Fiscal Year 2015 Agency Financial Report

The work of the Federal Trade Commission is Critical to protecting and strengthening free and open markets and promoting informed consumer 

choice, both in the United States and around the world.

Federal Trade Commission
Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov
FEDERAL TRADE COMMISSION

INTRODUCTION
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ABOUT THIS REPORT

The Federal Trade Commission’s (FTC) fiscal year (FY) 2015 Agency Financial Report (AFR) provides financial and highlevel 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 (https://www.ftc.gov/reports/agency-financial-report-fy2015), satisfies the 

reporting requirements contained in the following legislation:

•	 Federal Managers’ Financial Integrity Act of 1982

•	 Government Performance and Results Act of 1993

•	 Government Management Reform Act of 1994

•	 Federal Financial Management Improvement Act of 1996

•	 Reports Consolidation Act of 2000

•	 Accountability of Tax Dollars Act of 2002

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

•	 Government Performance and Results Modernization Act of 2010

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

combined Performance and Accountability Report. The FY 2015 APR will be combined with the FY 2017 Annual 

Performance Plan (APP) and included in the FY 2017 Congressional Budget Justification in February 2016. Also 

available in February 2016 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/about-ftc/performance). 

Certificate of Excellence and Special Award

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

its FY 2014 AFR as well as a Special Recognition award for Best Description for Assuring Data Quality.

CERTIFICATE OF

EXCELLENCE IN

ACCOUNTABILITY

REPORTING®

BEST-IN-CLASS AWARD

Presented to the

In recognition for Providing the

Best Description of the Process for 

Assuring Data Quality

in your FY14 Agency Financial Report

Federal Trade Commission

Ann M. Ebberts, MS, PMP

Chief Executive Officer, AGA

Robert F. Dacey, CGFM, CPA

Chair, Certificate of Excellence 

in Accountability Reporting Board

CERTIFICATE OF

 EXCELLENCE IN 

ACCOUNTABILITY

 REPORTING®

Presented to the

In recognition of your outstanding efforts in

preparing the Agency Financial Report for the fiscal 

year ended September 30, 2014.

A Certificate of Excellence in Accountability Reporting 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

Ann Ebberts, MS, PMP

Chief Executive Officer, AGA

Robert F. Dacey, CGFM, CPA

Chair, Certificate of Excellence 

in Accountability Reporting Board
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HOW THIS REPORT IS ORGANIZED

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

1. MANAGEMENT’S DISCUSSION AND ANALYSIS

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

of key and efficiency performance goals, mission challenges, financial highlights, and 

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

and regulations.

2. FINANCIAL SECTION

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

audited financial statements with accompanying notes.

3. OTHER INFORMATION

This section provides management and performance challenges identified by the Inspector 

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

and management assurances.

4. APPENDICES

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

goals; Appendix B lists the acronyms cited throughout this report; Appendix C provides 

contact information and acknowledgements.

FEDERAL TRADE COMMISSION

ManageMent’s dIscussIon 

and analysIs

FEDERAL TRADE COMMISSION

FInancIal sectIon

FEDERAL TRADE COMMISSION

other InForMatIon

FEDERAL TRADE COMMISSION

FEDERAL TRADE COMMISSION

appendIces
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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, Telemarking 

Sales Rule, Fair Credit Reporting Act, Identity Theft Act, and Equal Credit Opportunity Act. In total, the Commission 

has enforcement or administrative responsibilities under more than 70 laws (see http://www.ftc.gov/enforcement/statutes

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 1,176 full-time equivalent (FTE) employees at the end of FY 2015.

•	 Total new budget authority for FY 2015 was $293 million.
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MESSAGE FROM THE CHAIRWOMAN

Edith Ramirez

Chairwoman

The Federal Trade Commission has the important mission 

of protecting consumers and promoting competition 

in broad sectors of our economy. In FY 2015, 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 2015 PERFORMANCE 

HIGHLIGHTS

CONSUMER PROTECTION

This fiscal year, the FTC emphasized four areas that reflect 

key challenges consumers face today: the explosive growth 

of mobile platforms and new technologies; privacy and 

data security risks; fraud targeting specific communities 

and financial marketplace fraud. 

The FTC continues to focus on consumer protection 

issues that arise from the use of new technologies. In 

one such case, the largest prepaid mobile provider in the 

United States, TracFone, agreed to refund $40 million to 

customers to settle FTC charges that it misled millions 

of people with promises of “unlimited” data service even 

though it drastically slowed or cut off customer’s mobile 

data after they used more than a fixed amount in a 30-day 

period. The FTC has ongoing litigation against AT&T 

Mobility Inc. for making similar misleading “unlimited” 

data plan claims. In other technology related matters, the 

FTC has taken actions to halt Boost Software and Inbound 

Call Experts, two massive telemarketing operations that 

conned tens of thousands of consumers out of more than 

$120 million by deceptively marketing computer software 

and tech support services.

The FTC has employed a multi-pronged approach to 

protect the privacy of consumers’ personal information, 

including both law enforcement and policy initiatives. 

In August 2015, the FTC prevailed in the Third Circuit 

Court of Appeals, when the court affirmed the district 

court’s ruling denying Wyndham’s motion to dismiss and 

found that the FTC has the authority to bring enforcement 

actions for unreasonable data security practices under its 

Section 5 “unfairness” standard. The FTC filed a lawsuit 

against LeapLab, alleging the data broker sold sensitive 

personal information of hundreds of thousands of people, 

including Social Security and bank account numbers, to 

scammers. At least one of those marketers that the FTC 

sued, allegedly used the information to withdraw millions 

of dollars from people’s accounts without their consent. 

The FTC also launched IdentityTheft.gov, a new one-stop 

resource that makes it easier for identity theft victims to 

report and recover from identity theft. A Spanish version of 

the site is also available at RobodeIdentidad.gov. The FTC 

expanded its efforts to help businesses protect consumers’ 

information through a new initiative called “Start with 

Security” that includes new guidance that draws on lessons 

learned from the more than 50 data security cases brought 

by the FTC, as well as a series of conferences to be held 
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across the country. The FTC released a detailed report on 

the Internet of Things (IOT). The report recommends 

that companies developing Internet of Things devices give 

people choices about how their information will be used, 

build security in at the outset, consider measures to keep 

unauthorized users from accessing a consumer’s device or 

data, and where feasible, provide security patches to cover 

known risks.

The FTC has taken enforcement action to stop a variety 

of fraudulent practices that target specific communities, 

such as Spanish-speaking consumers, seniors, and military 

service members and their families. In the Hispanic 

Global Way case, a court entered an order banning the 

defendants from telemarketing and selling weight loss 

products. The settling defendants agreed to surrender all 

of their significant assets, and a default judgment of more 

than $50 million was imposed against the remaining 

defendants. The FTC also has taken enforcement actions 

to stop a variety of fraudulent practices. The FTC and law 

enforcement partners from all 50 states and the District of 

Columbia charged four sham cancer charities with taking 

more than $187 million from donors and spending much 

of it on the sham charities’ operators and telemarketers.

 The FTC has continued to take enforcement actions 

to stop deceptive and unfair practices in the financial 

marketplace. Two payday lending companies settled FTC 

charges that they illegally charged consumers undisclosed 

and inflated fees. AMG Services, Inc. and MNE Services, 

Inc. agreed to pay $21 million and to waive another $285 

million in charges that were assessed but not collected. 

The FTC settled its first cases with car title lenders. Two 

companies, First American Title Lending of Georgia, LLC, 

and Finance Select, Inc., advertised zero percent interest 

rates for 30-day car title loans without disclosing important 

loan conditions, or the higher finance charge that kicked in 

after the introductory period ended. The companies, which 

advertised in English and in Spanish, are now subject to 

orders prohibiting deceptive advertising of car title loans. 

The FTC continues to take action to stop false and 

unsubstantiated advertising claims such as deceptive 

online reviews, deceptive affiliate marketing networks, and 

deceptive health claims. 

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-Scott-Rodino (HSR) Act.

The healthcare and pharmaceutical sectors were again a 

priority area for competition enforcement. In general, 

the FTC works to promote competition in health 

care by eliminating impediments to entry by generic 

drug producers, stopping illegal monopolization and 

joint conduct by healthcare providers, and preventing 

anticompetitive healthcare mergers. The FTC has engaged 

in vigorous enforcement relating to anticompetitive 

“pay-for-delay” settlements of patent litigation in the 

pharmaceutical industry, in which a brand name drug 

company pays a generic drug company to delay its 

entry into the market. In May 2015, the Commission 

obtained a landmark settlement of its 2008 lawsuit against 

Cephalon, Inc. The stipulated federal court order requires 

Teva Pharmaceutical Industries, Ltd. (parent company of 

Cephalon, Inc.), the largest generic drug manufacturer in 

the world, to disgorge and return to purchasers, including 

drug wholesalers, pharmacies, and insurers, $1.2 billion in 

ill-gotten gains reaped from its anticompetitive agreements 

to pay four firms to refrain from selling generic versions of 

its blockbuster drug, Provigil. The stipulated order further 

prohibits Teva from engaging in similar patent settlement 

agreements in the future.

The FTC continues to prioritize healthcare provider 

consolidation, especially in light of the growing body of 

evidence showing that concentrated provider markets 

tend to lead to higher prices and lower quality of care. For 

example, in February 2015, the FTC achieved a significant 

victory when the Ninth Circuit Court of Appeals affirmed 
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the district court’s decision in St. Luke’s that Idaho’s 

dominant healthcare system’s acquisition of the state’s 

largest independent physician practice group violated the 

antitrust laws. 

Also, in February 2015, the U.S. Supreme Court affirmed 

a Commission decision that the North Carolina State 

Board of Dental Examiners illegally thwarted lowerpriced competition by engaging in anticompetitive 

conduct to prevent non-dentists from providing teeth 

whitening services to consumers in the state without 

any countervailing procompetitive justification. The 

decision affirmed a 2013 ruling by the U.S. Court of 

Appeals for the Fourth Circuit which noted that a state 

regulatory board dominated by self-interested private 

actors cannot rely on the state action doctrine to shield its 

anticompetitive conduct from antitrust review.

In June 2015, the FTC successfully concluded its 

litigation challenging Sysco Corporation’s acquisition of 

rival distributor US Foods that would have combined 

the two largest broadline food service distributors in the 

United States. The U.S. District Court for the District of 

Columbia granted a preliminary injunction enjoining the 

transaction pending an administrative proceeding on the 

merits. The parties abandoned their deal shortly after the 

district court ruling.

OUTREACH AND PARTNERSHIPS

Consumers, industry, and our international 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 2015 independent financial audit, we received our 19th 

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 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 and evolving markets, 

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; 

maturing the agency’s information technology governance 

process; improving contract management; stabilizing 

the agency’s eDiscovery support system; 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 

them, as discussed in the Other Information Section of this 

report at p. 78.

All of us at the FTC look forward to continuing our work 

to protect American consumers and promote competition.

Edith Ramirez

November 16, 2015
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TABLE OF CONTENTS

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

About This Report ............................................................................................................................................................iii

How This Report Is Organized.......................................................................................................................................... iv

The FTC AT-A-GLANCE ................................................................................................................................................. v

Message from the Chairwoman ......................................................................................................................................... vi

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 Reporting Process.............................................................................................................8

Verification and Validation of Performance Data ........................................................................................................8

Performance Goals Overview......................................................................................................................................8

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

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

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

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

FINANCIAL SECTION ................................................................................................................. 31

Message from the Chief Financial Officer.........................................................................................................................33

Report of Independent Auditors.......................................................................................................................................34

Principal Financial Statements..........................................................................................................................................40

Notes to the Financial Statements ....................................................................................................................................46

OTHER INFORMATION .............................................................................................................. 63

Inspector General Identified Management and Performance Challenges...........................................................................64

Chairwoman’s Response to IG Challenges........................................................................................................................78

Summary of Financial Statement Audit and Management Assurances ..............................................................................79

Schedule of Spending .......................................................................................................................................................80

Improper Payments Elimination and Recovery Improvement Act Reporting Details........................................................81

“Freeze the Footprint” Implementation ............................................................................................................................82

Civil Monetary Penalty Adjustment for Inflation Act .......................................................................................................83

APPENDICES..................................................................................................................................... 85

Appendix A: Data Quality Information............................................................................................................................86

Appendix B: Acronyms.....................................................................................................................................................91

Appendix C: Contact Information and Acknowledgements..............................................................................................93
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FEDERAL TRADE COMMISSION

MANAGEMENT’S DISCUSSION 

AND ANALYSIS
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AGENCY AND MISSION 

INFORMATION

The work of the Federal Trade Commission (FTC) is 

critical to protecting and strengthening free and open 

markets and promoting informed consumer choice, both 

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

FTC performs its mission through the use of a variety of 

tools, including law enforcement, rulemaking, research, 

studies on marketplace trends and legal developments, and 

consumer and business education.

VISION

A vibrant economy characterized by vigorous competition 

and consumer access to accurate information.

MISSION

Working to protect consumers by preventing 

anticompetitive, deceptive, and unfair business 

practices, enhancing informed consumer choice and 

public understanding of the competitive process, and 

accomplishing this without unduly burdening legitimate 

business activity.

OUR PURPOSE AND HISTORY

Consumers and businesses are likely to be more familiar 

with the work of the FTC than they think. In the 

consumer protection area, the product warranties, care 

labels in clothes, and labels on home appliances showing 

their energy cost provide information that is required 

by the FTC . Likewise, businesses must be familiar with 

the laws requiring truthful advertising and protecting 

consumers’ personally identifiable information. These laws 

are enforced by the FTC.

Competition among independent businesses is good for 

consumers, the businesses themselves, and the economy. 

Competitive markets yield lower prices and better quality 

goods and services, and a vigorous marketplace provides 

the incentive and opportunity for the development of new 

ideas and innovative products and services. Many of the 

laws governing competition also are enforced by the FTC.

The FTC has a long tradition of maintaining a competitive 

marketplace for both consumers and businesses. In 1903, 

Congress created the predecessor to the FTC, the Bureau 

of Corporations, as an investigatory agency within the 

Department of Commerce and Labor. The Bureau 

investigated and published reports on the operation of 

interstate corporations, looking for monopolistic practices. 

In one case of note, the Justice Department used the 

Bureau’s 1906 report on petroleum transportation when 

it successfully prosecuted and broke up Standard Oil in 

1911. In 1914, President Woodrow Wilson signed the 

Federal Trade Commission Act into law, creating the FTC, 

which then absorbed the Bureau of Corporations in 1915.

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

prevent unfair methods of competition in commerce as 

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

Congress passed additional laws giving the agency greater 

authority over anticompetitive practices. Recognizing that 

unfair and deceptive practices can distort a competitive 

marketplace as much as unfair methods of competition, in 

1938 Congress passed a broad prohibition against “unfair 

or deceptive acts or practices in or affecting commerce.” 

Since then, the FTC also has been directed to enforce 

a wide variety of other consumer protection laws and 

regulations.
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OUR ORGANIZATION

The FTC is an independent Federal agency that reports to 

the President and to Congress on its actions. These actions 

include pursuing vigorous and effective law enforcement; 

advancing consumers’ interests by sharing its expertise with 

Congress and state legislatures and U.S. and international 

government agencies; developing policy and research 

tools through hearings, workshops, and conferences; and 

creating practical and plain-language educational programs 

for consumers and businesses in a global marketplace with 

constantly changing technologies.

The FTC is headed by a Commission composed of 

five commissioners, nominated by the President and 

confirmed by the Senate, each serving a staggered 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 

held by Edith Ramirez, a commissioner since 2010, 

who was confirmed as Chairwoman on March 4, 2013. 

Commissioners include Julie Brill, Maureen K. Ohlhausen, 

and Terrell McSweeny. 

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

the Bureau of Consumer Protection, the Bureau of 

Competition, and the Bureau of Economics. Their 

work is aided by the Offices of the General Counsel, 

International Affairs, Policy Planning, the Secretary, 

the Executive Director, Congressional Relations, Public 

Affairs, Administrative Law Judges, Equal Employment 

Opportunity, Inspector General, and seven regional offices 

located throughout the country. For more information 

about the agency’s components, visit the FTC’s Bureaus 

and Offices webpage.

 The FTC Commission as of September 30, 2015: (left to right) Julie Brill, Commissioner; Edith Ramirez, Chairwoman; 

Maureen Ohlhausen, Commissioner; Terrell McSweeny, Commissioner. 
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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

Francine Lafontaine

Commissioner

Terrell McSweeny

Commissioner

Julie Brill

Office of

Congressional Relations

Jeanne Bumpus

Office of

Public Affairs

Justin Cole

Office of

Inspector General*

Roslyn Mazer

Office of

International Affairs

Randolph W. Tritell

Office of

Policy Planning

Marina Lao

Office of Equal

Employment Opportunity

Kevin D. Williams

Office of

the Secretary

Donald S. Clark

Office of

Administrative Law Judges*

D. Michael Chappell

Commissioner

Vacant

FEDERAL TRADE COMMISSION ORGANIZATION CHART

*An independent organization within the FTC
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NORTHWEST

(includes Alaska)

EAST 

CENTRAL

Washington, DC

(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

The graphic below illustrates the locations of the FTC regions.

OUR PEOPLE

The FTC’s workforce is its greatest 

asset. The agency’s workforce consists of 

1,176 civil service employees dedicated 

to addressing the major concerns of 

American consumers. This chart shows 

workforce composition by category.

FTC’s Workforce Composit

658 Attorneys

79 Economists

Information Technology

Investigative/Enforcement

Legal/Admin Support

Other

Paralegals

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PERFORMANCE 

HIGHLIGHTS

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

second 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 2015 APR will be combined with the FY 2017 Annual 

Performance Plan (APP) and included in the FY 2017 

Congressional Budget Justification in February 2016. 

Also available in February 2016 will be the Summary of 

Performance and Financial Information (SPFI). The AFR, 

combined APP and APR, and SPFI will be published at the 

FTC’s website (http://www.ftc.gov/about-ftc/performance).

This section explains the FTC’s strategic and performance 

planning framework and summarizes the key and efficiency 

performance goals. The performance results described in 

this report enable the FTC to administer its programs, 

gauge their success, and make adjustments necessary to 

improve program quality for the public. 

STRATEGIC AND PERFORMANCE 

PLANNING FRAMEWORK

The performance planning framework originates from the 

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

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

work is structured around three strategic goals and eight 

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

for its strategic goals.

STRATEGIC

(Dollars in millions) OBJEC

GOAL 1

PROTECT CONSUMERS

Net Costs: $170

1.1 Identify and take actions to address deceptive or unfair 

practices that harm consumers.

1.2 Provide the public with knowledge and tools to prevent harm 

to consumers.

1.3 Collaborate with domestic and international partners to 

enhance consumer protection.

GOAL 2 

MAINTAIN COMPETITION

Net Costs: $16

2.1 Identify and take actions to address anticompetitive mergers 

and practices that harm consumers.

2.2 Engage in effective research and stakeholder outreach to 

promote competition, advance its understanding, and create 

awareness of its benefits to consumers.

2.3 Collaborate with domestic and international partners to 

preserve and promote competition.

GOAL 3 

ADVANCE ORGANIZATIONAL 

PERFORMANCE

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

predominately by Goal 1’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 strategic goals and signify the relative efficiency and cost-effectiveness of agency program/

operations. The FTC does not divide net costs by objective.
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PERFORMANCE MEASUREMENT 

REPORTING PROCESS

Bureau and Office representatives serve as the Performance 

Measure Reporting Officials (PMROs), who act as 

data stewards for each of the agency’s publicly-reported 

performance goals. The PMROs report to the Deputy 

Performance Improvement Officer (PIO) on a monthly, 

quarterly, or annual basis via an internal data reporting 

tool. The Financial Management Office (FMO) also leads 

periodic performance goal reviews in coordination with 

budget execution reviews. The CFO/PIO, the Executive 

Director, the Chief of Staff, and the Chairwoman are 

briefed on the results and any significant variances in 

planned versus actual results. The PIO and Deputy PIO 

then coordinate with the PMROs on any adjustments to 

strategies and tactics based on the performance results.

VERIFICATION AND 

VALIDATION OF PERFORMANCE 

DATA

Appendix A: Data Quality Information contains 

definitions, calculation/formula information, data sources 

and limitations, and additional details on verification 

and validation for the performance goals included in this 

report. Additionally, the following steps outline how the 

agency ensures the performance information it reports is 

complete, reliable and accurate:

•	 The FTC has adopted a central internal repository 

for performance data entry, reporting and review. 

The electronic data tool reduces human error, 

increases transparency, and facilitates senior 

management review of the agency’s performance 

information.

•	 The agency maintains written procedures used to 

ensure timely reporting of complete, accurate, and 

reliable actual results relative to the key performance 

goals.

•	 The agency holds program managers accountable 

to set meaningful and realistic targets that also 

challenge the agency to leverage its resources. This 

includes ensuring ongoing monitoring and updating 

of performance targets. Further, when appropriate, 

program managers are required to explain how they 

will improve performance when targets are not met.

•	 The agency conducts quarterly performance 

measurement reviews with management as well as 

periodic reviews throughout the fiscal year with FTC 

Executives. This process includes substantiating that 

actual results reported are indeed correct whenever 

those results reveal significant discrepancies or 

variances from the target.

Agency program managers also monitor and maintain 

automated systems and databases that collect, track, 

and store performance data, with support provided by 

the FTC’s Office of the Chief Information Officer. In 

addition to the general controls the FTC has in place, 

which ensure only authorized staff can access key systems, 

each application (system) incorporates internal validation 

edits to ensure the accuracy of data contained therein. 

These application edits include checks for reasonableness, 

consistency, and accuracy. Crosschecks between other 

internal automated systems also provide assurances of 

data accuracy and consistency. In addition to internal 

monitoring of each system, experts outside of the business 

units (e.g., the Bureaus of Consumer Protection and 

Competition) routinely monitor the data collection. For 

example, senior economists from the Bureau of Economics 

review statistical data used by the Bureau of Competition 

to calculate performance results.

The FMO is responsible for providing direction and 

support on data collection methodology and analysis, 

ensuring that data quality checks are in place, and 

accurately reporting performance data.

PERFORMANCE GOALS 

OVERVIEW 

The FTC has established 29 performance goals for 

assessing program performance against strategic goals and 

objectives. Of the 29 total performance goals, 25 met or 

exceeded target, two did not meet target, data was not 

available at the time of publication for one, and data was 

not available due to a technical issue for one. The following 

table displays historical high-level performance trends for 

all of the FTC’s performance goals for the past three years.
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 9

COUNT OF PERFORMANCE GOALS

FY 

2015

FY 

2014

FY 

2013

GOAL 1

PROTECT

CONSUMERS

Target Met/Exceeded 10 6 12

Target Not Met 1 3 3

Data Not Available 1 0 1

Baseline Data Year 0 3 0

GOAL 2

MAINTAIN

COMPETITION

Target Met/Exceeded 9 8 14

Target Not Met 1 2 2

GOAL 3

ADVANCE

ORGANIZATIONAL

PERFORMANCE

Target Met/Exceeded 6 7 8

Target Not Met 0 0 0

Data Not Available at Time of 

Publication 1 0 0

TOTAL Target Met/Exceeded 25 21 34

Target Not Met 2 5 5

Data Not Available at Time of 

Publication 1 0 0

Data Not Available 1 0 1

Baseline Data Year 0 3 0

TOTAL 29 29* 40

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

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

performance goals because they best indicate whether 

agency activities are achieving the desired outcome 

associated with the related objective. Additionally, four 

performance goals are considered efficiency performance 

goals because either they are ratios of outcomes to inputs 

or they capture administrative timeliness. For each 

performance goal, the FTC has established a performance 

target.

The following tables summarize actual performance during 

FY 2015 against established targets for the FTC’s key and 

efficiency performance goals. The tables also include actual 

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

exceeded nine of the nine key performance goals and four 

of the four efficiency performance goals.

LEGEND FOR UPCOMING 

TABLES

✔ Signifies that the target is met or exceeded

✖ Signifies that the target is not met
10 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov 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)

2015 2014 2013

Target Actual Target Actual Target Actual

650.0% 723.4% Baseline Year 769.0% N/A N/A

✔

Note: See the FY 2015-2016 Performance Plan and FY 2014 Performance Report for an explanation as to why the FY 

2014 actual is different from what was published in the FY 2014 AFR.

Key Performance Goal 1.1.4

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

2015 2014 2013

Target Actual Target Actual Target Actual

$60.0 million $76.2 million Baseline Year $66.9 million 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)

2015 2014 2013

Target Actual Target Actual Target Actual

11,500 16,321

✔

11,250 12,205

✔

12,300 11,236

✖

New IdentityTheft.gov Website

The FTC launched IdentityTheft.gov, a new resource that makes it easier 

for identity theft victims to report and recover from identity theft. A Spanish 

version of the site is also available at RobodeIdentidad.gov. The new 

website contains an interactive checklist that walks people through the 

recovery process and helps them understand which recovery steps to take 

upon learning that their identity has been stolen. It provides sample letters

and other helpful resources. In addition, the site offers specialized tips for 

specific forms of identity theft, such as tax-related and medical identity 

theft. The site also has advice for people who have been notified that their 

personal information was exposed in a data breach. For more information, 

visit: https://www.ftc.gov/news-events/press-releases/2015/05/ftclaunches-new-resource-identity-theft-victims and https://www.identitytheft.gov/sample-letters.html (sample letters).
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 11

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)

2015 2014 2013

Target Actual Target Actual Target Actual

40 58

✔

40 45

✔

30 61

✔

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)

2015 2014 2013

Target Actual Target Actual Target Actual

40.0-60.0% 55.8%

✔

40.0-60.0% 57.1%

✔

40.0-60.0% 42.2%

✔

**This refers to the percentage of substantial investigations closed with an action taken. See Appendix A for more 

information.

FTC Merger Suit Maintains Competition in the Foodservice 

Distribution Industry 

In February 2015, the Commission sued to block Sysco’s proposed $8.2 billion merger with rival US Foods, 

charging that the deal would significantly reduce competition in broadline foodservice distribution, both 

nationwide and in a large number of local markets. Broadline 

distributors offer extensive product lines including national-brand and 

private-label food products, and provide frequent and flexible delivery, 

high levels of customer service, and other value-added services 

such as order tracking, menu planning, and nutritional information. 

Restaurants, hotels, cafeterias, educational institutions, and sports 

venues all rely on the services of broadline foodservice distributors. 

The proposed merger would likely have increased the prices paid 

by businesses and, in turn, people patronizing those establishments. 

Following a June 23, 2015 ruling by the U.S. District Court for the 

District of Columbia granting the FTC’s request for a preliminary 

injunction, Sysco and US Foods abandoned their proposed merger. 

For more information, visit: https://www.ftc.gov/enforcement/casesproceedings/141-0067/syscousf-holdingus-foods-matter.
12 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov 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)

2015 2014 2013

Target Actual Target Actual Target Actual

2,600.0% 5,129.1%

✔

2,600.0% 2,505.2%

✖

1,300.0% 1,382.2%

✔

Note: See the FY 2016-2017 Performance Plan and FY 2015 Performance Report to be published in February 2016 

(http://www.ftc.gov/about-ftc/performance) for more information on why the results for performance goals 2.1.3 and 

2.1.5 increased significantly in FY 2015.

Key/Efficiency Performance Goal 2.1.5

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

(Efficiency measure)

2015 2014 2013

Target Actual Target Actual Target Actual

400.0% 4,863.3%

✔

1,850.0% 2,028.3%

✔

2,000.0% 2,296.0%

✔

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

FTC Hosts Workshop on Sharing Economy Marketplaces

The recent explosion of activity on sharing economy platforms, 

internet marketplaces through which suppliers and customers 

transact for goods or services, has left state and local regulators 

grappling with ways to respond to the entry of innovative 

suppliers. Unlike platforms that link buyers to a single seller 

of a product or service, sharing economy platforms create 

virtual marketplaces in which many buyers and sellers, often 

individuals or small entities, can almost instantly connect with 

one another and do business. These platforms take advantage of 

increasing network connections and computing power, such as 

the proliferation of mobile internet-enabled devices, to significantly reduce the time and costs of matching buyers 

and sellers in these large and diverse marketplaces. Some of the most well-known businesses that have emerged 

from this young market sector, like Uber (local transportation services) and Airbnb (short term accommodation 

services), have already become an integral part of everyday life as people increasingly rely on sharing economy 

marketplaces as a source of income and a means of obtaining services.

In June 2015, the Commission hosted a workshop to examine competition, consumer protection, economic, and 

regulatory issues raised by the proliferation of online and peer-to-peer business platforms. More specifically, the 

workshop discussed matters including the importance of network effects and the mechanisms used to promote 

trust and confidence in transactions. It also covered the challenges policymakers face in tailoring state and local 

regulations to meet consumer protection and other regulatory goals while avoiding unnecessary impediments to 

entry by sharing economy suppliers.

The workshop enhanced the FTC’s expertise and knowledge base regarding competitive dynamics and consumer 

protection issues in this emerging sector of the economy. For more information, visit: https://www.ftc.gov/newsevents/events-calendar/2015/06/sharing-economy-issues-facing-platforms-participants-regulators. 
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 13

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

Key Performance Goal 2.3.1

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

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

2015 2014 2013

Target Actual Target Actual Target Actual

95.0% 100.0%

✔

95.0% 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)

2015 2014 2013

Target Actual Target Actual Target Actual

6.0 days 5.5 days

✔

6.0 days 5.4 days

✔

N/A 7.4 days

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

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

a new performance goal in FY 2014. Historical data is shown for context.

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)

2015 2014 2013

Target Actual Target Actual Target Actual

Exceed the 

governmentwide results of 

57.0% on the 

Federal Employee 

Viewpoint 

Survey’s Talent 

Management 

Index.

72.0%

✔

55.0% 70.0%

✔

56.0% 69.0%

✔
14 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov 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 Inspector General’s (IG) identified management and 

performance challenges (see Other Information Section). 

Management concurs with the IG identified challenges and 

assessment of agency progress in addressing the challenges.

STRATEGIC GOAL 1: PROTECT 

CONSUMERS

Under the goal of protecting consumers, the FTC will 

continue to give priority to addressing the following 

challenges: protecting Americans from fraud including in 

the financial services marketplace; protecting consumer 

privacy and improving data security including combating 

identity theft; stopping harmful practices that exploit new 

technology; and addressing emerging advertising issues and 

targeting deceptive advertising.

PROTECTING AMERICANS FROM 

FRAUD:

Fraud affects all consumers, and the FTC will continue 

its enforcement efforts to stop scams, focusing on those 

that cause the greatest consumer injury. In the last year, 

the FTC has seen an increase in consumer complaints 

about impostor scams in which the perpetrators pose 

as government agencies, well-known companies, utility 

companies, or other organizations. Certain scams, such as 

those involving business and income opportunities, affect 

all consumers, but can pose even a greater risk to those 

from lower income or underserved communities. The 

FTC also will continue to use the tools and authorities 

available to it to protect consumers by taking enforcement 

actions to stop telemarketing and online frauds, deceptive 

mortgage and other debt services, deceptive motor vehicle 

sales, leasing, and financing, payday lending operations 

engaging in deceptive practices, and abusive debt collection 

Fake Cancer Charities Duped Donors 

The FTC and law enforcement partners from all 50 states and the District of Columbia charged four sham cancer 

charities with taking over $187 million from donors and spending much of it on the sham charities’ operators 

and telemarketers. According to the complaint, while the 

sham charities told donors their money would help support 

cancer patients with medicine, groceries, transportation 

for chemo treatments, counseling, and hospice care, little 

or none went for those purposes. Under settlement orders, 

three defendants are banned from fundraising, charity 

management, and oversight of charitable assets, and 

Children’s Cancer Fund of America Inc. and The Breast 

Cancer Society are dissolved. Litigation continues against 

the remaining defendants. This is one of the largest actions 

brought to date by enforcers against charity fraud. For 

more information, visit: https://www.ftc.gov/news-events/

press-releases/2015/05/ftc-all-50-states-dc-charge-fourcancer-charities-bilking-over
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 15

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 and deceptive 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 cross-device tracking. The agency will bring 

enforcement actions as appropriate against entities that 

violate the revised Children’s Online Privacy Protection 

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

businesses on privacy and security issues. The agency 

also will participate in interagency groups, promote selfregulatory efforts, provide technical assistance to Congress 

on draft legislation, and participate in international privacy 

initiatives.

In addition, identity theft exacts a heavy financial and 

emotional toll from its victims, and the FTC will continue 

to assist the millions of Americans who are victimized each 

year through data security breaches and other means. The 

FTC will continue to be the repository for identity theft 

complaints and make them available to federal criminal 

law enforcement agencies. Our trained counselors will 

continue to advise identity theft victims who call our toll 

free number about rights and remedies available to them 

under federal law. The FTC also has developed a new 

website, IdentityTheft.gov, as the federal government’s onestop resource to help consumers report and recover from 

identity theft. IdentityTheft.gov highlights useful resources 

and connects identity theft victims to federal agencies 

and other organizations that are critical to the recovery 

process. Future enhancements to IdentityTheft.gov will 

allow visitors to create a customized plan based on their 

specific experiences. The agency also will train local law 

enforcement to spot and prosecute identity theft, and it 

will update educational materials. (Objectives 1.1, 1.2, 

and 1.3)

Robocalls: Humanity Strikes Back 

For the second year in a row, the FTC traveled to DEF CON, one of the world’s largest annual hacker 

conferences, to enlist tech gurus to help fight robocalls. During the conference, the agency held the contest, 

Robocalls: Humanity Strikes Back, that challenged contestants to create tools consumers could use to block and 

automatically forward robocalls to a honeypot — a data collection system that researchers and investigators can 

use to study the calls. To encourage innovation, the agency offered 

a $25,000 prize as the first place award and selected the inventors 

of a solution dubbed RoboKiller, which relies on universally available 

call forwarding functions that work on both landline and mobile 

phones and uses audio-fingerprint technology to identify robocalls. 

RoboKiller gives consumers greater control over how and when they 

receive calls by sending robocalls to a SpamBox that consumers can 

access at any time, utilizes consumer-controlled white and black list 

filtering (filtering that determines which calls will get through and 

which ones will be blocked), and provides personalized setting 

options. A runner-up contestant applied similar audio analytics in his 

solution and will receive a $10,500 prize. The contestants retain the 

intellectual property rights of their solutions. For more information, 

visit: https://www.ftc.gov/news-events/press-releases/2015/08/ftcawards-25000-top-cash-prize-contest-winning-mobile-app-blocks
16 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

STOPPING HARMFUL PRACTICES 

THAT EXPLOIT NEW TECHNOLOGY:

Technology provides countless benefits to consumers, 

including choice, convenience, and increased access to 

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

new vehicles for fraudulent, deceptive, and unfair 

practices in the marketplace. The FTC will continue to 

examine consumer protection issues in the mobile and 

connected 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. In addition, 

the new Office of Technology Research and Investigation 

is conducting research on emerging technologies to assist 

with enforcement actions, educate consumers, and inform 

policy on consumer protection matters involving emerging 

technologies. (Objectives 1.1, 1.2, and 1.3)

ADDRESSING EMERGING 

ADVERTISING ISSUES AND

TARGETING DECEPTIVE 

ADVERTISING:

Digital media has opened new avenues for companies 

to communicate with consumers, and the format of 

advertisements continues to evolve. Like all advertising, 

digital marketing must comply with the law. The FTC will 

take enforcement action against deceptive advertisements 

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

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

evaluate the use of online reviews of products or services, 

including the use of false reviews, undisclosed material 

connections with reviewers, prohibitions on negative 

reviews, or unsubstantiated testimonials, and take action 

as appropriate. Companies are increasingly blending 

advertising with news, entertainment, or editorial content 

in digital media. If consumers do not recognize and 

understand the difference between the advertising and 

other content, they may be deceived. The FTC, therefore, 

will continue to examine 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 

“Unlimited” Mobile Data Service Deceptively Advertised 

TracFone, the largest prepaid mobile provider in the United 

States, agreed to refund $40 million to customers to settle 

FTC charges that it misled millions of people with promises of 

“unlimited” data service. The FTC alleged that TracFone, under 

its various brands, advertised prepaid monthly mobile plans 

for $45 per month with “unlimited” data. Although TracFone 

emphasized unlimited data in its ads, the company drastically 

slowed or cut off people’s mobile data after they used more than 

a fixed amount in a 30-day period. The FTC also sued AT&T 

Mobility, LLC for allegedly misleading millions of its smartphone 

customers by charging them for “unlimited” data plans while 

reducing their data speeds if they used a certain amount of data 

in a billing cycle. The FTC alleges the reduced data speeds 

made it difficult for customers to use their smartphones for common tasks like browsing the web, using GPS, or 

streaming videos. The FTC is seeking refunds for affected AT&T customers. For more information, visit: https://

www.ftc.gov/news-events/press-releases/2015/01/prepaid-mobile-provider-tracfone-pay-40-million-settle-ftc 

(TracFone) and https://www.ftc.gov/news-events/press-releases/2014/10/ftc-says-att-has-misled-millionsconsumers-unlimited-data (AT&T).
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 17

claims; claims aimed at baby boomers and seniors; 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 and retail markets, and 

the energy industry. The agency will also work to promote 

sound competition policy at the international level and will 

continue advocating for competition before federal courts, 

state legislatures, and other governmental agencies.

PROMOTING COMPETITION 

IN HEALTH CARE AND 

PHARMACEUTICAL MARKETS:

The high cost of health care, which continues to account 

for a significant share of the gross domestic product, 

is a matter of concern for consumers, businesses, and 

taxpayers. To ensure that consumers receive the benefits of 

competitive healthcare markets, antitrust enforcement in 

this sector is a top priority for the Commission.

The FTC will continue to focus substantial resources 

on illegal reverse payment patent settlement agreements 

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.” Similarly, the Commission 

will continue to investigate other anticompetitive conduct, 

such as sham litigation, used to delay generic entry into 

pharmaceutical markets. Such practices deny consumers 

access to lower priced generic drugs, leading to significantly 

higher drug costs. The FTC reviews, investigates, and 

challenges these harmful practices where appropriate. 

The FTC also prioritizes stopping anticompetitive health 

care mergers that threaten higher costs or reduced quality, 

including those involving health care providers and 

pharmaceutical and medical device companies. In recent 

years, the FTC has required significant divestitures in a 

large number of pharmaceutical transactions. Additionally, 

since 2007, FTC enforcement against anticompetitive 

provider transactions has resulted in a growing number 

of provider deals abandoned or modified after the FTC 

threatened a challenge, and several successfully litigated 

challenges.

The FTC also attempts to better understand the markets 

it monitors and anticipate future antitrust developments 

through research and scholarship. In FY 2015, the FTC 

Landmark Antitrust Monetary Settlement 

The Federal Trade Commission reached a $1.2 billion settlement resolving its antitrust charges that Cephalon, Inc. 

illegally used reverse patent agreements—agreements between competitors to delay entry of generic products—

to block generic competition to its blockbuster sleep-disorder drug Provigil. The settlement ensures that Teva 

Pharmaceutical Industries, Ltd., which acquired Cephalon in 2012, 

will forfeit its illegal profits to compensate purchasers, including 

drug wholesalers, pharmacies, and insurers, who overpaid due to 

Cephalon’s illegal conduct. The action also serves as an important 

deterrent for future unlawful reverse patent agreements. This settlement 

represents the first FTC case to be resolved since the Supreme Court’s 

2013 ruling in FTC v. Actavis made clear that reverse payment patent 

settlements are subject to the same antitrust rules that govern U.S. 

business conduct generally. For more information, visit: https://www.

ftc.gov/enforcement/cases-proceedings/061-0182/cephalon-inc.
18 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

co-sponsored (with the DOJ Antitrust Division) a second 

workshop in the Examining Health Care Competition 

series. The knowledge gained from both workshops 

influences 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.

Antitrust and competition policy matters in the technology 

marketplace increasingly intersect with complex intellectual 

property (IP) concerns. IP concerns remain a Commission 

priority due to their widespread impact on competition 

and consumer protection. For example, the FTC is 

conducting a study of approximately 25 patent assertion 

entities (PAEs) and 15 other entities to better understand 

the PAE market. The FTC expects to issue a report that 

will provide guidance to other government agencies, 

academics, and industry participants. Through workshops, 

conferences, and studies, the FTC engages stakeholders 

to stay abreast of technological developments and their 

potential competitive impacts. This year the Commission 

hosted a workshop exploring the competition, consumer 

protection, and regulatory issues raised by emerging 

internet-based business platforms, known as the “sharing 

economy.” Additionally, FTC staff provides guidance 

concerning competition issues in the technology industry 

to various entities at the national, state, and local levels. 

For example, the Federal Trade Commission and the 

Department of Justice issued a joint policy statement on 

the sharing of cyber-security information that makes clear 

that properly designed cyber threat information sharing 

is not likely to raise antitrust concerns and can help 

secure the nation’s networks of information and resources. 

(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 addresses this concern by closely 

monitoring energy markets to identify and challenge 

anticompetitive mergers and conduct. FTC merger 

enforcement actions have resulted in multiple divestitures 

in the energy market during recent years. The FTC also 

continuously examines price movements and other activity 

through its Gasoline and Diesel Price Monitoring Project 

in an effort to identify anticompetitive conduct such as 

illegal agreements among competitors, agreements between 

manufacturers and product dealers, and monopolization 

that may undermine the benefits of competition. 

U.S. Supreme Court: State Boards Controlled by Market 

Participants Must be Actively Supervised

On February 25, 2015, the United States Supreme Court upheld 

the FTC’s 2011 decision and order that the North Carolina 

State Board of Dental Examiners violated federal antitrust 

law by illegally excluding non-dentists from providing teeth 

whitening services to consumers in the state. The Court’s decision 

establishes that, absent state supervision, federal antitrust laws 

do apply to professional boards regulating the industry to which 

its members belong. For more information, visit: https://www.ftc.

gov/enforcement/cases-proceedings/north-carolina-state-boarddental-examiners.
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 19

FTC Issues Section 5 Guidance

On August 13, 2015, the Federal Trade Commission issued a Statement of Enforcement Principles that 

describes the underlying antitrust principles that guide the Commission’s application of its statutory authority 

to take action against “unfair methods of competition” prohibited by Section 5 of the FTC Act but not covered 

by other antitrust laws. The statement explains that, consistent with FTC precedent, the Commission will 

adhere to the following principles when deciding whether to use its “standalone” authority under Section 5 of 

the FTC Act to challenge unfair methods of competition:

•	 the Commission will be guided by the public policy

underlying the antitrust laws, namely, the promotion of 

consumer welfare;

•	 the act or practice will be evaluated under a

framework similar to the rule of reason, that is, an 

act or practice challenged by the Commission must 

cause, or be likely to cause, harm to competition 

or the competitive process, taking into account any 

associated cognizable efficiencies and business 

justifications; and

•	 the Commission is less likely to challenge an act or practice as an unfair method of competition on a

standalone basis if enforcement of the Sherman or Clayton Act is sufficient to address the competitive 

harm arising from the act or practice.

For more information, visit: https://www.ftc.gov/news-events/press-releases/2015/08/ftc-issues-statementprinciples-regarding-enforcement-ftc-act.

to harm competition in the retail sector. These actions 

preserve competition for the benefit of consumers by 

keeping prices down, improving quality, and expanding 

innovation and consumer choices. In recent years, the 

Commission has successfully challenged several proposed 

supermarket acquisitions, including Bi-Lo/Delhaize 

America, Albertson’s/United Supermarkets, and Cerberus/

Safeway, which would likely have reduced competition 

in diverse geographic markets without the divestitures 

required by the Commission. The FTC also preserved 

competition in both the high school and college rings 

markets by challenging the proposed merger of two major 

ring manufacturers, which led the parties to abandon the 

transaction. 

The FTC also actively pursues opportunities to provide 

guidance to various levels of government in the interest 

of promoting competition in retail markets. For example, 

the FTC has advised several state legislatures regarding 

potential anticompetitive effects from laws prohibiting 

direct-to-consumer auto sales, potentially benefiting 

millions of consumers. (Objectives 2.1 and 2.2)

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 also issues reports 

on the factors that influence the prices that American 

consumers pay for gas. In compliance with the Energy 

Policy Act of 2005, the FTC issued its tenth annual 

Ethanol Market report in 2014, which concluded that the 

market is less concentrated than it was ten years ago. This 

year Commission staff also published a working paper 

examining increases in excise taxes on gasoline and diesel 

fuel in Washington state. (Objectives 2.1 and 2.2)

MAINTAINING ROBUST 

COMPETITION IN RETAIL 

MARKETS:

Retail markets impact the pocketbook of every American 

consumer. The FTC focuses significant resources on 

identifying and challenging mergers and conduct likely 
20 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

MANAGEMENT ASSURANCES

IMPLEMENTATION OF 

THE FEDERAL MANAGERS’ 

FINANCIAL INTEGRITY ACT 

(FMFIA)

The FTC considers internal controls to be an integral 

part of all systems and processes that the agency utilizes in 

managing its operations and carrying out activities toward 

achieving strategic goals and objectives. The FTC holds 

agency managers accountable for efficiently and effectively 

performing their duties in compliance with applicable laws 

and regulations and for maintaining the integrity of their 

activities through the use of 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.

During FY 2015, the SAT activities included planning 

the annual internal controls assessments, identifying key 

processes and related control activities, documenting 

the scope, design, and methodology of risk and internal 

control assessments, and monitoring corrective action plans 

and the remediation progress.

The FY 2015 accomplishments included adding resources 

to complete additional assessments, strengthening the 

internal control policy, corrective action plan guide, 

assessable unit profiles, and a multi-year assessment plan 

for key financial processes. 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) (e.g., Federal Information Security Management 

Act review), independent audits of service providers’ 

operations and financial systems (e.g., reviews conducted 

in accordance with Statement on Standards for Attestation 

Engagements (SSAE) No. 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.

The Chairwoman’s assurance statement that follows 

is supported by the processes and reviews described 

above, which were carried out in FY 2015. Management 

assurances tables appear in the Other Information Section.
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 21

CHAIRWOMAN’S FMFIA STATEMENT OF ASSURANCE

The Federal Trade Commission’s (FTC) management is responsible for establishing and 

maintaining effective internal control and financial management systems that meet the objectives 

of the Federal Managers’ Financial Integrity Act of 1982 (FMFIA).

In accordance with the requirements of the Office of Management and Budget (OMB) Circular 

A-123, Management’s Responsibility for Internal Control, the FTC conducted its annual 

assessment of the effectiveness of the organization’s internal controls to support effective and 

efficient programmatic operations, reliable financial reporting, and compliance with applicable 

laws and regulations; and whether the financial management system conforms to applicable 

financial systems requirements.

Based on the results of this assessment, the FTC provides reasonable assurance that its internal 

controls over the effectiveness and efficiency of operations, reliable financial reporting, and 

compliance with applicable laws and regulations as of September 30, 2015 were operating 

effectively, and that no material weaknesses were found in the design or operation of 

our internal controls. Some reporting officials identified areas for improvement in their 

individual assessments, which are being addressed internally and are not of a material nature.

Further, based on our assessment, we determined that the FTC financial management system 

conforms to applicable financial systems requirements.

Signed

Edith Ramirez

October 28, 2015
22 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

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 2015. 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 2015, the FTC has performed six assessment and 

authorization efforts and currently has twenty-four systems 

authorized to operate. The FTC continue to leveraged two 

Federal Risk and Authorization Management Program 

(FedRAMP) Joint Authorization Board provisional 

authorizations – one for the cloud hosting of our public 

web sites and one for the Sentinel Network Services 

systems.

DEBT COLLECTION 

IMPROVEMENT ACT

The Debt Collection Improvement Act of 1996 prescribes 

standards for the administrative collection, compromise, 

suspension, and termination of federal agency collection 

actions and referrals to the proper agency for litigation. 

The FTC monitors, administers and collects on debts 

less than 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 cross-servicing (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 2015, the 

FTC processed 8,662 invoices totaling $151 million that 

were subject to prompt payment. Of these invoices, 99.1 

percent were paid on time. During FY 2015, the FTC paid 

a total of $2,300 in interest penalties, or .0015 percent of 

the total dollar amount invoiced.

IMPROPER PAYMENT 

ELIMINATION AND RECOVERY 

IMPROVEMENT ACT (IPERIA)

The Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012 requires agencies to 

annually report on all programs and activities, identify 

those that may be susceptible to significant improper 

payments, estimate annual improper payments in the 

susceptible programs and activities, and report the results 

of their improper payment activities. In accordance 

with the OMB A-123 Appendix C guidance, the FTC 

performed a fiscal year 2015 risk assessment for nine 

payment processes including payroll, procurement, redress 

payments to consumers, travel, purchase card, pre-merger 

filing fee refunds, training, and two miscellaneous payment 

processes. Each payment program was defined by its own 

internal control framework. The FTC evaluated each 

payment program using the eleven qualitative risk factors 

identified in OMB Circular A-123 Appendix C. The FTC 

also performed a quantitative risk assessment and assessed 

risks related to the amounts of payments processed relative 

to the OMB specified threshold amounts which define 

payment programs susceptible to improper payments.

As a result of the risk assessment, the FTC determined 

that the agency’s programs and activities presented low 

risk of improper payments and that none of the agency’s 

programs or activities were determined to be susceptible 

to significant improper payments. In addition to the risk 

assessment of all payment processes, the Interior Business 

Center, the FTC’s shared service provider, compares the 

FTC’s payee records in the financial system with payee 

records in the Do Not Pay database. Also, the FTC 

reviews potential matches on an on-going basis to prevent 

improper payments and incorporates a pre-award check 

on potential contractors against the Do Not Pay database. 

In 2015, the FTC performed and documented testing 

of statistical samples from larger payment processes to 
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 23

verify that the FTC payment programs are not susceptible 

to significant improper payments. More information 

about the FTC’s IPERIA work can be found in the Other 

Information section of this report.

AGENCY FINANCIAL 

MANAGEMENT SYSTEMS 

STRATEGY

The FTC’s overall strategy for its financial management 

systems framework is driven by the objectives of 

operational effectiveness and efficiency, reliability and 

timeliness of data, and support of requirements for the 

agency’s strategic goals. 

The FTC obtains hosting and application management 

services 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 (OFF), Release 12, and 

the FTC uses 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 OFF, since FY 2008. 

The FTC also has been obtaining support from the IBC 

for its Federal Personnel/Payroll System (FPPS) since 1998. 

FPPS is hosted by the IBC and financial data from FPPS is 

interfaced into OFF.

The FTC continues to work with the IBC to enhance its 

existing systems. In FY 2015, the FTC transitioned to IBC 

for support of a new web-based travel management system, 

Carlson Wagonlit’s E2 Solutions. The FTC has begun 

implementation of a new acquisition system, Oracle’s 

Contract Lifecycle Management (CLM) that will be hosted 

by the IBC and fully integrated into OFF. Implementation 

of CLM will be completed in FY 2016.

FEDERAL CIVIL PENALTIES 

INFLATION ADJUSTMENT ACT 

OF 1990

As established by statutory civil penalty provisions, the 

FTC has jurisdiction to charge civil penalties for violations 

specified in the FTC Act and other laws the Commission 

is responsible for administering and enforcing. The FTC 

adjusts these civil penalty amounts for cost of living as 

required by the Civil Penalties Inflation Adjustment Act 

of 1990.

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

authority for the penalty, adjustment dates, and current 

penalty amount can be found in the Other Information 

section of this report. 
24 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

FINANCIAL HIGHLIGHTS

INTRODUCTION

The financial highlights that follow provide an overview 

of the FTC FY 2015 financial statements. An independent 

auditor audited the FTC’s Balance Sheet for the fiscal 

years ending September 30, 2015 and 2014, along with 

the Statement of Net Cost, Statement of Changes in Net 

Position, Statement of Budgetary Resources, Statement of 

Custodial Activity, and accompanying notes. For the 19th 

straight year, the FTC received an unmodified (previously 

called unqualified) 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, 2015 AND 2014

(Dollars in Millions) FY 2015 FY 2014 % Change

Fund balances with Treasury $ 869 $ 239 264%

Cash and other monetary assets 21 29 (28%)

Accounts receivable, net 14 65 (78%)

Property, plant, and equipment, net 63 64 (2%)

Total Assets $ 967 $ 397 144%

Liability for redress collected $ 751 $ 134 460%

Liability for redress to be collected 14 63 (78%)

Accounts payable and other 32 32 0%

Total Liabilities $ 797 $ 229 248%

Cumulative results of operations 170 168 1%

Total Net Position $ 170 $ 168 1%

Total Liabilities and Net Position $ 967 $ 397 144%

STATEMENT OF NET COST SUMMARY 

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

(Dollars in Millions) FY 2015 FY 2014 % Change

Protecting Consumers:

Gross costs $ 183 $ 171 7%

Less: earned revenue (13) (14) (7%)

Net Cost - Protecting Consumers 170 157 8%

Maintaining Competition:

Gross costs $ 132 $ 124 6%

Less: earned revenue (116) (106) 9%

Net Cost - Maintaining Competition 16 18 (11%)

Net Cost of Operations $ 186 $ 175 6%
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 25

BALANCE SHEET

COMPOSITION OF ASSETS

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

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

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

(PP&E). Non-entity assets are those assets held on behalf 

of others, i.e., collections and accounts receivable that arise 

from court-ordered judgments for monetary relief in the 

consumer redress program and civil monetary penalties.

Entity assets totaled $202 million, or 21 percent of all FTC 

assets as of September 30, 2015. The fund balance with 

Treasury of $139 million is the aggregate amount available 

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

net of accumulated depreciation, is $63 million, which 

is comprised of $37 million in leasehold improvements, 

$16 million in equipment, and $10 million in software. 

Of the total PP&E, $41 million is associated with the new 

FTC facility at Constitution Center. 

Non-entity assets total $765 million, or 79 percent of 

all FTC assets as of September 30, 2015. Fund balance 

with Treasury (deposit fund) for consumer redress of 

$730 million is held temporarily by the FTC until 

distributed to consumers, other harmed entities, or third 

party agents pending distribution to consumers on behalf 

of the FTC. Cash and other monetary assets of $21 million 

represent redress cash that has been transferred to third 

party agents pending distribution to consumers on behalf 

of the FTC. Net accounts receivable of $14 million is 

comprised of $13 million in net receivables arising from the 

settlement or litigation of administrative and Federal court 

cases in connection with the consumer redress program, and 

$1 million net receivables for civil monetary penalties. 

COMPOSITION OF ASSETS (Dollars in millions)

Assets FY15 FY14 Change

Entity Assets

Fund balance with Treasury $ 139 $ 133 $ 6

Property, plant, and equipment 63 64 (1) 

 $ 202 $ 197 $ 5 

Non-Entity Assets

Treasury deposit fund $ 730 $ 106 $ 624 

Accounts receivable 14 65 (51) 

Cash and other monetary assets 21 29 (8) 

$ 765 $ 200 $ 565 

Total Assets $ 967 $ 397 $ 570

Treasury

deposit fund

$106, 27%

Accounts receivable

$65, 16%

Property, plant,

and equipment

$64, 16%

Cash and other 

monetary assets

$29, 7%

Fund balance with Treasury

$133, 34%

FY 2014 

Non-Entity 

Entity 

Treasury 

deposit fund

$730, 76%

Accounts receivable 

$14, 1%

Property, plant, 

and equipment 

$63, 7%

Cash and other 

monetary assets 

$21, 2%

Fund balance with Treasury 

$139, 14%

FY 2015

Non-Entity 

Entity 
26 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

ANALYSIS OF ASSETS

The FTC’s total assets were $967 million at the end of 

FY 2015, an increase of $570 million or 144 percent over 

the FY 2014 total of $397 million. 

Entity assets were $202 million at the end of FY 2015, 

an increase of $5 million or 3 percent over the FY 2014 

total of $197 million. The change is from a $6 million 

increase in fund balance with Treasury and a $1 million 

decrease in PP&E. The $6 million increase in the fund 

balance with Treasury is from a $10 million increase in 

premerger notification filings under the HSR Act, offset 

by a $4 million increase in the payment for goods and 

services received.

Non-entity assets were $765 million at the end of FY 

2015, an increase of $565 million or 283 percent over 

the FY 2014 total of $200 million. This change is from 

a $624 million increase in the Treasury deposit fund 

for consumer redress, offset by a $51 million decrease 

in accounts receivable and an $8 million decrease in 

cash and other monetary assets. In total, the FTC 

collected $707 million during FY 2015, while disbursing 

$62 million to third party agents for disbursement to 

consumers, and disgorging $21 million to Treasury due to 

harmed consumers not being located or redress not being 

practicable.

The $707 million in the Treasury deposit fund for 

consumer redress reflects a significantly greater amount of 

collections than what is typical, as seen in the chart below, 

Trend in Treasury Deposit Fund Collections. The increase 

seen over prior years was a result of several significant 

judgments, and in some cases such as Cephalon, represents 

many years of dedicated work by the FTC staff. 

The FTC received $458 million from a settlement 

resolving antitrust charges that Cephalon, Inc. illegally 

blocked generic competition, known as pay for delay, 

to its drug Provigil. The settlement ensures that Teva 

Pharmaceutical Industries, Ltd., which acquired Cephalon 

in 2012, makes available a total of $1.2 billion to harmed 

entities. $742 million was directly paid out by Teva to 

harmed entities with the FTC receiving the remaining 

$458 million to disburse for future settlements, or disgorge 

to Treasury for amounts that are not settled.

The FTC received $80 million from AT&T Mobility 

LLC as part of a settlement to refund customers that were 

unlawfully billed for unauthorized third-party charges, a 

practice known as mobile cramming. 

The FTC received $40 million from TracFone as a 

settlement to refund customers that TracFone deceived 

through promises of unlimited data. TracFone advertised 

ANALYSIS OF ASSETS (Dollars in millions)

Accounts 

receivable

Cash and other 

monetary assets

Treasury 

deposit fund

General PP&E

Fund balance 

with Treasury

$200 $400 $600 $800

Millions

FY15

FY14

Asset Comparison between FY 2015 and 2014

$65

$29

$64

$133

$106

$21

$63

$139

$730

$14

$0

Non-Entity

Entity

$100

$200

$300

$400

$500

$600

$700

$800

Fiscal Year

2015 2014 2013 2012 2011

$707

$124

$36 $53 $42

Millions

Trend in Treasury Deposit Fund Collections

FY 2015 Treasury Deposit Fund Collection

Cephalon 

Other Collections $458, 65%

$129, 18%

TracFone Wireless

$40, 6%

AT&T Mobility

$80, 11%
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 27

prepaid monthly mobile plans for about $45 per month 

with unlimited data. However, TracFone drastically slowed 

or cut off consumers mobile data after they had crossed a 

fixed threshold of data within a 30-day period. 

COMPOSITION OF LIABILITIES

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

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

assets.

Entity liabilities totaled $32 million, or 4 percent of all 

FTC liabilities as of September 30, 2015. Employee related 

liabilities of $20 million consists of accrued payroll and 

annual leave wages earned by employees but not paid, and 

the Federal Employees Compensation Act (FECA) liability. 

Accounts payable consisted of the amounts owed for goods 

or services received but not yet paid, totaling $12 million.

Non-entity liabilities total $765 million or 96 percent 

of all FTC liabilities as of September 30, 2015. Liability 

for amounts collected of $751 million is offset by the 

non-entity Treasury deposit fund for consumer redress 

of $730 million and the cash and monetary assets of 

$21 million. Liability for amounts to be collected is offset 

by the non-entity asset accounts receivable of $14 million.

ANALYSIS OF LIABILITIES

The FTC’s total liabilities were $797 million at the end of 

FY 2015, an increase of $568 million or 248 percent over 

the FY 2014 total of $229 million. 

Entity liabilities were $32 million at the end of FY 2015, 

an increase of $3 million or 10 percent over the FY 2014 

total of $29 million. Accrued employee related and other 

liabilities increased by $3 million or 18 percent due to an 

additional workday accrued in the year-end payroll accrual, 

and an increase in the number of unfunded annual leave 

hours accrued during 2015. 

COMPOSITION OF LIABILITIES (Dollars in millions)

FY15 FY14 Change

Entity Liabilities

Employee related liabilities $ 20 $ 17 $ 3

Accounts Payable 12 12 (0) 

 $ 32 $ 29 $ 3 

Non-Entity Liabilities

Liability for amounts collected $ 751 $ 135 $ 616

Liability for amounts to be collected 14 65 (51) 

$ 765 $ 200 $ 565 

Total Liabilities $ 797 $ 229 $ 568

Liability for 

amounts collected

$135, 59%

Accounts payable

$12, 5%

Liability for amounts 

to be collected

$65, 29%

Employee related

liabilities

$17, 7%

Non-Entity

Entity 

FY 2014

Liability for 

amounts collected

$751, 94%

Accounts payable

$12, 1%

Liability for amounts 

to be collected

$14, 2%

Employee related

liabilities

$20, 3%

Non-Entity

FY 2015

Entity 
28 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

Non-entity liabilities were $765 million at the end of 

FY 2015, an increase of $565 million or 283 percent over 

the FY 2014 total of $200 million. Liability for amounts 

collected increased by $616 million, or 456 percent and 

the liability for amounts to be collected decreased by 

$51 million or 78 percent. This is equal to the increase/

decrease seen in non-entity assets. 

SUMMARY OF NET POSITION

The FTC’s net position consists of the difference between 

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

$170 million at the end of FY 2015, and is an increase 

of $2 million or 1 percent over the FY 2014 total of 

$168 million. 

STATEMENT OF NET COST

COMPOSITION OF THE NET 

COST OF OPERATIONS

The Statement of Net Cost presents the FTC’s gross 

costs less revenue earned for both of the FTC’s strategic 

goals, Protect Consumers and Maintain Competition. 

The third goal, Advance Organizational Performance, has 

its costs distributed based on FTE usage (unless a cost 

is clearly attributable to a specific goal). The FTC net 

cost of operations was $186 million in FY 2015, which 

consists of $315 million in gross costs and $129 million in 

earned revenue.

In addition to the earned revenue, the FTC collected 

$707 million in non-entity collections for the Treasury 

deposit fund for consumer redress, which are not 

included in the Statement of Net Cost, but are important 

in determining the overall impact of the agency’s 

strategic goals. 

The net cost of operations for the Protect Consumers 

strategic goal is $170 million, which consists of 

$183 million in gross costs and $13 million in earned 

revenue. The $13 million in earned revenue is from fees 

collected for the National Do Not Call Registry. The 

FTC receives fees from telemarketers who pay an annual 

subscription fee to download telephone numbers of 

consumers who do not wish to receive calls. Fees are based 

on the number of area codes downloaded. The FTC also 

received $222 million in non-entity collections as a part of 

the Protect Consumers strategic goal.

The net cost of operations for the Maintain Competition 

strategic goal is $16 million, which consists of 

$132 million in gross costs and $116 million in earned 

revenue. The $116 million in revenue comes from fees 

collected for premerger notification filings under the 

Hart-Scott-Rodino (HSR) Antitrust Improvement Act 

of 1976. The HSR Act requires the filing of premerger 

notifications with the FTC and the Antitrust Division 

of the Department of Justice (DOJ). The filing fees are 

determined by the value and size of the merging parties. 

By law, the FTC retains one-half of all premerger filing 

FY 2015 STATEMENT OF NET COST COMPARISON TO 

NON-ENTITY COLLECTIONS (Dollars in millions)

0

$100

$200

$300

$400

$500

Millions

Protect Consumers Maintain Competition

$183

$13

$222

$132 $116

$485 Gross Costs

Earned Revenues

Non-entity collections
 www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission 29

fees collected and remits one-half to the DOJ Antitrust 

Division. The FTC also received $485 million in nonentity collections as a part of the Maintain Competition 

strategic goal.

ANALYSIS OF NET COST OF 

OPERATIONS

(Dollars in millions) FY 2015 FY 2014 % Change

Gross costs $ 315 $ 295 7%

Less: earned revenue (129) (120) 8%

Net Cost of Operations $ 186 $ 175 6%

The FTC’s net cost of operations was $186 million at the 

end of FY 2015, an increase of $11 million or 6 percent 

from the FY 2014 total of $175 million. 

Gross costs increased $20 million or 7 percent from 

FY 2014. The cost increase is primarily the result of 

$33 million ($38 million - $5 million depreciation) in 

net costs being capitalized during FY 2014 for leasehold 

improvements, equipment, and technology infrastructure 

for the new FTC facility at Constitution Center, and a 

$5 million increase in employment related expenses. 

Earned revenue increased $9 million or 8 percent from 

FY 2014, and is attributed to a $9 million increase in HSR 

revenue earned in FY2015. The increase in HSR revenue 

is not due to an increase in fee amounts, but to an increase 

in the number of premerger notification filings received 

during FY 2015.

BUDGET AUTHORITY

The FTC receives an annual appropriation that is available 

until expended, subject to the Office of Management 

Budget (OMB) apportionment and Congressional 

restrictions on the expenditure of funds. The FTC’s budget 

authority is derived from a direct appropriation and 

offsetting collections.

FTC new budget authority in FY 2015 was $293 million, a 

decrease of $5 million or 2 percent from FY 2014 of $298 

million. The $293 million is comprised of $180 million in 

general fund appropriations and $113 million in spending 

authority from offsetting collections. The FY 2015 budget 

authority decrease is a result of the FTC requesting and 

receiving $5 million less in new budget authority due to 

a $10 million decrease in discretionary costs related to 

space replacement and relocation of staff, and costs related 

to technology investments. The $10 million decrease was 

offset by a planned $5 million increase in mandatory 

expenses from pay adjustments, and contract and other 

non-pay inflation. 

NEW BUDGET AUTHORITY (Dollars in millions)

Osetting Collection

$113

General Fund Appropriation

$180

Osetting Collection

$117

General Fund Appropriation

$181

FY 2015 - $293

FY 2014 - $298
30 Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov

LIMITATIONS OF FINANCIAL STATEMENTS

FTC management has prepared its FY 2015 financial statements from the books and records of the agency in accordance 

with OMB Circular A-136, financial reporting requirements, as amended. The financial statements represent the financial 

position and results of operations of the agency pursuant to the requirements of Chapter 31 of the U.S. Code Section 

3515(b). While these statements have been prepared from the agency’s books in accordance with the formats prescribed by 

the OMB, the statements are in addition to the financial reports used to monitor and control budgetary resources, which 

are prepared from the same books and records. These statements should be read with the understanding that they are for 

a component of the U.S. government, a sovereign entity. One implication is that unfunded liabilities cannot be liquidated 

without legislation that provides resources to do so.

FINANCIAL MANAGEMENT INDICATORS

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

monitor agencies’ financial management practices.

FINANCIAL MANAGEMENT INDICATORS FOR FY 2015

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) 99.1%

Percentage interest penalties paid to total dollars invoiced .0015%

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

for individually billed travel account holders 100%

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

for centrally billed travel accounts

100%

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

FINANCIAL SECTION
32 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 33

Message From The Chief Financial Officer

David Rebich

Chief Financial Officer

I am pleased to present FTC’s Agency Financial Report 

(AFR) for Fiscal Year 2015. 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 2015 and 

FY 2014. These financial statements, coupled with the 

agency’s Performance Highlights, demonstrate how the 

FTC optimizes the use of its financial resources to protect 

American consumers and maintain competition in the 

marketplace.

For the nineteenth consecutive year, an independent 

auditor rendered an unmodified opinion on FTC’s 

Financial Statements. The auditor also found no reportable 

conditions or significant deficiencies. We are very proud of 

this accomplishment and worked very hard to achieve this 

result. Some of our efforts this year include: 

•	 Conducting internal control reviews of identified 

assessable units;

•	 Assessing our Entity-wide Controls;

•	 Monitoring the status of Corrective Action 

Plans (CAPs), which resulted in closing 91 

recommendations from previous financial statement 

audits and other internal and external reviews;

•	 Successfully implementing an e-travel system on time 

and under budget;

•	 Continuing to improve our acquisition planning 

process and contract documentation; and

•	 Implementing a process to systematically review and 

update all administrative policies and procedures.

In 2015, we continued to strengthen our enterprise risk 

management efforts by maturing our internal control 

policies to enhance the structure around the program, 

engaging the Senior Assessment Team (SAT) with the 

results of internal reviews and developing a multiyear assessment plan to ensure material processes are 

continuously reviewed and monitored. 

With an eye towards further improvement, we identified 

the need for an automated acquisition system that is 

fully integrated with our financial system. We prepared 

a successful business case and gained FTC Governance 

Board approval. We then obtained a system integrator and 

the new system will be implemented in FY 2016. We are 

also working closely with our Shared Service Provider to 

meet the requirements of the Data Act. 

These accomplishments and on-going projects demonstrate 

our commitment to effectively managing our resources, 

and I am proud of the progress we have made during 

the past year to promote sound business practices in the 

conduct of our agency’s mission.

On behalf of the Chairwoman and everyone in the 

Financial Management Office, I would like to extend our 

special thanks to the financial management and program 

professionals throughout the FTC. Your dedication 

and hard work has enabled the FTC to deliver efficient 

programs and accurate, transparent, and timely financial 

information to the public. Your service to the FTC and 

American consumers is greatly appreciated.

David Rebich

Chief Financial Officer

November 16, 2015
34 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 35
36 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

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, 2015 and 2014, 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 U.S. generally accepted accounting principles; 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 U.S. generally accepted government auditing standards 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. 15-02, Audit 

Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 15-02 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 includes test of compliance with provisions 

of applicable laws, regulations and contracts that have a direct effect on the determination of material 

amounts and disclosure in the financial statements. The purpose was not to provide an opinion on 

compliance with provisions of applicable laws, regulations and contracts and, therefore, we do not express 

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.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 37

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, 2015 and 2014, and its net costs, changes in net position, budgetary 

resources, and custodial activity for the years then ended, in accordance with U.S. generally accepted 

accounting principles. 

Other Matters

Required Supplementary Information

U.S. generally accepted accounting principles require that the information in the Management’s Discussion 

and Analysis (MD&A), as part of 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 RSI in accordance with 

U.S. generally accepted government auditing standards, 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.

Other Information

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. 

The Message From Chairwoman, Message From The CFO and the Other Information sections are presented 

for purposes of additional analysis and are not a required part of the financial statements. Such information 

has not been subjected to the auditing procedures applied in the audits of the financial statements, and 

accordingly, we do not express an opinion or provide any assurance on it.

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 providing 

an opinion on internal control. Accordingly, we do not express such an opinion.

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.
38 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

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. During our audit of the financial statements no deficiencies 

in internal control were identified that were considered to be a material weakness. However, material 

weaknesses may exist that have not been identified.

We also identified other deficiencies in FTC’s internal control over financial reporting that we do not consider 

to be material weaknesses or significant deficiencies. Nonetheless, these deficiencies warrant FTC 

management’s attention. We have communicated these matters to FTC management and, will report on them

separately in a management letter.

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 and

contracts, noncompliance with which could have a direct and material effect on the determination of 

financial statement amounts. We limited our tests of compliance to the provisions described in the 

preceding sentence, and we did not test compliance with all laws, regulations and contracts applicable to 

FTC. The objective was not to provide an opinion on compliance with provisions of laws, regulations and

contracts and therefore, 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. 15-02. 

Management’s Responsibility for Internal Control and Compliance

FTC’s management is responsible for (1) evaluating effectiveness of internal control over financial 

reporting 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 control over financial reporting 

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. 15-02 

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 internal control 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. 15-02 that we deemed applicable to FTC’s 

financial statements for the fiscal year ended September 30, 2015. 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. 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 39

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, 2015
40 Federal Trade Commission • Fiscal Year 2015 • 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.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 41

FEDERAL TRADE COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2015 AND 2014

(Dollars in thousands)

2015 2014

Assets (Note 2):

Intragovernmental:

Fund balance with Treasury (Note 3) $ 868,730 $ 238,443

Accounts receivable, net (Note 5) 65 6

Total intragovernmental 868,795 238,449

Cash and other monetary assets (Note 4) 20,373 28,797

Accounts receivable, net (Note 5) 14,148 65,447 

Property, plant, and equipment, net (Note 6) 63,310 64,247

Total Assets $ 966,626 $ 396,940

Liabilities (Note 7): 

Intragovernmental:

Accounts payable $ 1,118 $ 823 

Other (Note 8) 3,400 4,427 

Total intragovernmental 4,518 5,250 

Accounts payable 11,508 10,805 

Accrued redress due to claimants 12,784 62,776 

Undisbursed redress collections 750,177 133,888 

Other (Note 8) 18,141 16,089 

Total Liabilities $ 797,128 $ 228,808 

Net Position (Note 1(p)):

Unexpended appropriations - - 

Cumulative results of operations 169,498 168,132 

Total Net Position $ 169,498 $ 168,132 

Total Liabilities and Net Position $ 966,626 $ 396,940

The accompanying notes are an integral part of these statements.
42 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

FEDERAL TRADE COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

(Dollars in thousands)

2015 2014

Costs by Strategic Goal:

Strategic Goal 1: Protect Consumers:

Gross costs (Note 11) $ 183,468 $ 170,494 

Less: earned revenue (Note 11) (13,458) (13,521)

Net cost 170,010 156,973

Strategic Goal 2: Maintain Competition:

Gross costs (Note 11) 132,312 124,479 

Less: earned revenue (Note 11) (115,814) (106,477)

Net cost 16,498 18,002 

Net Cost of Operations $ 186,508 $ 174,975 

The accompanying notes are an integral part of these statements.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 43

FEDERAL TRADE COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

(Dollars in thousands)

2015 2014

Cumulative Results of Operations:

Beginning balance $ 168,132 $ 152,491

Budgetary Financing Sources:

Appropriations used 179,675 181,182

Other Financing Sources (Non-Exchange):

Imputed financing 8,199 9,434

Total financing sources 187,874 190,616

Net cost of operations (186,508) (174,975)

Net change 1,366 15,641 

Cumulative Results of Operations $ 169,498 $ 168,132

Unexpended Appropriations:

Beginning balance $ - $ - 

Budgetary Financing Sources:

Appropriations received 179,675 181,182

Appropriations used (179,675) (181,182)

Total budgetary financing sources - - 

Total Unexpended Appropriations - - 

Net Position (Note 1(p)) $ 169,498 $ 168,132 

The accompanying notes are an integral part of these statements.
44 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

FEDERAL TRADE COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

(Dollars in thousands)

2015 2014

Budgetary Resources: 

Unobligated balance, brought forward, October 1 $ 27,447 $ 57,159 

Recoveries of prior year unpaid obligations 6,963 6,519 

Unobligated balance from prior year budget authority, net 34,410 63,678 

Appropriations 179,675 181,182

Spending authority from offsetting collections 113,327 116,725 

Total Budgetary Resources $ 327,412 $ 361,585

Status of Budgetary Resources: 

Obligations incurred (Note 12): $ 305,294 $ 334,138

Unobligated balance, end of period: 

 Apportioned 11,747 23,893

 Unapportioned 10,371 3,554

Total unobligated balance, end of period 22,118 27,447 

Total Status of Budgetary Resources $ 327,412 $ 361,585

Change in Obligated Balance: 

Unpaid Obligations: 

 Unpaid obligations, brought forward, October 1 $ 96,624 $ 96,445

 Obligations incurred (Note 12) 305,294 334,138

 Outlays, gross (303,308) (327,440)

 Recoveries of prior year unpaid obligations (6,963) (6,519)

 Unpaid obligations, end of period 91,647 96,624

Uncollected Payments: 

 Uncollected payments from Federal sources, brought forward, October 1 (745) (1,297)

 Change in uncollected payments from Federal sources, brought forward , October 1 168 552

 Uncollected payments from Federal sources, end of period (577) (745)

Memorandum (non-add) Entries: 

 Obligated balance, start of year, net 95,877 95,147 

 Obligated balance, end of period, net 91,070 95,877

Budget Authority and Outlays, Net: 

 Budget authority, gross $ 293,002 $ 297,907 

 Actual offsetting collections (129,173) (120,239)

 Change in uncollected customer payments from Federal sources 168 552

 Budget authority, net $ 163,997 $ 178,220

 Outlays, gross $ 303,308 $ 327,440 

 Actual offsetting collections (129,173) (120,239)

 Outlays, net 174,135 207,201

 Distributed offsetting receipts (21,331) (16,398)

 Agency outlays, net $ 152,804 $ 190,803 

The accompanying notes are an integral part of these statements.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 45

FEDERAL TRADE COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

(Dollars in thousands)

Protect 

Consumers

Maintain 

Competition 2015 2014

Revenue Activity (Note 15):

Sources of collections:

Premerger filing fees (net of refunds) $ - $ 115,678 $ 115,678 $ 106,263

Civil penalties and fines 5,411 - 5,411 11,802

Consumer redress (Note 16) 21,081 - 21,081 16,157 

Other miscellaneous receipts 250 - 250 240 

Total cash collections 26,742 115,678 142,420 134,462 

Accrual adjustments (1,328) - (1,328) 1,567

Total Custodial Revenue $ 25,414 $ 115,678 $ 141,092 $ 136,029

Disposition of Collections (Note 15):

Transferred to others:

Treasury general fund $ 26,742 $ - $ 26,742 $ 28,199 

Department of Justice - 115,678 115,678 106,263 

Amounts yet to be transferred (1,328) - (1,328) 1,567

Total Disposition of Collections $ 25,414 $ 115,678 $ 141,092 $ 136,029 

Net Custodial Activity $ - $ - $ - $ - 

The accompanying notes are an integral part of these statements.
46 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

NOTES TO THE FINANCIAL 

STATEMENTS 

NOTE 1—SIGNIFICANT 

ACCOUNTING POLICIES 

(a) Reporting Entity 

The Federal Trade Commission (FTC) is an independent 

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

Trade Commission Act of 1914. The FTC enforces a 

variety of federal antitrust and consumer protection 

laws. Its mission is working to protect consumers by 

preventing anticompetitive, deceptive, and unfair 

business practices, enhancing informed consumer choice 

and public understanding of the competitive process, 

and accomplishing this without unduly burdening 

legitimate business activity. The FTC is headed by 

five Commissioners, nominated by the President and 

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

The President chooses one Commissioner to act as Chair. 

The FTC carries out its mission of protecting consumers 

and maintaining competition through three bureaus: 

The Bureau of Consumer Protection (BCP), the Bureau 

of Competition (BC), and the Bureau of Economics 

(BE), which supports both BCP and BC. Additionally, 

various offices within the FTC provide critical mission 

support to the bureaus. The FTC’s staff is located in 

Washington, D.C. and seven other geographic areas. 

The financial statements and notes include the financial 

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

control. As further described in Note 1(b), these funds 

include appropriations received for salaries and necessary 

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

collections derived from court ordered judgments and 

settlements held for subsequent distribution to approved 

claimants. 

(b) Fund Accounting Structure 

The FTC, like other Federal agencies, uses Treasury 

Account Symbols (TAS) to record and track financial 

activity. These TAS are described as: 

General Fund 

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

account receives budget authority from an appropriation 

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

to fund the necessary expenses of the agency. Offsetting 

collections include fees collected for premerger notification 

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

Improvement Act of 1976, and collections for the National 

Do Not Call Registry, which operates under Section 5 

of the FTC Act. Collections in excess of Congressional 

limits are unavailable by law and included in the FTC’s 

unavailable – temporary reduction balance. (See Note 3, 

Fund Balance with Treasury) 

Deposit Fund 

Consumer Redress Escrow (TAS 29X6013): This account 

consists of amounts collected under the consumer redress 

program and held temporarily by the FTC until money 

is distributed to consumers (or to a third party agent that 

distributes money to consumers on the FTC’s behalf), 

other harmed entities, or transferred to the general fund 

of the Treasury. These funds, which are considered nonentity funds, do not affect the FTC’s Net Position and are 

not reported on the Statement of Changes in Net Position. 

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

Consumer Redress Activities) 

Clearing/Suspense Fund 

Budget Clearing and Suspense (TAS 29F3875): Fees 

collected for premerger notification filings under the HSR 

Act are deposited, initially, into the Budget Clearing and 

Suspense account, then distributed equally to the FTC 

(as an offsetting collection in the general fund) and the 

Department of Justice (DOJ). (See Note 1(q), Revenues 

and Other Financing Sources)

Receipt Accounts 

Fines, Penalties, and Forfeitures, Customs, Commerce, 

and Antitrust Laws (TAS 29 1040): Collections of 

civil penalties imposed in court actions for violations 

of antitrust acts and FTC orders are deposited into 

this account. Penalties imposed, but not yet collected, 

are accrued as accounts receivable and recorded in this 

account. The cash balance in the fund at the end of the 

fiscal year is transferred to the general fund of the Treasury. 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 47

General Fund Proprietary Receipts (TAS 29 3220):

Miscellaneous receipts that by law are not available for 

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

consumer redress program for which redress to consumers 

is not practicable, are held in this account until the end of 

the fiscal year when they are transferred to the general fund 

of the Treasury.

(c) Basis of Presentation and Accounting

The accompanying financial statements present the 

financial position, net cost of operations, changes in net 

position, budgetary resources, and custodial activities of 

the FTC, and have been prepared from the accounting 

records of the FTC. These financial statements may differ 

from other financial reports submitted pursuant to the 

Office of Management and Budget (OMB) directives for 

the purpose of monitoring and controlling the use of the 

FTC’s budgetary resources. 

The FTC’s financial statements are prepared in conformity 

with generally accepted accounting principles (GAAP) for 

Federal entities and with OMB Circular A-136, Financial 

Reporting Requirements (as revised August 2015). 

Accordingly, revenues are recognized when earned and 

expenses are recognized when incurred, without regard 

to the receipt or payment of cash. These principles differ 

from budgetary reporting principles. The differences relate 

primarily to the capitalization and depreciation of property 

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

As described in Note 1(b), the FTC maintains a single 

fund to account for salaries and all necessary expenses. 

Further, there are limited intra-entity transactions with 

any other fund (e.g., deposit fund) that would require 

eliminating entries to present consolidated statements. 

Accordingly, the statements are not labeled consolidated 

nor is the Statement of Budgetary Resources (SBR) 

presented as combined. 

Assets, liabilities, revenues and costs are classified 

in these financial statements according to the type 

of entity associated with the transactions. Balances 

classified as intragovernmental arise from transactions 

with other Federal entities. Balances not classified as 

intragovernmental arise from transactions with individuals 

or organizations outside of the Federal Government 

(i.e., with the Public). 

The FTC presents net cost of operations by its two 

major strategic goals: Protect Consumers and Maintain 

Competition. These goals are described in the agency’s 

strategic and performance plan and align with the agency’s 

major programs. 

(d) Use of Estimates 

The preparation of financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets 

and liabilities at the date of the financial statements and 

the reported amounts of revenues and expenses during 

the reporting period. For example, estimates are used in 

computing accounts payable for vendor service contracts, 

the allowance for uncollectible accounts, and the allocation 

of costs to strategic goals in the Statement of Net Cost. 

Actual results could differ from the estimated amounts. 

(e) Budget Authority 

The Congress passes appropriations annually that provide 

the FTC with authority to obligate funds for necessary 

expenses to carry out mandated program activities. These 

funds are available until expended, subject to the OMB 

apportionment and to Congressional 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. The FTC accounts for budget authority in its 

general fund (29X0100), as reflected in the Statement of 

Budgetary Resources. 
48 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

(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. Non-entity assets 

include collections and accounts receivable that arise from 

court-order judgments for monetary relief, civil monetary 

penalties, and the portion of fees collected for premerger 

notification filings that are distributed to the DOJ in a 

subsequent period. These non-entity assets are included in 

the financial statements along with an offsetting non-entity 

liability of equal amount. (See Note 2, Entity and NonEntity Assets)

(g) Fund Balance with Treasury 

The fund balance with Treasury (FBwT) is the aggregate 

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

deposit fund, and clearing/suspense fund. General funds 

include a portion that is available to the FTC to make 

expenditures and pay liabilities, and a portion that is 

unavailable. Deposit fund and clearing/suspense fund 

balances are non-entity funds that are temporarily held 

by the FTC until transferred to another Federal agency 

(Treasury or DOJ), or distributed to a third party. Fund 

balances are carried forward into subsequent fiscal years 

until disbursements are made. (See Note 3, Fund Balance 

with Treasury) 

(h) Cash and Other Monetary Assets 

In connection with the consumer redress program (and 

described in Note 16, Consumer Redress Activities), 

amounts necessary to cover current disbursement schedules 

are transferred from the FTC’s deposit fund to third party 

redress administrators to be held as cash in accounts at 

financial institutions. Upon approval by the FTC’s Redress 

Administration Office, the redress administrators process 

claims and disburse redress proceeds to affected consumers 

and approved claimants. The cash held in these financial 

institutions is included in the FTC’s financial statements 

as a non-entity asset. (See Note 4, Cash and Other 

Monetary Assets)

(i) Accounts Receivable, Net 

Accounts receivable, net of allowances, reflect the Federal 

Accounting Standards Advisory Board (FASAB) standard 

for the recognition of losses using the collection criterion 

of “more likely than not.” This criterion results in 

receivable balances that are more conservatively stated than 

those valued by the private sector under GAAP. FASAB 

states that it is appropriate to recognize the nature of 

federal receivables, which, unlike trade accounts of private 

firms or loans made by banks, are not created through 

credit screening procedures. Rather, these receivables 

arise because of the assessment of fines from regulatory 

violations. In these circumstances, historical experience and 

economic realities indicate that these types of claims are 

frequently not fully collectible. 

The method used to estimate the allowance for 

uncollectible accounts consists of individual case analysis 

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

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

probable recovery amount including the value of assets. 

Based on the litigation and collection status, cases are 

referred to the Treasury for collection action. 

(j) Property, Plant, and Equipment 

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

consists of general purpose equipment used by the agency 

and capital improvements made to buildings leased from 

the General Services Administration (GSA) by the FTC 

for office space, as well as software leased and purchased 

from vendors. The FTC’s capitalization policy, Accounting 

for Property, Plant, and Equipment, was updated with an 

effective date on or after October 1, 2014. PP&E placed 

in service prior to October 1, 2014, will continue to be 

accounted for based on the capitalization policy in effect at 

the time acquired, until fully depreciated or removed from 

service. The primary change relates to the capitalization 

thresholds for each asset type. Equipment was divided 

into three asset types (furniture, general equipment, and 

information technology equipment) that reflect asset 

characteristics, cost, and use. For financial reporting 

purposes, however, these three asset types are combined 

and reported as equipment. Prior to the October 1, 2014 

threshold change, the FTC capitalized items with 

an aggregate cost of $100 thousand or greater for all 

asset types.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 49

Effective October 1, 2014, capitalization thresholds are as 

follows:

Asset Type Capitalization Threshold

Furniture $ 50,000

General Equipment $ 50,000

IT Equipment $ 150,000

Leasehold Improvements $ 150,000

Internal Use Software $ 200,000

The FTC reports property and equipment at historical cost 

and capitalizes items based on the above thresholds and a 

useful life of two or more years. Property and equipment 

that meet these criteria are depreciated or amortized using 

the straight-line method over the estimated useful life of 

the asset. Additionally, assets under development, such as 

internal use software and leasehold improvements, with an 

estimated aggregate cost meeting the threshold criteria are 

capitalized and then amortized once completed and placed 

into service. Normal repairs and maintenance, and PP&E 

that do not meet the capitalization criteria, are recognized 

as an expense in the current period. (See Note 6, Property, 

Plant, and Equipment)

(k) Accrued Liabilities and Accounts 

Payable 

Accrued liabilities and accounts payable represent a 

probable future outflow or other sacrifice of resources from 

past transactions or events. Liabilities are recognized when 

they are incurred, regardless of whether they are covered by 

budgetary resources. The FTC has liabilities that are entity 

and non-entity. Entity liabilities cannot be liquidated 

without legislation that provides the resources to do so. In 

addition, the government, acting in its sovereign capacity, 

can abrogate the FTC’s liabilities (other than contracts). 

(See Note 7, Liabilities Covered and Not Covered by 

Budgetary Resources) 

(l) Employee Health Benefits and Life 

Insurance 

FTC employees are eligible to participate in the 

contributory Federal Employees’ Health Benefit Program 

(FEHBP) and the Federal Employees’ Group Life 

Insurance Program (FEGLIP) administered by the Office 

of Personnel Management (OPM). The FTC contributes a 

percentage to each program to pay for current benefits. 

(m) Employee Retirement Benefits 

FTC employees participate in either the Civil Service 

Retirement System (CSRS) or the Federal Employees’ 

Retirement System (FERS) administered by the OPM. 

Employees hired after December 31, 1983 are covered by 

FERS and Social Security, while employees hired prior 

to January 1, 1984 were allowed to elect joining FERS 

or remaining in CSRS. For employees participating in 

CSRS, the FTC contributes 7 percent of the employee’s 

basic pay to the Civil Service Retirement and Disability 

Fund. For employees participating in FERS, the FTC 

contributes 13.2 percent to the Federal Employees’ 

Retirement Fund. New employees hired between January 

1 and December 31, 2013 participate in FERS-RAE 

(Revised Annuity Employees). New employees hired on or 

after January 1, 2014 are covered by FERS-FRAE (Further 

Revised Annuity Employees). The FTC contribution is 

11.1 percent for both FERS-RAE and FERS-FRAE. In 

addition, the FTC contributes the employer’s matching 

share to the Social Security Administration under the 

Federal Insurance Contributions Act, which fully covers 

FERS participating employees. FTC contributions are 

recognized as current operating expenses. 

The Thrift Savings Plan (TSP) is a defined contribution 

retirement savings and investment plan for employees 

covered by either CSRS or FERS. Participating employees 

may contribute any dollar amount or percentage of basic 

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

by law. For those employees participating in FERS, the 

FTC makes a mandatory 1 percent contribution to this 

plan and in addition, matches 100 percent of the first 

3 percent contributed and 50 percent of the next 2 percent. 

CSRS participating employees do not receive a matching 

contribution from the FTC. The FTC contributions to the 

TSP are recognized as current operating expenses. 

The FTC does not report CSRS and FERS assets, 

accumulated plan benefits, or unfunded liabilities, if 

any, applicable to its employees. The OPM reports this 

information. However, the FTC recognizes the full cost 

of providing future pension benefits to covered employees 

at the time the employees’ services are rendered using cost 

factors provided by the OPM that estimate the true service 
50 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

cost of providing the pension benefits. The FTC recognizes 

the excess of the true service cost over amounts contributed 

as an imputed cost. This additional cost is financed by 

the OPM, and recognized as an imputed financing source 

by the FTC. (See Note 17, Reconciliation of Net Cost of 

Operation to Budget) 

(n) FECA and Other Post-Employment 

Benefits 

The Federal Employees’ Compensation Act (FECA) 

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

provides income and medical cost protection to covered 

Federal civilian employees injured on the job, and 

employees who have incurred a work-related injury or 

occupational disease. The DOL bills the FTC annually for 

the claims paid and the FTC recognizes the FECA liability 

for future payment. Payment is deferred for two years 

to allow for funding through the budget. The FTC also 

recognizes a FECA actuarial liability, which is an estimate 

for the future workers compensation as a result of past 

events using procedures developed by the DOL to estimate 

the liability. FECA liabilities are reported as not covered by 

budgetary resources. (See Note 7, Liabilities Covered and 

Not Covered by Budgetary Resources)

FTC employees eligible to participate in the FEHBP and 

the FEGLIP may continue to participate in these programs 

after their retirement. The FTC recognizes a current cost 

of providing post-retirement benefits using cost factors 

provided by the OPM that estimate the true cost of 

providing these benefits to current employees. The cost 

of providing post-retirement benefits for the FEHBP and 

FEGLIP is financed by the OPM, and recognized as an 

imputed financing source by the FTC. 

(o) Annual and Sick Leave

The FTC accrues an annual leave liability when employees 

earn leave and reduces the liability when employees take 

leave. The balance in this account reflects the current 

leave balances and pay rates of the FTC employees. 

Budget execution rules do not allow this liability to be 

funded as earned. It is funded when leave is taken or when 

paid out as a lump sum at the end of employment. As a 

result, accrued annual leave is reported as not covered by 

budgetary resources. Sick leave is non-vested and expensed 

as used. (See Note 7, Liabilities Covered and Not Covered 

by Budgetary Resources)

(p) Net Position 

Cumulative results of operations represent the net results 

of operations since inception, the cumulative amount of 

prior period adjustments, the remaining book value of 

capitalized assets, and future funding requirements. 

The portion of the FTC’s budget authority 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) 

(q) Revenues and Other Financing 

Sources 

The FTC’s activities are financed through exchange 

revenue it receives from others and through an 

appropriation provided by the Congress. Exchange 

revenues consist of fees collected for premerger notification 

filings under the HSR Act and collections for the National 

Do Not Call Registry. Additionally, exchange revenues 

include a small amount of reimbursements for services 

performed under inter-agency agreements. 

(r) Methodology for Assigning Costs and 

Exchange Revenues 

The FTC allocates costs and exchange revenues on the 

Statement of Net Cost to its two major strategic goals: 

Protect Consumers and Maintain Competition. Costs and 

exchange revenues that are identified specifically with each 

of these two strategic goals are charged or credited directly. 

Costs not directly attributable to these two goals, including 

costs related to the FTC’s third goal, Advance Performance, 

are allocated based on the percentage of direct full-time 

equivalents used by each of these two goals. 

NOTE 2—ENTITY AND NONENTITY ASSETS 

The FTC’s entity assets are comprised of undisbursed 

general funds, accounts receivable, and property, plant, and 

equipment. Accounts receivable, net, represents amounts 

due from other Federal agencies, current and former 

employees, and vendors. 

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

balances with Treasury, accounts receivable, and cash and 

other monetary assets. The fund balances with Treasury 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 51

consists of amounts held temporarily in deposit funds for 

the consumer redress program and collections of premerger 

filing fees held in clearing/suspense funds that will be 

transferred to the DOJ in a subsequent period. Cash and 

other monetary assets is cash held in financial institutions 

to meet current disbursement schedules for the consumer 

redress program. Accounts receivable, net, is the estimated 

amount collectible on consumer redress judgments and 

civil penalties.

The increase seen in deposit funds – consumer redress 

resulted primarily from the collection of three large 

judgements (Cephalon, AT&T, and TracFone) that await 

distribution to injured parties.

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

(Dollars in thousands) 2015 

Entity

2015 

Non-Entity

2015

Total

Intragovernmental:

Fund balance with Treasury:

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

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

Clearing/Suspense funds - premerger filing fees - 650 650 

Accounts receivable, net 65 - 65

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

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

Accounts receivable, net 74 14,074 14,148

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

Total Assets $ 201,725 $ 764,901 $ 966,626 

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 

Property, plant, and equipment, net 64,247 - 64,247 

Total Assets $ 197,044 $ 199,896 $ 396,940 
52 Federal Trade Commission • Fiscal Year 2015 • 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 unavailable balance is the result 

of recoveries that exceeded anticipated and apportioned 

amounts, the collection of fees ($18,638 thousand) above 

the authorized amount to spend in the current year and 

prior year, and $6,450 thousand of sequestered funds from 

FY 2013. 

Fund balance with Treasury consisted of the following as of September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Fund Balance with Treasury:

General funds $ 138,276 $ 132,737 

Deposit funds - consumer redress 729,804 105,091 

Clearing/suspense funds - premerger filing fees 650 615

Total Fund Balance with Treasury $ 868,730 $ 238,443 

Status of Fund Balance with Treasury:

Unobligated balance:

Available - apportioned $ 11,747 $ 23,893 

Unavailable - unapportioned 10,371 3,554 

Unavailable - temporary reduction 25,088 9,413 

Obligated balance not yet disbursed 91,070 95,877 

Non-budgetary fund balance with Treasury

Deposit funds - consumer redress 729,804 105,091 

Clearing/suspense funds - premerger filing fees 650 615 

Total Status of Fund Balance with Treasury $ 868,730 $ 238,443 

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 held 

in financial institutions necessary to cover current 

disbursement schedules in connection with the consumer 

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

Monetary Assets and Note 16, Consumer Redress 

Activities) 

Cash and other monetary assets consisted of the following as of September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Cash and Other Monetary Assets:

Consumer redress funds held in financial institutions $ 20,373 $ 28,797 

Total Cash and Other Monetary Assets $ 20,373 $ 28,797 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 53

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 and antitrust acts. Because of the nature of these 

receivables, they are frequently not fully collectible and 

are offset with a significant allowance. The allowance for 

uncollectible accounts is based on an analysis by a case 

manager who assesses the debtor’s ability and willingness 

to pay, the defendant’s payment record, and the probable 

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

statements along with an offsetting non-entity liability. 

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

(Dollars in thousands) Gross

Receivables 

 Allowance for

Uncollectible

Accounts 

 2015

Net 

 Entity Accounts Receivable: 

 Intragovernmental $ 65 $ - $ 65

 With the public 74 - 74 

 Total entity accounts receivable $ 139 $ - $ 139

 Non-Entity Accounts Receivable: 

 Consumer redress $ 1,579,257 $ 1,566,473 $ 12,784 

 Civil penalties 35,453 34,163 1,290 

 Total non-entity accounts receivable $ 1,614,710 $ 1,600,636 $ 14,074 

 Total Accounts Receivable $ 1,614,849 $ 1,600,636 $ 14,213 

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
54 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

NOTE 6—PROPERTY, PLANT, AND EQUIPMENT, NET 

The following represents the FTC’s capital assets and 

accumulated depreciation as of September 30, 2015 and 

2014. No impairment was recognized in either year. 

During FY 2015, software was discovered that should 

have been capitalized in FY 2012 for $1,072 thousand 

and in FY 2014 for $1,351 thousand and depreciated for 

$699 thousand for a total net increase of $1,724 thousand. 

Since this amount is not material to our FY 2014 or 

FY 2015 financial statements, the correction was made in 

FY 2015. 

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

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition

Value

Accumulated 

Depreciation /

Amortization

Net 

Book Value

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

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

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

Total Property, Plant, and Equipment $ 93,757 $ 30,447 $ 63,310 

Property, plant, 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 years $ 19,340 $ 3,157 $ 16,183 

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

Software 5 years 21,376 12,729 8,647 

Total Property, Plant, and Equipment $ 85,694 $ 21,447 $ 64,247 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 55

NOTE 7—LIABILITIES COVERED 

AND NOT COVERED BY 

BUDGETARY RESOURCES

The FTC recognizes three categories of liabilities 

described below:

Liabilities Covered by Budgetary Resources

Liabilities incurred that will be covered by available 

budgetary resources as of the Balance Sheet date. These 

include accounts payable for goods and services received, 

and accrued employee payroll and benefits payable.

Liabilities not Covered by Budgetary Resources

Liabilities incurred for which revenues or other sources of 

funds necessary to pay the liabilities have not been made 

available through Congressional appropriations or current 

earnings. These include unfunded FECA liabilities and 

accrued annual leave. 

Liabilities not Requiring Budgetary Resources

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

These include:

Undisbursed Premerger Filing Fees - the offsetting liability 

to the non-entity clearing/suspense fund balance for 

premerger fees that are payable to the DOJ in a subsequent 

period.

Accrued Civil Penalties due to Treasury - the offsetting 

liability to non-entity accounts receivable for civil 

penalties, net, that upon collection will be payable to the 

general fund of the Treasury.

Undisbursed Redress Collections - the offsetting liability to 

the non-entity deposit fund balance for consumer redress 

that is payable to approved claimants. 

Accrued Redress due to Claimants - the offsetting liability 

to the non-entity accounts receivable for consumer redress 

that upon collection will be payable to approved claimants.

Liabilities consisted of the following as of September 30, 2015 and 2014:

(Dollars in thousands)

2015 

Covered by 

Budgetary 

Resources

2015 

Not 

Covered by 

Budgetary 

Resources

2015 

Not 

Requiring 

Budgetary 

Resources

2015 

Total 

Liabilities

2014 

Covered by 

Budgetary 

Resources

2014 

Not 

Covered by 

Budgetary 

Resources

2014 

Not 

Requiring 

Budgetary 

Resources

2014 

Total 

Liabilities

Intragovernmental:

Accounts payable $ 1,118 $ - $ - $ 1,118 $ 823 $ - $ - $ 823 

Accrued employee benefits 1,098 - - 1,098 830 - - 830 

Other employment related 

liability - 3 - 3 - - - - 

FECA liability - 359 - 359 - 365 - 365 

Undisbursed premerger filing fees - - 650 650 - - 615 615 

Accrued civil penalties due to 

Treasury - - 1,290 1,290 - - 2,617 2,617 

Total intragovernmental liabilities $ 2,216 $ 362 $ 1,940 $ 4,518 $ 1,653 $ 365 $ 3,232 $ 5,250

Accounts payable 11,508 - - 11,508 10,805 - - 10,805

Reimbursable advances - - - - 45 - - 45 

Accrued payroll and benefits 4,898 - - 4,898 4,105 - - 4,105 

Accrued leave - 11,230 - 11,230 - 9,737 - 9,737 

Actuarial FECA - 2,013 - 2,013 - 2,202 - 2,202 

Undisbursed redress collections - - 750,177 750,177 - - 133,888 133,888 

Accrued redress due to claimants - - 12,784 12,784 - - 62,776 62,776 

Total liabilities $ 18,622 $ 13,605 $ 764,901 $ 797,128 $ 16,608 $ 12,304 $ 199,896 $ 228,808 
56 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

NOTE 8—OTHER LIABILITIES

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

(Dollars in thousands) 2015

Non-Current

2015

Current

2015

Total

Other intragovernmental:

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

FECA liability 359 - 359 

Undisbursed premerger filing fees - 650 650 

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

Subtotal other intragovernmental 359 3,041 3,400 

Accrued payroll and benefits - 4,898 4,898 

Accrued leave 11,230 - 11,230 

Actuarial FECA 2,013 - 2,013 

Subtotal other 13,243 4,898 18,141 

Total Other Liabilities $ 13,602 $ 7,939 $ 21,541 

Other liabilities consisted of the following as of September 30, 2014:

(Dollars 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
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 57

NOTE 9—OPERATING LEASES 

Leases of government and commercial property are made 

through and managed by the GSA. While the leases with 

the GSA are cancellable, the FTC’s intention is to stay 

in the GSA leased space and disclose the amounts that 

will be paid in the future to the GSA under signed lease 

agreements. The FTC has leases on three governmentowned properties and eight commercial properties totaling 

approximately 610 thousand square feet for use as offices, 

storage and parking. The FTC’s government leases expire 

at various dates through 2019, while the commercial leases 

expire at various dates through 2024. 

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

fiscal year ended September 30, 2015:

Fiscal Year

(Dollars in thousands)

2016 $ 6,741 

2017 6,722 

2018 6,680 

2019 6,349 

2020 - 

Thereafter - 

Total Future Minimum Lease Payments $ 26,492 

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

fiscal year ended September 30, 2015:

Fiscal Year 

(Dollars in thousands)

2016 $ 14,524 

2017 14,494 

2018 13,546

2019 14,052

2020 14,361 

Thereafter 48,083 

Total Future Minimum Lease Payments $ 119,060 

NOTE 10—COMMITMENTS AND 

CONTINGENCIES 

As of September 30, 2015, 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”.
58 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

NOTE 11—INTRAGOVERNMENTAL 

COSTS AND EXCHANGE REVENUES

The Statement of Net Cost presents the FTC’s costs 

and exchange revenues for its two major strategic goals. 

The costs and exchange revenues reported can be further 

classified as either “intragovernmental” or “public”. 

Intragovernmental costs and exchange revenues arise from 

transactions with another Federal entity, whereas, public 

costs and exchange revenues arise from transactions with 

non-Federal entities. 

A small portion of the FTC’s overall exchange revenue is 

intragovernmental arising from services provided to other 

Federal agencies under interagency agreements. The FTC 

bills the buying agency to recover the full cost of services, 

primarily salaries, and recognizes the revenue at the time 

expenditures are incurred. 

The bulk of the FTC’s exchange revenue is “public” and 

derived from two primary sources:

Fees collected for premerger notification filings under 

the HSR Act - The HSR Act requires the filing of 

premerger notifications with the FTC and the Antitrust 

Division of the DOJ and establishes a waiting period 

before certain acquisitions may be consummated. The 

filing fees are determined by the value and size of the 

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

filing fees collected, and remits one-half to the DOJ’s 

Antitrust Division. 

Subscription fees collected for the National Do Not 

Call Registry - The Do Not Call (DNC) Registry Fee 

Extension Act of 2007, which amended the Do Not Call 

Implementation Act, established a permanent fee structure 

for the DNC registry and provided that fees be reviewed 

annually and adjusted for inflation, as appropriate. 

Telemarketers must pay an annual subscription fee and 

download a list of telephone numbers of consumers who 

do not wish to receive calls. Fees are based on the number 

of area codes downloaded. The FTC recognizes the revenue 

when collected and the telemarketer is given access to the 

requested data. 

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

September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Strategic Goal 1: Protect Consumers

Intragovernmental gross costs $ 46,068 $ 62,467 

Public costs 137,400 108,027

Gross costs, Protect Consumers 183,468 170,494

Intragovernmental earned revenue - reimbursements (133) (3)

Public earned revenue - Do Not Call registry fees (13,325) (13,518)

Earned revenue, Protect Consumers (13,458) (13,521)

Net Cost, Protect Consumers $ 170,010 $ 156,973 

Strategic Goal 2: Maintain Competition

Intragovernmental gross costs $ 33,223 $ 45,608 

Public costs 99,089 78,871 

Gross costs, Maintain Competition 132,312 124,479

Intragovernmental earned revenue - reimbursements (136) (214)

Public earned revenue - premerger filing fees (115,678) (106,263)

Earned revenue, Maintain Competition (115,814) (106,477)

Net Cost, Maintain Competition $ 16,498 $ 18,002 

Net Cost of Operations $ 186,508 $ 174,975 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 59

NOTE 12—APPORTIONMENT CATEGORIES OF OBLIGATIONS 

INCURRED: DIRECT VS. REIMBURSABLE OBLIGATIONS 

Obligations incurred consisted of the following for the fiscal years ended September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Obligations Incurred:

Category A - direct obligations $ 302,093 $ 316,054

Category B - direct obligations 2,917 17,840

Category B - reimbursable obligations 284 244 

Total Obligations Incurred $ 305,294 $ 334,138

Category A – direct obligations represent amounts 

obligated in carrying out the FTC’s normal on-going 

operations. The source of funding for these obligations 

is an annual appropriation, offsetting collections, and 

unobligated funds brought forward from previous years. 

These funds are made available by the OMB through 

quarterly (Category A) apportionments.

Category B – direct obligations represent amounts 

obligated for space replacement and the relocation of 

the FTC staff. 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 the FTC is the provider of services. The source of 

funding for these obligations is reimbursements collected 

from other Federal agencies to cover the FTC’s costs in 

fulfilling the agreement.

NOTE 13—EXPLANATION OF 

DIFFERENCES BETWEEN THE 

STATEMENT OF BUDGETARY 

RESOURCES AND THE BUDGET 

OF THE UNITED STATES 

GOVERNMENT 

There are no material differences between amounts 

reported in the fiscal year 2014 Statement of Budgetary 

Resources and the fiscal year 2014 actual amounts as 

reported in the fiscal year 2016 Budget of the United States 

Government. The fiscal year 2017 Budget of the United 

States is not available to compare fiscal year 2015 actual 

amounts to the fiscal year 2015 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, 2015 and 2014, is 

$73,021 and $80,059 thousand, respectively. 
60 Federal Trade Commission • Fiscal Year 2015 • 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 

2015 and fiscal year 2014, the FTC collected $231,356 

and $212,526 thousand respectively, in HSR premerger 

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

was distributed to the DOJ, as shown on the Statement 

of Custodial Activity. Undistributed fees to the DOJ 

at September 30, 2015 and 2014 were $650 and $615 

thousand respectively.

Civil Penalties 

Civil monetary penalties and antitrust violations collected 

in connection with the settlement or litigation of the 

FTC’s administrative or Federal court cases are collected 

by either the FTC or the DOJ as provided by law. In 

those situations where the FTC collects the penalties, the 

funds are deposited in a receipt account with the Treasury. 

Civil penalties collected also include amounts collected 

for undecided civil penalty cases that are held until final 

disposition of the case. All civil penalties collected are 

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

the year.

Consumer Redress 

Collections for consumer redress reported on the Statement 

of Custodial Activity are limited to those collections that 

have been disgorged to the Treasury. Collections disgorged 

to the Treasury were $21,081 and $16,157 thousand as of 

September 30, 2015 and 2014 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.

Amounts Yet to be Transferred 

Amounts yet to be transferred represents the change in the 

offsetting liability for civil penalties due to Treasury that 

is established at the time an accounts receivable for civil 

penalties is recorded.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 61

NOTE 16—CONSUMER REDRESS ACTIVITIES 

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

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

where consumer redress is not practicable, the funds are transferred (disgorged) to the Treasury, or on occasion, used for 

consumer education or another purpose as directed by the final order issued by the court. Major components of the redress 

program include eligibility determination, claimant notification, and administration of redress to claimants. 

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

If redress is determined to be practicable, funds needed to cover immediate disbursements to injured parties are transferred 

to accounts at financial institutions from which redress third party administrators process claims and disburse proceeds 

to claimants.

Redress fund activities consisted of the following for the fiscal years ended September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Consumer Redress:

Fund Balance with Treasury

Beginning balance $ 105,091 $ 47,609

Collections 707,410 124,376

Disbursements to claimants, net - (69)

Disgorgements to Treasury (21,081) (16,157)

Transfers, expenses, refunds (61,616) (50,668)

Total Fund Balance with Treasury, Ending $ 729,804 $ 105,091 

Cash and Other Monetary Assets

Beginning balance $ 28,797 $ 18,239

Disbursements to claimants, net (49,823) (38,512)

Transfers, expenses, interest income 41,399 49,070 

Total Cash and Other Monetary Assets, Ending $ 20,373 $ 28,797

Accounts Receivable, Net

Beginning balance $ 62,776 $ 23,693 

Net activity (49,992) 39,083

Total Accounts Receivable, Ending $ 12,784 $ 62,776 
62 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

NOTE 17 — RECONCILIATION OF NET COST OF OPERATIONS TO 

BUDGET

For the fiscal years ended September 30, 2015 and 2014:

(Dollars in thousands) 2015 2014

Resources Used to Finance Activities:

Budgetary resources obligated:

 Obligations incurred $ 305,294 $ 334,138

 Less: spending authority from offsetting collections and recoveries (135,968) (126,206)

Total budgetary resources obligated 169,326 207,932 

Other resources:

 Imputed financing from costs absorbed by others 8,199 9,434

Total other resources 8,199 9,434 

Total Resources Used to Finance Activities $ 177,525 $ 217,366 

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

 Change in budgetary resources obligated, but not yet provided $ 6,765 $ 1,552

 Resources that finance the acquisition of assets (8,062) (46,691)

Total resources used to finance items not part of the net cost of operations (1,297) (45,139)

Total Resources Used to Finance the Net Cost of Operations $ 176,228 $ 172,227

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 $ 1,493 $ (1,648)

 Other (213) (90) 

Total components requiring or generating resources in future period 1,280 (1,738)

Components not requiring or generating resources:

 Depreciation and amortization 9,000 3,738 

 Losses on disposition of assets - other - 748

Total components not requiring or generating resources 9,000 4,486 

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

Generate Resources in the Current Period: $ 10,280 $ 2,748

Net Cost of Operations $ 186,508 $ 174,975 
FEDERAL TRADE COMMISSION

OTHER INFORMATION
64 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

INSPECTOR GENERAL-IDENTIFIED MANAGEMENT AND 

PERFORMANCE CHALLENGES

1

October 15, 2015

MEMORANDUM 

TO: Edith Ramirez 

Chairwoman, Federal Trade Commission 

FROM: Roslyn A. Mazer

Inspector General 

SUBJECT: FY 2015 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 identify the following as the most significant management challenges facing the FTC: 

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

or Compromise 

2. Maturing the Agency’s Information Technology Governance Process 

3. Improving Contract Management 

4. Stabilizing the Agency’s eDiscovery Support System 

5. Ensuring Compliance with Digital Records Management Requirements

Some of these are enduring challenges requiring leadership’s continued attention. Others are a 

priority at this time in the agency’s development, but may become a less pressing priority in the 

future. The FTC has made progress in addressing each of these challenges in FY 2015.

The attached document provides the analysis and justification 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 leadership’s ongoing support for the OIG’s independent mission, and we will 

continue to work with you in addressing these and other challenges the FTC faces in achieving its 

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Office of Inspector General
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2

vital mission. As the FTC continues to focus energy and resources on addressing these challenges, 

it will significantly enhance its performance and success. 

Attachment 1
66 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

3

Office of Inspector General

Top Management Challenges at the Federal Trade Commission

October 15, 2015

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

or Compromise 

Protecting information assets is an ongoing and complex challenge for the Federal Trade 

Commission (FTC). The challenge is exacerbated by the increasing volume and scope of 

information provided to the FTC on both a voluntary and compulsory basis. The FTC cannot 

effectively complete its missions if it loses the confidence of industry and the public that it can 

protect the trade secrets and other sensitive non-public information entrusted to its care.

The FTC Office of Inspector General (OIG) assists by assessing FTC information control 

procedures including conducting the annual Federal Information Security Management Act

(FISMA) effectiveness assessment of FTC information security and privacy programs. These 

assessments provide FTC management with an independent, high-level determination of the 

FTC’s ability to protect its information assets; the capability of the FTC to securely and cost 

effectively acquire, implement, and manage modern technologies; and maintain the skilled

workforce necessary to securely use technology to complete their responsibilities. In the 

FISMA assessments, the OIG determined that the FTC has robust privacy and information 

security programs that are in substantial compliance with FISMA and legislative requirements, 

government-wide policy, and technical guidance. The FTC can adequately protect its 

information assets and has done so while addressing organizational and technological changes, 

including modernization of the FTC infrastructure.

However, the OIG Fiscal Year (FY) 2014 FISMA evaluation underscores the need for the FTC to 

maintain information privacy and security programs that are continuously evolving and maturing. 

Recognizing the critical need for flexible, robust, and monitored information security control 

environments, the Office of Management and Budget (OMB) and the National Institute of 

Standards and Technology (NIST) revised federal security guidance to allow Departments and 

Agencies (D/A) to tailor information protection solutions to their organizational needs and 

missions. While the OMB and NIST guidance now allows D/A greater flexibility, this flexibility 

comes with a price: D/A managers must establish and maintain clear practices for planning, 

acquiring, implementing, maintaining, monitoring, and protecting its information technology 

assets, including hardware, software, and information.

In its FY 2014 FISMA report, the OIG identified the need for improvement in FTC planning and 

management of its information technologies. As a primary area for improvement, the OIG’s FY 

2014 FISMA evaluation highlights current deficiencies in FTC risk assessment and management. 

These techniques are used to identify vulnerabilities and develop the safeguards and 

countermeasures the FTC needs to deploy to avoid or minimize risk to its systems, operations, and 
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data. Weak Information Technology (IT) planning and management can result in inaccurate or 

delayed risk assessments and risk management, which ultimately results in increased potential for 

loss and mission failure. The evaluation questions if the FTC is equipped to perform risk 

management that keeps pace with the rate of technological change. The findings focus on 

enterprise-level issues, recommending that the FTC’s Information Technology governance 

procedures develop into more mature enterprise risk management capabilities, including a clear 

focus on management of information risk associated with its investments. Developing more 

mature information processes will ensure that 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 Office of the Chief Information Officer (OCIO) is working on a number of information 

technology initiatives that will protect the agency’s networks, systems, and data from compromise 

and loss.

In compliance with FISMA, the OCIO implemented the Cyber Security Assessment and 

Management (CSAM) tool managed by Department of Justice. CSAM provides OCIO with a 

mechanism for managing FISMA compliance by: 1) providing centralized and up-to-date 

information, checklists, analysis, and tracking capabilities; 2) ensuring efficient and effective 

management of vital resources and data; 3) ensuring best practices and that resources are 

accessible to assess and manage risks and vulnerabilities across the organization; and 

4) supporting Certification and Accreditation (C&A) of FTC’s network and mission systems. The 

CSAM tool allows the OCIO to more readily access information about its systems that will in turn 

allow for better planning and FISMA compliance across the enterprise. It will also afford the 

OCIO better visibility into the status of critical security artifacts and documents.

To further improve the agency’s risk management posture and ensure FTC systems are secure and 

protected from external threats, the OCIO, in conjunction with the Chief Privacy Officer (CPO) 

staff, is working to improve the agency’s Information Security Continuous Monitoring (ISCM) 

program through implementation of a vulnerability risk management (VRM) process. The 

objective of this initiative is to increase awareness and improve management of internal security 

risks by formalizing a more streamlined process through which risk can be identified, evaluated, 

documented, remediated, and easily understood by critical actors throughout the agency. Once 

fully implemented, this standardized approach to risk management will give all agency senior 

officials an immediate understanding of the risk posture of the agency. The outputs of the VRM 

process will be used to fine-tune the agency’s Continuous Diagnostics and Mitigation (CDM) 

process. 

Also in FY 2015, the OCIO staff, working in tandem with the Department of Homeland Security 

(DHS) and in coordination with representatives from throughout the agency, determined which 

agency systems require increased redundancy and resiliency. Base on this work, a draft business 

impact assessment has been submitted for management review. As part of this assessment, the 

OCIO will ensure that any disaster recovery or redundancy solution is secure and protected against 
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5

attacks and malicious activities, especially those systems that process or store personally

identifiable information (PII) or other sensitive data.

To further improve the agency’s ability to manage enterprise risk, the OCIO collaborated with IT 

Business Council and the IT Governance Board to update the agency’s IT governance program, 

incorporating risk management into the IT investment approval process. The OCIO updated the 

business case template for proposed IT investments to include a risk analysis and risk mitigation 

plan. Specifically, proponents of various IT investments are required to detail risks in areas such 

as cost, schedule, and business impact and provide a mitigation strategy for each risk. They are 

also required to identify the specific risks associated with privacy and security implicated by the 

proposed investment, including whether the proposed software or hardware will house PII or 

poses the potential for a loss of data. The OCIO also updated the IT governance program charter 

to require IT investment business cases and Board review for investments deemed “high-risk” or 

“high-impact to business operations,” regardless of the cost of the investment.

Other recent OCIO initiatives address security challenges by increasing the security of networks 

and systems FTC staff use daily to prevent data loss and unauthorized access to sensitive 

information. For example, the OCIO improved its secondary storage environment to provide 

additional security for offsite backup storage and reduce the risk of data loss. As part of this 

initiative, the OCIO transitioned all backup data to a secondary, backup disk storage network, 

located at the Commission’s auxiliary data center. This new backup storage system is less 

susceptible to failure and provides the Commission with a more secure and more reliable form of 

backup data storage. 

The OCIO is currently working with the Bureau of Economics to implement more robust data 

monitoring and logging in the Secure Investigative Lab (SIL) environment. The SIL houses some 

of the Commission’s most sensitive data, including PII and Sensitive Health Information (SHI) 

used in economic analysis in support of investigations and litigation. To detect and reduce the risk 

of data exfiltration and loss, the OCIO developed a comprehensive logging, auditing, and 

notification process, which monitors the modification and movement of any data. This process 

provides the Bureau of Economics and the OCIO with an audit trail for the loss of sensitive data 

or unauthorized access or modification to PII and SHI.

As part of its enterprise risk management efforts, the OCIO actively evaluates the inventory of IT 

software and hardware to determine which products are high-risk for the agency. This includes 

working to replace and upgrade aging infrastructure components and software to decrease the 

overall number of vulnerabilities in the environment and risk of failure. In FY 2015, OCIO began 

multiple projects to replace unsupported products, such as the replacement of the network 

infrastructure at the Commission’s Headquarters building, the upgrade of software and operating 

systems, such as Microsoft SQL Server and BMC Remedy IT Service Management, and the 

decommission or migration of applications built on unsupported platforms, such as Microsoft 

Windows Server 2003. Additionally, the OCIO replaced the agency’s mobile device management 

(MDM) software with a new platform that provides continuous monitoring and FISMA 2.0 

compliance enforcement, restricts access to authorized agency employees, and enhances security 

controls for the Commission’s mobile devices. Additionally, the new MDM decreases the threat 
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6

of compromise or data exfiltration by preventing the installation of unauthorized applications.

In addition to securing individual systems, the OCIO is working to improve the Commission’s 

overall IT security posture enterprise-wide. The OCIO continues to use tools and techniques to 

monitor events, detect attacks, and provide identification of unauthorized use of the system. These 

tools and techniques include, but are not limited to, intrusion detection systems, intrusion 

prevention systems, malicious code protection software, audit record monitoring software, and 

network monitoring software. The OCIO actively monitors all inbound and outbound 

communications that occur over networks external to the FTC, including publicly available 

systems, for unusual or unauthorized activities or conditions (e.g., the presence of malicious code, 

the unauthorized export of data, or signaling). 

The OCIO monitors information systems daily and audits monthly for unauthorized remote 

connections, and takes the appropriate action if they discover an unauthorized connection. The 

OCIO uses cryptography to protect the confidentiality and integrity of remote access sessions and 

routes all remote access through a limited number of managed access control points and protects 

wireless access via authentication and encryption.

Finally, to continue to improve overall IT security, the OCIO has engaged with the DHS to 

implement its government-wide Continuous Monitoring Dashboard. The OCIO is also working 

with the DHS to implement the EINSTEIN 3 (E3A) Program. EINSTEIN 3 is an advanced 

intrusion prevention system that detects malicious traffic targeting the FTC’s networks and 

prevents that malicious traffic from harming FTC networks. The system provides greater 

analytical tools and historical data to allow agencies to better analyze trends in vulnerabilities and 

attacks. Additionally, the system provides enhanced real-time alerts to allow the agency to 

respond to an event faster and more effectively.

2. Maturing the Agency’s Information Technology Governance Process 

As evidenced by the number of reports issued by the Government Accountability Office (GAO), 

OMB, and agency Inspectors General, effective governance of IT investments is a weakness 

throughout the federal government. The weaknesses are typically in planning and monitoring IT 

investments as they move from conception through development to operations and maintenance. 

The weaknesses result in systems/projects that are not delivered when required, often exceed cost 

projections, and fail to deliver specified reliability, performance, and security. Systems that 

perform as required, are reliable, and protect information assets are critical to the FTC.

The FTC has a number of responsibilities related to protecting consumers, including advocating 

for protection of consumer information and consumer privacy. For example, filing with the FTC is 

a legal requirement for most mergers and acquisitions, and the agency hosts a national repository 

of consumer complaints. The scope and impact of FTC activities leaves the general public with an 

outsized perception of the size of Commission. The FTC is dependent on the reliability and 

integrity of its information systems to complete its missions and protect its information assets. 

Consequently, the FTC is dependent on the quality of its investment analysis and IT governance 
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7

practices to ensure that its workforce has the information management and analysis capabilities it 

needs.

At the end of FY 2011, the FTC chartered IT governance boards to improve the planning, 

monitoring, and risk mitigation associated with its information systems. In FY 2012, the agency 

adopted its new governance structure and improvements commenced. While the governance 

structure was an improvement, its focus was on the management of the investment and not on 

management of risk associated with those investments. For example, an investment of less than 

$500,000 would not be subject to governance board procedure, regardless of the potential loss that 

the FTC might experience should there be a security breach. 

As part of the agency’s annual FISMA evaluations, the OIG reviews governance board activities 

to assess progress toward a mature planning and oversight structure. Our assessments showed that 

the FTC is continually improving its governance practices. For example, investment risk was 

elevated as a criterion for determining whether an investment/project is subject to governance 

board review and oversight. Under current procedures, an investment/project with a high risk of 

an adverse impact from a security breach is subject to governance board oversight, regardless of 

cost. Further, the agency now identifies reputational risk as a critical potential impact from system 

failure. 

In our FY 2013 and FY 2014 FISMA reports, the OIG issued recommendations for improving and 

maturing the FTC governance processes. The FTC and its Office of the Chief Information Officer 

(OCIO) are addressing all OIG recommendations. The OCIO requires all bureaus and offices to 

submit business cases for new or significant changes to IT investments for development, 

modernization, or enhancement whose lifetime cost exceeds a certain threshold, as well as highimpact and high-risk investments. However, documentation still does not consistently capture the 

rationale behind a decision, anticipated completion impediments and risks, and risk mitigation 

strategies. Significantly, FTC risk management still focuses on individual investments and not the 

enterprise analysis contained in NIST guidance; and OMB and the Department of Homeland 

Security now require an assessment of the maturity of continuous monitoring practices in 

accordance with the maturity model promulgated by the Council of the Inspectors General on 

Integrity and Efficiency (CIGIE).

In FY 2016, the OIG will complete an assessment of the FTC IT governance structure to 

determine whether practices have sufficiently matured to effectively address investment and risk 

management challenges; challenges resulting from a need to provide the FTC workforce with new

technologies and techniques that improve their ability to complete their missions while containing 

costs and protecting FTC information assets; and whether FTC continuous monitoring practices 

are addressing the CIGIE maturity model. 

Agency Progress in Addressing the Challenge

The OCIO, in conjunction with agency leadership, made steps toward maturing the agency’s IT 

governance process during fiscal year 2015. The OCIO collaborated with the chair of the 

Technology Council (now the IT Business Council) to develop an updated governance program 
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8

charter. In the updated charter, the roles and responsibilities of the governing bodies – the IT

Council, IT Business Council, and IT Governance Board – were better defined. The criteria for IT 

investments included in the new charter now require all investments considered “high-risk” and 

“high-impact” to be reviewed and approved via the IT governance program, regardless of 

investment amount. The business case analysis template was updated, as well, to better address 

risk, security, and privacy concerns. The investment business case must now include potential 

risks and mitigation, security considerations, and whether the investment will involve personally 

identifiable information (PII) or other sensitive data. Additionally, business cases must receive 

written concurrence from the Chief Privacy Officer (CPO) and the Chief Information Security 

Officer (CISO). Once the charter and business case analysis templates were finalized, the new 

process was used to develop, review, analyze, and approve 16 business cases for IT investments, 

including investments in business system enhancements, a new acquisition management system, 

and replacing end-of-life network and server components. 

After the FY 2015 investment cycle was completed, the governance program focused on the 

execution and control of approved investments. A new process was implemented to regularly 

review the status of current investments at all levels of the governance program. Part of this 

process included the implementation of Tech Stat briefings to both the Business Council and the 

Governance Board on large-scale, mission critical IT projects, such as the eDiscovery Support 

System and the rebuild of SAFE. Through the Tech Stat process, the governing bodies are able to

have visibility into variances in cost and schedule, technical challenges, and project risk. 

The OCIO continues to make improvements to the governance process in preparation for fiscal 

year 2016. The OCIO worked with all organizations across the FTC to build a portfolio of 

potential investments for FY 2016 and issued guidance to the organizations on which investments 

would require a business case and how to build the business case. In the future, OCIO will 

continue to review the IT governance process and recommend changes to better align the process 

with the budget cycle, integrate privacy and security, and provide increased control and oversight 

over investments regardless of cost, as well as operational spending and enterprise-wide portfolio 

analysis. The OCIO is also working with the governance members to build a repeatable and 

quantitative process for prioritizing and approving investments. This process would assist the 

governing bodies in determining the relative priority of an investment based on alignment with the 

FTC’s strategic plan, investment criticality, and risk. 

3. Improving Contract Management 

During FY 2014, the FTC obligated $104.9 million – about one-third of its operating budget – on

contracts for goods and services. Contractors assist with the deployment, operation, and 

maintenance of consumer databases and provide webhosting services. The FTC also has contracts 

for legal research tools and with software providers. In FY 2014, the highest dollar value contracts 

were for network infrastructure support ($3.8 million), expert witness services ($2.4 million), and 

telecommunication services ($2.2 million).

The FTC faces challenges with aspects of its contract management system, particularly with the 

Acquisition Branch’s guidance and oversight, execution of sound contracting techniques and 
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9

approaches, and the agency’s current procurement application. OIG reviews also show that the 

FTC faces challenges in retaining and managing a fully competent agency cadre of Contracting 

Officers (COs) and Contracting Officer’s Representatives (CORs). Some CORs lack general 

knowledge of the procurement process and are unaware of the most appropriate contract vehicle. 

CORs also have difficulty gathering and drafting requirements for contract solicitations, including 

proper performance metrics that measure progress toward satisfaction of contract objectives, and 

addressing poor contractor performance. Consequentially, the FTC risks poor contractor 

performance; losing money on unnecessary or poorly written contracts; and costly contract 

modifications and other adverse consequences from contracts that are not adequately written and 

deficient products and services delivered. 

Significant turnover in the staff responsible for administering, supporting, and overseeing the 

agency’s acquisition program has disrupted the contract management process. For example, in FY 

2015, two veteran COs departed; and the FTC hired a new Chief Acquisition Officer, four new 

COs, and a new vendor to provide contract management support. While staffing changes can 

introduce opportunities for improvements in process and program re-design, the staff “churn” 

experienced at the FTC poses operational risks due to lack of program continuity and consistency. 

This risk is particularly evident for CORs, who collaborate with COs during the requisition, 

contract award, and contract administration processes. Different COs may have different 

interpretations of the Federal Acquisition Regulations (FAR) and the COR role in monitoring 

contract performance. The absence of clear and timely communication of procedures, practices, 

and roles can result in inconsistent and ineffective contract management. Further complicating the 

contract management challenge is that the contract administration support application is not 

integrated with FTC’s financial system and does not provide contract funding or status visibility 

to the COR or CO. Without such capabilities, FTC contract administration staff must manually 

track significant contract events such as period of performance warning and end dates, and 

funding status and “burn rates.” 

To address this challenge, in FY 2016, the FTC will begin a multi-year process to fully integrate 

its procurement and financial systems. The new system is intended to integrate the FTC’s

acquisition and financial systems to provide improved data transparency and help the agency 

realize its Strategic Plan Objective 3.1, to “optimize resource management and infrastructure.” 

Successfully updating agency processes, policies and guidance for the new system and training 

staff in effective use of the expanded capabilities will be an ongoing challenge.

Agency Progress in Addressing the Challenge

While the FTC has had significant turnover in contracting staff and support in FY 2015, the 

Financial Management Office (FMO) has been working diligently to improve the agency’s 

procurement program. Under its new leadership, FMO’s Acquisitions Branch is rebuilding and 

specifically directing its efforts to delivering clear and consistent guidance and advice and more 

robust customer support through: 1) improved COR education; 2) improved management controls 

in, and the restructuring of, the Acquisitions Branch; 3) revised policy and procedures; and 

4) implementation of an electronic contract life cycle support system.
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For example, Contracting Officer Representative (COR) education is a priority for both FMO

management and the Chief Acquisitions Officer (CAO). FMO hosted required COR training in

July 2015 and will provide quarterly training going forward. Training topics will address current

COR needs and be directed towards maturing the FTC COR community’s knowledge base. Easy

to access COR resources are being developed on key procurement business processes, similar to

the resources that FMO provided on expert witnesses in 2014. FMO is committed to tracking

COR information manually until the Contract Lifecycle Module (CLM), discussed more fully

below, is online in FY 2016. CLM will allow COR information to be electronically updated and

will provide reports of current CORs.

The new CAO has built considerable structure around the contract file documentation and award

review processes, ensuring a level of consistency and that staff are held accountable to all

appropriate FAR standards. In FY 2015, the Acquisitions branch was restructured into three

teams, focused around key customers – the Administrative Services Office, the Office of the Chief

Information Officer, and the Bureaus and Offices, with a separate dedicated Contracting Officer to

support contracts for expert witnesses. Team leads and their colleagues meet weekly with their

customers so that there is a constant, free-flow of information throughout the procurement

process. Additionally, the Acquisitions Branch is contracting with an acquisition support provider

to provide liaisons to each of its major customers. The liaisons will provide guidance on the

acquisition process; ensure proper documents necessary for contracting are in place; assist

customers with initiating contract actions; and usher the acquisition through the process so that

both the Acquisitions Branch and the customer maintain visibility and confidence throughout the

entire process. This too should help increase COR confidence in, and knowledge about, the

acquisition process.

The CAO has directed a review of all policy and that new policies and procedures consistent with

the latest FAR provisions and other relevant federal regulations be drafted as required. When

completed, the Acquisitions Branch will have standardized policies and procedures that will

govern and simplify contracting actions for all contracting officers and CORs. This

standardization will give consistency to all acquisition actions, which in turn will make operations

more efficient and ensure compliance with federal regulations and guidance. The CAO also

conducted a thorough review of all staff performance objectives to ensure that required annual

training is completed and staff obtains additional professional development opportunities to stay

current and to improve their overall acquisition knowledge and performance.

As noted above, the FTC is working with the agency’s shared service provider, IBC, to implement

a contract lifecycle management module for FTC’s financial system. CLM will greatly improve

the way the FTC buys goods and services, routes requisitions, and administers and reports contract

information. It will provide much needed visibility to CORs into the funding status of their

contracts. A dedicated project manager will work with FMO, IBC, and agency stakeholders to

help manage CLM’s implementation and document needed business process changes. FMO will

also obtain a third party, independent verification and validation of CLM’s implementation to

ensure that it meets FTC’s requirements. Finally, FMO has assembled an agency-wide workgroup

to help update business processes, gather requirements, and train others. The workgroup,
74 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

11

composed of agency employees familiar with submitting requisitions and the acquisitions process, 

is poised to help ensure a smooth and positive transition to the new system.

The above-noted changes have taken time to put in place, and while a number of these efforts are 

still ongoing, now that the branch is right-sized, customer-focused, and providing more consistent 

guidance, we are confident that the agency’ procurement program is positioned for success.

4. Stabilizing the Agency’s eDiscovery Support System 

The FTC maintains a litigation support platform that functions as an eDiscovery Support System 

(eDSS) for legal processing and legal review. Through a contract award in 2012, the eDSS was 

intended to enable the FTC’s two litigating Bureaus – Competition and Consumer Protection –

and the FTC’s eight remote Regional Offices to store, process, review, and tag large sets of data 

for its cases. Competition case teams use the platform in their litigation efforts challenging 

mergers and acquisitions and anticompetitive conduct. Consumer protection case teams use the 

eDSS to support enforcement of federal consumer protection laws. 

The eDSS was not effectively integrated into the FTC technical infrastructure and FTC business 

practices. As a result, it has experienced significant management and technical deficiencies, 

including cost overruns and persistent system latency. The persistent technical issues impede 

users’ ability to rely upon the platform to move between documents or retrieve data – all critical 

requirements in deadline-driven litigation. 

The eDSS challenges are complicated by the FTC’s inability to perform basic troubleshooting and 

root cause analyses. For example, the lack of appropriate technical tools and lack of understanding 

of concurrent processing and system logging restrict the FTC from effectively evaluating 

workload impacts due to difficulties in determining the number of concurrent users. Echoing other 

management challenges the OIG identified this year, there is no formal process for problem 

follow-up, monitoring the aging of trouble reports, or oversight of actions taken and/or required to 

assess and resolve the eDSS problems.

The eDSS was intended to replace six obsolete legacy systems, process four terabytes of data daily 

(Bureau cases can each require a range of 300 GB to 4 TB of storage), and permit access for 150 

concurrent-license users. Due to persistent outages and functionality issues, these objectives have 

not been achieved after three years of contract performance. FTC litigation teams have adapted as 

best they can to continue to bring successful cases. 

Stabilizing the eDSS is essential to enabling the FTC to accomplish its competition and consumer 

protection missions. The FTC needs to support “big data” analyses, especially as the volume of 

data that must be processed continues to increase and analytical approaches become more 

complex. In FY 2016, the OIG will complete an evaluation of the root causes of the eDSS 

performance and management issues. The evaluation will contain recommendations to mitigate 

performance risk with the current eDSS platform and to prevent similar occurrences in future 

efforts to modernize and enhance the FTC technological case and data analysis capabilities.
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Agency Progress in Addressing the Challenge

The OCIO is actively working on improving the performance and stability of the eDiscovery 

Support System (also known as EDSS). After continued performance issues in June 2015, OCIO 

prepared an after-action report (AAR) documenting lessons learned, root cause analysis, and 

recommendations for future improvements. The AAR will be presented to the IT Governance 

Board in October 2015 for review and approval of the recommended course of action. The 

recommended course of action includes increasing resources to support the application, 

implementing better performance monitoring and issue tracking, and streamlining the acceptance 

testing process to decrease the time and effort needed to perform upgrades and software patches 

needed to fix code errors and security vulnerabilities (hotfixes). The additional resources 

requested will provide OCIO with the expertise needed to troubleshoot performance problems, 

perform timely upgrades and patches, and implement necessary changes to the configuration to 

improve performance and functionality.

The move to implement timely upgrades and patches are critical to improving EDSS’s 

performance. These upgrades are critical to ensuring errors or bugs in the application code are 

fixed before causing major performance degradation. To streamline the process for implementing 

upgrades and hotfixes, the OCIO is recommending moving the development and acceptance test 

functions for EDSS to a testing platform in the production environment. This will provide a 

dedicated development and testing environment without the constant configuration changes in the 

standard development and testing environment, which will lead to faster deployment of bug fixes 

and patches. The OCIO is also proposing, as part of the AAR, a service-level agreement to require 

implementing hotfixes 14 calendar days after release and upgrades 30 calendar days after release 

of the first service pack.

As the OCIO continues to troubleshoot and make improvements to the EDSS application and the 

underlying infrastructure, system performance will be closely monitored to validate whether the 

configuration changes are actually improving performance. In support of monitoring, OCIO will 

conduct an overall analysis review of the As-Is environment for EDSS, document configuration 

baselines, and establish performance benchmarks for future EDSS updates. Additionally, the 

OCIO will define infrastructure performance metrics for a number of parameters to include server 

and network utilization. This will assist the OCIO in further determining whether performance 

issues arise from the application or the infrastructure.

Looking toward the future, the OCIO will begin an analysis of alternatives for the EDSS

application to begin preparation for the expiration of the EDSS contract in FY 2017. As part of 

this alternative analysis, the OCIO and business owners in the bureaus will analyze alternative 

applications, including externally hosted solutions, and determine whether EDSS is still the best 

option for the agency’s current and future litigation support, eDiscovery, and “big data” 

requirements. 
76 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

13

5. Ensuring Compliance with Digital Records Management Requirements 

In November 2011, the President signed a Presidential Memorandum, Managing Government 

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

practices. In August 2012, OMB and the National Archives and Records Administration (NARA) 

issued a “Managing Government Records Directive” that requires “to the fullest extent possible, 

[federal] agencies eliminate paper and use electronic recordkeeping.” We must address these 

challenges while using the opportunity to develop a 21st-century framework for the management 

of Government records.

The OMB/NARA Directive requires federal agencies to make several changes in records 

management processes. The Directive states: “By December 31, 2016, Federal agencies must 

manage all email records in an electronic format. Email records must be retained in an appropriate 

electronic system that supports records management and litigation requirements (which may 

include preservation-in-place models), including the capability to identify, retrieve, and retain the 

records for as long as they are needed. Beginning one year after issuance of this Directive, each 

agency must report annually to OMB and NARA the status of its progress toward this goal.” The 

Directive also states: “By December 31, 2019, all permanent electronic records in Federal 

agencies will be managed electronically to the fullest extent possible for eventual transfer and 

accessioning by NARA in an electronic format.”

The Directive has significant implications for FTC operations. It requires a shift from paper to 

digital records wherever possible, and to provide appropriate training to FTC staff. The FTC will 

need to reconsider its records organizations procedures from the authoring and creation of records; 

to the methods and tools used to acquire, store, track, and retrieve them; and, finally, to their 

disposal.

The FTC Congressional Budget Justifications for FY 2015 and FY 2016 set forth the same 

strategies for an FTC transition to electronic information resource management: “(1) Developing 

an agency-wide information governance policy that provides enterprise-level standards for file 

structures for organizing information, mandatory and optional metadata (searchable information 

about the document), document naming conventions, access restrictions, and retention rules and 

triggers. (2) Implementing an Enterprise Content Management System (ECMS) that staff will use 

to draft, collaborate on, and finalize work, including consumer protection and competition case

filings. The ECMS will enable us to maintain agency records in a secure electronic format for the 

required retention period and to transfer permanent agency records to the National Archives and 

Records Administration (NARA) [in an electronic format].” Enterprise Content Management 

System electronic information resource management with the following: an agency-wide 

information governance policy that provides enterprise-level standards for structured, organized 

information; mandatory and optional metadata; uniform document naming conventions; access 

restrictions; and retention rules and triggers. Such a strategy will enable the FTC to maintain 

agency records in a secure electronic format for the required retention period, and transfer 

permanent agency records to NARA as necessary. 
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14

To fully comply with the OMB/NARA directive and other legal requirements regarding electronic

recordkeeping, the transition to digital records management will require the FTC’s continued

focus in FY 2016. In particular, the Records and Filings Office must provide guidance and 

enhanced search capacities for electronic documents. The agency also must continue to train staff 

in identifying and labeling federal records (including emails), as well as proper and NARAcompliant retention and disposition of records. 

Agency Progress in Addressing the Challenge

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

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,” and meets the OMB/NARA Directive requirement to manage all 

email records in an electronic format by 2016. In 2015, RFO developed a new Managing Your 

Electronic Files tip sheet that provides additional guidance to agency staff on managing records 

(including email) in electronic format. 

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 FTC 

administrative litigation. In FY 2015, RFO enhanced the E-Filing system to include non-public 

filings, electronic service of filings, and an electronic docket. These enhancements make the FTC 

administrative litigation process and its official records virtually fully electronic.

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

This includes file structures, metadata, naming conventions, access restrictions, and retention 

rules and triggers. The FTC plans to utilize an Enterprise Content Management System (ECMS) 

to maintain agency records for the required retention period and to transfer permanent agency 

records to NARA in electronic format. The FTC plans to incorporate the management of email 

records in the ECMS. The ECMS will provide enhanced search capacities for electronic 

documents and meet the OMB/NARA Directive requirement to manage permanent electronic 

records electronically by 2019. In FY 2015, the agency continued planning for transition to an 

ECMS, as part of FTC’s overall IT modernization strategy.
78 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

CHAIRWOMAN’S RESPONSE TO IG-IDENTIFIED 

CHALLENGES
 www.ftc.gov www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission Federal Trade Commission 79

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
80 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

SCHEDULE OF SPENDING

The Schedule of Spending (SOS) provides an overview of how and on what the FTC spent money during FY 2015 and 

FY 2104. The data used for this schedule is the same data used for the Statement of Budgetary Resources (SBR). The 

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

Statement of Net Cost. The SOS provides summary level information by mission for the “Obligations Incurred” line on 

the SBR. The FTC has two primary missions – Protect Consumers and Maintain Competition.

(Dollars in thousands) 2015 2014

What Money is Available to Spend?

Total Resources $ 327,412 $ 361,585

 Less amount available but not agreed to be spent 11,747 23,893

 Less amount not available to be spent 10,371 3,554

Total Amounts Agreed to be Spent $ 305,294 $ 334,138

How was the Money Spent/Issued?

Consumer Protection 

Personnel compensation and benefits $ (109,290) $ (106,869)

Contractual services (42,733) (54,061)

Rent, communications, and utilities (16,306) (20,418)

Acquisition of assets (7,012) (9,796)

Other (2,035) (1,988)

Total Consumer Protection (177,376) (193,132)

Maintain Competition

Personnel compensation and benefits (78,816) (78,025)

Contractual services (30,819) (39,470)

Rent, communications, and utilities (11,759) (14,907)

Acquisition of assets (5,057) (7,152) 

Other (1,467) (1,452)

Total Maintain Competition (127,918) (141,006)

Total Amounts Agreed to be Spent $ (305,294) $ (334,138)

Who did the Money go to?

Federal entities $ (72,776) $ (78,850)

Non-Federal entities (232,518) (255,288)

Total Amounts Agreed to be Spent $ (305,294) $ (334,138)

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

Financial Statements and, therefore, it is not audited.
 www.ftc.gov www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission Federal Trade Commission 81

THE IMPROPER PAYMENTS ELIMINATION AND RECOVERY 

IMPROVEMENT ACT REPORTING DETAILS

The Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012 requires agencies to 

annually report on all programs and activities, identify 

those that may be susceptible to significant improper 

payments, estimate annual improper payments in the 

susceptible programs and activities, and report the results 

of their improper payment activities. In accordance 

with the OMB A-123 Appendix C guidance, the FTC 

performed a fiscal year 2015 risk assessment for nine 

payment processes including payroll, procurement, redress 

payments to consumers, travel, purchase card, pre-merger 

filing fee refunds, training, and two miscellaneous payment 

processes. Each payment program was defined by its own 

internal control framework. The FTC evaluated each 

payment program using the following qualitative risk 

factors identified in OMB Circular A-123 Appendix C:

•	 The relative complexity of the program or 

activity operation

•	 The extent and significance of recent changes in the 

program that may be reason for improper payment 

in funding, authorities, practices and procedure

•	 The level, experience, and quality of training 

for personnel responsible for program eligibility 

determination or certifying that payments 

are accurate

•	 The inherent risks of improper payments due to the 

nature of programs or operation

•	 Known control deficiencies (i.e., reported by OIG, 

or GAO) that might hinder accurate payment 

certification

•	 The program or activity was recently initiated at 

the agency

•	 The volume of payments made annually

•	 Results from prior improper payment work

The FTC also performed a quantitative risk assessment 

and assessed risks related to the amounts of payments 

processed relative to the OMB specified threshold amounts 

that define payment programs susceptible to improper 

payments.

As a result of the risk assessment, the FTC determined 

that the agency’s programs and activities presented low 

risk of improper payments and that none of the agency’s 

programs or activities were determined to be susceptible 

to significant improper payments. In addition to the risk 

assessment of all payment processes, the Interior Business 

Center (IBC), the FTC’s shared service provider, compares 

the FTC’s payee records in the financial system with payee 

records in the Do Not Pay databases. Additionally, the 

FTC reviews potential matches on an on-going basis to 

prevent improper payments and incorporates a pre-award 

check on potential contractors against the Do Not Pay 

databases. In 2015, the FTC performed and documented 

testing of statistical samples from larger payment 

processes to verify that the FTC payment programs 

are not susceptible to significant improper payments. 

In conjunction with the IBC, the FTC’s review of all 

payments made in FY 2015 confirmed that the FTC did 

not make any improper payments in FY 2015.
82 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

THE IMPROPER PAYMENTS ELIMINATION AND RECOVERY 

IMPROVEMENT ACT REPORTING DETAILS (CONTINUED) 

Number (#

of Paym

Revie

for Poss

Imprope

Payme

Dollars 

of Paym

Revie

for Poss

Imprope

Payme

Number (#

of Paym

Stopp

Dollars

of Paym

Stopp

Number (#

of Pot

Imprope

Payme

Reviewed

Determin

Accu

Dollars

of Pot

Imprope

Payme

Determin

Accu

Reviews with 

the IPERIA 

specified 

databases

9,445 $ 157.2M 0 $ 0.00 0 $ 0.00

Reviews with 

databases 

not listed in 

IPERIA

0 $ 0.00 0 $ 0.00 0 $ 0.00

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

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

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

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

and the Prisoner Update Processing System of the Social Security Administration.

“FREEZE THE FOOTPRINT” IMPLEMENTATION

FY 2012 FY 2015 CHAN

Rentable Square Footage 638,877 610,662 28,215

FY 2015 – Increased square footage due to re-evaluation of space in newly obtained facility, Constitution Center. The 

agency’s total square footage did not increase above the FY 2012 baseline, which is consistent with, OMB Memorandum 

M-12-12 Section 3.

In FY 2017, the Federal Trade Commission will off-set the FY 2015 increase of 3,536 square feet by reducing our footprint 

by 3,620 square feet in several Regional offices as their leases expire.

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 operations and maintenance costs. 
 www.ftc.gov www.ftc.gov www.ftc.gov • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • Federal Trade Commission Federal Trade Commission Federal Trade Commission 83

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, requires agencies to make regular and 

consistent inflationary adjustments of civil monetary penalties to maintain their deterrent effect. This table reports the 

most recent inflationary adjustments to civil monetary penalties.

Penalty Authority

(Statute)

Date of Previous 

Adjustment

Date of Current 

Adjustment

Current Penalty 

Level

Violations of cease and desist 

orders

The Clayton Act 

Section 7A(g)(1) 

15 U.S.C 18a(g)(1)

January 2005 February 2009 $16,000 

The Clayton Act 

Section 11(l) 

15 U.S.C. 21(l)

February 2009 April 2014 $8,500 

Failure to file reports 

required by the FTC Act

The FTC Act 

Section 5(l) 

15 U.S.C. 45(l)

January 2005 February 2009 $16,000 

The FTC Act 

Section 5(m)(1)(A) 

15 U.S.C. 45(m)(1)(A)

January 2005 February 2009 $16,000 

The FTC Act 

Section 5(m)(1)(B) 

15 U.S.C. 45(m)(1)(B)

January 2005 February 2009 $16,000 

Failure to file reports 

required by the FTC Act

The FTC Act 

Section 10 

15 U.S.C. 50

November 1996 April 2014 $210 

Failure to file required 

business information with 

the Commission

The Webb-Pomerene 

(Export Trade) Act 

Section 5 

15 U.S.C. 65

November 1996 April 2014 $210 

Failure to maintain proper 

records of fiber content

The Wool Products Labeling Act 

Section 6(b) 

15 U.S.C. 68d(b)

November 1996 April 2014 $210 

Failure to maintain records The Fur Products Labeling Act 

Section 3(e)

15 U.S.C. 69a(e)

November 1996 April 2014 $210

The Fur Products Labeling Act 

Section 8(d)(2) 

15 U.S.C. 69f(d)(2)

November 1996 April 2014 $210 

FTC enforcement of 

knowing violations

The Energy Policy and 

Conservation Act 

Section 333(a) 

42 U.S.C. 6303(a)

November 1996 April 2014 $210 
84 Federal Trade Commission Federal Trade Commission Federal Trade Commission • Fiscal Year 2015 Fiscal Year 2015 Fiscal Year 2015 • www.ftc.gov www.ftc.gov www.ftc.gov

Penalty Authority

(Statute)

Date of Previous 

Adjustment

Date of Current 

Adjustment

Current Penalty 

Level

Recycled oil labeling 

violations

The Energy Policy and 

Conservation Act 

Section 525(a) 

42 U.S.C. 6395(a)

February 2009 April 2014 $8,500 

The Energy Policy and 

Conservation Act 

Section 525(b) 

42 U.S.C. 6395(b)

January 2005 February 2009 $16,000 

FTC enforcement of 

knowing violations

The Fair Credit Reporting Act 

Section 621(a)(2) 

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

January 2005 February 2009 $3,500 

Failure to comply with filing 

requirements

The Medicare Prescription Drug 

Improvement and Modernization 

Act of 2003 

Public Law 108-173 

Section 1115(a) 

21 U.S.C. 355 note

January 2005 April 2014 $12,100 

Violations of prohibitions 

on market manipulation and 

provision of false information 

to federal agencies

The Energy Independence and 

Security Act of 2007 

Section 814(a) 

42 U.S.C. 17304

February 2009 April 2014 $1,100,000 

CIVIL MONETARY PENALTY ADJUSTMENT FOR 

INFLATION (CONTINUED)
FEDERAL TRADE COMMISSION

APPENDICES
86 Federal Trade Commission • Fiscal Year 2015 • 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.

Performance Goal 1.1.3: Total consumer savings 

compared to the amount of FTC resources allocated to 

consumer protection law enforcement.

Definition and background: This measure tracks how 

much money the FTC’s law enforcement efforts save 

consumers each year. The FTC has found that typically 

when it files a complaint in federal district court and 

obtains a court order, the defendants stop their practices. 

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

contempt proceedings. By stopping these practices, the 

agency directly prevents further consumer losses caused by 

these defendants.

Calculation/Formula: The sum of the estimated 

consumer savings generated and the amount of money the 

FTC returned to consumers, divided by the amount of 

resources spent on consumer protection law enforcement 

for the current fiscal year. The Consumer and Business 

Education and Economics and Consumer Policy resources 

are excluded from the base.

Data sources: To make dollar value assessments, staff uses 

company sales and other records, as well as information 

from employees and customers, where applicable. Bureau 

of Consumer Protection (BCP) case managers derive the 

amount of economic injury to consumers by estimating 

the consumer loss due to fraudulent, deceptive, or unfair 

practices in the 12 months prior to the FTC’s first contact 

with the defendants or by dividing the estimated total 

economic injury by the amount of time the defendants’ 

business operated to derive an annualized estimate of 

consumer savings. The measure also includes instances 

wherein, as a result of FTC staff action directed specifically 

at a business, that business stops its allegedly unfair 

or deceptive practices. Staff is surveyed by email after 

the completion of a case to determine the dollar value 

assessments. Estimates will be reported in the Debrief in 

the Redress and Enforcement Database in mid fiscal year 

2016. See goal 1.1.4 for more information about the total 

amount of money returned to consumers.

Verification and validation: The consumer savings by 

case are maintained in a spreadsheet by BCP staff in the 

Division of Consumer Response and Operations (DCRO). 

The spreadsheet is reviewed quarterly by headquarters and 

regional office management to verify the accuracy of the 

report and to ensure that all applicable cases are included 

in the report.

Data limitations: The calculation does not perfectly 

estimate the agency’s impact because it assumes that the 

challenged business practices would have continued for 

only one more year and it ignores the deterrent effect of 

FTC enforcement.

Performance Goal 1.1.4: Amount of money the FTC 

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

Definition and background: The amount of money 

includes the sum of redress checks cashed by consumers 

and all other amounts of money collected from defendants 

that is forwarded to the U.S. Treasury.

Calculation/Formula: Sum of redress checks cashed 

by consumers, the amount of residual redress money or 

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

Treasury, and the amount of civil penalties collected that 

are also forwarded to the U.S. Treasury.

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

reports from the agency’s Financial Management Office 

(FMO), redress contractor reports, and matter bank 

statements. The civil penalty data is summarized in a 

spreadsheet maintained by BCP staff in DCRO.

Verification and validation: 

1. The Redress Administration Office (RAO) in 

DCRO reconciles monthly activity reports submitted 

by the redress contractors and FMO with matter 

bank statements.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 87

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 separately maintained spreadsheet 

that includes a list of all civil penalty orders in the 

current fiscal year. BCP budget staff also reconciles 

the civil penalty spreadsheet with data maintained by 

FMO and with memos received by the Department 

of Justice, which contain copies of the checks 

and electronic fund transfers for civil penalty 

disgorgements.

Data limitations: The amount of money is not a 

perfect measure of the effectiveness of the agency’s work 

protecting consumers. If the FTC steps in and stops 

scams in their incipiency, there is less injury and therefore 

less redress provided in those situations but consumers 

are undoubtedly better off. Also, the amount of money 

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

the amount of money the defendants have to satisfy the 

judgment.

OBJECTIVE 1.2 – PROVIDE THE 

PUBLIC WITH KNOWLEDGE AND 

TOOLS TO PREVENT HARM TO 

CONSUMERS.

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

international, and private partnerships to maximize the 

reach of consumer and business education campaigns.

Definition and background: This measure helps 

determine the extent to which FTC’s education tools 

reach consumers through partnerships with federal, 

state, local, international, and private organizations. 

These organizations work as partners with the FTC by 

distributing these materials to their clients and customers. 

BCP maximizes its reach to consumers and businesses by 

providing free bulk quantities of education materials via an 

online order system.

Data sources: The data is compiled from the number 

of organizations ordering consumer and/or business 

education materials for distribution. This data comes from 

the database of customer orders.

Verification and validation: The data for organizations 

disseminating materials is obtained from the data file 

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

of publications. That information is filtered to include only 

orders by organizations – not individuals – and duplicates 

are excluded. The result is a list of unique organizations 

that ordered the FTC’s education publications for 

dissemination to consumers and businesses.

Data limitations: The data is compiled from customer 

input via the online order website. If customers fail to 

enter an organization name, they are not included in this 

measure, which could result in under reporting. There is 

no feasible workaround to mitigate this limitation.

OBJECTIVE 1.3 – COLLABORATE 

WITH DOMESTIC AND 

INTERNATIONAL PARTNERS 

TO ENHANCE CONSUMER 

PROTECTION.

Performance Goal 1.3.2: Number of investigations or 

cases in which the FTC obtained foreign-based evidence 

or information or engaged in other mutual assistance 

that contributed to FTC law enforcement actions, or in 

which the FTC cooperated with foreign agencies and/or 

multilateral organizations on enforcement matters.

Definition and background: This measure tracks 

investigations or cases in which the FTC obtains 

foreign-based evidence; engages in mutual assistance 

that contributes to FTC law enforcement actions; or in 

which the FTC cooperates with foreign agencies and/or 

multilateral organizations on enforcement matters.

Data sources: Office of International Affairs (OIA) weekly 

reports and internal tracking sheets.

Verification and validation: Consumer protection 

team members report matters they worked on in which 

information was shared. Staff reviews and compiles the 

matters reported. Managers review these matters to ensure 

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

previously counted.

Data limitations: Review is necessary to avoid double 

counting of particular matters.
88 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

STRATEGIC GOAL 2: 

MAINTAIN COMPETITION

OBJECTIVE 2.1 – IDENTIFY AND 

TAKE ACTIONS TO ADDRESS 

ANTICOMPETITIVE MERGERS 

AND PRACTICES THAT HARM 

CONSUMERS.

Performance Goal 2.1.1: Percentage of actions taken to 

maintain competition in substantial merger and nonmerger 

investigations.

Definition and background: This measure ensures that 

FTC actions promote vigorous competition by preventing 

anticompetitive mergers and stopping business practices 

that diminish competition. This measure reflects actions 

to promote competition, including litigated victories, 

consent orders, abandoned transactions, or restructured 

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

through restructuring) in a significant percentage of 

substantial merger and nonmerger investigations.

Calculation/Formula: The measure is calculated by taking 

the number of substantial investigations concluded with an 

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

total number of substantial investigations closed.

Data sources: To ensure consistent reporting within 

the Bureau of Competition (BC), press releases are the 

primary source of information for public actions, such 

as consent orders and judicial review outcomes. Internal 

communications from staff attorneys are used to identify 

those investigations that were closed because parties 

abandoned a transaction or because staff did not find the 

transaction likely to harm competition. This information 

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

cross-referenced with both the list of known second request 

and compulsory process merger investigations as recorded 

in the agency’s matter tracking database and the list of 

nonmerger investigations with more than 150 hours, as 

identified using the agency’s staff time reporting system.

Verification and validation: The data is entered into a 

BC database by staff and reviewed monthly by analysts, 

attorneys, economists, and senior management.

Data limitations: This measure does not include actions 

that are still in litigation or on appeal.

Performance Goal 2.1.3: Total consumer savings 

compared to the amount of FTC resources allocated to the 

merger program.

Definition and background: This measure ensures that 

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

that estimated consumer savings exceed how much is spent 

on the merger program.

Calculation/Formula: Estimated consumer savings are 

divided by the amount of resources spent on the merger 

program for the current fiscal year. Consumer savings are 

calculated by adding the estimated consumer savings of 

individual merger actions for the current fiscal year plus 

the previous four fiscal years and dividing the sum by 

five. When available, case-specific data is used to generate 

the estimate of consumer savings. Otherwise, staff uses a 

formula of three percent of the volume of commerce of the 

relevant product market(s) for two years.

Data sources: The lead attorney estimates consumer 

savings for a particular case using the applicable estimation 

formula and submits it to 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: The data is dependent on the estimates 

of consumer savings made by staff in accordance with the 

applicable estimation formulas. Additionally, a five-year 

average is used because an individual year may be heavily 

influenced by significant cases in that year.

Performance Goal 2.1.5: Total consumer savings 

compared to the amount of FTC resources allocated to 

the nonmerger program.

Definition and background: This measure ensures that 

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

that estimated consumer savings exceed how much is spent 

on the nonmerger program.

Calculation/Formula: This measure is calculated by 

taking the estimated consumer savings divided by the 

amount of resources spent on the nonmerger program. 

Consumer savings are calculated by taking the sum of the 

estimated consumer savings in nonmerger actions for the 

current fiscal year plus the previous four fiscal years, and 

dividing the sum by five. When available, case-specific 

data is used to generate the estimate of consumer savings. 
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 89

Otherwise, staff uses a formula of one percent of the 

volume of commerce of the relevant product market(s) for 

one year.

Data sources: The lead attorney estimates consumer 

savings for a case using the applicable estimation 

formula and submits it to the Bureau of Economics for 

concurrence. 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: The data is dependent on the estimates 

of consumer savings made by staff in accordance with the 

applicable estimation formulas. Additionally, a five-year 

average is used because an individual year may be heavily 

influenced by significant cases in that year.

OBJECTIVE 2.3 – COLLABORATE 

WITH DOMESTIC AND 

INTERNATIONAL PARTNERS 

TO PRESERVE AND PROMOTE 

COMPETITION.

Performance Goal 2.3.1: Percentage of FTC cases 

involving at least one substantive contact with a foreign 

antitrust authority in which the agencies followed 

consistent analytical approaches and reached compatible 

outcomes.

Definition and background: This measure tracks the 

number of cases in which at least one substantive contact 

has taken place and where, in the judgment of Office 

of International Affairs (OIA) management, consistent 

analytical approaches were observed, compared with the 

total number of cases. The phrase “reached compatible 

outcomes” means that the reviewing agencies’ remedial 

measures are not inconsistent; professional judgment from 

OIA senior management is used to make a final decision 

on compatibility for FTC measurement purposes.

Calculation/Formula: Number of cases where a foreign 

antitrust authority or agency followed consistent analytical 

approaches and reached compatible outcomes as a 

percentage of the total number of cases the FTC has at 

least one substantive contact.

Data sources: OIA weekly reports and internal logs.

Verification and validation: International antitrust 

team members report matters they worked on in which 

substantial contact took place. Staff reviews and compiles 

the matters reported, as overseen by an international 

antitrust attorney. Managers review and ensure that the 

matters reported qualify for the measure.

Data limitations: Review is necessary to ensure that the 

matters reported included substantive contact with a 

foreign antitrust authority.

STRATEGIC GOAL 3: 

ADVANCE ORGANIZATIONAL 

PERFORMANCE

OBJECTIVE 3.1 – OPTIMIZE 

RESOURCE MANAGEMENT AND 

INFRASTRUCTURE.

Performance Goal 3.1.4: Average number of days for the 

FTC to release information in response to a simple FOIA 

request.

Definition and background: The FTC receives a number 

of requests that upon initial review appear to be requests 

the agency can fulfill quickly. For example, a number of 

consumers file identity theft complaints or a complaint 

against a company they believe has engaged in bad acts 

and then request copies of what they submitted to the 

FTC. Responding to these requests is fairly simple and 

straightforward, and the requests represent a strong 

percentage of the types of requests the agency fills. This 

measure tracks the agency’s response time in processing 

a simple FOIA request for access to public records. The 

agency also keeps track of a number of other measures 

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

for simple and complex requests; steps that the FTC has 

taken to make its response system effective; steps taken to 

increase proactive disclosures; steps taken to decrease the 

FTC’s backlog and improve timeliness in responding to 

requests, and other measures. Those reports can be found 

here: http://www.ftc.gov/foia/chiefreports.shtm
90 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

Calculation/Formula: Sum of the number of days to 

process each request divided by the total number of 

requests processed.

Data sources: All of the FOIA requests that the FTC 

receives are logged into and processed through a system 

called FOIAxpress. FOIAxpress is one of the electronic 

systems that various agencies use to track their FOIA 

requests and responses.

Verification and validation: Generally, under the Freedom 

of Information Act an agency has 20 business days to 

respond to each request. When the FOIA Unit receives 

a FOIA request, it logs the request into the FOIAxpress 

system, scans it, and assigns a number to each request. 

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

processing each request. FOIAxpress automatically counts 

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

FOIA requests.

Data limitations: Occasionally, when the agency upgrades 

FOIAxpress, the upgrade does not proceed smoothly and 

the agency has to repeat processing steps that have already 

occurred.

OBJECTIVE 3.2 – CULTIVATE A 

HIGH-PERFORMING, DIVERSE, AND 

ENGAGED WORKFORCE.

Performance Goal 3.2.2: The extent employees believe 

the FTC has the talent necessary to achieve organizational 

goals.

Definition and background: This measure gauges the 

extent employees think the organization has the talent 

necessary to achieve organizational goals so that the FTC 

has a strong foundation of organizational, individual, and 

management excellence driving mission success.

Data sources: The Federal Employee Viewpoint Survey

Talent Management Index is the data source. The survey 

is administered annually by the U.S. Office of Personnel 

Management (OPM). It is a tool that measures employees’ 

perceptions of whether, and to what extent, conditions 

that characterize successful organizations are present. 

This survey was administered for the first time in 2002, 

and then repeated in 2004, 2006, 2008, 2010, 2011, 

2012, 2013, 2014, and most recently in 2015. 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.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 91

APPENDIX B: ACRONYMS

Acronym Definition

AAR After Action Report

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 

C & A Certification and Accreditation

CAO Chief Acquisitions Officer

CDM Continuous Diagnostics and Mitigation

CFS Core Financial System

CIGIE Counsel of the Inspectors General on Integrity and Efficiency

CISO Chief Information Security Officer

CLM Contract Lifecycle Management

CO Contracting Officer

COPPA Children’s Online Privacy Protection Act 

COR Contracting Officer Representative

CPO Chief Privacy Officer

CSAM Cyber Security Assessment and Management

CSRS Civil Service Retirement System 

DCRO Division of Consumer Response and Operations

DHS Department of Homeland Security

DNC Do Not Call 

DOJ Department of Justice 

DOL Department of Labor 

ECMS Enterprise Content Management System

eDSS eDiscovery Support System

EFT Electronic Funds Transfer

ERCR Electronic Recordkeeping Certification Review 

FAR Federal Acquisition Regulations

FASAB Federal Accounting Standards Advisory Board 

FBwT Fund Balance with Treasury

FECA Federal Employees’ Compensation Act 

FedRAMP Federal Risk and Authorization Management Program

FEGLIP Federal Employees’ Group Life Insurance Program 

FEHBP Federal Employees’ Health Benefit Program 

FERS Federal Employees’ Retirement System 

FICA Federal Insurance Contributions Act 

FISMA Federal Information Security Management Act 
92 Federal Trade Commission • Fiscal Year 2015 • www.ftc.gov

Acronym Definition

FMFIA Federal Managers’ Financial Integrity Act 

FMO Financial Management Office

FOIA Freedom of Information Act

FPPS Federal Personnel/Payroll System

FTC Federal Trade Commission 

FTE Full-Time Equivalent 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GPRA Government Performance and Results Act 

GSA General Services Administration 

HSR Hart-Scott-Rodino Act

IBC Department of the Interior Business Center 

IG Inspector General 

IOT Internet of Things

IP Intellectual Property

IPERIA Improper Payments Elimination and Recovery Improvement Act

ISCM Information Security Continuous Monitoring

IT Information Technology

MDM Mobile Device Management

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 

OFF Oracle Federal Financials

OIA Office of International Affairs

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

PAE Patent Assertion Entity

PII Personally Identifiable Information

PIO Performance Improvement Officer

PMRO Performance Measure Reporting Official

PP&E Property, Plant, and Equipment

RAO Redress Administration Office

RFO Records and Filings Office

SAT Senior Assessment Team

SBR Statement of Budgetary Resources 

SHI Sensitive Health Information

SIL Secure Investigative Lab

SPFI Summary of Performance and Financial Information 

SOS Schedule of Spending

SSAE Statement on Standards for Attestation Engagements

TAS Treasury Account Symbol 

VRM Vulnerability Risk Management
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 93

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 www.ftc.gov/news-events/press-releases

AGENCY FINANCIAL REPORT (AFR) SPECIFIC

The FTC welcomes comments or suggestions for improvement of its AFR. Please contact the agency to provide feedback 

or to request additional copies.

AFR Internet Site www.ftc.gov/reports/agency-financial-report-fy2015

AFR Contact Joseph O’Leska

AFR Telephone 202-326-2716

AFR Email Address gpra@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
94 Federal Trade Commission • Fiscal Year 2015 • 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 offers our sincerest thanks and acknowledges the following individuals who made significant contributions 

in producing this report: Heather Hippsley of the Office of the Chairwoman; George Adam, Pat Bak, Sharon Ball, 

Michelle Carter, Paula Chandler, Chloe Collins, Doug Craig, Valerie Green, James Hale, Tonia Hill, Kimberly Mayo, 

Jeff Nakrin, Mark Oemler, Joseph O’Leska, Karen Overmier, David Rebich, David Robbins, Randall Salzer, Vi Truong, 

Lori Walsh-Van Wey, Linda Wilson, and Katie Wurtz of the Office of the Executive Director; Shannon Chowdhury and 

Nathan Hawthorne of the Bureau of Competition; Jenny Kellogg of the Bureau of Consumer Protection; Liz Callison 

of the Bureau of Economics; Sarah Mackey and Dione Stearns of the Office of the General Counsel; Philip Runco of 

the Office of Congressional Relations; Gail Kingsland of the Office of Public Affairs; Donald Clark of the Office of 

the Secretary; Chris Bryan of the Office of Policy Planning; and Russell Damtoft and Priscilla Jamison of the Office of 

International Affairs. Finally, we offer thanks to AOC Solutions and Graphic Visions for their contributions in the design 

and production of this report.
 www.ftc.gov • Fiscal Year 2015 • Federal Trade Commission 95
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