the following as of September 30, 2014:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition

Value

Accumulated 

Depreciation /

Amortization

Net 

Book Value

Equipment 5-20 yrs. $	 19,340 $	 3,157 $	 16,183

Leasehold improvements 15 yrs 44,978 5,561 39,417 

Software 5 yrs. 21,376 12,729 8,647 

Total General Property and Equipment $	 85,694 $	 21,447 $	 64,247

General property and equipment, net consisted of the following as of September 30, 2013:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition

Value

Accumulated 

Depreciation /

Amortization

Net 

Book Value

Equipment 5-20 yrs. $	 10,356 $	 4,779 $	 5,577

Leasehold improvements 15 yrs 16,079 6,638 9,441 

Software 5 yrs. 20,067 13,043 7,024 

Total General Property and Equipment $	 46,502 $	 24,460 $	 22,042
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 51

NOTE 7—LIABILITIES 

COVERED AND NOT 

COVERED BY BUDGETARY 

RESOURCES

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 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 consist of the following as of September 30, 2014 and 2013:

(Dollars in thousands)

2014 

Covered by 

Budgetary 

Resources

2014 Not 

Covered by 

Budgetary 

Resources

2014 Not 

Requiring 

Budgetary 

Resources

2014 Total 

Liabilities

2013 

Covered by 

Budgetary 

Resources

2013 Not 

Covered by 

Budgetary 

Resources

2013 Not 

Requiring 

Budgetary 

Resources

2013 Total 

Liabilities

Intragovernmental:

Accounts payable $	 823 $	 - $	 - $	 823 $	 1,555 $	 - $	 - $	 1,555

Accrued employee benefits 830 - - 830 732 - - 732 

FECA liability - 365 - 365 - 394 - 394 

Other employment related 

liability - - - - - 2 - 2 

Undisbursed premerger filing 

fees - - 615 615 - - 136 136 

Accrued civil penalties due to 

Treasury - - 2,617 2,617 - - 1,050 1,050 

Total intragovernmental liabilities $	 1,653 $	 365 $ 	 3,232 $ 	 5,250 $	 2,287 $	 396 $	 1,186 $	 3,869

Accounts payable 10,805 - - 10,805 8,591 - - 8,591 

Reimbursable advances 45 - - 45 - - - - 

Accrued payroll and benefits 4,105 - - 4,105 3,626 - - 3,626 

Accrued leave - 9,737 - 9,737 - 11,385 - 11,385 

Actuarial FECA - 2,202 - 2,202 - 2,254 - 2,254 

Undisbursed redress collections - - 133,888 133,888 - - 65,848 65,848 

Accrued redress due to claimants - - 62,776 62,776 - - 23,693 23,693 

Total liabilities $	 16,608 $	 12,304 $	199,896 $	228,808 $	 14,504 $	 14,035 $	 90,727 $	119,266
FINANCIAL SECTION

52 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

NOTE 8—OTHER LIABILITIES

Other liabilities consisted of the following as of September 30, 2014 (in thousands):

2014

Non-Current

2014

Current

2014

Total

Other intragovernmental:

Accrued employee benefits $	 - $	 830 $	 830

FECA liability 365 - 365 

Undisbursed premerger filing fees - 615 615 

Accrued civil penalties due to Treasury - 2,617 2,617 

Subtotal other intragovernmental $	 365 $ 	 4,062 $	 4,427

Reimbursable Advances - 45 45 

Accrued payroll and benefits - 4,105 4,105 

Accrued leave 9,737 - 9,737 

Actuarial FECA 2,202 - 2,202 

Subtotal other $	 11,939 $	 4,150 $ 	 16,089

Total Other Liabilities $	 12,304 $	 8,212 $	 20,516

Other liabilities consisted of the following as of September 30, 2013 (in thousands):

2013

Non-Current

2013

Current

2013

Total

Other intragovernmental:

Accrued employee benefits $	 - $	 734 $	 734

FECA liability 394 - 394 

Accrued civil penalties due to Treasury - 1,050 1,050 

Undisbursed premerger filing fees - 136 136 

Subtotal other intragovernmental $	 394 $	 1,920 $	 2,314

Reimbursable Advances - - - 

Accrued payroll and benefits - 3,626 3,626 

Accrued leave 11,385 - 11,385 

Actuarial FECA 2,254 - 2,254 

Subtotal other 13,639 3,626 17,265 

Total Other Liabilities $	 14,033 $	 5,546 $	 19,579
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 53

NOTE 9—OPERATING LEASES 

Leases of government and commercial property are 

made through and managed by the GSA. While the 

leases with GSA are cancellable, the FTC’s intention is 

to stay in the GSA leased space and disclose the future 

lease payments to GSA. The FTC has leases on three 

government-owned properties and eight commercial 

properties totaling approximately 607 thousand square 

feet for use as offices, storage and parking. The FTC’s 

current 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, 2014:

Fiscal Year

(Dollars in thousands)

2015 $	 6,737

2016 6,742 

2017 6,722 

2018 6,679 

2019 6,349 

Thereafter - 

Total Future Minimum Lease Payments $	 33,229

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

fiscal year ended September 30, 2014:

Fiscal Year 

(Dollars in thousands)

2015 $	 14,988

2016 14,588 

2017 14,544 

2018 13,582 

2019 14,371 

Thereafter 64,630 

Total Future Minimum Lease Payments $	 136,703

NOTE 10—COMMITMENTS 

AND CONTINGENCIES 

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” as of 

September 30, 2014.
FINANCIAL SECTION

54 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

NOTE 11—INTRAGOVERNMENTAL COSTS AND EXCHANGE 

REVENUES 

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

ended September 30, 2014 and 2013:

(Dollars in thousands) 2014 2013

Strategic Goal 1: Protect Consumers

Intragovernmental gross costs $	 62,467 $	 45,938

Public costs 108,027 119,628 

Gross costs, Protect Consumers 170,494 165,566 

Intragovernmental earned revenue - reimbursements (3) (6)

Public earned revenue - Do Not Call registry fees (13,518) (14,112)

Earned revenue, Protect Consumers (13,521) (14,118)

Net Cost, Protect Consumers $	 156,973 $	 151,448

Strategic Goal 2: Maintain Competition

Intragovernmental gross costs $	 45,608 $	 33,954

Public costs 78,871 88,421 

Gross costs, Maintain Competition 124,479 122,375 

Intragovernmental earned revenue - reimbursements (214) (491)

Public earned revenue - premerger filing fees (106,263) (81,202)

Earned revenue, Maintain Competition (106,477) (81,693)

Net Cost, Maintain Competition $	 18,002 $	 40,682

Net Cost of Operations $	 174,975 $	 192,130

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. 

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 Antitrust Division. 

Subscription fees collected for the National DNC 

Registry - The Do Not Call 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. 

FTC recognizes the revenue when collected and the 

telemarketer is given access to the requested data. 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 55

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 

the unobligated funds brought forward from previous 

years. These funds are made available by OMB through 

quarterly (Category A) apportionments.

Category B – direct obligations represent amounts

obligated for space replacement and the relocation of 

FTC staff. The funding for these obligations is derived 

from the same sources as Category A, direct obligations, 

however, there is a limit on the amount available for this 

purpose. 

Category B – reimbursable obligations represent

amounts obligated in fulfilling interagency agreements 

when 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 12—APPORTIONMENT CATEGORIES OF OBLIGATIONS 

INCURRED: DIRECT VS. REIMBURSABLE OBLIGATIONS 

Obligations incurred consisted of the following for the fiscal years ended September 30, 2014 and 2013:

(Dollars in thousands) 2014 2013

Obligations Incurred:

Category A - direct obligations $	 316,054 $	 277,209

Category B - direct obligations 17,840 21,945 

Category B - reimbursable obligations 244 544 

Total Obligations Incurred $	 334,138 $	 299,698

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 fiscal year 2013 Statement of Budgetary 

Resources and the fiscal year 2013 actual amounts as 

reported in the fiscal year 2015 Budget of the United 

States Government. The fiscal year 2016 Budget of the 

United States is not available to compare fiscal year 

2014 actual amounts to the fiscal year 2014 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, 2014 and 2013, is 

$80,059 and $81,941 thousand, respectively.
FINANCIAL SECTION

56 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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. During fiscal year 

2014 and fiscal year 2013, the FTC collected $212,526

and $162,404 thousand respectively, in HSR premerger

filing fees. One-half of the amounts collected in each 

year were distributed to DOJ, as shown on the Statement 

of Custodial Activity. Undistributed fees to the DOJ 

at September 30, 2014 and 2013 were $615 and $136

thousand respectively. 

Civil Penalties 

Civil monetary penalties 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 FTC deposits the money 

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. 

Collections disgorged to the Treasury were $16,157 and

$14,518 thousand as of September 30, 2014 and 2013

respectively. 

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.

(Decrease)/Increase in Amounts Yet to 

be Transferred 

The decrease/increase in 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. 
FINANCIAL SECTION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 57

NOTE 16—CONSUMER REDRESS ACTIVITIES 

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

proceedings and its federal court cases. The FTC attempts to distribute funds thus obtained to consumers 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 needed to cover immediate disbursements to consumers are 

transferred to accounts at financial institutions from which redress third-party administrators process claims and 

disburse proceeds to claimants.

Redress fund activities consisted of the following for the fiscal years ended September 30, 2014 and 2013:

(Dollars in thousands) 2014 2013

Consumer Redress:

Fund Balance with Treasury

Beginning balance $	 47,609 $	 56,575

Collections 124,376 36,063 

Disbursements to claimants, net (69) (23)

Disgorgements to Treasury (16,157) (14,518)

Transfers, expenses, refunds (50,668) (30,488)

Total Fund Balance with Treasury, Ending $	 105,091 $	 47,609

Cash and Other Monetary Assets

Beginning balance $	 18,239 $	 28,360

Disbursements to claimants, net (38,512) (36,621)

Transfers, expenses, interest income 49,070 26,500 

Total Cash and Other Monetary Assets, Ending $	 28,797 $	 18,239

Accounts Receivable, Net

Beginning balance $	 23,693 $	 27,219

Net activity 39,083 (3,526)

Total Accounts Receivable, Ending $	 62,776 $	 23,693
FINANCIAL SECTION

58 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

NOTE 17 — RECONCILIATION OF NET COST OF OPERATIONS 

TO BUDGET

For the fiscal years ended September 30, 2014 and 2013:

(Dollars in thousands) 2014 2013

Resources Used to Finance Activities:

Budgetary resources obligated:

 Obligations incurred $	 334,138 $	 299,698

 Less: spending authority from offsetting collections and recoveries (126,206) (98,869)

Total budgetary resources obligated 207,932 200,829 

Other resources:

 Imputed financing from costs absorbed by others 9,434 9,207 

Total other resources 9,434 9,207 

Total Resources Used to Finance Activities $ 	 217,366 $ 	 210,036

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

 Change in budgetary resources obligated, but not yet provided $	 1,552 $ 	 (14,277)

 Resources that finance the acquisition of assets (46,691) (6,873)

Total resources used to finance items not part of the net cost of operations (45,139) (21,150)

Total Resources Used to Finance the Net Cost of Operations $ 	 172,227 $	 188,886

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 $	 (1,648) $	 (144)

 Other (90) 172 

Total components requiring or generating resources in future period (1,738) 28 

Components not requiring or generating resources:

 Depreciation and amortization 3,738 3,216 

 Losses on disposition of assets - other 748 - 

Total components not requiring or generating resources 4,486 3,216 

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

Generate Resources in the Current Period:

$ 	 2,748 $	 3,244

Net Cost of Operations $	 174,975 $	 192,130
 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 59

OTHER INFORMATION
OTHER INFORMATION

60 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

INSPECTOR GENERAL IDENTIFIED MANAGEMENT AND 

PERFORMANCE CHALLENGES

1

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Office of Inspector General

October 14, 2014

MEMORANDUM

TO: Edith Ramirez

Chairwoman, Federal Trade Commission

FROM: Kelly C. Tshibaka

Acting Inspector General

SUBJECT: FY 2014 FTC Management Challenges

The Reports Consolidation Act of 2000 requires that the Inspector General provide a summary of 

our perspective on the most serious management and performance challenges facing the agency 

and a brief assessment of the agency’s progress in addressing those challenges. The management 

challenges in this document are based on work conducted by the Office of Inspector General 

(OIG) and discussions with senior leaders at the Federal Trade Commission (FTC). 

We highlight the following as the most significant challenges facing the FTC:

 Securing the Agency’s Information Systems and Networks from Destruction, Data Loss, 

or Compromise

 Leveraging the Value of Investments and Work Performed

 Recruitment, Retention, and Staff Size

 Ensuring Compliance with Digital Records Management Requirements

These challenges do not reflect areas in which the FTC is failing; rather, they represent 

opportunities for mission advancement. Some of these challenges will always exist and require 

the agency’s continued attention. Others are a priority for this time in the agency’s development, 

but may become less of a priority in the future. For example, last year the OIG identified 

“Consolidating satellite offices into the Constitution Center” as a top management challenge. 

This year, however, we have not included any aspects of the move to Constitution Center in the 

Management Challenges because the FTC did a remarkable job of accomplishing that 

consolidation on time and within budget.

The FTC has made progress in addressing each of these challenges in FY 2014. As the FTC 

continues to focus energy and resources on addressing these challenges, it will significantly 

enhance its performance and success.

INSPECTOR GENERAL-IDENTIFIED MANAGEMENT 

AND PERFORMANCE CHALLENGES
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 61

2

The attached document provides the rationale for our assessment. We provided a draft of our 

assessment to management and its comments are incorporated into the section headings “Agency 

Progress in Addressing the Challenge.”

We appreciate the ongoing support the OIG receives from agency leadership and will continue to 

work with you in addressing these and other challenges the FTC faces in achieving its mission.

Attachment
OTHER INFORMATION

62 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

1

Office of Inspector General

Top Management Challenges at the Federal Trade Commission

October 14, 2014

1. Securing the Agency’s Information Systems and Networks from Destruction, Data Loss, 

or Compromise

The Federal Trade Commission (FTC) Office of Inspector General (OIG) conducts annual 

Federal Information Security Management Act (FISMA) reviews, which evaluate the 

effectiveness of FTC information security and privacy programs. While the OIG has found 

the FTC to be in substantial compliance with FISMA and other applicable privacy and 

security requirements, the ability to protect information assets is a complex challenge for the

FTC.

In an environment where technology is changing at an increasing rate, the FTC faces

emerging vulnerabilities as it integrates new technologies (e.g., cloud and mobile computing)

into its Information Technology (IT) infrastructure, encounters changing and pervasive

threats, and is targeted by individuals incentivized to disrupt or compromise its operations. In

addition, guidance for federal agencies has become more flexible, which allows agencies to 

tailor information protection solutions specific to their needs, but provides less direction as to 

what solutions are effective.

The information security and privacy environment is fluid and ever-changing, which means it 

will pose a constant challenge for the FTC. In addition to an ever-changing environment, the

FTC experienced obstacles to its efforts to improve the information security and privacy

programs when senior management turned over (the Executive Director and Chief Information 

Officer retired), and when the FTC consolidated its two Washington, D.C. satellite offices into 

one location at Constitution Center. The FTC’s reactive security measures were strong during

these disruptions, but heavily relied on the workforce to maintain information security and 

privacy programs. Developing more mature information processes will ensure that the FTC 

security and privacy programs continue to provide high levels of protection for FTC information 

assets, but with less workforce stress, greater operational consistency, and improved security.

Agency Progress in Addressing the Challenge

The OCIO and the Chief Privacy Officer (CPO) continue to work with FTC system owners and 

managers to ensure that information security and privacy requirements are identified, 

documented, communicated appropriately, and incorporated into the design and implementation 

of each system. System owners and managers are reminded that periodic test and evaluation of 

information security and privacy controls is necessary to ensure effective implementation and 

operation of those controls. They are also reminded that maintaining and, as necessary, updating 

the corresponding information security and privacy documentation (such as system security 

plans and Privacy Impact Assessments) is a pre-requisite to issuance and retention of the 

system’s authorization to operate. OCIO staff, along with the Office of General Counsel staff and 
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 63 2

the CPO, continue to meet with system owners to make sure that contract language addresses 

information security and privacy controls and related FTC practices and procedures, including 

continuous monitoring, so that Contracting Officer Representatives (CORs) can manage and 

assist in evaluating the compliance of contractor-hosted systems and services. As the OCIO and 

the CPO continue to work closely to implement and coordinate privacy controls with information 

security controls, as required by NIST Special Publication 800-53 rev. 4, the FTC will continue 

to develop and improve its risk-based assessments of information security and privacy as new 

technologies are integrated into the FTC infrastructure.

Related to the implementation and coordination of controls, in FY 2014 the FTC launched a 

process improvement initiative to track and monitor the agency’s open audit findings and 

recommendations through a data-driven monthly review process. Management officials report on 

the status and progress of their items to senior management, and FMO ensures that relevant 

documentation is gathered and maintained in a limited-access reporting tool. This regular review 

process strengthens the agency’s internal controls and enhances transparency of operations.

Also in FY 2014, the FTC consolidated its satellite offices into the newly renovated Constitution 

Center and the FTC Headquarters building. The OCIO relocated select IT services and 

applications previously hosted in the New Jersey and Headquarters buildings, to the Constitution 

Center, consolidating applications and services in proximity of the user and to provide for future 

expansion. The move also allowed OCIO to upgrade and replace aging infrastructure 

components with newer, more secure products with better performance including replacing the 

agency’s firewall infrastructure and upgrading equipment in the OCIO’s Acceptance Testing and 

Development environments. In FY 2015 and FY 2016, the OCIO will continue to replace and 

upgrade aging infrastructure equipment and operating systems to decrease risk of system failure 

and security vulnerabilities.

The control of IT assets during the move to Constitution Center was critical, and included the 

movement of desktop equipment (e.g., laptops, workstations, telephones, TVs, and computer 

monitors) for over 700 FTC staff, as well as all network (data center) and audio/video equipment 

(e.g., servers, switches, routers, storage, cameras, VTCs). The IT Asset Management Team 

performed a full physical inventory of all assets moved and coordinated with system 

administrators to decommission and dispose of assets that were deemed “end of life”. In FY 

2015 and FY 2016, the IT Asset Management Team will continue to refine policy and procedure, 

formalize reporting and statistical sampling requirements, and incorporate a variety of electronic 

tools to assist with mandatory inventory requirements. 

In FY 2015 and FY 2016, the FTC will begin to move select core IT services to the cloud to 

improve service offerings and resolve outstanding security vulnerabilities. The FTC recognizes

the need to improve the availability of core IT services in a secure and cost effective manner. As 

part of the evaluation of potential cloud service offerings, the FTC has utilized the standards set 

forth by the Federal Risk Authorization and Management Program (FedRAMP) to ensure the 

most stringent security measures are in place to protect agency data. The use of cloud services 

will also decrease risk of data loss and service interruption if the FTC’s main data center is 

unavailable.
OTHER INFORMATION

64 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

3

2. Leveraging the Value of Investments and Work Performed

The FTC must make effective use of limited resources by targeting its law enforcement and 

education efforts to maximize its desired outcome to protect consumers and promote 

competition. A complex marketplace, ever-evolving fraud schemes, declining budgets, and 

increasing workloads require continuous reassessment of management practices in achieving

that objective.

The OIG performed an evaluation of the FTC’s Bureau of Consumer Protection’s (BCP) 

enforcement and non-enforcement strategies, goals, policies and procedures. This evaluation 

found that the BCP’s strategic planning is a best practice in comparison to other agencies the

OIG examined. This evaluation also identified opportunities, including better leveraging the 

value of investments and work performed, that could further maximize consumer protection 

and enhance an already strategic and successful program. While the review only looked at the

BCP, we believe that leveraging the value of investments and work performed is a challenge

across the FTC.

For example, the FTC has a Management Data Dashboard (MDD) that provides financial reports 

and certain information on staff activity, matters management, etc. While the evolution of the 

MDD is headed in the right direction, the data collected is from disparate systems that are not 

integrated to provide agency leaders with a broad perspective on the status of their operations. 

Integrated data on costs would better equip agency leadership to plan and monitor its work. 

When data management systems are not integrated and compatible, excessive use of resources 

and inconsistent analysis of program results can occur. In order to make informed decisions and 

ensure accountability, the FTC needs data management systems that can generate timely, 

accurate, and useful information.

Agency Progress in Addressing the Challenge

Given the breadth of the agency’s jurisdiction, it is essential for the FTC to target its enforcement 

and education efforts to achieve the agency’s goals and maximize results. As the OIG noted, 

BCP, as an example, conducts strategic planning to identify priority areas and to focus its 

resources. BCP also takes steps to leverage the value of its investments and the work it performs.

With respect to enforcement actions, one of BCP’s largest investments is its Consumer Sentinel 

database of consumer complaints. BCP uses this database to help target and develop its cases.

BCP is implementing several OIG recommendations from the OIG’s recent evaluation to ensure 

that it is maximizing the value of its investment. With respect to educational efforts, BCP 

leverages its resources and the work it performs by partnering with other governmental and nongovernmental organizations. These organizations are well placed to get the information that the 

FTC produces into the hands of the people or businesses that need it. For example, in the three 

months since the FTC launched Pass It On – its paradigm-shifting campaign to educate older 

Americans about fraud – organizations in all 50 states ordered 500,000 copies of the materials.

These organizations include state departments of aging, individual residential centers, banks, 

libraries, and social services agencies – each of whom have relationships with older consumers 

and can distribute the materials directly to them.
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 65

4

In regard to the Management Data Dashboard (MDD), the OCIO continues to work with bureaus 

and offices to develop MDD as the agency’s management information analysis and decision 

support system. Since February 2012, MDD has provided increasingly more matter, staff activity 

and financial information, reports and dashboards to BCP, BC and BE to enable various types of 

operations analysis and decision making. For example, in FY 2012, MDD integrated matter 

information from several disparate agency matter and matter event tracking systems and 

provided bureau managers with a full view of many stages of a case, such as investigation, 

consent negotiation, court litigation, administrative adjudication, order compliance and consumer 

redress. MDD integrates staff hours information with matter information and enables managers 

to analyze resource allocation by matter, by program, by topic, by issue, etc. MDD also enables 

managers to receive periodic email notification of matter events such as issuance of subpoenas 

and Civil Investigative Demands. In FY 2013, MDD integrated official commission document 

information into the system, enabling bureau managers to search and retrieve commission 

documents based on a wealth of matter and program information, in addition to document 

metadata. 

In FY 2014, MDD integrated FTC core financial transaction data into the system and enabled 

bureau managers to analyze their respective organization’s status of funds and spending 

categories. In September 2014, MDD further integrated detailed stenographic service and 

litigation support cost data into the system. For example, bureau managers are able to analyze 

different types of costs (expert witness, court reporting, litigation support, travel, etc.) associated 

with a particular enforcement actions, determine the average cost of matters within a particular 

program, and many other analysis scenarios that leverage integrated matter, staff activity and 

cost data. In FY 2015, MDD will expand to provide financial reporting and analytics to FTC 

non-bureau offices such as OIA, OPP, and OED. The MDD team will also continue to work with 

the three Bureaus in FY 2015 to enhance bureau reports and dashboards to make them more 

intuitive and relevant to specific management decision-making.

3. Recruitment, Retention, and Staff Size

The FTC has a productive workforce replete with high performers. While it achieves 

impressive accomplishments for its size, it faces challenges in recruitment and retention in

mission support areas, and having enough positions (Full Time Equivalents) across the FTC to 

perform its mission. The FTC has managed this challenge by triaging its projects and by relying

on high performing employees and contractor support. This works as a short-term solution, but 

it is not sustainable long-term and it comes at the cost of mission effectiveness.

The area in which the FTC most experienced this challenge in FY 2014 is the Office of the 

Executive Director (OED). The OED provides critical mission support services for the FTC, 

including facilities, security, budget, acquisitions, human resources, information technology, and 

records management. When OED key positions are vacant, or when it does not have the human 

resources it needs to operate effectively and efficiently, the whole agency is detrimentally

affected. While the FTC consistently is rated one of the best places to work in the government, 
OTHER INFORMATION

66 Federal Trade Commission Fiscal Year 2014 www.ftc.gov 5

the FTC has experienced difficulty recruiting and retaining highly qualified individuals in some

OED positions.

Agency Progress in Addressing the Challenge

The FTC is committed to maintaining its high performance standards in protecting American 

consumers and remaining among the best places to work by developing strategies that address 

our recruitment, retention, and staff size challenges.

The FTC continues to recruit highly talented individuals into our workforce. Last winter, the 

agency opened a buy out and early-out window as one means to reshape the workforce, reduce 

skills gaps, and recruit individuals with the right skills to meet our mission. Twenty-one 

employees accepted our offer and left in early January. While in the short-term the loss of these 

employees required the agency to triage projects or use contractor support, in the long-term the 

agency is hiring individuals with the skills necessary for mission accomplishment now and in the 

future. This phenomenon was particularly acute in the Office of the Executive Director in which 

half of its leadership team retired in January 2013, including the Executive Director. The new 

Executive Director who came on board in late summer 2013 has made it a priority to fill all key 

OED positions, which will be accomplished in the very near future. To retain talented staff, the 

agency established a workforce flexibility team in FY 2014 to create a vision for future 

workplace initiatives. The FTC will continue to provide family friendly benefits for employees in 

balancing work and life issues and annually assess employee satisfaction to meet our recruitment 

and retention challenges. In FY 2014, the agency undertook an analysis of the use of full-time 

equivalents (FTEs) that assessed high priority program requirements and funding sources 

available to determine if any plus up of authorized FTE could be supported. Based on this 

analysis, an additional ten FTE were allocated across the agency to support long-term mission 

accomplishment. The agency will assess and adjust this decision in FY 2015 and beyond. 

4. Ensuring Compliance with Digital Records Management Requirements

In November 2011, President Obama signed a Presidential Memorandum, Managing 

Government Records, instituting a government-wide effort to reform records management 

policies and practices. In August 2012, the Office of Management and Budget and the National 

Archives and Records Administration issued a “Managing Government Records Directive” that 

requires agencies to eliminate paper and use electronic recordkeeping to the greatest extent 

possible. This Directive requires the FTC to make several transitions in its records management 

processes, including managing both permanent and temporary email records in an accessible

electronic format by December 31, 2016.

The FTC already has begun efforts to fully comply with the OMB directive and other legal 

requirements regarding electronic recordkeeping. The transition to digital records management 

will require the FTC’s continued focus in FY 2015.
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 67

6

Agency Progress in Addressing the Challenge

As noted above, the National Archives and Records Administration (NARA) approved a new 

comprehensive records retention schedule for the FTC in 2012. This new records retention 

schedule is media neutral and thus gives the FTC the legal authority to maintain its federal 

records in electronic format. The transition to maintaining agency records in electronic format is 

well underway. FTC staff currently store and access electronic information in shared network 

drives, following the FTC’s Shared Network Space policy that was established in 2006. This 

policy establishes a high-level folder structure and enhances the ability to control access 

privileges to information. In 2013, FTC’s Records and Filings Office (RFO) issued guidance to 

agency staff that federal records—including email records--can be stored on shared drives as part 

of the matter file. Use of shared drives to store records is consistent with the agency’s business 

process and with NARA Bulletin 2012-02 (December 6, 2011), on “Guidance on Managing 

Content on Shared Drives.” 

As part of the transition to maintaining agency records in electronic format, the FTC continues to 

use our Electronic Recordkeeping Certification Review (ERCR) process to evaluate 

recordkeeping requirements for existing and new systems. RFO has certified two systems to 

house permanent electronic records -- the Matter Management System 2 and the E-Filing system 

-- for public filings in FTC administrative litigation. In FY 2015, RFO is enhancing the E-Filing 

system to include electronic service of filings by the parties and an electronic docket of public 

filings that will accessible by the parties, as well as expanding the system to include non-public 

filings. These enhancements will make the FTC administrative litigation process and its official 

records virtually fully electronic.

FTC plans to utilize an Enterprise Content Management System (ECMS) to maintain agency 

records in electronic format for the required retention period and to transfer permanent agency 

records to NARA. RFO is working with agency stakeholders to develop information governance 

for FTC records. This includes taxonomy, common vocabulary, access controls, and retention 

triggers. FTC plans to incorporate the management of email records in the ECMS. In FY 2015, 

the agency will develop its strategic plan for transition to an ECMS, as part of FTC’s overall IT 

modernization strategy.
OTHER INFORMATION

68 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

CHAIRWOMAN’S RESPONSE TO IG CHALLENGES CHAIRWOMAN’S RESPONSE TO IG CHALLENGES
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 69

SUMMARY OF FINANCIAL STATEMENT AUDIT AND 

MANAGEMENT ASSURANCES 

TABLE 1: SUMMARY OF FINANCIAL STATEMENT AUDIT

Audit Opinion Unmodified

Restatement No

Material Weaknesses

Beginning 

Balance New Resolved Consolidated Ending Balance

0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

TABLE 2: SUMMARY OF MANAGEMENT ASSURANCES

Effectiveness of Internal Control Over Financial Reporting 

(Federal Managers’ Financial Integrity Act (FMFIA) Para. 2)

Statement of Assurance Unmodified

Material Weaknesses

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control Over Operations (FMFIA Para. 2)

Statement of Assurance Unmodified

Material Weaknesses

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA Para. 4)

Statement of Assurance Systems conform to financial management system requirements

Non-Conformances

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Non-Conformances 0 0 0 0 0 0
OTHER INFORMATION

70 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

THE IMPROPER PAYMENTS ELIMINATION AND 

RECOVERY ACT REPORTING DETAILS

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments Elimination and 

Recovery Act (IPERA) of 2010 and the Improper Payments Elimination and Recovery Improvement Act (IPERIA) 

of 2012, requires agencies to review all programs and activities and identify those that may be susceptible to significant 

improper payments. For all programs and activities in which the risk of improper payments is significant, agencies 

are to estimate the annual amount of improper payments in the susceptible programs and activities. Office of 

Management and Budget (OMB) Circular A-123 requires agencies to report the results of their improper payment 

activities. The IPERA also requires agencies to conduct payment recapture audits.

Office of Management and Budget (OMB) Memorandum M-11-16 prescribes guidance for agencies to use in 

implementing IPERA. OMB guidance defines “significant improper payments”, for FY 2014 reporting, as those in 

any particular program or activity that exceed both 1.5 percent of program outlays and $10 million of all program or

activity payments made during the fiscal year (or $100 million regardless of the improper payment percentage of total

program outlays). In addition, the OMB guidance addresses implementing payment recapture audits, for programs 

and activities that expend $1 million or more annually, provided it is cost-effective to do so.In accordance with the

OMB guidance, the FTC reviewed its programs and activities and determined that none of the agency’s programs 

or activities were susceptible to making significant improper payments and that the implementation of a payment 

recapture audit would not be cost–effective.

The FTC is cross-serviced by the Department of the Interior Business Center (IBC) for accounting system support 

and accounts payable processing. As a result, the implementation of the Do Not Pay (DNP) initiative is a joint 

responsibility between the FTC and IBC. Prior to making a new contact award, the FTC checks the System for 

Award Management (SAM) and the Excluded Parties List System (EPLS) for a match. If there is not a match, the 

FTC submits a new vendor request to IBC. The IBC Vendor Maintenance Team verifies all of FTC’s new Employee 

and Non Federal Vendor requests against the Department of Treasury’s Do Not Pay (DNP) databases using the 

DNP Portal on-line search capability. If the IBC Vendor Maintenance Team finds a positive match, they advise the 

FTC. The FTC reviews match, determines if the payment is proper or improper, and reports the results. The FTC 

also reviews the Social Security Administration’s (SSA) Death Master File (DMF) as an additional check to prevent 

improper payments before releasing Federal funds. 

As the below table shows, the FTC has not had any matches with the DMF and only 111 matches with SAM/EPLS. 

FTC’s review of all payments made in FY 2014 confirmed that the FTC did not make any improper payments in FY 

2014.

Nu

P

Re

fo

P

Do

P

Re

fo

P

Nu

P

S

Do

P

S

Nu

I

P

Rev

Not

Do

I

P

Rev

S

Reviews with 

DMF 0 $	 0.00 0 $	 0.00 0 $	 0.00

Reviews with 

SAM/EPLS 111 $	 100,710.00 0 $	 0.00 0 $	 0.00
OTHER INFORMATION

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 71

“FREEZE THE FOOTPRINT” IMPLEMENTATION

In FY 2014, the Federal Trade Commission reduced our overall square footage from 633,000 to 607,008.  

FY 2012 FY 2014 C

Rentable Square Footage 638,877 607,008 31,869 

In the future, the Federal Trade Commission will continue our efforts to reduce our office footprint each time we 

renew a lease with GSA.

FTC has no buildings that meet the requirements to report operation and maintenance costs. 
APPENDICES

72 Federal Trade Commission Fiscal Year 2014 www.ftc.gov
 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 73

APPENDICES
APPENDICES

74 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

APPENDIX A: DATA QUALITY 

INFORMATION

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.

Definition and background: This measure tracks 

how much money the FTC saves consumers each year 

through law enforcement. 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.

Data sources: To make dollar value assessments, 

staff uses company sales and other records, as well as 

information from employees and customers, where 

applicable. Bureau of Consumer Protection (BCP) 

case managers derive the amount of economic injury 

to consumers stopped 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 defendant(s) 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. Staff is surveyed by email after 

the completion of a case to determine the dollar value 

assessments. Beginning in the mid-fiscal year 2015, the 

estimates will be reported in the Debrief in the Redress 

and Enforcement Database. See measure 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 

the Division of Planning and Information (DPI). 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.

Key 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 
APPENDICES

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 75

(FMO), redress contractor reports, and matter bank 

statements. The civil penalty data is summarized in a 

spreadsheet maintained by BCP staff in DPI.

Verification and validation: 

1. The Redress Administration Office (RAO) in DPI 

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.

3. BCP budget staff reconciles the civil penalty 

spreadsheet with a separate 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.

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.

Definition and background: This measure helps 

determine the extent to which 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. The Bureau 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 received 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.

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.

Definition and background: This measure tracks 

investigations or cases in which the FTC obtains 

foreign-based evidence or engages in mutual assistance 

that contributes to FTC law enforcement actions or 

in which we cooperate with foreign agencies and/or 

multilateral organizations on enforcement matters.

Data sources: Office of International Affairs (OIA) 

weekly reports and internal tracking sheets.
APPENDICES

76 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

Verification and validation: Consumer protection 

team members report matters they worked on in which 

information was shared. Staff review and compile 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.

STRATEGIC GOAL 2: 

MAINTAIN COMPETITION

OBJECTIVE 2.1: IDENTIFY AND 

TAKE ACTIONS TO ADDRESS 

ANTICOMPETITIVE MERGERS 

AND PRACTICES THAT HARM 

CONSUMERS.

Key/Efficiency 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: Press releases are the source of 

information for public actions, such as consent orders 

and the results of judicial review, while 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 

that the transaction is likely to harm competition. 

This information is then used to populate the bureau’s 

enforcement database and is cross-referenced with both 

the list of known second request and compulsory process 

merger investigations as recorded in an agency database 

of matters and the list of nonmerger investigations with 

more than 150 hours, as identified using the agency’s 

time and attendance reporting database.

Verification and validation: The data is entered into 

a bureau 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.

Key/Efficiency 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 

generated under goal 2.1.2 are divided by the amount of 

resources spent on the merger program for the current 

fiscal year.

Data sources: The lead attorney estimates consumer 

savings for a particular case using the appropriate 

applicable estimation formula and submits it to the 

Bureau of Economics 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: See goal 2.1.2.

Key/Efficiency 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 generated under 

goal 2.1.4 divided by the amount of resources spent on 

the nonmerger program.
APPENDICES

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 77

Data sources: The lead attorney estimates consumer 

savings for a particular case using the appropriate 

applicable estimation formula. The FTC’s financial 

system provides the amount of resources expended on 

the nonmerger program.

Verification and validation: See goal 2.1.1.

Data limitations: See goal 2.1.2.

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.

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 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: Office of International Affairs weekly 

reports and internal logs.

Verification and validation: International antitrust 

team members report matters they worked on in which 

substantial contact took place. Staff review and compile 

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.

Efficiency 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 requests that upon initial review appear to be 

requests we 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 they represent a strong percentage 

of the types of requests we fill. This measure tracks the 

agency’s response time in processing a simple FOIA 

request for access to public records. We also keep track 

of a number of other measures on an annual basis, 

this includes: the FTC’s response time for simple and 

complex requests; steps that the FTC has taken to make 

our 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. Those reports can be found 

here: http://www.ftc.gov/foia/chiefreports.shtm

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.
APPENDICES

78 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

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, the information is logged into 

the FOIAxpress system, the request is scanned, and 

numbers are assigned to each request. This begins the 

clock running 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 we have to repeat processing steps that 

have already occurred.

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.

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

is administered annually by the U.S. Office of Personnel 

Management (OPM). The Federal Employee Viewpoint 

Survey is a tool that measures employees’ perceptions of 

whether, and to what extent, conditions that characterize 

successful organizations are present. This survey was 

administered for the first time in 2002, and then 

repeated in 2004, 2006, 2008, 2010, 2011, 2012, and 

most recently in 2013. 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.
APPENDICES

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 79

Acronym Definition

ACO Accountable Care Organization

AFR Agency Financial Report

APP Annual Performance Plan

APR Annual Performance Report 

BC Bureau of Competition 

BCP Bureau of Consumer Protection 

BE Bureau of Economics 

CFO Chief Financial Officer

CFS Core Financial System

COPPA Children’s Online Privacy Protection Act

CPO Chief Privacy Officer

CSRS Civil Service Retirement System 

D.C. District of Columbia

DMF Death Master File

DNC Do Not Call 

DNP Do Not Pay

DOJ Department of Justice 

DOL Department of Labor 

ECMS Enterprise Content Management System

EFT Electronic Funds Transfer

EPLS Excluded Parties List System

ERCR Electronic Recordkeeping Certification Review 

FASAB Federal Accounting Standards Advisory Board 

FBWT Fund Balance with Treasury

FedRAMP Federal Risk and Authorization Management Program 

FECA Federal Employee’s Compensation Act 

FEGLIP Federal Employees Group Life Insurance Program 

FEHBP Federal Employees Health Benefit Program 

FEMA Federal Emergency Management Agency 

FERS Federal Employees Retirement System 

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 

APPENDIX B: ACRONYMS
APPENDICES

80 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

Acronym Definition

GAO Government Accountability Office 

GSA General Services Administration 

HSR Hart-Scott-Rodino Act

IBC Department of the Interior Business Center 

IG Inspector General 

IPERA Improper Payments Elimination and Recovery Act

IT Information Technology

MC Maintain Competition 

MDD Management Data Dashboard 

MD&A Management’s Discussion and Analysis

N/A Not Applicable or Not Available 

NARA National Archives and Records Administration

NIST National Institute of Standards and Technology 

OCIO Office of the Chief Information Officer 

OED Office of the Executive Director

OIA Office of International Affairs

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

OPP Office of Policy Planning

OS Office of the Secretary

PAE Patent Assertion Entity

PAR Performance and Accountability Report

PC Protect Consumers 

PIO Performance Improvement Officer

PMRO Performance Measure Reporting Official

RAO Redress Administration Office

RFO Records and Filings Office

RSI Required Supplementary Information

SAM System for Award Management

SAT Senior Assessment Team

SBR Statement of Budgetary Resources 

SCA Statement of Custodial Activity

SEP Standard Essential Patent

SPFI Summary of Performance and Financial Information 

SOA Statement of Assurance 

SSAE Statement on Standards for Attestation Engagements

TAS Treasury Account Symbol 

TSR Telemarketing Sales Rule

TSP Thrift Savings Plan 

TTY Text Telephone or Telephone Typewriter 

US United States
APPENDICES

 www.ftc.gov Fiscal Year 2014 Federal Trade Commission 81

APPENDIX C: 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 http://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 http://www.ftc.gov/reports/agency-financial-report-fy2014 

AFR Contact Joseph O’Leska

AFR Telephone 202-326-2716

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
APPENDICES

82 Federal Trade Commission Fiscal Year 2014 www.ftc.gov

CONSUMER RESPONSE CENTER

General Complaints 877-FTC-HELP (877-382-4357)

Identity Theft Complaints 877-ID-THEFT (877-438-4338)

Online General Complaints www.ftc.gov/complaint

Identity Theft Education and Complaints www.ftc.gov/idtheft

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: Heather Hippsley of the Office of the Chairwoman; George Adam, Chloe Collins, Antonio 

Gomez, Valerie Green, James Hale, Karen Leydon, Kimberly Mayo, Joseph O’Leska, Mark Oemler, David Rebich, 

David Robbins, Randall Salzer, Michelle Thornton, Lori Walsh-Van Wey, and Milissa Young-Loiselle of the Office of 

the Executive Director; Jeanine Balbach, Shannon Chowdhury, Nathan Hawthorne and Andrea Zach of the Bureau 

of Competition; Laura DeMartino, Gregory Fortsch and Jenny Kellogg of the Bureau of Consumer Protection, Sarah 

Mackey and Dione Stearns of the Office of the General Counsel, and Gail Kingsland of the Office of Public Affairs. 

Finally, we offer thanks to AOC Solutions, LMI and Graphic Visions for their contributions in the design and 

production of this report.

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