FEDERAL TRADE COMMISSION

AGENCY FINANCIAL REPORT

FISCAL YEAR 2018
FEDERAL TRADE COMMISSION
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TAB LE OF CONTE NTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

About This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

How This Report Is Organized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The FTC At-A-Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Message from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Agency and Mission Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Performance Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Agency Mission Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

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

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

Financial Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Principal Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Summary of the Top Management Challenges Identified by the Office of Inspector General . . . . . . . . . . . . . 84

Summary of Financial Statement Audit and Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Payment Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

“Reduce the Footprint” Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Fraud Reduction Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Civil Monetary Penalty Adjustment for Inflation Implementation Reporting Act Details . . . . . . . . . . . . . . . . 89

Grant Oversight & New Efficiency (GONE) Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Appendix A: Data Quality Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Appendix B: Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Appendix C: Contact Information and Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
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Introduction
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INTRODUCTION

ABOUT THIS REPORT

The Federal Trade Commission’s (FTC) fiscal year (FY) 2018 Agency Financial Report (AFR) provides financial 

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

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

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

legislation: 

•	 Federal Managers’ Financial Integrity Act of 1982 

•	 Prompt Payment Act of 1982

•	 Government Performance and Results Act of 1993

•	 Government Management Reform Act of 1994

•	 Federal Financial Management Improvement Act of 1996

•	 Reports Consolidation Act of 2000

•	 Accountability of Tax Dollars Act of 2002

•	 Government Performance and Results Modernization Act of 2010

•	 Improper Payments Elimination and Recovery Improvement Act of 2012

•	 Digital Accountability and Transparency Act of 2014

•	 Federal Information Security Modernization Act of 2014

•	 Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

•	 Fraud Reduction and Data Analytics Act of 2015

The FTC publishes both an AFR and an Annual Performance Report (APR) . The FY 2018 APR will be 

combined with the FY 2020 Annual Performance Plan (APP) and included in the FY 2020 Congressional Budget 

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

with other performance documents .

CERTIFICATE OF EXCELLENCE AND BEST-IN-CLASS AWARD

 

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

Reporting for its FY 2017 AFR . The FTC also received a Special Recognition “Best-in-Class” Award for 

addressing matters of importance to all Americans . The FY 2017 AFR demonstrated the value provided by 

the FTC, while quantifying the benefits the agency brought to the American public by highlighting examples 

of cases and investigations the agency pursued .

Building on the FY 2017 financial reporting success, the FTC again presents actual agency accomplishments 

to demonstrate its continuing commitment to protecting consumers and promoting competition .
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INTRODUCTION

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Financial Section

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Management’s 

Discussion and Analysis

HOW THIS REPORT IS ORGANIZED

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

1. MANAGEMENT’S DISCUSSION AND ANALYSIS

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

performance goals, mission challenges, financial highlights, 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 the Office of Inspector General’s summary on top management 

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

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

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

4. APPENDICES

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

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

information and acknowledgements .

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Other Information

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Appendices
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INTRODUCTION

THE FTC AT-A-GLANCE

HISTORY

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

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

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

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

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

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

LAWS ENFORCED

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

jurisdiction in broad sectors of the economy . The agency administers a wide variety of laws and regulations . 

Examples include the Federal Trade Commission Act, Clayton Act, Telemarketing Sales Rule, Fair Credit 

Reporting Act, Identity Theft Act and Equal Credit Opportunity Act . In total, the commission has enforcement 

or administrative responsibilities under more than 70 other laws .

PROFILE

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

•	 The	agency	had	1,114	full-time	equivalent	employees	at	the	end	of	FY	2018.

•	 Total	new	budget	authority	for	FY	2018	was	$306	million,	which	comprises	$168	million	in	general	fund	

appropriations	and	$138	million	in	offsetting	collections.

HEADQUARTERS

The FTC established its headquarters at 600 Pennsylvania, N .W ., 

Washington, D .C ., with President Franklin D . Roosevelt laying the 

cornerstone himself . Roosevelt remarked, “May this permanent home 

of the Federal Trade Commission stand for all time as a symbol of the 

purpose of the government to insist on a greater application of the 

golden rule to conduct the corporation and business enterprises in 

their relationship to the body politic .” Listen to FDR’s speech . 

The building, which is particularly known for its two art deco-style 

statues called “Man Controlling Trade,” is located at the apex of the 

Federal Triangle, and was the culmination of the massive Depressionera government building project . Commissioners and staff officially 

moved in on April 21, 1938, and the building continues to function as 

the FTC’s headquarters, serving the agency’s adjudicative, executive, 

policy, and administrative functions . 
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INTRODUCTION

MESSAGE FROM THE CHAIRMAN

Joseph J . Simons

Chairman

The Federal Trade Commission is an independent 

law enforcement agency with a dual focus on 

protecting consumers and promoting competition in 

broad sectors of the economy . In FY 2018, the agency 

continued to pursue a vigorous law enforcement 

agenda, along with various policy and education 

initiatives, to advance the interests of consumers 

and encourage competition and innovation, all 

while efficiently managing the agency’s resources . 

Notably, the agency welcomed an entirely new slate 

of Commissioners this year – the first complete 

changeover in leadership since the agency’s founding 

– and effectuated a smooth transition . Thanks to 

my predecessor, Acting Chairman Maureen K . 

Ohlhausen, the FTC was in excellent shape when I 

took over as Chairman in May 2018 .

The FTC is a highly successful and mission-driven 

agency . Still, the FTC has always been committed to 

self-examination and critical thinking, to ensure that 

our enforcement and policy efforts keep pace with 

changes in the economy . When the FTC periodically 

engages in serious reflection and evaluation, we are 

better able to promote competition and innovation, 

protect consumers, and shape the law, so that free 

markets continue to thrive . Therefore, as my top 

policy priority, in September 2018 I initiated a 

series of Hearings on Competition and Consumer 

Protection in the 21st Century to consider 

whether broad-based changes in the economy, 

evolving business practices, new technologies, and 

international developments warrant adjustments 

to competition and consumer protection law, 

enforcement priorities, and policy . These hearings, 

which will continue into early 2019, are convening a 

wide range of experts, and are accompanied by robust 

public comment opportunities . 

This Agency Financial Report highlights the FTC’s 

major accomplishments, illustrates how the agency 

manages its resources, and outlines its plans to 

address the challenges ahead . 

FY 2018 PERFORMANCE 

HIGHLIGHTS

CONSUMER PROTECTION

The FTC’s consumer protection enforcement 

initiatives are primarily focused on addressing trends 

in the marketplace that cause harm to consumers: 

stopping fraud targeting specific populations, 

protecting consumers from deceptive or unfair 

practices in the financial marketplace, safeguarding 

consumers’ privacy and data security, and prosecuting 

deceptive marketing and advertising claims . The FTC 

also engages in significant policy work and research 

through, for example, our Office of Technology 

Research and Investigation, as well as numerous 

workshops and seminars we hold each year on 

consumer issues . Through extensive consumer 

and business education and outreach, the FTC not 

only empowers consumers to avoid scams, but also 

provides guidance to businesses to help them comply 

with relevant laws and regulations .

Stopping fraud against consumers is at the heart of 

the FTC’s mission . In April 2018, three telemarketers, 

and a host of companies whose services they used, 

settled allegations that they ran a massive phony debt 

relief operation that bilked tens of millions of dollars 

from financially strapped consumers . Victims paid 

hundreds to thousands of dollars a month to various 

debt relief services, but found their debts unpaid, their 

accounts in default, and their credit scores lower . The 
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INTRODUCTION

marketers agreed to be banned from telemarketing, as 

well as from selling debt relief, credit repair, and other 

financial products and services . 

The FTC has also focused on challenging deceptive 

advertising . In February 2018, the agency settled 

allegations that advertising agency Marketing 

Architects created and disseminated deceptive radio 

ads for weight-loss products marketed by its client, 

Direct	Alternatives.	The	$2	million	judgment	is	

among the largest ever obtained by the FTC against 

an advertising agency . In another case earlier this 

year, a federal district judge found defendants, 

who ran Hi-Tech Pharmaceuticals, in contempt for 

violating a 2008 order by continuing to deceptively 

market dietary supplements with unsubstantiated 

claims such as “rapid fat loss” and “extreme weight 

loss	guaranteed.”	The	court	imposed	a	more	than	$40	

million judgment against the defendants . 

The FTC has continued its leadership in protecting 

consumers’ privacy interests and promoting data 

security . For example, on the privacy front, in January 

2018	the	FTC	obtained	$650,000	from	electronic	toy	

manufacturer, Vtech, in settlement of allegations that 

the company collected personal information from 

children without having provided notice to, or getting 

consent from, their parents, and without having taken 

reasonable steps to secure the data it collected . The 

settlement marks the agency’s first children’s privacy 

and security case involving Internet-connected toys . 

The Commission also announced data security 

actions	against	mobile	device	manufacturer	BLU	and	

online tax preparation service TaxSlayer, as well as 

revised	complaint	and	order	against	Uber.

PROMOTING COMPETITION

For more than 100 years, the Commission has actively 

enforced the antitrust laws in a range of industries of 

critical importance to American consumers, including 

health care, technology, energy, consumer goods 

and services, and manufacturing . The agency also 

conducts workshops, publishes studies, and pursues 

advocacy opportunities to promote competition and 

educate policymakers about its benefits .

In FY 2018, the FTC continued its commitment to 

maintain competition through vigorous enforcement 

with a litigated victory against pharmaceutical 

company AbbVie . In June 2018, a federal court 

ruled that AbbVie used sham litigation to delay 

generic competitors from entering the market for its 

testosterone replacement drug, Androgel, and the 

court	awarded,	with	pre-judgment	interest,	$493.7	

million in equitable monetary relief . This win for 

consumers marks the Commission’s first-ever litigated 

victory on the merits in a sham litigation matter and 

the largest monetary award ever in a litigated FTC 

antitrust case . (This matter is pending on appeal .)

In July 2018, a federal court granted a preliminary 

injunction to block Wilhelmsen Maritime Services’ 

proposed acquisition of Drew Marine Group . The 

proposed transaction likely would have reduced 

competition significantly by combining the world’s 

two largest suppliers of marine water treatment 

chemicals and services used by global fleets to 

maintain critical on-board equipment on tankers, 

container ships, cruise ships, and military vessels 

(among others) . The parties abandoned their 

transaction shortly after the district court’s ruling . 

The FTC’s Economic Liberty Task Force, a major 

policy initiative, continued its work this year with 

the release of a policy paper, Options to Enhance 

Occupational License Portability . The paper examines 

ways to reduce or eliminate unnecessary or overbroad 

occupational licensing requirements on workers who 

move to new states or who wish to market services 

across state lines . The effects of such requirements can 

impose real and lasting costs on American workers, 

especially those who are low income or from military 

families, and can also impact all consumers who 

purchase services from licensed professionals .

The Commission also continued to challenge 

potentially anticompetitive mergers in a variety of 

industries from missiles to cooking oil, including:

•	 J.M.	Smucker’s	proposed	acquisition	of	Conagra	

Brands’s Wesson cooking oil brand, which would 

have given Smucker, owner of the Crisco brand, 

control of at least 70 percent of the market for 

branded canola and vegetable oils sold to retailers 

and eliminated the vigorous head-to-head 

competition between the two firms; and

•	 CDK	Global’s	proposed	acquisition	of	Auto/Mate,	

which would have reduced competition in the 

already	concentrated	U.S.	market	for	specialized	

software used by new car dealers . Auto/Mate 

competed with larger competitors by offering 

lower prices, flexible contract terms, free software 
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INTRODUCTION

upgrades and training, and high quality customer 

service—hallmarks of the benefits of vigorous 

competition in the marketplace . The proposed 

acquisition likely would have eliminated these 

important benefits .

In each of these cases, the parties, faced with the 

FTC’s challenge, abandoned the proposed transaction .

OUTREACH AND 

PARTNERSHIPS

Consumers, industry, and law enforcement partners 

help keep the FTC informed about real-world trends 

and challenges in the marketplace . Consumers can 

contact the agency online or via toll-free phone 

numbers . FTC outreach includes online resources, 

such as www .ftc .gov, much of which is available 

in Spanish as well as English . The agency also 

provides updates on Facebook and Twitter, and hosts 

educational videos on its YouTube channel . The FTC’s 

online Business Center offers extensive guidance to 

businesses .

The Commission has a long history of providing 

technical assistance to foreign competition and 

consumer protection agencies that seek to initiate 

or improve their law enforcement and policy 

development programs . For example, in 2018, 

the FTC concluded a two-year capacity-building 

program for the Antimonopoly Committee of 

Ukraine.	The	FTC,	along	with	the	Department	of	

Justice and Competition Bureau Canada, embedded 

several career lawyers and economists within the 

Antimonopoly Committee to transfer investigational 

and	analytical	expertise	to	their	Ukrainian	colleagues	

by working together on the Committee’s cases . The 

program was so successful that the Antimonopoly 

Committee asked the FTC to renew its assistance for 

an additional year .

FINANCIAL MANAGEMENT

The FTC takes very seriously its commitment to 

responsible stewardship of the public resources 

entrusted to us by the American taxpayers and 

Congress . The agency’s FY 2018 independent financial 

audit yielded our 22nd consecutive unmodified 

opinion, the highest audit opinion available . The 

independent auditors did not identify any material 

weaknesses, significant deficiencies, or instances of 

non-compliance with internal controls, financial 

systems, or laws and regulations . I am pleased to 

report that management’s assessment of risks and 

review of controls and financial systems disclosed 

no material weaknesses, and that the financial and 

performance data presented here is reliable and 

complete (see Statement of Assurance, p . 34) .

FUTURE CHALLENGES

In pursuing its strategic goals and objectives, many 

of the FTC’s challenges are defined by marketplace 

conditions, and thus are always changing and 

evolving . The agency works to stay informed about 

new technologies that can bring tremendous benefits 

to consumers, but may also pose challenges on both 

the competition and consumer protection fronts . For 

a more detailed description of the mission challenges 

identified by agency senior management, see p . 26 .

In addition, the Office of Inspector General (OIG) 

identified two significant management challenges 

this year: (1) securing information systems and 

networks from destruction, data loss, or compromise; 

and (2) addressing the escalating costs of expert 

witnesses . In addition, the OIG identified three 

“watch list” issues that, while not serious management 

challenges, still warrant attention: (1) development 

of a risk management framework in support of the 

Federal Information Security Management Act; (2) 

acquisition planning and contract management; 

and (3) improper influences by former officials and 

employees . Agency management agrees that these 

are important challenges and concurs with the IG’s 

assessment of our progress in addressing these 

challenges (see the “Other Information” section) .

Working with the FTC’s partners and colleagues in 

Congress, industry, and domestic and international 

law enforcement, the agency will continue to fulfill its 

mission to protect American consumers and promote 

competition .

Joseph J . Simons

November 13, 2018
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Management’s 

Discussion and Analysis
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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

AGENCY AND MISSION 

INFORMATION 

The work of the Federal Trade Commission (FTC) 

is critical to protecting and strengthening free and 

open markets and promoting informed consumer 

choice,	both	in	the	United	States	(U.S.)	and	around	

the world . The FTC performs its mission through the 

use of a variety of tools, including law enforcement, 

rulemaking, research, studies on marketplace trends 

and legal developments, and consumer and business 

education . 

VISION 

A vibrant economy characterized by vigorous 

competition and consumer access to accurate 

information . 

MISSION 

Protecting consumers and competition by preventing 

anticompetitive, deceptive, and unfair business 

practices through law enforcement, advocacy, and 

education without unduly burdening legitimate 

business activity . 

OUR PURPOSE AND HISTORY 

Consumers and businesses are likely to be more 

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

the consumer protection area, the product warranties, 

care labels in clothes, and labels on home appliances 

showing their energy cost provide information that 

is required by the FTC . Likewise, businesses must be 

familiar with the laws requiring truthful advertising 

and protecting consumers’ personally identifiable 

information . These laws are enforced by the FTC . 

Competition among independent businesses is good 

for consumers, the businesses themselves, and the 

economy . Competitive markets yield lower prices 

and better quality goods and services, and a vigorous 

marketplace provides the incentive and opportunity 

for the development of new ideas and innovative 

products and services . Many of the laws governing 

competition are also enforced by the FTC . 

The FTC has a long tradition of maintaining a 

competitive marketplace for both consumers and 

businesses . In 1903, Congress created the predecessor 

to the FTC, the Bureau of Corporations, as an 

investigatory agency within the Department of 

Commerce and Labor . The Bureau investigated and 

published reports on the operation of interstate 

corporations, looking for monopolistic practices . In 

one case of note, the Justice Department used the 

Bureau’s 1906 report on petroleum transportation 

when it successfully prosecuted and broke up 

Standard Oil in 1911 . In 1914, President Woodrow 

Wilson signed the Federal Trade Commission Act 

into law, creating the FTC, which then absorbed the 

Bureau of Corporations in 1915 . 

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

prevent unfair methods of competition in commerce 

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

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 .

OUR ORGANIZATION 

The FTC is an independent Federal law enforcement 

agency that reports to the President and to Congress 

on its actions, with both consumer protection and 

competition jurisdiction in broad sectors of the 

economy . The agency administers a wide variety 

of laws, such as the Federal Trade Commission Act 

(FTC Act), Fair Credit Reporting Act, and Clayton 

Act . In total, the Commission has enforcement or 

administrative responsibilities under more than 70 

laws . The FTC also enforces rules issued pursuant 

to the Federal Trade Commission Act or other 

laws, including the Business Opportunity Rule and 

the Telemarketing Sales Rule . FTC actions include 

pursuing vigorous and effective law enforcement; 

advancing consumers’ interests by sharing its 

expertise with Congress and state legislatures 

and	U.S.	and	international	government	agencies;	

developing policy and research tools through 

hearings, workshops, and conferences; and creating 

practical and plain-language educational programs 

for consumers and businesses in a global marketplace 

with constantly changing technologies . 
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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

The FTC is headed by a Commission composed of 

five commissioners, nominated by the President and 

confirmed by the Senate, each serving a staggered 

seven-year term . No more than three commissioners 

may be from the same political party . The President 

designates one Commissioner to act as Chair who 

is given the responsibility for the administration 

of the Commission . Joseph J . Simons was sworn 

in as Chairman on May 1, 2018 . The four current 

Commissioners are Noah Phillips, Rohit Chopra, 

Rebecca Slaughter, and Christine Wilson who were 

also sworn in during 2018 . This is the first complete 

changeover in leadership since the agency’s founding . 

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

workforce consists of 1,114 civil service employees 

dedicated to carrying out the agency’s mission .

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

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

antitrust laws, which form the foundation of our 

free market economy . The antitrust laws promote 

the interests of consumers; they support unfettered 

markets and result in lower prices and more choices . 

By enforcing the antitrust laws, the Bureau promotes 

competition and protects consumers’ freedom to 

choose goods and services in an open marketplace 

at a price and quality that fit their needs . The Bureau 

seeks to prevent anticompetitive mergers and other 

anticompetitive business practices in the marketplace .

The Bureau of Consumer Protection’s (BCP) mandate 

is to protect consumers against unfair, deceptive or 

fraudulent practices . The Bureau enforces a variety 

of consumer protection laws enacted by Congress, 

as well as trade regulation rules issued by the 

Commission . Its actions include individual company 

and industry-wide investigations, administrative and 

federal court litigation, rulemaking proceedings, and 

consumer and business education . In addition, the 

Bureau contributes to the Commission’s on-going 

efforts to inform Congress and other government 

entities of the impact that proposed actions could 

have on consumers .

The Bureau of Economics helps the FTC evaluate 

the economic impact of its actions . To do so, the 

Bureau provides economic analysis and support to 

antitrust and consumer protection investigations 

and rulemakings . It also analyzes the impact 

of government regulation on competition and 

consumers and provides Congress, the Executive 

Branch and the public with economic analysis of 

market processes as they relate to antitrust, consumer 

protection, and regulation .

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

Simons, Rohit Chopra, Christine S. Wilson
14 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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The work of the bureaus is aided by several 

additional offices:

The Regional Offices work with the Bureaus of 

Competition and Consumer Protection to conduct 

investigations and litigation, provide advice to state 

and local officials on the competitive implications of 

proposed actions, recommend cases, provide local 

outreach services to consumers and businesspersons, 

and coordinate activities with local, state, and regional 

authorities .

The Office of Congressional Relations works closely 

with members of Congress and their staffs . The office 

informs Commissioners and FTC staff of Capitol Hill 

issues and policies, and helps provide information 

on legislation of interest to the Commission . It also 

coordinates the preparation of both Congressional 

testimony and responses to Congressional inquiries 

concerning FTC policies and programs .

The Office of Public Affairs (OPA) informs the 

news media, as well as the public at large, about 

the activities of the FTC and responds to media 

inquiries about Commission actions and policy . 

OPA also manages the agency’s main website, FTC .

gov, and social media accounts, which are critical 

communication tools for the agency .

The Privacy Office ensures that the agency’s 

practices and policies comply with applicable federal 

information privacy and security requirements . 

The Office of Policy Planning conducts research, 

develops policy recommendations, and generates 

written comments and reports on a variety of 

competition and consumer protection issues . Policy 

Planning staff research and analyze emerging issues 

relating to competition in a variety of industries, 

including issues at the intersection of competition 

and intellectual property, in order to enrich the 

Commission’s expertise and inform enforcement 

decisions involving novel or complex legal issues .

The Office of International Affairs leads and 

coordinates the FTC’s work in international antitrust, 

consumer protection, and technical assistance 

projects . The FTC works with competition and 

consumer protection agencies around the world to 

promote cooperation and convergence toward best 

practices . 

The Office of the Secretary oversees swift and prompt 

processing of all matters presented to the Commission 

and supports the Commission decision-making 

process and ensures it operates efficiently . The office 

also responds to most Congressional and White 

House correspondence raising constituent issues .

The Office of the General Counsel is the 

Commission’s chief legal officer and adviser . The 

office represents the Commission in court and 

provides legal counsel to the Commission, the three 

bureaus, and other offices .

The Office of the Executive Director is responsible 

for the administration and management of 

the Commission through four organizations, 

which manage the Commission’s human capital, 

information technology, financial management, and 

administrative/records management services .

The Office of Administrative Law Judges performs 

the initial adjudicative fact-finding in Commission 

administrative complaint proceedings, guided by the 

FTC Act, the Administrative Procedure Act, relevant 

case law interpreting these statutes, and the FTC’s 

Rules of Practice . Administrative Law Judges are 

independent decision makers, appointed under the 

authority of the Office of Personnel Management .

The Office of Inspector General is an independent 

and objective organization within the FTC, 

established in compliance with the Inspector 

General	Act	Amendments	of	1988.	Under	the	

Inspector General Act, the office conducts audits and 

investigations relating to the programs and operations 

of the FTC . 

The Office of Equal Employment Opportunity and 

Workplace Inclusion advises and assists the FTC in 

carrying out its responsibilities and duties relative to 

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

and other laws, executive orders, and regulatory 

guidelines affecting affirmative employment and the 

processing of EEO complaints .

For more information about the agency’s components, 

visit the FTC’s Bureaus and Offices webpage .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 15

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FEDERAL TRADE COMMISSION ORGANIZATIONAL CHART

Bureau of

Competition

Bruce Hoffman

Bureau of

Consumer 

Protection

Andrew Smith

Chairman

Joseph J. Simons

Chief of Staff

Tara Isa Koslov

Chief Technologist

Vacant

Commissioner

Noah Joshua 

Phillips

Office of the

General Counsel

Alden F. Abbott

Bureau of

Economics

Bruce Kobayashi

Commissioner

Rohit Chopra

Commissioner

Christine S. Wilson

Office of

Congressional Relations

Jean Bumpus

Office of

Public Affairs

Cathy MacFarlane

Office of

Inspector General*

Andrew Katsaros (Acting)

Office of

International Affairs

Randolph W. Tritell

Office of

Policy Planning

Bilal Sayyed

Office of Equal Employment 

Opportunity and Workplace 

Inclusion*

Kevin D. Williams

Office of

the Secretary

Donald S. Clark

Commissioner

Rebecca Kelly 

Slaughter

Privacy Office 

John Krebs

Office of the

Executive Director

David B Robbins

Regions

* An independent organization within the FTC

Office of

Administrative Law Judges*

D. Michael Chappell
16 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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

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

competition missions through law enforcement, partnerships, and outreach to community and industry groups . 

Currently, eight regional offices covering seven geographic regions conduct investigations and litigation; provide 

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

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

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

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

offices in the Northwest Region (Seattle in 1925), East Central Region (Cleveland in 1954), Southeast Region

(Atlanta in 1957), and Southwest Region (Dallas in 1972), as well as a second Western Region office (Los Angeles 

in 1961) .

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

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

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

activities with local, state, regional, and cross-border law enforcement authorities . The regional offices host 

events such as Common Ground conferences that bring together state and federal consumer protection officials, 

legal services attorneys, and other consumer advocates to discuss emerging trends and challenges facing 

consumers, and routinely meet with small businesses and other industry groups . 

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

below illustrates the locations of the FTC regions .

San Francisco, CA

NORTHEAST

EAST 

CENTRAL

MIDWEST

SOUTHWEST

WESTERN

NORTHWEST

Los Angeles, CA

Dallas, TX SOUTHEAST

Atlanta, GA

Cleveland, OH Chicago, IL

New York, NY

DC

Hawaii

Alaska

Seattle, WA

Puerto Rico
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 17

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

PERFORMANCE HIGHLIGHTS

For the fifth 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 2018 APR will be combined with 

the FY 2020 Annual Performance Plan (APP) and 

included in the FY 2020 Congressional Budget 

Justification to be published in February 2019 . The 

AFR and combined APP and APR, 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 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

In FY 2018, the FTC published an updated Strategic 

Plan for Fiscal Years 2018 to 2022 . The Office of 

the Executive Director led the strategic planning 

process by establishing a governance structure of 

subject matter experts and executive leadership 

representatives across the FTC . Stakeholder 

engagement included the entire FTC workforce, key 

stakeholder organizations, and twelve congressional 

committees . The FTC’s work is structured around 

three strategic goals and nine objectives . The 

following table shows the FTC’s net costs for its 

strategic goals .

STRATEGIC GOALS

(Dollars in millions) OBJECTIVES

GOAL 1: Protect consumers from 

unfair and deceptive practices in the 

marketplace .

*Net Costs: $172

1.1 Identify and take actions to address deceptive or 

unfair practices that harm consumers.

1.2 Provide consumers and businesses with knowledge 

and tools that provide guidance and prevent harm.

1.3 Collaborate with domestic and international 

partners to enhance consumer protection.

GOAL 2: Maintain competition to 

promote a marketplace free from 

anticompetitive mergers, business 

practices, or public policy outcomes .

*Net Costs: $23

2.1 Identify and take actions to address anticompetitive 

mergers and practices.

2.2 Engage in effective research, advocacy, and 

stakeholder outreach to promote competition, and 

advance its understanding.

2.3 Collaborate with domestic and international 

partners to preserve and promote competition.

GOAL 3: Advance the FTC’s 

performance through excellence in 

managing resources, human capital, 

and information technology .

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

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

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

that are clearly attributable to a specific goal.

3.1 Optimize resource management and infrastructure.

3.2 Cultivate a high-performing, diverse, and engaged 

workforce.

3.3 Optimize technology and information management 

that supports the FTC mission.

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

program/operations. The FTC does not divide net costs by objective.
18 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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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 Performance Improvement Officer (PIO) 

on a quarterly or annual basis via an internal data 

reporting tool . The Financial Management Office 

(FMO) leads periodic performance goal reviews in 

coordination with budget execution reviews . The 

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

and the Chairman are briefed on the results and 

any significant variances in planned versus actual 

results . The PIO and the FMO Performance Team 

then coordinate with the PMROs on any adjustments 

to strategies and tactics based on the performance 

results .

VERIFICATION AND VALIDATION 

OF PERFORMANCE DATA

Appendix A: Data Quality Information contains 

detailed information about the agency’s key measures 

which include definitions, how calculations are done, 

data sources, and how data is collected . Additionally, 

the following outlines steps the agency takes to ensure 

the performance information it reports is complete, 

reliable, and accurate:

•	 The	FTC	has	adopted	a	central	internal	repository	

for performance data entry, reporting, and review . 

The electronic data tool reduces human error, 

increases transparency, and facilitates 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 internal monitoring of each system, 

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

of Consumer Protection and Competition) routinely 

monitor the data collection . For example, senior 

economists from the Bureau of Economics review 

statistical data used by the Bureau of Competition to 

calculate performance results .

The FMO is responsible for providing direction and 

support on data collection methodology and analysis, 

ensuring that data quality checks are in place, and 

accurately reporting performance data .

PERFORMANCE GOALS 

OVERVIEW 

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

has established 36 performance goals for assessing 

program performance against strategic goals and 

objectives, including eight new measures which are 

being baselined in FY 2018 . A significant change 

was made to Goal 3 with the addition of seven new 

baseline performance goals plus a new objective that 

further addresses the importance of critical support 

functions in achieving the FTC mission . Of the 36 

performance goals, 25 met or exceeded targets, one 

did not meet target, and data was not available at the 

time of publication for two . In addition eight goals 

were baselined . The following table displays historical 

high-level performance trends for all of the FTC’s 

performance goals for the past five years .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 19

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

SummARy Of PERfORmAnCE GOALS

FY 

2014

FY 

2015

FY 

2016

FY 

2017

FY 

2018

GOAL 1: Protect 

consumers from unfair 

and deceptive practices 

in the marketplace.

Target Met/Exceeded 6 10 11 10 9

Target Not Met 3 1 1 1 1

Data Not Available 1 1 1

Baseline Year 3 1

GOAL 2: Maintain 

competition to promote 

a marketplace free from 

anticompetitive mergers, 

business practices, or 

policy outcomes.

Target Met/Exceeded 8 10 9 7 9

Target Not Met 2 1 2

Data Not Available 1 1

Baseline Year

GOAL 3: Advance the 

FTC’s performance 

through excellence in 

managing resources, 

human capital, and 

information technology.

Target Met/Exceeded 7 7 7 7 7

Target Not Met

Data Not Available

Baseline Year 7

TOTAL Target Met/Exceeded 21 27 27 24 25

Target Not Met 5 1 2 3 1

Data Not Available 1 2 2

Baseline Year 3 8

TOTAL MEASURES 29 29 29 29 36

Of the 36 performance goals, nine are considered 

“key” performance goals because they best indicate 

whether agency activities are achieving the desired 

outcome associated with the related objective . For 

each performance goal, the FTC has established a 

performance target, except for new measures which 

are setting a baseline in FY 2018, and will establish 

targets for FY 2019 and FY 2020 in the APP .

The following tables summarize actual performance 

during FY 2018 against established targets for the 

FTC’s key performance goals . The tables also include 

actual results from the prior four fiscal years where 

appropriate . The FTC met or exceeded eight of the 

nine key performance goals . The ninth key goal was 

baselined in FY 2018 . 

LEGEND FOR UPCOMING 

TABLES

✔ Signifies that the target is met or exceeded

✖ Signifies that the target is not met
20 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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STRATEGIC GOAL 1: Protect consumers from unfair and deceptive 

practices in the marketplace.

KEY PERFORMANCE GOAL 1.1.3:

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

enforcement.

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

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

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

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

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

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

as what consumers lost in the past. Due to large year-to-year variation, consumer savings is calculated as a threeyear rolling average, divided by the current year’s cost of enforcement.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target N/A N/A N/A N/A $6.50 in 

consumer 

savings per $1 

spent

Actual N/A N/A $8.60 in 

consumer 

savings per $1 

spent*

$35.00 in 

consumer 

savings per $1 

spent*

$38.90 in 

consumer 

savings per $1 

spent

Status N/A N/A N/A N/A ✔

New in FY 2018: While a version of this metric has been reported for several years, beginning in FY 2018 we 

changed how we calculate this measure. We are now including money returned to consumers directly by the 

defendants, not just through the FTC. We have also started reporting this as a three-year rolling average.

*Prior year data, using the updated calculation method, is included for reference. Data on the amount of money 

returned to consumers by defendants, however, is not available for FY14 and FY15, which affects the rolling 

averages reported for FY16 and FY17.

Monopolization via Abuse of Government Processes

Notably	this	year,	the	U.S.	District	Court	for	the	Eastern	District	

of Pennsylvania granted the Commission’s request for permanent 

injunction in FTC v. AbbVie and awarded, with pre-judgment 

interest,	$493.7	million	($447.7M	plus	$46M	in	prejudgment	

interest) in equitable monetary relief to consumers harmed by 

AbbVie’s use of baseless “sham” patent infringement lawsuits and 

reverse payment settlements to delay generic competitors from 

introducing lower-priced versions of the testosterone replacement 

drug AndroGel . This win for consumers marks the Commission’s 

first-ever litigated victory on the merits in a sham litigation matter . 

This matter is pending on appeal . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 21

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

KEY PERFORMANCE GOAL 1.1.4: 

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

FTC enforcement action.

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

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

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

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

FTC is targeting the right defendants. Due to large year-to-year variation, the number reported is a three-year rolling 

average (average of the current year and two prior year totals).

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target N/A N/A N/A N/A Baseline

Actual N/A N/A $80.6 million* $2.67 billion* $3.22 billion

Status N/A N/A N/A N/A N/A

New in FY 2018: While a version of this metric has been reported for several years, beginning in FY 2018 we 

changed how we calculate this measure. We are now including money returned to consumers directly by the 

defendants, not just through the FTC. We have also started reporting this as a three-year rolling average.

*Prior year data, using the updated calculation method, is included for reference. Data on the amount of money 

returned to consumers by defendants, however, is not available for FY14 and FY15, which affects the rolling 

averages reported for FY16 and FY17.

The FTC Hosts Workshops to Study Competition in Prescription Drug 

Markets and the Contact Lens Marketplace 

The FTC hosted two competition policy workshops 

this year that addressed issues in key health care 

markets . In November 2017, the FTC hosted a 

workshop titled “Understanding Competition in 

Prescription Drug Markets: Entry and Supply Chain 

Dynamics.” Recently, concern about rising drug prices has caused policymakers to question whether there 

are obstacles to generic entry that prevent competition from keeping prices in check . Participants discussed 

generic drug markets, intermediaries in the pharmaceutical supply chain, and potential next steps to 

encourage entry and expand access through lower prices . 

In March 2018, the FTC hosted a second 

workshop titled “The Contact Lens Rule and the 

Evolving Contact Lens Marketplace.” During 

this workshop, participants explored issues 

regarding competition in the contact lens marketplace, consumer access to contact lenses, prescription 

release and portability, and related subjects . The workshop was held in conjunction with the Commission’s 

regulatory review of the Contact Lens Rule . 
22 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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KEY PERFORMANCE GOAL 1.2.1: 

Rate of consumer satisfaction with FTC consumer education websites.

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

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

includes the customer satisfaction scores for consumer.ftc.gov and bulkorder.ftc.gov. 

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target 73 73 73 73 72.5

Actual 79 Data Not 

Available

76 77 77

Status ✔ N/A ✔ ✔ ✔

KEY PERFORMANCE GOAL 1.3.2: 

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

engaged in other mutual assistance that contributed to FTC law enforcement actions or in which the FTC 

cooperated with foreign agencies and/or multilateral organizations on enforcement matters.

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

FTC and international consumer protection partners through litigation support, information sharing, and building 

international consumer protection capacity. This measure counts the number of investigations and cases where 

information was shared between the FTC and foreign consumer protection agencies.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target 40 40 40 40 40

Actual 45 58 53 50 43

Status ✔ ✔ ✔ ✔ ✔

Challenging the Wilhelmsen Maritime Services and 

Drew Marine Group Merger 

In February 2018, the Commission issued an administrative 

complaint and authorized staff to seek a preliminary injunction to 

prevent Wilhelmsen Maritime Services’ proposed acquisition of 

Drew Marine Group . According to the complaint, the deal likely 

would have significantly reduced competition by combining the 

world’s two largest suppliers of marine water treatment chemicals 

and services used by global fleets to maintain critical on-board 

equipment on tankers, container ships, cruise ships, and military 

vessels (among others) . In July 2018, the federal district court for 

the District of Columbia granted the Commission’s request for 

preliminary injunction, and the parties subsequently abandoned their transaction.
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 23

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STRATEGIC GOAL 2: Maintain competition to promote a marketplace 

free from anticompetitive mergers, business practices, or public policy 

outcomes.

KEY PERFORMANCE GOAL 2.1.1: 

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

competition.

Description: This measure ensures that FTC actions maintain competition by preventing anticompetitive mergers 

and stopping business practices that restrain competition. This measure reflects actions taken to promote 

competition, including litigated victories, consent orders, abandoned transactions, or restructured transactions (either 

through a fix-it-first approach or eliminating the competitive concern) in a significant percentage of full merger and 

nonmerger investigations.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target 40-60% 40-60% 40-60% 40-60% 40-70%

Actual 57.1% 57.7% 54.6% 49.1% 67.9%

Status ✔ ✔ ✔ ✔ ✔

KEY PERFORMANCE GOAL: 2.1.3: 

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

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

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

large year-to-year variation, consumer savings is calculated as a five-year rolling average, divided by the current 

year’s cost of enforcement.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target $26 in 

consumer 

savings per $1 

spent

$26 in 

consumer 

savings per $1 

spent

$26 in 

consumer 

savings per $1 

spent

$42 in 

consumer 

savings per $1 

spent

$42 in 

consumer 

savings per $1 

spent

Actual $25.10 in 

consumer 

savings per $1 

spent

$51.30 in 

consumer 

savings per $1 

spent

$46.40 in 

consumer 

savings per $1 

spent

$55.60 in 

consumer 

savings per $1 

spent

$50.20 in 

consumer 

savings per $1 

spent

Status ✖ ✔ ✔ ✔ ✔
24 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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KEY PERFORMANCE GOAL 2.1.5: 

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

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

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

program. Due to large year-to-year variation, we calculate consumer savings as a five-year rolling average, divided 

by the current year’s cost of enforcement.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target $18.50 in 

consumer 

savings per $1 

spent

$4 in 

consumer 

savings per $1 

spent

$4 in 

consumer 

savings per $1 

spent

$40 in 

consumer 

savings per $1 

spent

$40 in 

consumer 

savings per $1 

spent

Actual $20.30 in 

consumer 

savings per $1 

spent

$48.60 in 

consumer 

savings per $1 

spent

$52.30 in 

consumer 

savings per $1 

spent

$39.60 in 

consumer 

savings per $1 

spent

$40.10 in 

consumer 

savings per $1 

spent

Status ✔ ✔ ✔ ✖ ✔

KEY PERFORMANCE GOAL 2.3.1: 

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

which the agencies followed consistent analytical approaches and reached compatible outcomes.

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

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

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

activities. 

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target 95% 95% 95% 95% 95%

Actual 100% 100% 100% 96% 98%

Status ✔ ✔ ✔ ✔ ✔

Building Antitrust Capacity in Ukraine

In 2018, the FTC concluded a two-year capacity-building 

program	for	the	Antimonopoly	Committee	of	Ukraine,	

aimed at enhancing the Committee’s role in promoting 

Ukraine’s	transition	to	a	functioning	market	economy.	With	

financial	support	from	the	U.S.	Agency	for	International	

Development	(USAID),	the	FTC,	along	with	the	Department	

of Justice and Competition Bureau Canada, embedded 

several career lawyers and economists in the Antimonopoly 

Committee to transfer investigational and analytical 

expertise	to	their	Ukrainian	colleagues	by	working	together	

on the Committee’s cases . Among other things, FTC advisors encouraged adoption of International 

Competition Network best practices, helped implement a case screening mechanism, and worked with the 

Antimonopoly Committee to build an economics department . The program was so successful that both 

USAID	and	the	Antimonopoly	Committee	asked	the	FTC	to	renew	its	assistance	for	an	additional	year.
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 25

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

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

in managing resources, human capital, and information technology.

KEY PERFORMANCE GOAL 3.2.3: 

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

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

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

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

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

Experience.

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

communication and workforce motivation. 

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

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

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Target N/A N/A N/A N/A 67.6% 

(governmentwide average)

Actual 76.0%* 78.5%* 81.5%* 82.5%* 83.1%

Status N/A N/A N/A N/A ✔

New in FY 2018: The FTC’s FY 2018-2022 Strategic Plan added this new key measure, tracking the EEI. This 

replaces a previous key measure, which tracked the FEVS Talent Management Index.

* Prior year data included for reference.

FEVS EMPLOYEE ENGAGEMENT INDEX SCORES 

FOR MEDIUM AGENCIES (1000-9999 EMPLOYEES)
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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

AGENCY MISSION CHALLENGES

In today’s increasingly complex economy, the FTC 

stands as a champion for competition and consumers . 

For example, when consumers and businesses 

encounter difficulties with financial scams, deceptive 

or fraudulent advertising, or online privacy and 

data security, the FTC is prepared to respond with 

vigorous law enforcement . Similarly, when consumers 

are harmed by anticompetitive business practices in 

key sectors of our economy like technology and health 

care, the FTC steps forward, bringing to bear its full 

complement of enforcement and policy tools .

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 

independently from the process by which the 

Inspector General (IG) identified management and 

performance challenges (see Other Information 

Section) . Management concurs with the IG-identified 

challenges and assessment of agency progress in 

addressing the challenges .

STRATEGIC GOAL 1: PROTECT 

CONSUMERS

Pursuant to the agency’s Protect Consumers goal, 

the FTC will continue to prioritize the following 

challenges: protecting Americans from fraud, 

including in the financial services marketplace; 

protecting consumers as technology evolves; 

protecting consumer privacy and improving data 

security, including combating identity theft; and 

addressing emerging advertising issues and targeting 

deceptive advertising .

PROTECTING AMERICANS FROM FRAUD:

Fraud affects all consumers and honest businesses . 

The FTC will continue its enforcement efforts to 

stop fraud, focusing on those instances that cause or 

are likely to cause the greatest consumer harm . The 

FTC continues to receive consumer complaints about 

imposter scams in which the perpetrators pose as 

government agencies, legitimate technical support 

companies, family members, or other trusted entities . 

Certain scams, such as those involving business and 

income opportunities, pose an even greater risk 

to consumers from lower income or underserved 

communities .

The FTC Begins Hearings Examining Competition and Consumer 

Protection in the 21st Century 

In 2018, the FTC announced a 

series of hearings to consider 

whether broad-based changes 

in the economy, evolving 

business practices, new 

technologies, or international 

developments might require adjustments to competition and consumer protection law and policy . In 

conjunction with the public comment process, these events will provide the FTC with a diverse range of 

viewpoints and stimulate evaluation of key enforcement and policy issues . The first hearing was held in 

September 2018 and addressed topics including the landscape of competition and consumer protection 

law	and	policy;	concentration	and	competitiveness	in	the	U.S.	economy;	regulation	of	consumer	data;	the	

consumer welfare standard in antitrust; and vertical mergers . Additional hearings have been held since then, 

and more are planned for FY 2019 .

in the 21st Century

Competition and Consumer Protection

Hearings on
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The FTC will maintain a focus on frauds targeting 

specific populations, including military consumers, 

seniors, non-English-speaking consumers, and small 

businesses . Con artists continue to target the most 

vulnerable consumers and consumers in financial 

distress . Therefore, the FTC will continue to pursue 

law enforcement actions to stop deceptive or other 

unlawful conduct in mortgage, student loan, and 

other debt relief services; payday lending; and debt 

collection . This unlawful conduct can have severe 

consequences for consumers who can least afford it . 

The FTC will also prioritize outreach and education 

for these populations .

The FTC will continue to closely coordinate 

with other federal agency partners to ensure that 

consumers are protected in the financial marketplace, 

and to avoid duplicative efforts between agencies . 

Through the FTC’s Business Center at business .ftc .gov

and other outreach efforts, the FTC will continue 

to offer educational materials to help businesses – 

especially small businesses – understand and comply 

with consumer protection laws and avoid becoming 

victims of fraud (Objectives 1 .1, 1 .2, and 1 .3) .

PROTECTING CONSUMERS AS 

TECHNOLOGY EVOLVES:

Technology provides countless benefits to consumers, 

including choice, convenience, and increased access 

to goods, services, and information . However, it 

also enables new vehicles for fraudulent, deceptive, 

and unfair practices in the marketplace . The FTC 

will continue its focus on the consumer protection 

issues associated with the use of emerging 

technology, including a careful consideration of the 

costs and benefits of new business practices and 

the importance of fostering innovation . The FTC 

will take enforcement actions against deceptive 

advertisements that appear in new formats and new 

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

social networks) . The FTC recently held a workshop 

exploring how scammers are exploiting public interest 

in cryptocurrencies (such as Bitcoin and Litecoin) and 

discussed ways to empower and protect consumers 

against these scams . In addition, with the return of 

FTC jurisdiction over Internet Service Providers 

(ISPs) pursuant to the Federal Communications 

Commission’s (FCC) Restoring Internet Freedom 

Order, the FTC will monitor consumer complaints 

about ISPs, and will take appropriate action against 

deceptive ISP advertising or other unfair or deceptive 

ISP practices . The FTC will continue to conduct 

research on emerging technologies to assist with 

enforcement actions, inform policy, and educate 

consumers .

Consumers and law enforcers face challenges 

resulting from technological advances that facilitate 

the use of illegal robocalls and make it easier for 

fraudsters perpetrating telemarketing scams to hide 

their location . The FTC will continue to work with 

consumer groups, telecommunications industry 

representatives, technologists, policymakers, and 

other stakeholders to develop solutions to halt illegal 

robocalls and other telemarketing practices that 

violate the Telemarketing Sales Rule . The FTC and 

FCC will continue their coordinated efforts to combat 

illegal robocalls and promote innovative solutions 

to protect consumers . The FTC and FCC hosted 

a joint policy forum highlighting the actions the 

agencies and others have taken to fight the scourge of 

Debt Relief Scammers Settle with the FTC and Florida

Three Helping America Group marketers, who allegedly sold phony debt 

relief services, agreed to be banned from telemarketing and selling debt 

relief, credit repair, and other financial products and services, under 

settlements with the FTC and the State of Florida . The marketers allegedly 

convinced people to pay hundreds to thousands of dollars a month by 

falsely promising to resolve their debts and improve their credit . Over 

time, victims found their debts unpaid, their accounts in default, and their 

credit scores lower; some were sued by their creditors, and others were 

forced into bankruptcy .
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illegal robocalls . The FTC and FCC also co-hosted a 

Robocalls Expo to showcase innovative technologies, 

devices, and apps to minimize the number of illegal 

robocalls consumers receive (Objectives 1 .1, 1 .2, 

and 1 .3) .

PROTECTING CONSUMER PRIVACY AND 

IMPROVING DATA SECURITY:

The FTC will continue to take a leading role in 

efforts to protect consumers from unfair or deceptive 

practices related to the security and privacy of their 

personal information, while preserving the many 

benefits that technological advances offer . The agency 

will stop unfair and deceptive consumer privacy and 

data security practices through law enforcement and 

will promote strong and balanced privacy and security 

protections through policy initiatives on a range of 

topics . The FTC hosted a workshop on Informational 

Injury, highlighting emerging issues in understanding 

and quantifying privacy and data security related 

harm to consumers . The FTC also hosted its third 

annual PrivacyCon event to highlight research 

that explores the privacy and security implications 

of emerging technologies, such as the Internet of 

Things, artificial intelligence, and virtual reality . 

The event also focused on the economics of privacy, 

including how to quantify the harms that result when 

companies fail to secure consumer information, and 

how to balance the costs and benefits of privacyprotective technologies and practices . In addition, 

the FTC issued a report recommending that mobile 

device manufacturers consider taking additional steps 

to get more security updates to user devices faster . 

The report found that the complexity of the mobile 

ecosystem means that the security update process for 

patching operating system software on some mobile 

devices is intricate and time-consuming . The FTC 

recently launched a small business cybersecurity 

education campaign to help small businesses 

strengthen their cyber defenses and protect sensitive 

data that they store .

The agency will bring appropriate enforcement 

actions against entities that violate the Children’s 

Online Privacy Protection Act (COPPA) Rule . 

The FTC recently co-hosted a workshop with the 

Department of Education to examine privacy issues 

related to education technology . The agency also 

will continue to participate in interagency groups, 

promote self-regulatory efforts, provide technical 

assistance to Congress on draft legislation, and 

participate in international privacy initiatives . In 

addition, the agency will continue to support the 

development of the digital economy through crossborder data flows, executing with diligence its 

enforcement role in the Privacy Shield framework and 

the Asia-Pacific Economic Cooperation/Cross Border 

Privacy Rules . 

Identity theft exacts a heavy financial and emotional 

toll from its victims . The FTC will continue to assist 

the millions of Americans who are victimized each 

year through data security breaches and other means . 

The FTC will continue to be the repository for 

Decrypting Cryptocurrency Scams

The FTC hosted a “Decrypting Cryptocurrency Scams” 

workshop in Chicago to examine scams involving 

cryptocurrencies . The workshop brought together 

consumer groups, law enforcement, research organizations, 

and the private sector to explore how scammers are 

exploiting public interest in cryptocurrencies (such as 

Bitcoin and Litecoin) and to discuss ways to empower and 

protect consumers . Cryptocurrencies are digital assets 

that use cryptography to secure or verify transactions . 

They	are	not	created	by	a	government	or	central	bank,	but	they	can	be	exchanged	for	U.S.	dollars	or	other	

government-backed currencies . Scams involving cryptocurrencies include deceptive investment and 

business opportunities, bait-and-switch schemes, and deceptively marketed “mining machines” that falsely 

promise opportunities to generate new cryptocurrency .
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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

identity theft complaints and make them available 

to federal criminal law enforcement agencies . The 

agency’s trained counselors will continue to advise 

identity theft victims who call our toll-free number 

about rights and remedies available to them under 

federal law . The FTC’s website IdentityTheft .gov is 

the federal government’s one-stop resource to help 

consumers report and recover from identity theft . 

IdentityTheft .gov highlights useful resources and 

connects identity theft victims to federal agencies and 

other organizations that are critical to the recovery 

process . IdentityTheft .gov allows visitors to create a 

customized plan based on their specific experiences . 

Recently, the FTC and the Internal Revenue Service 

(IRS) teamed up to make it easier for consumers 

to report tax-related identity theft and to receive 

assistance to aid their recovery . The IRS now 

allows consumers to report identity theft to the IRS 

electronically through the FTC’s IdentityTheft .gov

website . In addition, the Bureau of Consumer 

Protection’s Office of Technology Research and 

Investigation is monitoring and conducting research 

on emerging technologies . That research assists with 

the Commission’s consumer protection efforts on 

enforcement, consumer education, and policymaking . 

The agency also will train local law enforcement to 

spot and prosecute identity theft, and will update 

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

ADDRESSING EMERGING ADVERTISING 

ISSUES AND TARGETING DECEPTIVE 

ADVERTISING:

Digital media has opened new avenues for companies 

to communicate with consumers, and the format 

of advertisements continues to evolve . Like all 

advertising, digital marketing must comply with the 

law . 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 

Electronic Toy Maker Settles FTC Allegations that it Violated Children’s 

Privacy Law

The FTC obtained $650,000 from electronic toy manufacturer, 

Vtech	and	its	U.S.	subsidiary	in	settlement	of	allegations	that	the	

company	violated	U.S.	children’s	online	privacy	laws	by	collecting	

personal information from children without having provided 

direct notice to, and obtained consent from, their parents and 

without having taken reasonable steps to secure the data it 

collected . The settlement marks the agency’s first children’s privacy 

and security case involving Internet-connected toys .

Court Imposes $40 Million Judgment Against Weight-Loss Supplement 

Marketers for Order Violations 

A federal district judge issued an order finding several defendants 

in contempt for violating previous court orders related to the sale 

of weight-loss dietary supplements . The more than $40 million 

judgment imposed against the defendants who ran Hi-Tech 

Pharmaceuticals will be refunded to deceived consumers who 

bought the products . The sanction is one of the largest the FTC has 

obtained in a dietary supplement case . The Court found that the 

defendants continued to deceptively market dietary supplements 

with unsubstantiated claims such as “rapid fat loss,” “fat burner,” 

“extreme weight loss guaranteed,” and “curbs the appetite,” in violation of a 2008 order .
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the use of fabricated reviews, undisclosed material 

connections with reviewers, prohibitions on negative 

reviews, or unsubstantiated testimonials, and take 

action as appropriate . Companies are increasingly 

blending advertising with news, entertainment, 

or editorial content in digital media . If consumers 

do not recognize and understand the difference 

between the advertising and other content, they 

may be deceived . The FTC, therefore, will continue 

to examine consumer protection issues raised by 

sponsored content, “native” advertising that looks 

like surrounding non-commercial content, and 

endorsements . 

The FTC will continue to address deceptive 

advertising of health products, such as homeopathic 

products and dietary supplements . The agency will 

focus on disease prevention and treatment claims; 

claims aimed at baby boomers, seniors, and military 

members; and claims exploiting emerging health 

threats . The FTC also will continue to focus its law 

enforcement efforts on misleading environmental 

marketing claims and will educate businesses about 

the	FTC’s	Guides	for	the	Use	of	Environmental	

Marketing Claims (“Green Guides”) (Objectives 1 .1, 

1 .2, and 1 .3) .

STRATEGIC GOAL 2: MAINTAIN 

COMPETITION

Pursuant to the agency’s Maintain Competition 

goal, the FTC will continue to prioritize promoting 

competition and preventing anticompetitive conduct 

in 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 . In order to facilitate these goals, the FTC has 

commenced a series of public hearings to examine 

whether broad-based changes in the economy, 

evolving business practices, new technologies, or 

international developments might require adjustments 

to competition and consumer protection laws, 

enforcement priorities, or policy . These Hearings 

on Competition and Consumer Protection in the 

21st Century (21st Century Hearings) are designed 

to stimulate thoughtful dialogue and evaluation of 

the FTC’s near- and long-term law enforcement and 

policy agenda . 

PROMOTING COMPETITION IN HEALTH 

CARE AND PHARMACEUTICAL MARKETS:

The high cost of health care, which continues to 

account for a significant share of the gross domestic 

product, is a matter of concern for consumers, 

businesses, and taxpayers . To ensure that consumers 

receive the benefits of competitive health care 

markets, antitrust enforcement and advocacy in this 

sector are top priorities for the Commission .

The FTC will continue to focus resources on 

anticompetitive reverse payment patent settlement 

agreements . Branded and generic drug manufacturers 

use these agreements to delay generic competition . As 

the	U.S.	Supreme	Court	explained	in	FTC v. Actavis, 

“there is reason for concern that settlements taking 

this form tend to have significant adverse effects 

on competition .” Similarly, the Commission will 

continue to investigate other anticompetitive conduct, 

FTC Obtains Judgment Against Ad Agency

Marketing Architects, an advertising agency that created and 

disseminated allegedly deceptive radio ads for weight-loss products 

marketed by its client, Direct Alternatives, agreed to pay $2 

million to settle a complaint filed by the FTC and the State of 

Maine . The complaint also alleged that Marketing Architects had a 

history of creating similar claims for other weight-loss marketers, 

including Sensa, which was the subject of a 2014 FTC complaint 

and settlement . Direct Alternatives earlier settled a 2016 suit filed 

by	the	FTC	and	Maine.	The	$2	million	judgment	is	among	the	

largest ever obtained by the FTC against an advertising agency .
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Challenging the CDK Global and Auto/Mate Merger

In March 2018, the FTC authorized staff to seek a preliminary 

injunction to stop CDK Global’s proposed acquisition of Auto/

Mate, pending an administrative trial on the merits . According 

to the Commission’s administrative complaint, the deal would 

have	reduced	competition	in	the	already	concentrated	U.S.	

market for specialized software known as Dealer Management 

Systems . These systems are used by new car dealers to 

manage all aspects of the automotive sales business, including 

accounting, payroll, parts and vehicle inventory, service repair 

scheduling, and vehicle financing . Auto/Mate competed with 

CDK and other larger competitors in the industry and won business by offering lower prices, flexible 

contract terms, free software upgrades and training, and high quality customer service—hallmarks of the 

benefits of vigorous competition in the marketplace . The proposed acquisition likely would have eliminated 

these important benefits . Facing the Commission’s challenge, the parties abandoned their transaction .

such as sham litigation or the abuse of government 

regulatory processes used to delay generic entry 

into pharmaceutical markets . Such practices deny 

consumers access to lower priced generic drugs . 

The FTC reviews, investigates, and challenges these 

harmful practices where appropriate . 

The FTC also prioritizes stopping anticompetitive 

health care mergers that could lead to higher costs 

or reduced quality, including those involving health 

care providers and pharmaceutical and medical 

device companies . In recent years, the FTC has 

required significant divestitures in a large number of 

pharmaceutical transactions . 

Beyond enforcement, the FTC utilizes its full range 

of policy and advocacy tools to promote competition 

in health care markets . For example, the FTC has 

advocated against state legislation that attempts to 

immunize competing hospitals and other health care 

providers from federal antitrust laws when they merge 

or engage in certain forms of collaboration . In the 

FTC’s view, state efforts to immunize such conduct 

are unnecessary . The antitrust laws already permit 

procompetitive collaboration that would benefit 

consumers; therefore, the main effect of these statutes 

would be to immunize conduct that likely would 

restrain competition and result in higher health care 

prices for consumers, without generating offsetting 

benefits .

The FTC also attempts to better understand the 

markets it monitors and to anticipate future antitrust 

law and policy developments through research and 

scholarship . The FTC’s ongoing 21st Century Hearings 

will continue that tradition (Objectives 2 .1 and 2 .2) .

CONTINUING EMPHASIS ON 

TECHNOLOGY: 

The continuing importance of technology and the 

fast pace at which it evolves are crucial marketplace 

challenges . FTC antitrust investigations involve 

increasingly complicated 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) premerger 

notification program, and 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, and that will not generate 

sufficient efficiencies to outweigh the competitive 

harm . The FTC is vigilant when 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 are a primary focus of the 

21st Century Hearings that commenced in September 
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2018 . The hearings are covering topics such as: 

the intersection between privacy, big data, and 

competition; competition and consumer protection 

issues in communication, information, and media 

technology networks; and the consumer welfare 

implications of algorithmic decision tools, artificial 

intelligence, and predictive analytics (Objectives 2 .1 

and 2 .2) .

PREVENTING ANTICOMPETITIVE 

ACTIVITY IN THE ENERGY INDUSTRY: 

The agency continues to closely monitor energy 

markets to identify and challenge anticompetitive 

mergers and conduct . FTC merger enforcement 

actions have resulted in multiple divestitures in 

the energy sector in recent years, particularly in 

local markets for retail fueling (e .g ., Alimentation 

Couche-Tard (ACT)/Holiday and ACT/JetPep) . The FTC also continuously examines price 

movements and other activity through its Gasoline 

and Diesel Price Monitoring Project, a tool that 

can help identify anticompetitive conduct such as 

illegal agreements among competitors, agreements 

between manufacturers and product dealers, and 

monopolization that may undermine the benefits of 

competition . 

The FTC regularly issues reports on the factors that 

influence the prices American consumers pay for gas . 

In compliance with the Energy Policy Act of 2005, 

the FTC issued its thirteenth annual Ethanol Market 

report in 2017, which concluded that the market 

is less concentrated than it was thirteen years ago 

(Objectives 2 .1 and 2 .2) .

MAINTAINING ROBUST COMPETITION IN 

RETAIL MARKETS:

Competition in retail markets impacts the wallet 

of every American consumer . The FTC focuses 

significant resources on identifying and challenging 

mergers and conduct likely to harm competition in 

the retail sector . These actions preserve competition, 

which benefits consumers by keeping prices down, 

improving quality and service, and expanding 

innovation and consumer choice . In recent years, 

the Commission has successfully challenged several 

large retail mergers, including Walgreens/Rite 

Aid, Smucker/ConAgra, and several supermarket 

acquisitions .

As in other sectors, the FTC also continues to study 

evolving competitive dynamics that affect how 

consumers shop for products they want to buy . The 

retail sector, perhaps more than most, has been 

reshaped through advances in technology, including 

behavioral advertising, predictive analytics, and big 

data—three transformative innovations that the 

Commission’s ongoing 21st Century Hearings will 

address (Objectives 2 .1 and 2 .2) .

Challenging the Smucker and Conagra Merger

In March 2018, the Commission authorized 

staff to seek a preliminary injunction in federal 

court to prevent J.M. Smucker’s $285 million 

proposed acquisition of Conagra Brands, 

Inc.’s Wesson cooking oil brand, pending an 

administrative trial on the merits . According 

to the Commission’s complaint, the deal would 

have given Smucker, owner of the Crisco brand, 

control of at least 70 percent of the market for 

branded canola and vegetable oils sold to grocery and other retailers . The transaction would have eliminated 

the vigorous head-to-head competition between the two firms, increasing Smucker’s negotiating leverage 

with retailers and leading to higher prices for consumers . In the face of the FTC’s challenge, the parties 

abandoned the proposed transaction . 
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MANAGEMENT 

ASSURANCES

IMPLEMENTATION OF THE 

FEDERAL MANAGERS’ 

FINANCIAL INTEGRITY ACT 

(FMFIA) 

The FTC’s Enterprise Risk Management (ERM) 

and internal controls are integral to the agency’s 

operations and to carrying out activities that achieve 

strategic goals and objectives . Internal controls are 

part of all agency systems and processes . Management 

is responsible for implementing, monitoring, and 

improving on these controls as well as assessing 

agency performance risks in order to operate 

effectively and efficiently, ensure reliability of financial 

and performance information, and comply with 

applicable laws and regulations .

The FTC’s Senior Management Council provides 

oversight to the Senior Assessment Team (SAT) 

activities and is instrumental in the strategic risk 

management and mitigation efforts for the agency’s 

most significant risks . The SAT plans and executes the 

agency’s enterprise risk and internal control program 

activities . This includes assessing and improving 

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

Management and Budget (OMB) Circular A-123, 

Management Responsibilities for Enterprise Risk 

Management and Internal Controls), monitoring and 

remediating identified risks, and communicating the 

results of reviews to senior management and the head 

of the agency .

During FY 2018, 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 .

In FY 2018, the FTC continued with implementing 

its ERM program plan and strategy . The agency’s 

progress includes implementing new risk registers 

with programs, monitoring risk registers, executing 

an annual segment of the multi-year internal 

control assessment plan, identifying and analyzing 

risk, assessing entity level control activities, and 

monitoring corrective actions . In determining 

whether management control deficiencies or 

nonconformances existed that must be disclosed in 

the annual assurance statement, the SAT and the 

Chairman evaluated several sources of information . 

These range from results of ERM activities and 

information from independent audits or reviews 

including those performed by the Office of Inspector 

General (OIG), the Government Accountability 

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

Management Act review), independent audits of 

service providers’ operations and financial systems 

(e .g ., reviews conducted in accordance with Statement 

on Standards for Attestation Engagements or the 

SSAE No . 18 report), and other relevant evaluations 

and control assessments .

The Chairman’s assurance statement is supported by 

the processes and reviews described above, which 

were performed in FY 2018 . Management assurance 

tables appear in the Other Information section .
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UNITED	STATES	OF	AMERICA

Federal Trade Commission

WASHINGTON, D .C . 20580

Joseph J . Simons

Chairman

CHAIRMAN’S FMFIA STATEMENT OF ASSURANCE

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

maintaining effective risk management, 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 Enterprise Risk Management and 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 an unmodified assurance that its 

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

and compliance with applicable laws and regulations were operating effectively as of September 

30, 2018, 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 provide an unmodified statement of assurance (no material

weaknesses or lack of compliance reported) that the FTC financial management systems 

substantially conform with the Federal Financial Management Improvement Act of 1996

(FFMIA), applicable financial systems requirements, applicable Federal accounting standards

and	the	U.S.	Standard	General	Ledger	at	the	transaction	level.

Joseph J . Simons

Chairman

October 31, 2018
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 35

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

SUMMARY OF MATERIAL 

WEAKNESS AND 

NONCONFORMANCES

As noted in the Chairman’s FMFIA Statement of 

Assurance, the FTC has no material weaknesses or 

nonconformances to report for FY 2018 .

FEDERAL INFORMATION 

SECURITY MANAGEMENT ACT 

(FISMA) 

As mandated by FISMA, the agency continues to 

maintain an information security program to manage 

information technology in accordance with OMB 

Circular A-130 requirements and National Institute 

of Standards and Technology (NIST) guidance . 

During FY 2018, three systems were retired, two 

were added, and eight assessment and authorization 

efforts were performed . The FTC currently has eleven 

systems authorized to operate . The FTC leverages 

six Federal Risk and Authorization Management 

Program (FedRAMP) cloud service providers: one 

for web hosting of the agency’s public web properties, 

three for the agency’s Sentinel Network Services, 

one for the litigation services, and one for electronic 

case management and Freedom of Information Act 

Solutions .

DIGITAL ACCOUNTABILITY AND 

TRANSPARENCY ACT OF 2014 

(DATA ACT)

The DATA Act expands the Federal Funding 

Accountability and Transparency Act of 2006 to 

increase accountability and transparency in federal 

spending, making federal expenditure information 

more accessible to the public; improve the quality 

of the information on USASpending.gov, as verified 

through regular audits of the posted data; and 

streamline and simplify reporting requirements 

through clear data standards . The FTC successfully 

transmitted the data files and certified the quarterly 

submissions in compliance with the government-wide 

requirements	set	by	OMB	and	the	U.S.	Department	of	

Treasury .

DEBT COLLECTION 

IMPROVEMENT ACT 

The Debt Collection Improvement Act of 1996 

prescribes standards for the administrative collection, 

compromise, suspension, and termination of 

federal agency collection actions and referrals to 

the proper agency for litigation . The FTC monitors, 

administers, and collects on debts less than 120 days 

delinquent . The FTC also monitors, administers and 

collects on debts more than 120 days delinquent . 

Eligible, nonexempt debts more than 120 days 

old	are	transferred	to	the	U.S.	Department	of	the	

Treasury for cross-servicing . In addition, recurring 

payments are processed by electronic funds transfer in 

accordance with the provisions of the Debt Collection 

Improvement Act .

PROMPT PAYMENT ACT 

The Prompt Payment Act requires federal agencies 

to make timely payments to vendors, including 

any interest penalties for late invoice payments . In 

FY 2018, the FTC processed 3,328 invoices totaling 

$85	million	that	were	subject	to	prompt	payment.	

Of these invoices, 97 .13 percent were paid on time . 

During	FY	2018,	the	FTC	paid	a	total	of	$4,409	in	

interest penalties, or .0049 percent of the total dollar 

amount invoiced .

AGENCY FINANCIAL 

MANAGEMENT SYSTEMS 

STRATEGY

The FTC’s overall strategy for its financial 

management systems is to ensure that the systems 

provide accurate, reliable, and timely information 

for management decision making, maintain effective 

internal controls, and comply with applicable laws 

and regulations . It is also critical that the financial 

management systems support both operational 

efficiency and effectiveness in meeting the agency’s 

strategic goals . The FTC uses the Oracle Federal 

Financials (OFF) as its core financial system and relies 

on the Department of the Interior’s Interior Business 

Center (IBC), a Federal Shared Service Provider, to 

host and support OFF operations . The IBC also hosts 

and supports other financial management systems for 
36 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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the FTC including the personnel and payroll system, 

the travel management system, and the procurement 

management system (a component module of OFF) . 

The FTC has been receiving payroll support services 

from the IBC since 1998 and additional financial 

management and systems services since 2008 .

The core financial system is delivered using OFF 

Release 12 .1, and provides general ledger, accounts 

payable, accounts receivable, budget execution, 

requisition, contract writing (Contract Lifecycle 

Management), and reporting capabilities . 

The FTC, with the IBC’s support, continues to 

modernize and integrate its financial management 

systems . In FY 2018, the FTC implemented the 

Invoice Processing Platform (IPP), a secure web-based 

service that more efficiently manages government 

invoicing from purchase orders through payment 

notifications . The IPP automates vendor invoicing 

and payment activities and aims to reduce costs and 

improve accuracy of transactions . These efforts not 

only comply with Federal Financial Management 

Improvement Act Section 803(a) requirements but 

also guidance of OMB Memorandum M-13-08 on the 

use of shared service solutions and automation to save 

cost and improve the quality and performance of the 

Federal Government .

In FY 2019, the IBC and the FTC will complete two 

significant upgrades to the financial system that 

began in FY 2018 . The first upgrade will bring OFF 

from Release 12 .1 to the latest Release 12 .2 . This 

will significantly improve processing of acquisition 

transactions . The second upgrade will improve the 

data analytics functions within OFF, migrating from 

the Oracle Discoverer reporting system to the Oracle 

Business Intelligence Enterprise Edition/Oracle 

Business Intelligence Application solutions . This will 

allow the FTC to use business analytics to deliver 

information across the agency from front line users to 

senior management . 

In addition to application management and support 

services, the FTC also relies on the IBC for limited 

transaction processing . In support of the Federal 

Government’s commitment to improve financial 

systems through shared service and the Office of 

Management and Budget’s guiding principle to 

support plans that offer the best value for the Federal 

Government, it is important for the FTC to continue 

to evaluate its operations and the services it receives . 

This will allow the FTC to ensure the most effective 

deployment of personnel and financial resources . 

As part of the ongoing effort to achieve continued 

improvement, the FTC will evaluate the capabilities 

and gaps of existing services to ensure the FTC 

is employing the most effective mix of services, 

therefore providing the most value to taxpayers for 

Financial Management services at the FTC .

FEDERAL CIVIL PENALTIES 

INFLATION ADJUSTMENT ACT 

OF 1990

As established by statutory civil penalty provisions, 

the FTC has jurisdiction to charge civil penalties for 

violations specified in the FTC Act and other laws 

the Commission is responsible for administering 

and enforcing . The FTC adjusts these civil penalty 

amounts for cost of living, as required by Federal Civil 

Penalties Inflation Adjustment Act of 2015 .

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

authority for the penalty, adjustment dates, and 

current penalty amount can be found in the Other 

Information section of this report .

FRAUD REDUCTION AND DATA 

ANALYTICS ACT

The Fraud Reduction and Data Analytics Act of 2015 

was passed to improve federal agency financial and 

administrative controls and procedures to assess and 

mitigate fraud risks, and to improve Federal agencies’ 

development and use of data analytics for the purpose 

of identifying, preventing, and responding to fraud, 

including improper payments . 

During FY 2018, the FTC expanded its fraud risk 

program, strengthened the agency’s processes, and 

improved internal controls to prevent, detect, and 

mitigate fraud risks . Please see the Fraud Reduction 

Report in the Other Information section of this report 

for additional information . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 37

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

FINANCIAL HIGHLIGHTS

INTRODUCTION

The FTC’s accounting practices continue to be 

accurate and transparent, which directly supports 

the agency’s dual mission to protect consumers and 

promote competition, and consistently demonstrates 

the FTC’s commitment to responsible stewardship 

of resources and sound financial operations . For 

the 22nd straight year, the FTC again received 

a “clean” or unmodified opinion on its audited 

financial statements . Independent auditors issue 

an unmodified opinion when an entity’s financial 

statements are presented fairly, in all material 

aspects,	in	accordance	with	U.S.	Generally	Accepted	

Accounting Principles (GAAP) .

The following discussion provides an overview of the 

agency’s financial position and results of operations . 

The complete audited financial statements with 

accompanying notes, including the independent 

auditor’s report, are presented in the Financial Section 

of this report .

BALANCE SHEET

The FTC’s Balance Sheet includes both entity and 

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

are authorized by the Congress for the FTC to use in 

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

(PP&E) . Entity liabilities consist of probable and 

measurable future outflows of FTC entity resources . 

Non-entity assets (which are not available for the 

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

i .e ., collections and accounts receivable that arise from 

civil monetary penalties and court-ordered judgments 

for monetary relief in the agency’s consumer redress 

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

non-entity liabilities . 

CONDENSED BALANCE SHEET 

AS OF SEPTEMBER 30, 2018 AND 2017

(Dollars in Millions) FY 2018 FY 2017 % Change

Entity Assets

Fund balance with Treasury $ 129 $ 133 -3%

General property, plant, and equipment 39 51 -24%

Total Entity Assets 168 184 -9%

Non-Entity Assets

Fund balance with Treasury 359 432 -17%

Accounts receivable 599 70 756%

Total Non-Entity Assets 958 502 91%

Total Assets 1,126 686 64%

Entity Liabilities

Employee related liabilities 22 21 5%

Accounts payable and other 11 11 0%

Total Entity Liabilities 33 32 3%

Non-Entity Liabilities

Redress collections not yet disbursed 359 432 -17%

Liability for amounts to be collected 599 70 756%

Total Non-Entity Liabilities 958 502 91%

Total Liabilities $ 991 $ 534 86%

Cumulative results of operations 135 152 -11%

Total Net Position 135 152 -11%

Total Liabilities and Net Position $ 1,126 $ 686 64%
38 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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BALANCE SHEET

ENTITY

Entity	assets	totaled	$168	million,	or	15	percent	of	all	

FTC assets, as of September 30, 2018, a decrease of 

$16	million,	or	9	percent	from	the	FY 2017	total	of	

$184	million.		

The Fund Balance with Treasury (FBwT) of 

$129 million	comprises	$37	million	that	is	temporarily	

unavailable	for	expenditure	and	$92 million	available	

to the FTC to make expenditures and pay liabilities, 

for	a	total	decrease	of	$4	million,	or	3	percent,	from	

the	FY	2017	total	of	$133	million.	At	the	end	of	

FY 2018,	the	FTC’s	FBwT	contained	$32	million	in	

temporarily unavailable offsetting collections (fees 

from the FTC’s National Do Not Call Registry and 

premerger notification filings) that exceeded the 

amount authorized to offset the FTC’s appropriation . 

Of	the	$32	million,	$6	million	was	temporarily	

reduced by the FY 2013 sequestration .

PP&E, net of accumulated depreciation/amortization, 

is	$39	million,	which	consists	of	$29	million	in	

leasehold	improvements,	$7	million	in	equipment,	

and	$3	million	in	software.	Of	the	total	PP&E,	

$27 million	is	associated	with	the	FY	2014	relocation	

of staff to office space at the Constitution Center . 

The	$12	million	decrease	in	PP&E	is	primarily	due	

to asset disposals and the continued depreciation/

amortization of assets related to the FY 2014 staff 

relocation .

The annual trend in the FTC’s total assets reflects 

the OMB Category B apportionment between 

FY 2010	and	FY	2013	of	more	than	$74	million	for	

the relocation of staff to office space at Constitution 

Center . The move was completed in FY 2014, with 

over	$46	million	being	spent	on	capitalized	assets.		

Since these assets were placed in service, the FTC’s 

PP&E balance has decreased, primarily due to 

continual depreciation on these assets . 

Millions

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

FBwT PP&E

ENTITY ASSETS
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 39

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

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

FTC liabilities as of September 30, 2018, and represent 

an insignificant change in liabilities from FY 2017 to 

FY 2018 .

Employee-related	liabilities	of	$22	million	consist	of	

accrued payroll, accrued annual leave wages earned 

by employees but not paid, and the Federal Employees 

Compensation Act (FECA) liability . Accounts payable 

and	other	liabilities	totaling	$11	million	consists	of	

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

the FTC has received . 

Entity liabilities have a smaller range of fluctuation 

in comparison to entity assets . Accounts payable 

balances fluctuate more significantly when capitalized 

purchases are involved . This is evident in FY 2011 

when purchases of information technology hardware 

and software were accrued near the end of the 

fiscal	year.		The	FY	2016	figure	included	$2	million	

in unearned revenues for advances received from 

the Department of Justice (DOJ) in support of the 

Consumer Sentinel Network . Employee-related 

liabilities fluctuate based on the FTE count and the 

timing of the payroll disbursement cycle . At the end 

of FY 2014, the payroll and benefit liability included 

7 days of unpaid wages while the FY 2018 year-end 

payroll accrual included 10 days of unpaid wages .

ENTITY LIABILITIES

BALANCE SHEET

NON-ENTITY

Non-entity	assets	totaled	$958	million,	or	97	percent	

of all FTC assets, as of September 30, 2018 . This 

represents	an	increase	of	$457	million,	or	91	percent,	

from	the	FY	2017	total	of	$501	million.

Non-entity assets are equal to, and offset by, nonentity	liabilities.	The	$599	million	net	accounts	

receivable	balance	is	offset	by	the	$599	million	liability	

for	amounts	to	be	collected,	while	the	$359	million	

FBwT	is	offset	by	the	$359	million	liability	for	redress	

collections not yet disbursed . 

The FY 2018 ending net accounts receivable balance 

of	$599 million	reflects	amounts	to	be	paid	to	the	

FTC from court-ordered judgments in the consumer 

redress	program.	This	represents	a	$529	million	

increase in net accounts receivable from the FY 2017 

total	of	$70	million.	The	majority	of	the	increase	is	

the result of the receivable from a 2018 judgment 

against AbbVie, Inc .	for	$494	million	(83	percent	of	

the ending balance) . A federal district court ruled 

that AbbVie used sham litigation to illegally maintain 

its monopoly over the testosterone replacement drug 

Androgel,	and	ordered	$494	million	in	monetary	

relief to consumers who were overcharged for 

Androgel as a result of AbbVie’s conduct . This court 

order represents the largest monetary award ever in a 

litigated FTC antitrust case . 
40 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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NON-ENTITY ASSETS & LIABILITIES

The remaining ending net accounts receivable balance 

of	$105	million	primarily	consists	of	amounts	to	

be paid to the FTC from the following cases: AMG 

Services for a payday lending scheme that deceived 

consumers; I Works for deceptive “trial” memberships 

for bogus government-grant and money-making 

schemes; Midway Industries for tricking businesses 

and consumers into paying for overpriced office and 

cleaning supplies that they never ordered; and Stark 

Law for deceptive and abusive collection practices . 

Thirty-two additional matters account for the 

remainder of the balance .

The FY 2018 ending FBwT for consumer redress of 

$359	million	is	being	held	temporarily	by	the	FTC	

until it is distributed to consumers, other harmed 

parties, or redress third party administrators (for 

distribution to consumers on behalf of the FTC), 

or disgorged to Treasury (if consumer redress is 

not	practicable).	The	decrease	of	$73	million	in	

FBwT	consists	of	$526	million	in	collections	offset	

by	$599 million	in	disbursements.	The	largest	

collection	($471	million)	and	the	largest	disbursement	

($505 million)	both	relate	to	a	2016	judgment	against	

AMG Services, Inc ., a payday lender that illegally 

charged consumers undisclosed and inflated fees . 

Four large judgments account for almost 75 percent 

of	the	FY	2018	ending	FBwT	of	$359	million.	

The graphic on the following page illustrates the 

major collections and disbursements that occurred 

throughout the fiscal year .

Historic trends of FBwT for consumer redress are 

primarily driven by a few select cases: 

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

a settlement resolving antitrust charges that 

Cephalon, Inc . illegally blocked generic competition 

to its drug Provigil by engaging in “pay for delay” 

conduct .

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

Herbalife International of America, Inc . to settle 

FTC charges that Herbalife deceived consumers as 

part of a multi-level marketing operation . This large 

collection	was	primarily	offset	by	a	$120	million	

disbursement to harmed parties as a result of the 

Cephalon, Inc . settlement .

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

the Herbalife settlement to claimants . Additionally, 

the	FTC	disbursed	$125	million	to	harmed	parties	

as a result of the Cephalon, Inc . settlement .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 41

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

NON-ENTITY ASSETS - FUND BALANCE WITH TREASURY

FY 2018 Activity

FY 2018 NON-ENTITY FUND BALANCE WITH TREASURY TIMELINE OF ACTIVITY 

$432M Beginning Balance - FY 2018 Non-Entity Fund Balance with Treasury

A $3M CWB Collected $3M from a 2015 settlement for a scheme that bilked millions of dollars from 

consumers by trapping them into loans they never authorized. 

B $1M

Direct 

Altrnatives/ 

Original 

Organics

Collected $1M in previously anticipated collection from a 2016 judgment that resulted from 

a joint FTC and Maine Attorney General action to stop deceptive advertising and illegal 

billing practices.

C $13M NetSpend 

Corporation

Collected $13M from a 2017 judgment for deceiving people about access to funds 

deposited on NetSpend debit cards. 

D ($8.4M) Sale Slash, 

LLC.

Disbursed $8.4M (442,898 refund checks) to consumers who bought deceptively marketed 

weight-loss supplements. Refunds are a result of a 2016 settlement with Sale Slash, LLC.

E $6.3M Tarr, Inc.

Collected $6.3M from a 2017 settlement with Tarr, Inc. for selling weight-loss, musclebuilding, and wrinkle-reduction products to consumers using unsubstantiated health 

claims, fake magazine and news sites, bogus celebrity endorsements, and phony consumer 

testimonials. 

F ($3M) CWB Disbursed $3M (72,836 refund checks) to harmed consumers from a payday loan scheme. 

Refunds are a result of 2015 settlement.

G $48M AMG Services 

Inc.

Collected $48M as part of a 2016 judgment for a payday lending scheme that deceived 

consumers across the country and illegally charged them undisclosed and inflated fees. 

H $5M

Telestar 

Consulting, 

Inc.

Collected $5M from a 2017 settlement to settle charges that Telestar Consulting, Inc. and 

its owner tricked childcare centers, schools, and police and fire departments into paying for 

products they never ordered. 

I ($7.5M)

Allstar 

Marketing 

Group, LLC

Disbursed $7.5M (218,254 refund checks) to harmed consumers who were victims of 

deceptive “buy-one-get-one-free” promotions. Refunds are a result of a 2015 settlement.

J $2M Marketing 

Architects, Inc.

Collected $2M from a 2018 settlement with Marketing Architects, Inc. (MAI), an advertising 

agency that created and disseminated allegedly deceptive radio ads for weight-loss 

products marketed by its client, Direct Alternatives.

K ($10M) Inbound Call 

Experts, LLC.

Disbursed $10M (36,830 refund checks) to consumers who lost money to a technical 

support scam. Refunds are a result of a 2016 settlement.

L ($4.7M) Cardinal 

Health, Inc.

Disbursed $4.7M to hospitals and clinics that overpaid for radiopharmaceuticals. Funds are 

from a 2015 settlement against Cardinal Health, which unlawfully monopolized the market 

for low-energy radiopharmaceuticals in 25 geographic areas throughout the United States.
42 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

FY 2018 NON-ENTITY FUND BALANCE WITH TREASURY TIMELINE OF ACTIVITY (CONTINUED)

M $3.3M JK 

Publications

Collected $3.3M from a 2000 judgment against an adult web site operation for its illegal 

billing scam, which repeatedly placed charges on consumers' credit and debit cards for 

X-rated Internet visits they had not made and services they didn't order.

N $1.8M

Apply 

Knowledge, 

LLC

Collected $1.8M from a 2018 settlement with a deceptive work-from-home scheme that 

conned millions of dollars from consumers by falsely promising they could earn substantial 

income by purchasing business coaching services. 

O ($20M) Uber

Disbursed $20M (88,799 refund checks) to drivers for Uber Technologies Inc. Refunds are 

a result of a 2017 settlement with Uber Technologies to resolve FTC charges that it misled 

prospective drivers with exaggerated earning claims and claims about financing through its 

Vehicle Solutions Program.

P $423M AMG Services 

Inc.

Collected $423M from a 2016 judgment for a payday lending scheme that deceived 

consumers across the country and illegally charged them undisclosed and inflated fees. 

Q ($15M) Lights of 

America

Disbursed $15M (499,105 refund checks) to harmed consumers for a judgment against 

Lights of America Inc. and other defendants for violating federal law by overstating the light 

output and life expectancy of their LED bulbs, and falsely comparing the brightness of their 

LED bulbs with that of other light bulbs. Refunds are a result of a 2014 judgment.

R ($11M) NetSpend 

Corporation

Disbursed $11M (430,000 refund checks) to consumers. Refunds are a result of a 2017 

settlement to settle allegations that the prepaid card company deceived consumers about 

access to funds deposited on NetSpend debit cards.

S ($505M) AMG Services 

Inc.

Disbursed $505M (1,179,803 refund checks) consumers who were deceived by a massive 

payday lending scheme operated by AMG Services, Inc. Refunds are a result of a 2016 

judgment.

T $1.7M Treasure Your 

Success

Collected $1.7 from a 2015 judgment for deceptive telemarketing activities purporting to be 

a credit card interest rate reduction service that used robocalls to solicit consumers.

$4M Net of other collections $18M and disbursing ($14M) activities, related to over 200 additional matters.

$359M Ending Balances – FY 2018 Non-Entity Fund Balance with Treasury 

SIGNIFICANT CONTRIBUTORS TO THE FY 2018 NON-ENTITY FUND BALANCE WITH 

TREASURY ENDING BALANCES

$213M Cephalon, Inc.

$213M (59% of the ending balance) held by the FTC from a 2015 settlement resolving 

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

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

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

harmed parties. Of the $458M the FTC collected, a total of $245M was disbursed in FY 2016 

and FY 2017. The remaining funds will be used to pay future claims. At the end of the settlement 

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

$33M Lifelock

$33M held by the FTC from a 2015 settlement to resolve the FTC’s contempt charges that 

Lifelock violated the terms of a 2010 federal court order that requires it to secure consumers’ 

personal information and prohibits Lifelock from deceptive advertising. 

$13M AMG Services 

Inc.

$13M held by the FTC from a 2016 judgment (and earlier settlements) against a payday lending 

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

inflated fees.

$9M Cardinal 

Health, Inc.

$9M held by the FTC from a 2015 settlement with Cardinal Health, which unlawfully 

monopolized the market for low-energy radiopharmaceuticals in 25 geographic areas throughout 

the United States.

$91M The remaining FBWT balance consists of funds held by the FTC from 127 separate matters.

$359M Ending Balance - FY 2018 Non-Entity Fund Balance with Treasury
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 43

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

STATEMENT OF NET COST

STATEMENT OF NET COST SUMMARY

FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017

(Dollars in Millions) FY 2018 FY 2017 % Change

Protecting Consumers:

Gross costs $ 184 $ 182 1%

Less: earned revenue (12) (15) -18%

Protecting Consumers 172 167 -3%

Maintain Competition:

Gross costs $ 156 $ 145 7%

Less: earned revenue (133) (126) 6%

Maintaining Competition 23 19 22%

Net Cost of Operations $ 195 $ 186 5%

The Statement of Net Cost presents the FTC’s 

gross costs less revenue earned for two of the FTC’s 

strategic goals: Protect Consumers and Maintain 

Competition . The third goal, Advance Organizational 

Performance, has its costs distributed to the other 

two strategic goals based on FTE usage (unless a cost 

is clearly attributable to a specific goal) . The FTC 

net	cost	of	operations	was	$195	million	in	FY	2018,	

which	consists	of	$340	million	in	gross	costs	offset	by	

$145 million	in	earned	revenue.

The FY 2018 net cost of operations for the Protect 

Consumers	strategic	goal	was	$172	million,	consisting	

of	$184	million	in	gross	costs	offset	by	$12	million	

in earned revenue, which is mostly revenue from 

fees collected for the National Do Not Call (DNC) 

Registry . The FTC receives fees from telemarketers 

who pay an annual subscription fee to download 

telephone numbers of consumers who do not wish to 

receive calls . The DNC fees are based on the number 

of area codes that a telemarketer downloads . 

The FY 2018 net cost of operations for the Maintain 

Competition	strategic	goal	was	$23	million,	consisting	

of	$156	million	in	gross	costs	offset	by	$133	million	

in earned revenue, which is mostly revenue from 

fees collected for premerger notification filings, with 

a	small	portion	(about	$0.5	million)	from	multiple	

reimbursable agreements with other Federal agencies . 

Premerger notification filings are made under the 

Hart-Scott-Rodino (HSR) Antitrust Improvement 

Act of 1976, which gives the federal government 

the opportunity to investigate and challenge certain 

mergers that are likely to harm consumers before 

injury occurs . The HSR Act requires the filing of 

premerger notifications with the FTC and the DOJ 

Antitrust Division . The filing fees are determined by 

the size of the merging parties and the value of the 

proposed transaction . By law, the FTC retains onehalf of all premerger filing fees collected and remits 

one-half to the DOJ Antitrust Division .

The increase in the overall gross costs is primarily 

attributable to higher overhead costs related to 

payroll, higher cost factors for pension and postretirement benefits, information technology, and 

write-offs of fixed assets . Additionally, costs for expert 

witnesses increased significantly in FY 2018 .
44 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

FTC NET COST OF OPERATIONS 

VS. BENEFIT TO CONSUMERS

The	FTC	had	gross	costs	of	$340	million	in	FY	2018,	

offset	by	$145	million	in	earned	revenue	resulting	

in	a	total	net	cost	of	operations	of	$195	million.		

However, a large portion of the FTC’s operations 

result in activity whose benefits are not reflected on 

the Statement of Net Cost . These important benefits 

to the public should be considered in determining the 

overall impact of the agency’s strategic goals . 

The Statement of Net Cost includes only entity 

activity . During FY 2018, the FTC disbursed 

$601 million	in	non-entity	collections	to	claimants,	

third party administrators, and the General Fund of 

the	U.S.	Government.	Additionally,	the	FTC	saved	

consumers	an	estimated	$1.3	billion*	through	its	

merger and non-merger competition law enforcement 

actions	and	an	estimated	$1.8	billion*	through	its	

consumer protection law enforcement actions . 

The FTC’s cost to protect consumers and maintain 

competition is a small fraction of the amount the 

FTC has saved consumers . For FY 2018, the FTC 

provided	an	estimated	total	of	$3.7	billion	in	benefits	

to consumers . When this benefit is compared to the 

$195	million	in	net	costs,	it	equates	to	every	$1	of	

the	FTC’s	cost	returning	an	estimated	$19	in	FTCprovided benefits to consumers .

COST vs BENEFIT

*These	estimates	were	calculated	based	on	performance	measures	1.1.3	(consumers	savings	from	consumer	protection	law	enforcement),	

2 .1 .3 (consumer savings from merger enforcement), and 2 .1 .5 (consumer savings from non-merger enforcement) . See Appendix A – Data 

quality information on these measures and how these estimates were calculated . While the performance measures are based on 3-5 year 

rolling averages, the statistic presented above is based on only the FY 2018 activity .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 45

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

BUDGETARY RESOURCES AND HOW THEY WERE USED

BUDGET AUTHORITY

The FTC receives an annual appropriation that 

is available until expended, subject to Office of 

Management and Budget (OMB) apportionment 

and Congressional restrictions on the expenditure 

of funds (see FTC’s FY 2019 Congressional Budget 

Justification, page 3, “Appropriations Language 

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

from a direct appropriation and offsetting collections .

In	FY	2018,	the	FTC	received	$306	million	in	new	

budget	authority.	This	was	a	$7	million	decrease	

from the FY 2017 amount . The FY 2018 budget 

authority	comprised	$168	million	in	general	fund	

appropriations,	plus	$138	million	in	spending	

authority from offsetting collections, consisting 

of	$126	million	from	fees	collected	for	premerger	

notification filings under the Hart-Scott-Rodino 

Antitrust	Improvements	Act	of	1976,	and	$12	million	

from fees collected for the National Do Not Call 

Registry . 

Because current year offsetting collections up to the 

congressionally authorized amount are deducted from 

gross budget authority and outlays, only 55 percent of 

the FTC’s net budget authority comes from Treasury 

General Fund appropriations . This reduces the 

burden	the	FTC	places	on	the	federal	budget	to	$168	

million, which is less than 1/10 of 1 percent of the 

total non-defense discretionary spending for FY 2018 .

The FTC’s total budgetary resources as presented on 

the	Statement	of	Budgetary	Resources	is	$349	million.		

This	consists	of	$306	million	in	new	budgetary	

authority	for	FY	2018,	$33	million	in	unobligated	

balances	from	prior	years,	and	$10	million	in	

recoveries of obligations from prior years . Of the 

$349	million	in	budgetary	resources,	$345	million	was	

apportioned,	with	$4	million	being	unapportioned.

General fund

appropriation

$175 Million

Offsetting

collection

$138 Million

General fund

appropriation

$168 Million

Offsetting

collection

$138 Million

NEW BUDGET AUTHORITY
46 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

Historically, the FTC’s budget authority has been 

relatively static . From FY 2010 through FY 2013, the 

FTC received an OMB category B apportionment 

for the relocation of staff to office space at the 

Constitution Center . Excluding the category B 

funding,	the	FTC	had	an	11	percent	or	$30	million	

change	from	FY 2010	($276	million)	to	FY	2018	

($306 million).	As	shown	in	the	figure	below,	the	

agency’s FY 2018 budget authority would have had to 

increase	a	total	of	$44	million	(or	16	percent)	just	to	

keep pace with OMB’s annual escalation factors .

The constraints from stagnant financial resources 

are further magnified by increasing costs and rising 

expectations from the American public . From 2010 to 

2017 (2018 data was not yet available) the number of 

consumer complaints and mergers reported each rose 

by more than 75 percent among other measures of the 

FTC’s increased workload . While the FTC continues 

to do more with less, the gap between the actual 

budget authority that the FTC has received and the 

inflation-adjusted amount is apparent, and continues 

to widen as the agency’s competition and consumer 

protection workloads increase . 

The FTC’s increasing costs are also reflected in expert 

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

regarded law enforcement activities, the FTC is 

engaged in a larger number of complex investigations 

and litigation matters related to both the competition 

and consumer protection missions . For example, the 

services of these expert witnesses are critical to the 

successful investigation and litigation of merger cases, 

as experts provide insight on proper definition of 

product and geographic markets, assess the likelihood 

of entry by new competitors, and develop models to 

evaluate merger efficiencies as compared to potential 

competitive harm . Another factor contributing to 

higher expert witness costs is a rise in the number of 

consumer complaints . For FY 2019 the FTC requested 

an	additional	$3.38	million	(total	$309.7	million)	to	

cover rising expert witness costs .

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

120%

100%

80%

60%

40%

20%

0%

-20%

Consumer complaints received (data only 

through 2017)

Mergers reported (data only through 2017)

OMB cost factor inflation

FTC budget (excludes one-time funds 

for a building move)

FTC employees 

PERCENTAGE CHANGE IN CONSUMER COMPLAINTS, 

MERGERS, AND FTC RESOURCES SINCE 2010
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 47

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

THE FTC’S FY 2018 

OBLIGATIONS:

In	FY	2018,	the	FTC	obligated	$326	million.	This	was	

an	increase	of	$11.5	million,	or	less	than	4 percent,	

compared to new obligations in FY 2017 . The increase 

in obligations incurred in FY 2018 was primarily 

from higher spending on contractual services related 

to information technology (IT) support services and 

for transitioning the IT infrastructure to a cloudbased environment . Additionally, spending on expert 

witnesses	increased	by	$3	million,	to	$18	million,	

in FY 2018 compared to FY 2017 . The FTC payroll 

spending	also	increased	by	0.8	percent	to	$199	million	

in	FY	2018	from	$197	million	in	FY	2017.	This	

increase was mostly attributable to the 1 .9 percent pay 

raise for FY 2018, plus upward grade classifications 

pursuant to 5 C .F .R . 531 .401 et seq . offset by savings 

from attrition . 

FY 2018 FTC OBLIGATIONS BY CATEGORY
48 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

Historically the FTC’s obligations by category have 

remained relatively steady when expressed as a 

percentage of all obligations during a particular fiscal 

year . However, between FY 2014 and FY 2018 there 

were several notable changes:

•	 Expert	witness	obligations	increased	from	

$7.7 million	in	FY	2014	to	$18.4	million	in	FY	2018,	

a 138 percent increase over a five-year period . 

•	 PP&E	obligations	decreased	from	$5.8	million	in	

FY 2014	to	$1.4	million	in	FY	2018,	or	a	decrease	

from 1 .8 percent of total obligations in FY 2014 to 

0 .4 percent in FY 2018 .

FTC OBLIGATIONS* BY CATEGORY - 5 YEAR TREND

FY14 FY15 FY16 FY17 FY18

*Excludes	obligations	from	the	OMB	category	B	apportionment	for	the	relocation	of	staff	to	office	space	at	Constitution	Center

FTC USASPENDING.GOV PROFILE: 

Additional details of agency 

spending are captured on 

usaspending .gov, where beginning 

in FY 2017, federal agencies 

certified to the accuracy of data . 

Federal spending is available for 

public consumption to ensure 

taxpayers can see how their money 

is being used in communities across 

America . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 49

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

FY 2018 SUMMARY OF BUDGETARY RESOURCES, 

OBLIGATIONS, AND BENEFITS

During	FY	2018,	the	FTC	obligated	$326	million	against	its	

budgetary resources in carrying out its mission and resulted 

in	total	benefits	to	consumers	of	$3.7	billion.
50 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LYS I S

FINANCIAL MANAGEMENT INDICATORS FOR FY 2018

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

OMB to monitor agencies’ financial management practices .

DEBT MANAGEMENT

Eligible debt transferred to Treasury 100%

FUNDS MANAGEMENT

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

reported in Treasury reports and the agency fund balance with Treasury recorded in its 

general ledger)

100% reconciled

PAYMENT MANAGEMENT

Percentage invoices paid on time (per Prompt Payment Act) 97.13%

Percentage interest penalties paid to total dollars invoiced .0049%

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

billed travel account holders 100%

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

billed travel accounts 100%

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

cards 100%

LIMITATIONS OF FINANCIAL 

STATEMENTS

The FY 2018 financial statements have been 

prepared from the books and records of the agency 

in accordance with OMB Circular A-136, financial 

reporting requirements, as amended . The financial 

statements represent the financial position and 

results of operations of the agency pursuant to the 

requirements of Chapter	31	of	the	U.S.	Code	Section	

3515(b) . While these statements have been prepared 

from the agency’s books in accordance with GAAP 

for federal entities and the formats prescribed by the 

OMB, the statements are in addition to the financial 

reports used to monitor and control budgetary 

resources, which are prepared from the same books 

and records . These statements should be read with the 

understanding that they are for a component of the 

U.S.	government,	a	sovereign	entity.	
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 51

Financial Section
52 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

David Rebich

Chief Financial Officer

I am pleased to present the FTC’s Agency Financial 

Report (AFR) for Fiscal Year 2018 . The AFR allows us 

the opportunity to demonstrate the FTC’s efficient and 

effective stewardship of taxpayer dollars entrusted to 

the FTC to accomplish the agency’s mission . Our goal 

is to present the Agency’s use of resources, operational 

effectiveness, financial stewardship, and internal controls 

in a manner that demonstrates the incredible value that 

the FTC provides to the American public . The financial 

statements and corresponding financial analysis 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 .

The FTC is the only federal agency with both consumer 

protection and competition jurisdiction in broad sectors 

of the economy . The FTC exemplifies good government 

by advancing consumer interests and encouraging 

innovation and competition . The FTC’s greatest assets are 

the employees who work tirelessly to achieve the agency’s 

mission . Their incredible dedication and focus are evident 

in the FTC’s Employee Engagement Score of 83% on the 

2018 Federal Employee Viewpoint Survey . 

For the 22nd consecutive year, an independent auditor 

issued an unmodified opinion on the FTC’s Financial 

Statements, with no material weaknesses or significant 

deficiencies . This continued achievement is due to the 

exceptional efforts of the Financial Management Office 

staff, which is supported by fund managers and the 

dedicated cadre of Contracting Officer Representatives 

throughout the agency . This past year, the FTC 

has demonstrated our commitment to continuous 

improvement with the following accomplishments:

•	 Developed	and	monitored	the	FTC	risk	profile;

•	 Established	a	Fraud	Workgroup	to	develop	a	Fraud	Risk	

Register;

•	 Replaced	a	manual	expense	accrual	methodology	with	

an automated statistical model; 

•	 Implemented	electronic	invoicing	through	the	Invoice	

Processing Platform; 

•	 Focused	resources	on	closing	26	Corrective	Action	

Plans (CAPs) in the Financial Management Office 

(FMO), and encouraged collaboration throughout the 

agency to close an additional 42 CAPs identified from 

previous internal and external audits and reviews; and

•	 Implemented	the	FY	2018-FY	2022	Strategic	Plan	and	

began collecting data on meeting the new performance 

goals .

Looking forward to FY 2019, we will continue to work 

with our Shared Service Provider (SSP) to upgrade to a 

newer version of the Oracle Federal Financial software 

and continue to transition to a new financial reporting 

tool . We will also continue to evaluate the use of resources 

within FMO to ensure that our financial management 

operations are efficient and effective . In addition, we 

will evaluate our resource levels, including the use of 

contractors, as well as our relationship with our SSP . It is 

important that we deploy the most cost effective balance 

of service offerings to ensure we are being good stewards 

of taxpayer dollars . 

The accomplishments outlined in this report are the 

result of the FTC employees’ hard work and dedication to 

the mission . The unmodified audit opinion and financial 

accomplishments reflect organizational commitment to 

sound financial management . We will continue to support 

the Agency’s mission, while being exemplary stewards 

of the funds entrusted to us by the American people . 

I would like to thank all of the employees here at the 

FTC and especially the employees within the Financial 

Management Office . 

David Rebich

Chief Financial Officer

November 13, 2018
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 53

FINANCIAL SECTION

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Office of Inspector General

November 13, 2018

MEMORANDUM

FROM: Andrew Katsaros

Acting Inspector General

TO: Joseph J. Simons, Chairman

Noah Joshua Phillips, Commissioner 

Rohit Chopra, Commissioner 

Rebecca Kelly Slaughter, Commissioner 

Christine S. Wilson, Commissioner 

SUBJECT: Report on Audit of the FTC’s FY 2018 and 2017 Financial Statements

I am pleased to provide you with the attached audit report required by the Accountability of Tax Dollars 

Act of 2002, which presents an unmodified opinion on the Federal Trade Commission’s (FTC) financial 

statements for fiscal years 2018 and 2017. We commend the FTC for attaining an unmodified (clean) 

opinion for the 22nd consecutive year.

We contracted with the independent certified public accounting firm of Brown & Company CPAs and 

Management Consultants, PLLC (Brown & Company) to audit the financial statements of the FTC as of 

and for the fiscal years ended September 30, 2018 and 2017, and to provide reports on internal control 

over financial reporting and compliance with laws and other matters. The contract required the audit to 

be performed in accordance with U.S. generally accepted government auditing standards, Office of 

Management and Budget audit guidance, and the Government Accountability Office’s Financial Audit 

Manual.

In its audit, Brown & Company found:

• FTC’s financial statements as of and for the fiscal years ended September 30, 2018 and 2017, are 

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

principles;

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

performed; and

• no reportable noncompliance for fiscal year 2018 with provisions of applicable laws, regulations, 

contracts, and grant agreements tested.

Brown & Company is responsible for the attached auditor’s report dated November 13, 2018, and the 

conclusions expressed in the report. We do not express opinions on FTC’s financial statements or 
54 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

conclusions about the effectiveness of internal control or conclusions on compliance with laws and 

regulations.

We appreciate the cooperation given by management to Brown & Company and the Office of Inspector 

General during the audit. If you have any questions or would like to discuss the report, please contact me 

at (202) 326-2355.

Attachment
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 55

FINANCIAL SECTION

REPORT OF INDEPENDENT AUDITORS

INDEPENDENT AUDITOR’S REPORT 

Inspector General 

Federal Trade Commission

Washington, D.C. 

In our audits of the fiscal years 2018 and 2017 financial statements of the Federal Trade Commission 

(FTC), we found

 FTC’s financial statements as of and for the fiscal years ended September 30, 2018, and

2017, are presented fairly, in all material respects, in accordance with U.S. generally accepted 

accounting principles; 

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

procedures we performed; and 

 no reportable noncompliance for fiscal year 2018 with provisions of applicable laws,

regulations, contracts, and grant agreements we tested.

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

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

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

with laws, regulations, contracts, and grant agreements. 

Report on the Financial Statements

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

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

balance sheets as of September 30, 2018, and 2017; the related statements of net cost, changesin net

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

notes to the financial statements. 

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

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

opinion. 

Management’s Responsibility 

FTC’s management is responsible for (1) the preparation and fair presentation of these financial

statements in accordance with U.S. generally accepted accounting principles; (2) preparing, measuring, 

and presenting the RSI in accordance with U.S. generally accepted accounting principles; (3) preparing 

and presenting other information included in documents containing the audited financial statements and 

auditor’s report, and ensuring the consistency of that information with the audited financial statements 

and the RSI; and (4) maintaining effective internal control over financial reporting, including 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.
56 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

Auditor’s Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. U.S. 

generally accepted government auditing standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement. We are

also responsible for applying certain limited procedures to RSI and other information included with the

financial statements. 

An audit of financial statements 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 auditor’s 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 of financial statements also involves evaluating the appropriateness of the accounting policies

used and the reasonableness of significant accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements. Our audits also included performing such 

other procedures as we considered necessary in the circumstances. 

Opinion on Financial Statements 

In our opinion, FTC’s financial statements present fairly, in all material respects, FTC’s financial 

position as of September 30, 2018, and 2017, and its net cost of operations, changes in net position, 

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

generally accepted accounting principles. 

Other Matters

RequiredSupplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards

Advisory Board (FASAB) require that the RSI be presented to supplement the financial

statements. Although the RSI is not a part of the financial statements, FASAB considers this

information to be an essential part of financial reporting for placing the financial statements

in 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

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

auditor'sinquiries, the financial statements, and other knowledge we obtained during the audit

of the financial statements, in order to report omissions or material departures from FASAB

guidelines, if any, identified by these limited procedures. We did not audit and we do not

express an opinion or provide any assurance on the RSI because the limited procedures we

applied do not provide sufficient evidence to express an opinion or provide any assurance.
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 57

FINANCIAL SECTION

Other Information

FTC’s other information contains a wide range of information, some of which is not directly

related to the financial statements. This information is presented for purposes of additional

analysis and is not a required part of the financial statements or the RSI. We read the other 

information included with the financial statements in order to identify material 

inconsistencies, if any, with the audited financial statements. Our audit was conducted for the

purpose of forming an opinion on FTC’s financial statements. We did not audit and do not

express an opinion or provide any assurance on the other information.

Report on Internal Control over Financial Reporting

In connection with our audits of FTC’s financial statements, we considered FTC’s internal control

over financial reporting, consistent with our auditor's responsibility discussed below. We performed 

our procedures related to FTC’s internal control over financial reporting in accordance with U.S. 

generally accepted government auditing standards.

Management’s Responsibility 

FTC’s management isresponsible for maintaining effective internal control over financial reporting,

including 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

In planning and performing our audit of FTC’s financial statements as of and for the year ended

September 30, 2018, in accordance with U.S. generally accepted government auditing standards, we

considered the FTC’s internal control over financial reporting as a basis for designing audit

procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the 

financial statements, but not for the purpose of expressing an opinion on the effectiveness of FTC’s

internal control over financial reporting. Accordingly, we do not express an opinion on FTC’s internal

control over financial reporting. We are required to report all deficiencies that are considered to be

significant deficienciesor material weaknesses. We did not consider all internal controls relevant to

operating objectives, such as those controls relevant to preparing performance information and

ensuring efficient operations.

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. 
58 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

Definition and Inherent Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with

governance, management, and other personnel, the objectives of which are to provide reasonable

assurance that (1) transactions are properly recorded, processed, and summarized to permit the

preparation of financial statements in accordance with U.S. generally accepted accounting principles,

and assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and (2) 

transactions are executed in accordance with provisions of applicable laws, including those

governing the use of budget authority, regulations, contracts, and grant agreements, noncompliance

with which could have a material effect on the financial statements.

Because of itsinherent limitations, internal control over financial reporting may not prevent, or detect

and correct, misstatements due to fraud or error. 

Results of Our Consideration of Internal Control over Financial Reporting

Our consideration of internal control was for the limited purpose described above, and was not

designed to identify all deficiencies in internal control that might be material weaknesses and

significant deficiencies or to express an opinion on the effectiveness of FTC’s internal control over

financial reporting. Given these limitations, during our audit, we did not identify any deficiencies in

internal control over financial reporting that we consider to be material weaknesses. 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 we will report on them separately in a management letter. 

Intended Purpose of Report on Internal Control over Financial Reporting

The purpose of this report is solely to describe the scope of our consideration of FTC’s internal 

control over financial reporting and the results of our procedures, and not to provide an opinion on

the effectiveness of the FTC’s internal control over financial reporting. This report is an integral part 

of an audit performed in accordance with U.S. generally accepted government auditing standards in

considering internal control over financial reporting. Accordingly, this report on internal control over

financial reporting is notsuitable for any other purpose.

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements 

In connection with our audits of FTC’s financial statements, we tested compliance with selected 

provisions of applicable laws, regulations, contracts, and grant agreements consistent with our 

auditor’s responsibility discussed below. We caution that noncompliance may occur and not be

detected by these tests. We performed our tests of compliance in accordance with U.S. generally

accepted government auditing standards.

Management’s Responsibility 

FTC’s management is responsible for complying with laws, regulations, contracts, and grant 

agreements applicable to FTC. 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 59

FINANCIAL SECTION

Auditor’s Responsibility

Our responsibility is to test compliance with selected provisions of applicable laws, regulations, 

contracts, and grant agreements applicable to FTC that have a direct effect on the determination of 

material amounts and disclosures in FTC’s financial statements, and perform certain other limited 

procedures. Accordingly, we did not test compliance with all laws, regulations, contracts, and grant 

agreements applicable to FTC. 

Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant Agreements 

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and grant 

agreements disclosed no instances of noncompliance for fiscal year 2018 that would be reportable 

under U.S. generally accepted government auditing standards. However, the objective of our tests 

was not to provide an opinion on compliance with laws, regulations, contracts, and grant agreements 

applicable to FTC. Accordingly, we do not express such an opinion. 

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

The purpose of this report is solely to describe the scope of our testing of compliance with selected 

provisions of applicable laws, regulations, contracts, and grant agreements, and the results of that 

testing, and not to provide an opinion on compliance. This report is an integral part of an audit 

performed in accordance with U.S. generally accepted government auditing standards in considering 

compliance. Accordingly, this report on compliance with laws, regulations, contracts, and grant 

agreements is not suitable for any other purpose.

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

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

specified parties.

Largo, Maryland

November 13, 2018
60 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

PRINCIPAL FINANCIAL STATEMENTS

FINANCIAL STATEMENT DESCRIPTIONS

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

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

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

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

to determine the net cost. 

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

during the reporting period. 

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

resources at fiscal year-end. 

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

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

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

information on select statement lines.
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 61

FINANCIAL SECTION

BALANCE SHEET

As of september 30, 2018 And 2017

(Dollars in thousands)

2018 2017

Assets (Note 2):

Intragovernmental:

Fund balance with Treasury (Note 3) $ 487,600 $ 565,055

Accounts receivable, net (Note 4) 18 52

Advances and prepayments 232 253

Total intragovernmental 487,850 565,360

Accounts receivable, net (Note 4) 598,971 69,972

Property, plant, and equipment, net (Note 5) 38,529 50,714

Total Assets $ 1,125,350 $ 686,046

Liabilities (Notes 6 and 7):

Intragovernmental:

Accounts payable $ 560 $ 1,181

Other liabilities (Note 7) 2,296 1,847

Total intragovernmental 2,856 3,028

Accounts payable 10,169 9,533

Accrued redress due to claimants 598,515 69,887

Undisbursed redress collections (Note 15) 358,776 431,573

Other (Note 7) 19,673 19,857

Total Liabilities 989,989 533,878

Net Position (Note 1(n)):

Unexpended appropriations - -

Cumulative results of operations 135,361 152,168

Total Net Position 135,361 152,168

Total Liabilities and Net Position $ 1,125,350 $ 686,046

The accompanying notes are an integral part of these statements.
62 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

STATEMENT OF NET COST

for the YeArs ended september 30, 2018 And 2017

(Dollars in thousands)

2018 2017

Costs by Strategic Goal (Note 10):

Strategic Goal 1: Protect Consumers:

Gross costs $ 184,553 $ 181,505 

Less: earned revenue (12,311) (14,565)

Net cost 172,242 166,940

Strategic Goal 2: Maintain Competition:

Gross costs 156,580 145,532 

Less: earned revenue (133,481) (126,037)

Net cost 23,099 19,495

Net Cost of Operations $ 195,341 $ 186,435

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

STATEMENT OF CHANGES IN NET POSITION

for the YeArs ended september 30, 2018 And 2017

(Dollars in thousands)

2018 2017

Unexpended Appropriations:

Beginning balance $ - $ - 

Budgetary Financing Sources:

Appropriations received 168,023 175,374

Appropriations used (168,023) (175,374)

Total budgetary financing sources - - 

Total Unexpended Appropriations - - 

Cumulative Results of Operations

Beginning balance $ 152,168 $ 156,333

Budgetary Financing Sources:

Appropriations used 168,023 175,374

Other Financing Sources (Non-Exchange): 

Imputed financing 10,511 6,896 

Total financing sources 178,534 182,270

Net cost of operations (Note 10) (195,341) (186,435) 

Net change (16,807) (4,165)

Cumulative Results of Operations 135,361 152,168

Net Position (Note 1(n)) $ 135,361 $ 152,168

The accompanying notes are an integral part of these statements.
64 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

STATEMENT OF BUDGETARY RESOURCES

for the YeArs ended september 30, 2018 And 2017

(Dollars in thousands)

2018 2017

Budgetary Resources: 

 Unobligated balance, brought forward, October 1 $ 33,167 $ 25,950 

 Recoveries of unpaid prior year obligations 9,454 8,947

 Other changes in unobligated balance 94 18

 Unobligated balance from prior year budget authority, net 42,715 34,915

 Appropriations 168,023 175,374

 Spending authority from offsetting collections 138,317 137,625 

Total Budgetary Resources $ 349,055 $ 347,914

Status of Budgetary Resources: 

 New obligations and upward adjustments (total) (Note 11) $ 326,238 $ 314,747

 Unobligated balance, end of year: 

 Apportioned, unexpired accounts 18,285 27,241 

 Unapportioned, unexpired accounts 4,532 5,926

 Unexpired unobligated balance, end of year 22,817 33,167

 Unobligated balance, end of year (total) 22,817 33,167

Total Budgetary Resources $ 349,055 $ 347,914

Outlays, Net: 

 Outlays, gross $ 318,589 $ 313,468 

 Actual offsetting collections (145,907) (138,700)

 Outlays, net 172,682 174,768 

 Distributed offsetting receipts (7,816) (94,654)

 Agency outlays, net $ 164,866 $ 80,114

The accompanying notes are an integral part of these statements.
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 65

FINANCIAL SECTION

STATEMENT OF CUSTODIAL ACTIVITY

for the YeArs ended september 30, 2018 And 2017

(Dollars in thousands)

Protect 

Consumers

Maintain 

Competition

FY

2018

FY

2017

Revenue Activity (Note 14):

Sources of collections:

Premerger filing fees (net of refunds) $ - $ 132,923 $ 132,923 $ 125,440 

Civil penalties and fines 2,450 - 2,450 2,517

Consumer redress 7,612 - 7,612 94,463 

Other miscellaneous receipts 204 - 204 191

Total cash collections 10,266 132,923 143,189 222,611

Accrual adjustments 434 - 434 (731)

Total Custodial Revenue $ 10,700 $ 132,923 $ 143,623 $ 221,880 

Disposition of Collections (Note 14):

Transferred to others:

Treasury general fund $ 10,266 $ - $ 10,266 $ 97,171

Department of Justice - 132,923 132,923 125,520

Amounts yet to be transferred 434 - 434 (811) 

Total Disposition of Collections $ 10,700 $ 132,923 $ 143,623 $ 221,880 

Net Custodial Activity $ - $ - $ - $ -

The accompanying notes are an integral part of these statements.
66 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

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NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1—SIGNIFICANT ACCOUNTING POLICIES 

(A) FUND ACCOUNTING STRUCTURE 

The Federal Trade Commission (FTC) records and 

tracks financial activities using Treasury Account 

Symbols (TAS) . These TAS are described below: 

GENERAL FUND 

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

this account receives budget authority from an 

appropriation and offsetting collections, up to a limit 

set by Congress, to fund necessary expenses of the 

agency . Offsetting collections include fees collected 

for premerger notification filings under the HartScott-Rodino (HSR) Antitrust Improvement Act of 

1976, and fees collected for the National Do Not Call 

Registry, which operates under Section 5 of the FTC 

Act . Collections in excess of congressional limits 

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

unavailable – excess offsetting collections . (See Note 

3, Fund Balance with Treasury .) 

DEPOSIT FUND 

Consumer Redress Escrow (TAS 29X6013): This 

account consists of money collected as a result of 

court ordered judgments related to the consumer 

redress program and held temporarily by the FTC 

until distributed (either directly by the FTC or 

through a third-party agent) to consumers or harmed 

entities, or transferred to the General Fund of the 

U.S.	Government.	Judgments	imposed	but	not	yet	

collected are accrued as accounts receivable and 

recorded in this account . Accrued receivables and 

funds collected are considered non-entity assets under 

the FTC’s custody or management . They do not affect 

the FTC’s net position and are not reported on the 

agency’s Statement of Changes in Net Position . (See 

Note 3, Fund Balance with Treasury and Note 15, 

Consumer Redress Activities .) 

CLEARING/SUSPENSE ACCOUNT 

Budget Clearing and Suspense (TAS 29F3875): Fees 

collected for premerger notification filings under 

the HSR Act are deposited, initially, into the Budget 

Clearing and Suspense account, then distributed 

equally to the FTC (as an offsetting collection in the 

general fund) and the Department of Justice (DOJ) . 

(See Note 1(o), Revenues and Other Financing 

Sources .) 

RECEIPT ACCOUNTS 

Fines, Penalties, and Forfeitures, Customs, 

Commerce, and Antitrust Laws (TAS 29 1040): 

Collections of civil penalties imposed in court actions 

for violations of antitrust acts and FTC orders are 

deposited into this account . Penalties imposed but 

not yet collected are accrued as accounts receivable 

and recorded in this account . The cash balance in the 

account	is	transferred	to	the	General	Fund	of	the	U.S.	

Government at the end of each fiscal year . 

General Fund Proprietary Receipts (TAS 29 3220): 

Miscellaneous receipts that by law are not available 

for the FTC’s use and collections for the consumer 

redress program for which redress to consumers is not 

practicable are transferred to the General Fund of the 

U.S.	Government	at	the	end	of	each	fiscal	year.

(B) BASIS OF PRESENTATION AND 

ACCOUNTING

The accompanying financial statements present the 

financial position, net cost of operations, changes 

in net position, budgetary resources, and custodial 

activities of the FTC, and have been prepared from 

the accounting records of the FTC . These financial 

statements may differ from other financial reports 

submitted pursuant to the Office of Management 

and Budget (OMB) directives for the purpose of 

monitoring and controlling the use of the FTC’s 

budgetary resources . 

The FTC’s financial statements are prepared in 

conformity	with	U.S.	Generally	Accepted	Accounting	

Principles (GAAP) for federal entities and with OMB 

Circular A-136, Financial Reporting Requirements 

(as revised July 2018) . 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 
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FINANCIAL SECTION

budgetary reporting principles . The differences relate 

primarily to the capitalization and depreciation of 

property and equipment, as well as the recognition of 

other long-term assets and liabilities .

As described in Note 1(a), Fund Accounting 

Structure, the FTC maintains a single fund to 

account for salaries and all necessary expenses . 

Further, there are limited intra-entity transactions 

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

require eliminating entries to present consolidated 

statements . Accordingly, the statements are not 

labeled consolidated nor is the Statement of Budgetary 

Resources 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 . 

(C) USE OF ESTIMATES 

The preparation of financial statements in conformity 

with GAAP requires management to make estimates 

and assumptions that affect the reported amounts 

of assets and liabilities at the date of the financial 

statements and the reported amounts of revenues and 

expenses during the reporting period . For example, 

estimates are used in computing accounts payable 

for vendor service contracts, the allowance for 

uncollectible accounts, and the allocation of costs to 

strategic goals in the Statement of Net Cost . Actual 

results could differ from the estimated amounts . 

The vendor accounts payable accrual is an estimate, 

and is accrued separately from the accounts payable 

accrual for travel and interagency agreements . In FY 

2018, the FTC enhanced its approach to estimating 

the accrual for vendor accounts payable . The agency 

uses statistical techniques to evaluate vendor accounts 

payable balances for previous fiscal years, averages 

the balances to obtain an accrual estimate, and then 

adjusts the estimate using a factor that represents 

the proportional change in obligations between the 

current and the previous fiscal year . Every year, 

the agency statistically validates that the yearend 

vendor accounts payable accrual was reasonable . The 

validated amount is subsequently used in calculating 

the following year’s estimate, which also considers 

any changes to invoice payment timeframes that 

may affect the vendor accounts payable’s statistical 

assumptions .

(D) BUDGET AUTHORITY 

The Congress passes appropriations annually that 

provide the FTC with authority to obligate funds for 

necessary expenses to carry out program activities . 

These funds are available until expended, subject 

to the OMB apportionment and to congressional 

restrictions on the expenditure of funds (see the 

FTC’s FY 2018 Congressional Budget Justification, 

page 3, “Appropriations Language Provisions”) . In 

addition, the FTC places internal restrictions on fund 

expenditures to ensure the efficient and proper use 

of all funds . The FTC’s budget authority is derived 

from a direct appropriation and offsetting collections . 

The FTC accounts for budget authority in its General 

Fund account (29X0100) as reflected in the Statement 

of Budgetary Resources . 

(E) ENTITY AND NON-ENTITY ASSETS 

The FTC reports on both entity and non-entity assets 

in the financial statements . Assets that the agency is 

authorized to use in its operations are entity assets . 

Assets that the agency holds on behalf of another 

federal agency or a third party and are not available 

for the FTC’s use are non-entity assets . Non-entity 

assets include collections and accounts receivable 

that arise from 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 offsetting non-entity liabilities 

of equal amount . (See Note 2, Entity and Non-Entity 

Assets .)

(F) 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 fund cash balance includes a portion 
68 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

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 .) 

(G) ACCOUNTS RECEIVABLE, NET 

Accounts receivable, net of allowances, reflect the 

Federal Accounting Standards Advisory Board 

(FASAB) standard for the recognition of losses using 

the collection criterion of “more likely than not .” 

This criterion results in receivable balances that are 

more conservatively stated than those valued by 

the private sector under GAAP . FASAB states that 

it is appropriate to recognize the nature of federal 

receivables, which, unlike trade accounts of private 

firms or loans made by banks, are not created 

through credit screening procedures . Rather, these 

receivables arise because of the assessment of fines 

from regulatory violations . In these circumstances, 

historical experience and economic realities indicate 

that these types of claims are frequently not fully 

collectible . Accounts receivable includes estimates 

of the net cash value from court appointed receivers 

for which the FTC anticipates the proceeds will be 

deposited in the Consumer Redress Escrow account .

The method used to estimate the allowance for 

uncollectible accounts consists of individual case 

analysis by a case manager who assesses the debtor’s 

ability and willingness to pay, the defendant’s payment 

history, and the probable recovery amount including 

the value of assets . Based on the litigation and 

collection status, cases may be referred to the Treasury 

for collection action . (See Note 4, Accounts receivable, 

Net .)

(H) GENERAL PROPERTY, PLANT, AND 

EQUIPMENT 

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

consists of general purpose equipment used by the 

agency and capital improvements made to buildings 

leased from the General Services Administration 

(GSA) by the FTC for office space, as well as software 

leased and purchased from vendors . The FTC’s 

capitalization policy, Accounting for Property, Plant, 

and Equipment, was updated with an effective date on 

or after October 1, 2014 . PP&E placed in service prior 

to October 1, 2014, will continue to be accounted 

based on the capitalization policy in effect at the time 

acquired, until fully depreciated or removed from 

service . 

Effective October 1, 2014, capitalization thresholds 

are as follows:

Asset Type Capitalization 

Threshold

Furniture $ 50,000

General Equipment $ 50,000

IT Equipment $ 150,000

Leasehold Improvements $ 150,000

Internal Use Software $ 200,000

The FTC reports property and equipment at historical 

cost and capitalizes acquisitions based on the above 

thresholds for items with a useful life of two or more 

years . Property and equipment that meet these criteria 

are depreciated or amortized using the straight-line 

method over the estimated useful life of the asset . 

An exception applies to leasehold improvements, 

which are depreciated over the lesser of the useful 

life of the asset or the remaining lease term . Assets 

under development, such as internal use software and 

leasehold improvements with an estimated aggregate 

cost meeting the threshold criteria, are capitalized 

and then amortized once completed and placed 

into service . Normal repairs and maintenance, and 

PP&E that do not meet the capitalization criteria, are 

recognized as an expense in the current period . (See 

Note 5, General Property, Plant, and Equipment .)

(I) 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 nonentity . 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) . 
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FINANCIAL SECTION

(J) 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 . 

(K) EMPLOYEE RETIREMENT 

BENEFITS 

FTC employees participate in either the Civil 

Service Retirement System (CSRS) or the Federal 

Employees’ Retirement System (FERS) administered 

by the OPM . Employees hired after December 31, 

1983, are covered by FERS and Social Security, 

while employees hired prior to January 1, 1984, 

were allowed to elect joining FERS or remaining 

in CSRS . For employees participating in CSRS, the 

FTC contributes 7 percent of the employee’s basic 

pay to the Civil Service Retirement and Disability 

Fund . For employees participating in FERS, the FTC 

contributes 13 .2 percent to the Federal Employees’ 

Retirement Fund . New employees hired between 

January 1 and December 31, 2013, participate in 

FERS-RAE (Revised Annuity Employees) . New 

employees hired on or after January 1, 2014, 

participate in FERS-FRAE (Further Revised Annuity 

Employees) . The FTC contributes 11 .1 percent for 

both FERS-RAE and FERS-FRAE . In addition, the 

FTC contributes the employer’s matching share to 

the Social Security Administration under the Federal 

Insurance Contributions Act, which fully covers 

FERS participating employees . FTC contributions are 

recognized as current operating expenses . 

The Thrift Savings Plan (TSP) is a defined 

contribution retirement savings and investment 

plan for employees covered by either CSRS or FERS . 

Participating employees may contribute any dollar 

amount or percentage of basic salary to the TSP, not 

to exceed an annual dollar limit set by law . For those 

employees participating in FERS, the FTC makes 

a mandatory 1 percent contribution to this plan 

and, in addition, matches 100 percent of the first 3 

percent contributed by employees and 50 percent of 

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

contribution from the FTC . The FTC contributions to 

the TSP are recognized as current operating expenses . 

The FTC does not report CSRS and FERS assets, 

accumulated plan benefits, or unfunded liabilities, if 

any, applicable to its employees . The OPM reports this 

information . However, the FTC recognizes the full 

cost of providing future pension benefits to covered 

employees at the time the employees’ services are 

rendered using cost factors provided by the OPM that 

estimate the true service cost of providing the pension 

benefits . The FTC recognizes the excess of the true 

service cost over amounts contributed as an imputed 

cost . This additional cost is financed by the OPM and 

recognized as an imputed financing source by the 

FTC . (See Note 16, Reconciliation of Net Operating 

Cost and Net Budgetary Outlays .)

(L) FECA AND OTHER POSTEMPLOYMENT BENEFITS 

The Federal Employees’ Compensation Act (FECA) 

administered	by	the	U.S.	Department	of	Labor	

(DOL) provides income and medical cost protection 

to covered federal civilian employees injured on 

the job, and employees who have incurred a workrelated 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 6, Liabilities Not 

Covered by Budgetary Resources .)

FTC employees eligible to participate in the FEHBP 

and the FEGLIP may continue to participate in these 

programs after their retirement . The FTC recognizes 

a current cost of providing post-retirement benefits 

using cost factors provided by the OPM that estimate 

the true cost of providing these benefits to current 

employees . The cost of providing post-retirement 

benefits for the FEHBP and FEGLIP is financed by 

the OPM and recognized as an imputed financing 

source by the FTC . (See Note 16, Reconciliation of 

Net Operating Cost and Net Budgetary Outlays .)
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FINANCIAL SECTION

(M) 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 6, Liabilities Not Covered by Budgetary 

Resources .)

(N) NET POSITION 

The portion of the FTC’s budget authority funded by 

a direct appropriation is fully expended during the 

year . Therefore, there is no unexpended appropriation 

balance in net position at the end of the year . (See 

Statement of Changes in Net Position .) 

Cumulative results of operations represent the net 

results of operations since the agency’s inception, the 

cumulative amount of prior period adjustments, the 

remaining book value of capitalized assets, and future 

funding requirements . 

(O) REVENUES AND OTHER 

FINANCING SOURCES 

The FTC’s activities are financed through exchange 

revenues it receives from others and through an 

appropriation provided by the Congress . Exchange 

revenues consist of fees collected for premerger 

notification filings under the HSR Act and fees 

collected for the National Do Not Call Registry . 

Additionally, exchange revenues include a small 

amount of reimbursements for services performed 

under inter-agency agreements . 

(P) 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 

supporting each of these two goals . (See Statement of 

Net Cost .)
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FINANCIAL SECTION

NOTE 2—ENTITY AND NON-ENTITY 

ASSETS 

The FTC’s entity assets are comprised of undisbursed 

general funds, accounts receivable, and property, plant 

and equipment . Accounts receivable, net, represents 

amounts due from other federal agencies, current and 

former employees, and vendors . 

The FTC’s non-entity assets comprise of fund 

balance with Treasury and accounts receivable . The 

fund balance with Treasury consist of amounts held 

temporarily in deposit funds for the consumer redress 

program and collections of premerger filing fees held 

in clearing/suspense funds that will be transferred to 

the DOJ in a subsequent period . Accounts receivable, 

net, is the estimated amount collectible on consumer 

redress judgments and civil penalties .

Entity and non-entity assets consisted of the following as of September 30, 2018: 

(Dollars in thousands) 2018

Entity

2018 

Non-Entity

2018

Total

Intragovernmental:

 Fund balance with Treasury:

 General funds $ 128,824 $ - $ 128,824 

 Deposit funds - consumer redress - 358,776 358,776

 Accounts receivable, net 18 - 18

 Advances and Prepayments 232 - 232

Total intragovernmental assets 129,074 358,776 487,850 

 Accounts receivable, net 18 598,953 598,971

 Property, plant and equipment, net 38,529 - 38,529

Total Assets $ 167,621 $ 957,729 $ 1,125,350 

Entity and non-entity assets consisted of the following as of September 30, 2017:

(Dollars in thousands) 2017

Entity

2017 

Non-Entity

2017

Total

Intragovernmental:

Fund balance with Treasury:

General funds $ 133,482 $ - $ 133,482 

Deposit funds - consumer redress - 431,573 431,573

Accounts receivable, net 52 - 52

Advances and Prepayments 253 - 253

Total intragovernmental assets 133,787 431,573 565,360 

Accounts receivable, net 81 69,891 69,972

Property, plant and equipment, net 50,714 - 50,714

Total Assets $ 184,582 $ 501,464 $ 686,046 
72 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 3—FUND BALANCE WITH 

TREASURY 

The FTC’s FBwT consists of undisbursed appropriated 

funds, which are either unobligated or obligated, as 

well as non-budgetary deposit funds arising from 

amounts collected for consumer redress and not 

yet disbursed to disbursing agents or directly to 

claimants . The unobligated balance includes available 

and unavailable balances . 

The unavailable – unapportioned balance of 

$4,532	thousand	is	the	result	of	recoveries	that	

exceeded anticipated and apportioned amounts . The 

unavailable - excess offsetting collections balance of 

$26,004	thousand	are	HSR		fees	collected	above	the	

yearly congressional authorized amount to collect 

and	spend,	and	comprises	of	$6,924	thousand	in	the	

current	year	and	$19,080	thousand	from	previous	

years . The unavailable - temporary reduction of 

$6,450	thousand	consists	of	$5,418	thousand	HSR	

and	$1,032	thousand	National	Do	Not	Call	Registry	

offsetting collections sequestered from FY 2013 . 

The	difference	of	$32,454	thousand	between	the	

Statement of Budgetary Resources unobligated 

balance,	end	of	year	of	$22,817	thousand	and	the	

FBwT	total	unobligated	balance	of	$55,271	thousand	

is	the	$26,004	thousand	Unavailable	–	excess	

offsetting	collections	and	Unavailable	–	temporary	

reduction	of	$6,450	thousand.

The FTC’s FBwT, as reflected in the entity’s general 

ledger, has no material discrepancy with the amounts 

reported	in	U.S.	Treasury	account	balances.

Fund balance with Treasury consisted of the following as of September 30, 2018 and 2017:

(Dollars in thousands) 2018 2017

Status of Fund Balance with Treasury:

 Unobligated balance:

 Available - apportioned $ 18,285 $ 27,241 

 Unavailable - unapportioned 4,532 5,926 

 Unavailable - excess offsetting collections 26,004 19,080 

 Unavailable - temporary reduction 6,450 6,450 

 Total Unobligated balance: 55,271 58,697 

 Obligated balance not yet disbursed 73,553 74,785 

 Non-budgetary fund balance with Treasury 358,776 431,573 

Total Status of Fund Balance with Treasury $ 487,600 $ 565,055
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FINANCIAL SECTION

NOTE 4—ACCOUNTS RECEIVABLE, NET 

Accounts receivable, net consisted of the following as of September 30, 2018:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible

Accounts 

 2018 Net

 Entity Accounts Receivable: 

 Intragovernmental $ 18 $ - $ 18

 With the public 57 39 18 

 Total entity accounts receivable 75 39 36 

 Non-Entity Accounts Receivable: 

 Consumer redress 2,674,249 2,075,734 598,515 

 Civil penalties 39,826 39,388 438 

 Total non-entity accounts receivable 2,714,075 2,115,122 598,953 

Total Accounts Receivable $ 2,714,150 $ 2,115,161 $ 598,989 

Accounts receivable, net consisted of the following as of September 30, 2017:

(Dollars in thousands) Gross

Receivables 

Allowance for

Uncollectible

Accounts 

2017 Net

 Entity Accounts Receivable: 

 Intragovernmental $ 52 $ - $ 52

 With the public 81 - 81 

 Total entity accounts receivable 133 - 133

 Non-Entity Accounts Receivable: 

 Consumer redress 2,585,646 2,515,759 69,887

 Civil penalties 39,081 39,077 4 

 Total non-entity accounts receivable 2,624,727 2,554,836 69,891

Total Accounts Receivable $ 2,624,860 $ 2,554,836 $ 70,024 

The majority of the FTC’s accounts receivable are 

non-entity accounts receivable arising from the 

settlement or litigation of administrative and federal 

court cases in connection with the consumer redress 

program, and from civil monetary penalties imposed 

for violation of an FTC order and/or antitrust acts . 

Because of the nature of these receivables, they are 

frequently not fully collectible and are offset with a 

significant allowance . The allowance for uncollectible 

accounts is based on an analysis by a case manager who 

assesses the debtor’s ability and willingness to pay, the 

defendant’s payment history, and the probable recovery 

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

statements along with offsetting non-entity liabilities . 

Non-entity redress gross accounts receivable is the 

court ordered judgment amount, usually a calculated 

amount of ill-gotten gains by the defendant(s) . 

The related allowance for uncollectible accounts 

is the estimate the FTC will not collect from the 

defendant(s), which often times is a large percentage 

of	the	judgment.	The	$529,062	thousand	increase	in	

the FY 2018 accounts receivable, net from the FY 2017 

accounts	receivable,	net	of	$69,891	thousand	consists	

mostly of a FY 2018 judgment against AbbVie, Inc ., 

for	$493,716	thousand	that	has	no	allowance,	because	

a bond for the full amount of the judgment is with the 

court while the defendant’s appeal is decided by the 

Court of Appeals . 

Net interest and the related allowance for doubtful 

accounts was recorded as of September 30, 2018 . 

Accumulated unrecognized interest on receivables 

deemed	uncollectible	totaled	$6,412	thousand	and	

$739	thousand	as	of	September	30,	2018,	and	2017,	

respectively .
74 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 5—GENERAL PROPERTY 

PLANT, AND EQUIPMENT, NET 

The following represents the FTC’s capital assets and 

accumulated depreciation as of September 30, 2018, 

and 2017 . No impairment was recognized in either 

year . The accumulated depreciation has increased by 

$5,521	thousand	while	the	current	year	depreciation	

and	amortization	expense	is	$9,907	thousand,	as	

presented	in	Note	16.	The	difference	of	$4,386	

thousand	results	from	asset	disposals	where	$4,286	

thousand of accumulated depreciation/amortization 

was removed for fully depreciated assets . In addition, 

a	$100	thousand	leasehold	adjustment	was	recorded	

due to the Chicago regional office space move .

Property, plant, and equipment, net consisted of the following as of September 30, 2018:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation/

Amortization

Net 

Book Value

Equipment 5-20 years $ 25,802 $ 18,837 $ 6,965

Leasehold improvements 15 years 46,301 17,564 28,737 

Software 5 years 22,791 19,964 2,827 

Total Property, Plant, and Equipment $ 94,894 $ 56,365 $ 38,529 

Property, plant, and equipment, net consisted of the following as of September 30, 2017:

Asset Class

(Dollars in thousands)

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation/

Amortization

Net 

Book Value

Equipment 5-20 years $ 26,992 $ 15,138 $ 11,854

Leasehold improvements 15 years 46,566 14,718 31,848 

Software 5 years 28,000 20,988 7,012

Total Property, Plant, and Equipment $ 101,558 $ 50,844 $ 50,714 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 75

FINANCIAL SECTION

NOTE 6—LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The FTC recognizes two categories of liabilities not 

covered by budgetary resources described below:

LIABILITIES NOT COVERED BY 

BUDGETARY RESOURCES

Liabilities incurred for which revenues or other 

sources of funds necessary to pay the liabilities have 

not been made available through Congressional 

appropriations or current earnings . These include 

unfunded FECA liabilities and accrued annual leave . 

LIABILITIES NOT REQUIRING 

BUDGETARY RESOURCES

Non-entity liabilities that are covered by non-entity 

assets . These include:

Accrued Civil Penalties due to Treasury - offsetting 

liability to non-entity accounts receivable for civil 

penalties, net, that upon collection will be payable to 

the	General	Fund	of	the	U.S.	Government.

Undisbursed	Redress	Collections	-	offsetting	liability	

to the non-entity deposit fund balance for consumer 

redress that is payable to approved claimants . 

Accrued Redress due to Claimants - offsetting liability 

to the non-entity accounts receivable for consumer 

redress that upon collection will be payable to 

approved claimants . 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 2018:

(Dollars in thousands) Not Covered by Budgetary 

Resources

Not Requiring Budgetary 

Resources FY 2018 Total

Intragovernmental Liabilities:

FECA liability $ 358 $ - $ 358

Other employment related liability 3 - 3 

Accrued civil penalties due to Treasury - 438 438 

Total Intragovernmental Liabilities 361 438 799 

Non-Federal Liabilities:

Accrued leave 11,455 - 11,455 

Actuarial FECA 2,146 - 2,146 

Undisbursed redress collections - 358,776 358,776 

Accrued redress due to claimants - 598,515 598,515 

Total Non-Federal Liabilities 13,601 957,291 970,892 

Total Unfunded Liabilities 13,962 957,729 971,691 

Liabilities Covered by Budgetary Resources 18,298 

Total Liabilities $ 989,989

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 2017:

(Dollars in thousands) Not Covered by Budgetary 

Resources

Not Requiring Budgetary 

Resources FY 2017 Total

Intragovernmental Liabilities:

FECA liability $ 353 $ - $ 353

Other employment related liability - - - 

Accrued civil penalties due to Treasury - 4 4 

Total Intragovernmental Liabilities 353 4 357 

Non-Federal Liabilities:

Accrued leave 11,681 - 11,681 

Actuarial FECA 2,095 - 2,095 

Undisbursed redress collections - 431,573 431,573 

Accrued redress due to claimants - 69,887 69,887 

Total Non-Federal Liabilities 13,776 501,460 515,236 

Total Unfunded Liabilities 14,129 501,464 515,593 

Liabilities Covered by Budgetary Resources 18,285 

Total Liabilities $ 533,878
76 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 7 – OTHER LIABILITIES

As of September 30, 2018, and 2017, components of amounts reported on the Balance Sheet as Other 

Intragovernmental Liabilities and Other Liabilities along with a categorization of current versus long-term are as 

follows:

Other liabilities consisted of the following as of September 30, 2018:

(Dollars in thousands) 2018

Non-Current

2018

Current

2018

Total

Other intragovernmental liabilities:

Accrued employee benefits $ - $ 1,500 $ 1,500 

FECA liability 358 - 358 

Reimbursable advances - - - 

Accrued civil penalties due to Treasury - 438 438 

Total Other Intragovernmental Liabilities: 358 1,938 2,296 

Other Non-Federal liabilities:

Accrued payroll and benefits - 6,072 6,072 

Accrued leave 11,455 - 11,455 

Actuarial FECA 2,146 - 2,146 

Total Other Non-Federal Liabilities 13,601 6,072 19,673 

Total Other Liabilities $ 13,959 $ 8,010 $ 21,969 

Other liabilities consisted of the following as of September 30, 2017:

(Dollars in thousands) 2017

Non-Current

2017

Current

2017

Total

Other intragovernmental liabilities:

Accrued employee benefits $ - $ 1,477 $ 1,477 

FECA liability 353 - 353 

Reimbursable advances - 13 13

Accrued civil penalties due to Treasury - 4 4

Total Other Intragovernmental Liabilities: 353 1,494 1,847

Other Non-Federal liabilities: 

Accrued payroll and benefits - 6,081 6,081

Accrued leave 11,681 - 11,681 

Actuarial FECA 2,095 - 2,095

Total Other Non-Federal Liabilities 13,776 6,081 19,857

Total Other Liabilities $ 14,129 $ 7,575 $ 21,704 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 77

FINANCIAL SECTION

NOTE 8—OPERATING LEASES 

Leases of government-owned and commercial-owned 

property are made through and managed by the 

GSA . The FTC does not have any lease agreements 

with non-federal entities . While leases with the 

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

the GSA leased space and disclose the amounts that 

will be paid in the future to the GSA under signed 

lease agreements . The FTC leases spaces from four 

government-owned properties and seven commercial 

properties totaling approximately 611 thousand 

square feet for use as offices, storage, and parking . 

The FTC’s government leases expire on various dates 

through 2028, while the commercial leases expire at 

various dates through 2031 .

Future minimum lease payments due under leases of government-owned 

property for the fiscal year ended September 30, 2018:

Fiscal Year

(Dollars in thousands)

2019 $ 7,143 

2020 798 

2021 803 

2022 755 

2023 599 

Thereafter 2,787 

Total Future Minimum Lease Payments $ 12,885 

Future minimum lease payments due under leases of commercial-owned 

property for the fiscal year ended September 30, 2018:

Fiscal Year

(Dollars in thousands)

2019 $ 14,134

2020 14,414 

2021 14,622 

2022 15,482 

2023 15,587 

Thereafter 18,334 

Total Future Minimum Lease Payments $ 92,573

NOTE 9—COMMITMENTS AND 

CONTINGENCIES 

As of September 30, 2018, and 2017, the FTC had 

no pending single or aggregate administrative 

proceeding(s), legal action(s), and claim(s) brought 

by or against it, including pending litigation where 

adverse decisions are considered by management and 

legal counsel as “probable” or “reasonably possible .” 

This includes tort claims administered by the DOJ 

and	funded	through	the	Judgment	Fund	of	the	U.S.	

Treasury . Accordingly, no balances are recorded in the 

financial statements in relation to contingencies .
78 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 10—EXCHANGE REVENUES 

The Statement of Net Cost presents the FTC’s costs 

and exchange revenues for its two major strategic 

goals . The exchange revenues and related costs are 

presented by the major strategic goals they support 

and are further classified as “intragovernmental” 

or “public .” Intragovernmental costs and exchange 

revenues arise from transactions with another federal 

entity and public costs and exchange revenues arise 

from transactions with non-federal entities . 

The FTC’s intergovernmental costs are for services 

received from other federal agencies under 

reimbursable agreements to carry out its programs . 

The federal agencies providing the services bill the 

FTC based on full cost recovery . The FTC recognizes 

costs based on the services it receives from other 

agencies .

FEDERAL EXCHANGE REVENUES

A small portion of the FTC’s overall exchange revenue 

is intragovernmental arising from services provided to 

other federal agencies under interagency agreements . 

The FTC bills requesting agencies to recover the full 

cost of services, primarily salaries, and recognizes 

revenue at the time expenditures are incurred . The 

reimbursable	revenue	and	costs	are	$575	thousand	for	

FY	2018	and	$2,536	thousand	for	FY	2017.

The majority of the FTC’s exchange revenue is 

“public” and derived from two primary sources:

Fees collected for premerger notification filings 

under the HSR Act - The HSR Act requires entities 

to file premerger notifications with the FTC and 

the Antitrust Division of the DOJ and establishes a 

waiting period before certain mergers, acquisitions, or 

transfers of assets may be completed . The filing fees 

are determined by the values and sizes of involved 

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

premerger filing fees collected and remits the other 

one-half to the DOJ’s Antitrust Division . 

Subscription fees collected for the National Do Not 

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

Extension Act of 2007, which amended the Do Not 

Call Implementation Act, established a permanent 

fee structure for the DNC registry and provides that 

fees be reviewed annually and adjusted for inflation, 

as appropriate . Telemarketers must pay an annual 

subscription fee and download a list of telephone 

numbers of consumers who do not wish to receive 

calls . Fees are based on the number of area codes 

downloaded . The FTC recognizes revenue when 

collected and the telemarketers are given access to the 

requested data . 

The HSR and DNC fees are determined based on 

their respective congressional authorities . Each year, 

language in the appropriations bill specifies the amount 

of fees collected that the FTC can use to offset its 

annual appropriation . While the fees relate to major 

strategic goals, the fees are not related to specific costs 

incurred . As a result, the information below presents 

the full cost of operations with related exchange 

revenues by the FTCs two primary strategic goals .

Exchange revenues and related costs by strategic goal for the fiscal years ended September 

30, 2018 and 2017

(Dollars in thousands) 2018 2017

Strategic Goal 1: Protect Consumers

 Intragovernmental gross costs $ 44,845 $ 44,611 

 Public costs 139,708 136,894

Gross costs, Protect Consumers 184,553 181,505 

 Intragovernmental earned revenue - reimbursements (17) (1,939)

 Public earned revenue - Do Not Call registry fees (12,294) (12,626)

Earned revenue, Protect Consumers (12,311) (14,565)

Net Cost, Protect Consumers 172,242 166,940

Strategic Goal 2: Maintain Competition

 Intragovernmental gross costs 38,048 35,770 

 Public costs 118,532 109,762 

Gross costs, Maintain Competition 156,580 145,532 

 Intragovernmental earned revenue - reimbursements (558) (597)

 Public earned revenue - premerger filing fees (132,923) (125,440)

Earned revenue, Maintain Competition (133,481) (126,037)

Net Cost, Maintain Competition 23,099 19,495 

Net Cost of Operations $ 195,341 $ 186,435 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 79

FINANCIAL SECTION

NOTE 11—APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED: 

DIRECT VS. REIMBURSABLE OBLIGATIONS 

Obligations incurred consisted of the following for the fiscal years ended September 30, 2018 

and 2017:

(Dollars in thousands) 2018 2017

Obligations Incurred:

Category A - direct obligations $ 325,871 $ 314,003

Category B - reimbursable obligations 367 744

Total Obligations Incurred $ 326,238 $ 314,747

Category A – direct obligations represent amounts 

obligated in carrying out the FTC’s normal ongoing operations . The source of funding for these 

obligations is an annual appropriation, offsetting 

collections, and unobligated funds brought forward 

from previous years . These funds are made available 

by the OMB through quarterly (Category A) 

apportionments .

Category B – reimbursable obligations represent 

amounts obligated in fulfilling interagency 

agreements when the FTC is the provider of services . 

The source of funding for these obligations is 

reimbursements collected from other federal agencies 

to cover the FTC’s costs in fulfilling the agreement .

The FTC does not have any activity exempt from 

apportionment or apportioned under Category AB .

NOTE 12—EXPLANATION OF 

DIFFERENCES BETWEEN THE 

STATEMENT OF BUDGETARY 

RESOURCES AND THE BUDGET 

OF THE UNITED STATES 

GOVERNMENT 

The	Budget	of	the	United	States	Government	

(President’s Budget) contains budget proposals for 

the upcoming fiscal year along with forecasted results 

for the current fiscal year and actual results for the 

previous fiscal year . The most current version of the 

President’s Budget is the FY 2019 President’s Budget, 

which contains FY 2017 actual results . There are 

no material differences between amounts reported 

in the FY 2017 Statement of Budgetary Resources 

and the FY 2017 actual amounts as reported in the 

FY 2019 President’s Budget; however, the Statement 

of Budgetary Resources includes Distributed 

Offsetting Receipts, which are excluded from the 

President’s	Budget.	The	FY	2020	Budget	of	the	United	

States Government is not available to compare FY 

2018 actual amounts to the FY 2018 Statement of 

Budgetary Resources . The expected availability for 

this report is February 2019 on the OMB’s website . 
80 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 13—UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Undelivered obligations consisted of the following as of September 30, 2018 and 2017:

(Dollars in thousands) 2018 2017

Non-Federal unpaid obligations $ 46,116 $ 46,970

 

Federal unpaid obligations 9,463 10,441

Federal paid obligations 232 253

Total federal obligations 9,695 10,694

Total Undelivered Orders $ 55,811 $ 57,664

NOTE 14—CUSTODIAL ACTIVITIES 

The primary custodial activities of the FTC are: 

PREMERGER FILING FEES 

Fees collected for premerger notification filings under 

the HSR Act are divided evenly between the FTC 

and the DOJ . The portion of collections designated 

for the DOJ is reported as a custodial activity . As 

of September 30, 2018 and 2017, the FTC collected 

$265,846	and	$250,880	thousand	respectively,	in	

HSR premerger filing fees . One-half of the amounts 

collected in each year was distributed to the DOJ, as 

shown on the Statement of Custodial Activity . 

CIVIL PENALTIES 

Civil monetary penalties and antitrust violations 

collected in connection with the settlement or 

litigation of the FTC’s administrative or Federal court 

cases are collected by either the FTC or the DOJ as 

provided by law . In those situations where the FTC 

collects the penalties, the funds are deposited in a 

receipt account with the Treasury . Civil penalties 

collected also include amounts collected for 

undecided civil penalty cases that are held until final 

disposition of the cases . All civil penalties collected 

are	transferred	to	the	General	Fund	of	the	U.S.	

Government at the end of the fiscal year . 

CONSUMER REDRESS 

Collections for consumer redress reported on the 

Statement of Custodial Activity are limited to those 

collections that have been disgorged to the Treasury . 

Net	disgorgements	to	the	Treasury	were	$7,612	

thousand	as	of	September	30,	2018	and	$94,463	

thousand as of September 30, 2017 . 

Other line items on the Statement of Custodial 

Activity include: 

ACCRUAL ADJUSTMENTS 

Accrual adjustments represent the change in accounts 

receivable, net of allowances for uncollectible 

accounts, for civil penalties assessed in court actions .

AMOUNTS YET TO BE TRANSFERRED 

Amounts yet to be transferred represent the change 

in the offsetting liability for civil penalties due to 

Treasury that is established at the time an accounts 

receivable for civil penalties is recorded . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 81

FINANCIAL SECTION

NOTE 15—CONSUMER REDRESS ACTIVITIES 

The FTC obtains funds for consumer redress in connection with the settlement or litigation of both 

administrative proceedings and Federal court cases . The FTC holds redress funds in a deposit fund at Treasury 

until a determination is made on the practicability of redress . The FTC attempts to distribute funds to injured 

parties whenever possible . If redress is determined to be practicable, funds are either directly disbursed by 

the FTC to claimants or are transferred to accounts at financial institutions from which redress third party 

administrators process claims and disburse proceeds to injured parties . Disbursements to claimants and third 

party	administrators	totaled	$591,345	and	$543,432	thousand	as	of	September	30,	2018,	and	2017	respectively.		

In those cases where consumer redress is not practicable, funds are transferred (disgorged) to the Treasury, 

or on occasion, used for consumer education or another purpose as directed by the final order issued by the 

court . Major components of the redress program include eligibility determination, claimant notification, and 

administration of redress to claimants . 

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

2018 and 2017:

(Dollars in thousands) 2018 2017

Consumer Redress:

Fund Balance with Treasury

Beginning balance $ 431,573 $ 796,395

Collections 526,160 273,073

Disbursements to claimants and third party 

administrators for redress, net (591,345) (543,432)

Disgorgements to Treasury, net (7,612) (94,463)

Total Fund Balance with Treasury, Ending $ 358,776 $ 431,573 

Accounts Receivable, Net

Beginning balance $ 69,887 $ 98,182 

Net activity 528,628 (28,295)

Total Accounts Receivable, Ending $ 598,515 $ 69,887
82 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

FINANCIAL SECTION

NOTE 16 — RECONCILIATION OF NET OPERATING COST AND NET 

BUDGETARY OUTLAYS

The reconciliation schedules presented below bridge the gap between the net operating costs presented on the 

Statement of Net Cost and the net outlays presented on the Statement of Budgetary Resources for the fiscal years 

ended September 30, 2018, and 2017 . The increase in agency outlays is primarily due to the reduction in redress 

amounts disgorged to the Treasury, which are displayed as distributed offsetting receipts .

Reconciliation of Net Operating Cost and Net Budgetary Outlays for the Years Ended September 30, 2018 and 2017:

FY 2018

Intragovernmental With the Public Total

Net Operating Cost $ 82,318 $ 113,023 $ 195,341

Components of Net Operating Cost Not Part of the Budgetary Outlays

Depreciation and Amortization - (9,907) (9,907)

Losses on Asset Dispositions - (1,540) (1,540)

Increase/(Decrease) in Assets (55) (63) (118)

(Increase)/Decrease in Liabilities 557 (403) 154 

Imputed Costs (10,510) - (10,510)

Expense Offsets for Capitalized Costs - (629) (629)

Total Components of Net Operating Cost Not Part of the Budgetary Outlays (10,008) (12,542) (22,550)

Components of Budgetary Outlays Not Part of Net Operating Cost

Purchases of Assets - (109) (109)

Collections of Pre-Merger Fees - Custodial Activity - - - 

Miscellaneous Receipts - (7,816) (7,816)

Total Components of Budgetary Outlays Not Part of Net Operating Cost - (7,925) (7,925)

Net Outlays (Calculated) $ 72,310 $ 92,556 $ 164,866 

Related Amounts on the Statement of Budgetary Resources 

Outlays, Gross $ 318,589 

Actual Offsetting Collections (145,907)

Outlays, Net $ 172,682 

Distributed Offsetting Receipts (7,816)

Agency Outlays, Net $ 164,866 

FY 2017

Intragovernmental With the Public Total

Net Operating Cost $ 77,845 $ 108,590 $ 186,435

Components of Net Operating Cost Not Part of the Budgetary Outlays

Depreciation and Amortization - (10,534) (10,534)

Losses on Asset Dispositions - - - 

Increase/(Decrease) in Assets 231 2 233 

(Increase)/Decrease in Liabilities (2,644) 4,295 1,651 

Imputed Costs (6,896) - (6,896)

Expense Offsets for Capitalized Costs - 96 96 

Total Components of Net Operating Cost Not Part of the Budgetary Outlays (9,309) (6,141) (15,450)

Components of Budgetary Outlays Not Part of Net Operating Cost

Purchases of Assets - 3,783 3,783 

Collections of Pre-Merger Fees - Custodial Activity - 422 422 

Miscellaneous Receipts - (95,076) (95,076)

Total Components of Budgetary Outlays Not Part of Net Operating Cost - (90,871) (90,871)

Net Outlays (Calculated) $ 68,536 $ 11,578 $ 80,114 

Related Amounts on the Statement of Budgetary Resources 

Outlays, Gross $ 313,468 

Actual Offsetting Collections (138,700)

Outlays, Net $ 174,768 

Distributed Offsetting Receipts (94,654)

Agency Outlays, Net $ 80,114 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 83

Other Information
84 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

OTH E R I N FOR MATION

SUMMARY OF THE TOP MANAGEMENT CHALLENGES IDENTIFIED BY THE OFFICE OF INSPECTOR 

GENERAL

As required by the Reports Consolidation Act of 2000, the Federal Trade Commission (FTC) 

Office of Inspector General (OIG) has identified the following issues as the most serious 

management and performance challenges facing the FTC. The entire FY 2018 report is available 

at https://www.ftc.gov/about-ftc/office-inspector-general. 

The FTC is continuing to address two significant areas of risk – legacy IT and availability of 

cybersecurity personnel. The FTC will also need to mitigate its IT risks by fully integrating 

privacy controls into security controls, thereby creating a consolidated and unified set of 

controls. 

The FTC is challenged with rising costs for expert witness contracts and must actively manage 

its investigative and litigation resources. Overcoming this challenge will be critical as the agency 

pursues larger and more complex cases. In the FTC’s estimation, unpredictability surrounding 

the mix of scope and disposition of cases presents the greatest challenge to projecting costs for 

the expert witness program. 

The OIG also provided the following “watch list” issue areas that do not rise to the level of 

serious management and performance challenges, but nonetheless require management’s 

continued attention. 

1. Securing Information Systems and Networks from Destruction, Data Loss, or 

Compromise 

2. Addressing the Escalating Costs of Expert Witnesses

1. Development of a Risk Management Framework in Support of FISMA

2. Acquisition Planning and Contract Management

3. Improper Influences by Former Officials and Employees

Summary of the Top Management Challenges 

Identified by the Office of Inspector General
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 85

OTH E R I N FOR MATION

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
86 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

OTH E R I N FOR MATION

PAYMENT INTEGRITY

The Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012 requires agencies 

to annually report on all programs and activities, 

identify those that may be susceptible to significant 

improper payments, estimate annual improper 

payments in the susceptible programs and activities, 

and report the results of their improper payment 

activities . In FY 2015, the FTC performed and 

documented testing of statistical samples from larger 

payment processes to verify that the FTC payment 

programs are not susceptible to significant improper 

payments and also conducted a qualitative risk 

assessment over all payment programs . The FY 2015 

quantitative and qualitative analyses served as a 

baseline for the FTC’s FY 2018 activities .

 In accordance with the OMB A-123 Appendix 

C guidance, the FTC performed a FY 2018 risk 

assessment for nine payment processes . The 2018 

qualitative risk assessment was a refreshment of 

the FY 2015 risk assessment to meet the threeyear required cycle . The risk assessment included 

all major payment programs including payroll, 

procurement, redress payments to consumers, 

travel, purchase card, premerger filing fee refunds, 

training, and two miscellaneous payment processes . 

Each payment program was defined by its own 

internal control framework . The FTC evaluated each 

payment	program	over	$1	million	using	the	following	

qualitative risk factors identified in OMB Circular 

A-123 Appendix C: 

•	 The	relative	complexity	of	the	program	or	activity	

operation;

•	 The	extent	and	significance	of	recent	changes	in	the	

program that may be reason for improper payment 

in funding, authorities, practices and procedures; 

•	 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;	and	

•	 Results	from	prior	improper	payment	work.	

As a result of the FY 2018 risk assessment, the FTC 

determined that the agency’s programs and activities 

present low risk of improper payments and that none 

of the agency’s programs or activities were determined 

to be susceptible to significant improper payments . 

In addition to the risk assessment of all payment 

processes, the Interior Business Center (IBC), the 

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

payee records in the financial system with payee 

records in the Do Not Pay databases . To prevent 

improper payments, the FTC reviews potential 

matches on an on-going basis and incorporates a preaward check on potential contractors against the Do 

Not Pay databases . 

For	programs	with	more	than	$1	million	of	

expenditures, the FTC determined and documented 

that performing recapture audits were not cost 

effective . The FTC’s analysis had two parts . First 

was the error rates determined during the FY 2015 

quantitative risk assessment and the second was 

the documented management assessments of the 

controls within the payment processes . The FY 2015 

test work used statistical methods to project error 

rates to the population of payments for the larger 

payment processes . These larger payment amounts 

could have produced errors classifying the process 

as ‘Significant’ . This test work did not detect errors 

within the population of payments and, therefore, did 

not identify payments subject to recapture . Recent 

management assessments of each payment process 

determined sufficient controls to detect and prevent 

improper payments were in place and operating 

effectively . As a result, the Office of the Chief 

Financial Officer determined and documented that 

projected amounts subject to recapture audits are ‘di 

minimus’ and recapture audits are not cost-effective . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 87

OTH E R I N FOR MATION

PAYMENT INTEGRITY (CONTINUED)

Number (#) 

of Payments 

Reviewed 

for Possible 

Improper 

Payments

Dollars ($) 

of Payments 

Reviewed 

for Possible 

Improper 

Payments

Number 

(#) of 

Payments 

Stopped

Dollars ($) 

of Payments 

Stopped

Number (#) of 

Potential Improper 

Payments 

Reviewed and 

Determined 

Accurate

Dollars ($)

of Potential 

Improper 

Payments 

Determined 

Accurate

Reviews with 

the IPERIA 

specified 

databases

8,771 $ 686.7M 0 $ 0.00 0 $ 0.00

Reviews with 

databases not 

listed in IPERIA

0 $ 0.00 0 $ 0.00 0 $ 0.00

More information on Improper Payments can be found at https://paymentaccuracy .gov/ .

“REDUCE THE FOOTPRINT” IMPLEMENTATION 

The Federal Trade Commission is committed to reducing the total square footage of its office and warehouse 

inventory relative to the established FY 2015 baseline in accordance with Section 3 of the Office of Management 

and Budget (OMB) Memorandum 12-12, Promoting Efficient Spending to Support Agency Operations: Reduce the 

Footprint.

Reduce the Footprint Baseline Comparison FY 2015

Baseline FY 2018 Change (FY 2015 Baseline - FY 2018)

Rentable Square Footage 611,407 611,402 (5) 

Total square footage decreased by less than 1 percent in FY 2018 from the FY 2015 baseline year and 829 square 

feet compared to FY 2017 primarily due to moving into a new, smaller space in Los Angeles, which is consistent 

with Section 3, OMB M-12-12 . 

The FTC renovations aim to utilize space and energy in the most efficient manner possible in all buildings it 

occupies . The FTC continues to identify opportunities to reduce total square footage for consideration in future 

budget years while carrying out its mission . 

The FTC currently has no buildings that meet the requirements to report operations and maintenance costs . 
88 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

OTH E R I N FOR MATION

FRAUD REDUCTION 

REPORT

During 2018, the FTC directed several efforts to 

implement the Fraud Reduction Data Analytics Act 

(FRDAA) of 2015 . The objectives of these efforts 

were to implement the financial and administrative 

controls contained within the act, strengthen the 

FTC processes to reflect the GAO Fraud Risk 

Principle contained in the federal internal control 

standards, and apply the leading fraud risk practices 

for managing fraud risk, promoted by the OMB in its 

recent update to Circular A123 .

This year, the FTC implemented several strategies, 

procedures, and took steps to prevent and detect 

fraud within the agency . These actions include the 

following:

The CFO designated in writing the Enterprise Risk 

Management (ERM) program manager as the agency’s 

official Fraud Risk Coordinator . Responsibilities of 

the Fraud Risk Coordinator include: 1) coordinate 

agency-wide efforts to identify, assess and respond to 

fraud risks; 2) implement the collection and analysis 

of available data to support managers’ efforts to 

prevent, detect and respond to fraud risks; 3) conduct 

ongoing monitoring, audit and evaluations over fraud 

prevention, detection and response activities; and 4) 

incorporate fraud risk management into the broader 

ERM framework .

The Fraud Risk Coordinator chartered a Fraud 

Risk Register Work Group consisting of program 

staff from each major mission and mission support 

program . The Work Group trained its members in 

GAO standards, OMB practices and the FTC risk 

management framework . Work Group members 

then developed the FTC’s Fraud Risk Register by 

identifying, analyzing and prioritizing risks and 

identifying different available data sets, which 

may support ongoing monitoring to prevent and 

detect fraud . The developed Fraud Risk Register 

was integrated into the overall FTC ERM risk 

management framework .

The ERM program conducted several financial 

process reviews this year, which identified fraud 

vulnerabilities within processes . The ERM program 

worked with agency programs to mitigate risks 

surrounding redress payments to the public through, 

limited designations of authorized officials to approve 

payments, implementation of sequentially numbered 

authorization records and payment voucher forms, 

reconciliations of authorizations to payments and 

improved monitoring of contractors’ controls during 

payment processes . In addition, the FTC implemented 

a new cash management policy to significantly restrict 

the number of monetary instruments received, 

redirect customer payments to electronic funds 

payments and shift the mailing of any remaining 

cash receipts from program offices to the Financial 

Operations Division where collections are processed .

This year, the ERM program began collecting and 

analyzing data to prevent and detect fraud . A review 

of the Federal Transit Benefit Program payment 

schedules analyzed data to confirm payments 

were made only to eligible beneficiaries and only 

during their periods of eligibility . Additionally, the 

ERM Program analyzed micro-purchase card data 

and individually billed travel card data to identify 

inappropriate card use, then researched and resolved 

exceptions with cardholders .

During FY 2019, the FTC plans to strengthen and 

extend agency level fraud risk management and 

monitoring by leveraging its cross-programmatic 

Fraud Risk Register Work Group, increasing data 

collection and analysis, conducting additional 

audit and evaluations to identify vulnerabilities and 

coordinating all of these activities within the overall 

ERM framework .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 89

OTH E R I N FOR MATION

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015, requires agencies to make regular and consistent inflationary 

adjustments of civil monetary penalties to improve the effectiveness of civil monetary penalties and to maintain 

their deterrent effect . The 2015 act requires agencies to: (1) adjust the level of civil monetary penalties with 

an initial “catch-up” adjustment; and (2) make subsequent annual adjustments for inflation . Accordingly, the 

Federal Trade Commission increased its maximum civil penalty amounts to address inflation since the initial 

catch-up adjustment .

The following table illustrates the civil monetary penalties that the FTC may impose, the authority for imposing 

the penalty, penalty description, year enacted, latest year of adjustment, current penalty level, the Bureau that 

administers the penalty, and location for penalty update details . Additional information about these penalties 

and the latest adjustment is available in the Federal Register . 

Statutory 

Authority 

Penalty 

(Name or 

Description)

Year 

Enacted

Latest year of 

adjustment 

(via statute or 

regulation)

Current 

Penalty Level 

($ Amount or 

Range)

SubAgency/ 

Bureau/

Unit

Location 

for Penalty 

Update 

Details

The Clayton Act Section 

7A(g)(1)

15 U.S.C 18a(g)(1)

Premerger filing 

notification 

violations

1976 January 22, 2018 $ 41,484 BC Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Clayton Act Section 

11(l)

15 U.S.C. 21(l)

Violations of 

cease and desist 

orders

1959 January 22, 2018 $ 22,039 BC Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The FTC Act Section 5(l)

15 U.S.C. 45(l)

Unfair or 

deceptive acts or 

practices

1973 January 22, 2018 $ 41,484 BC and 

BCP

Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The FTC Act Section 5(m)

(1)(A)

15 U.S.C. 45(m)(1)(A)

Unfair or 

deceptive acts or 

practices

1975 January 22, 2018 $ 41,484 BC and 

BCP

Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The FTC Act Section 5(m)

(1)(B)

15 U.S.C. 45(m)(1)(B)

Unfair or 

deceptive acts or 

practices

1975 January 22, 2018 $ 41,484 BC and 

BCP

Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The FTC Act Section 10

15 U.S.C. 50

Failure to file 

required reports

1914 January 22, 2018 $ 545 BC and 

BCP

Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Webb-Pomerene (Export 

Trade) Act

Section 5 15 U.S.C. 65

Failure to 

file required 

statements

1918 January 22, 2018 $ 545 BC Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Wool Products Labeling 

Act Section 6(b)

15 U.S.C. 68d(b)

Failure to 

maintain required 

records 

1940 January 22, 2018 $ 545 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Fur Products Labeling 

Act Section 3(e)

15 U.S.C. 69a(e)

Failure to 

maintain required 

records 

1951 January 22, 2018 $ 545 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903
90 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

OTH E R I N FOR MATION

Statutory 

Authority 

Penalty 

(Name or 

Description)

Year 

Enacted

Latest year of 

adjustment 

(via statute or 

regulation)

Current 

Penalty Level 

($ Amount or 

Range)

SubAgency/ 

Bureau/

Unit

Location 

for Penalty 

Update 

Details

The Fur Products Labeling 

Act Section 8(d)(2)

15 U.S.C. 69f(d)(2)

Failure to 

maintain required 

records 

1951 January 22, 2018 $ 545 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Energy Policy and 

Conservation Act

Section 333(a) 42 U.S.C. 

6303(a)

Knowing 

violations

1975 January 22, 2018 $ 449 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Energy Policy and 

Conservation Act

Section 525(a) 42 U.S.C. 

6395(a)

Recycled 

oil labeling 

violations

1975 January 22, 2018 $ 22,039 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Energy Policy and 

Conservation Act

Section 525(b) 42 U.S.C. 

6395(b)

Willful violations 1975 January 22, 2018 $ 41,484 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Fair Credit Reporting 

Act Section 621(a)(2)

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

Knowing 

violations

1996 January 22, 2018 $ 3,895 BCP Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Medicare Prescription 

Drug Inprovement and 

Modernization Act of 2003 

Public Law 108-173 Section 

1115(a) 21 U.S.C. 355 note

Non-compliance 

with filing 

requirements

2003 January 22, 2018 $ 14,666 BC Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

The Energy Independence 

and Security Act of 2007 

Section 814(a) 42 U.S.C. 

17304

Market 

manipulation or 

provision of false 

information to 

federal agencies

2007 January 22, 2018 $ 1,180,566 BC Federal Register 

Vol. 83, January 

22, 2018, Pages 

2902-2903

GRANTS OVERSIGHT & NEW EFFICIENCY (GONE) ACT

Per OMB Management Procedures Memorandum 2016-04, the GONE Act reporting requirements apply 

to agencies that award grants or cooperative agreements . As the FTC does not award grants or cooperative 

agreements, the reporting requirements do not apply .

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION 

(CONTINUED)
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 91

Appendices
92 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

APPENDICES

APPENDIX A: DATA QUALITY INFORMATION

STRATEGIC GOAL 1 – PROTECT CONSUMERS FROM UNFAIR AND 

DECEPTIVE PRACTICES IN THE MARKETPLACE.

by BCP case managers by estimating the consumer 

loss due to fraudulent, deceptive, or unfair practices 

in the 12 months prior to the FTC’s first contact 

with the defendants or by dividing the estimated 

total economic injury by the amount of time the 

defendants’ business operated to derive an annualized 

estimate of consumer savings . The measure also 

includes instances wherein, as a result of FTC law 

enforcement action directed specifically at a business, 

that business stops its allegedly unfair or deceptive 

practices . The amount reported is a three-year rolling 

average (average of the current year and two prior 

year totals) .

The annual expenditures on consumer protection 

law enforcement are the FTC budget dollars spent 

on consumer protection law enforcement . Dollars 

spent on the Consumer and Business Education and 

Economics and Consumer Policy work are excluded 

from this calculation . The amount reported is a threeyear rolling average (average of the current year and 

two prior year totals) .

Definitions: N/A

Data Sources: 

Amount of money the FTC returned to consumers: 

Based on BCP’s collection’s database data exports 

from	FOCUS,	the	agency’s	financial	system	

maintained by the Financial Management Office 

(FMO), redress contractor reports, and matter bank 

statements .

Sum of the estimated consumer savings generated by 

law enforcement actions: Staff uses company sales and 

other records, as well as information from company 

employees and customers, where applicable . After 

the completion of a case, staff reports the estimated 

dollar value of consumer loss in the Redress and 

Enforcement Database . If staff has not completed the 

survey in the Redress and Enforcement Database or 

provided the required information, staff is surveyed 

by email . 

For money spent on law enforcement: FMO staff 

provides the annual expenditures data to BCP staff .

PERFORMANCE GOAL 1.1.3: TOTAL 

CONSUMER SAVINGS COMPARED TO THE 

AMOUNT OF FTC RESOURCES ALLOCATED 

TO CONSUMER PROTECTION LAW 

ENFORCEMENT.

Description: This measure tracks the efficiency of 

the FTC’s consumer protection law enforcement 

spending . We compare how much money the FTC 

saves consumers each year through law enforcement 

to the amount the FTC spends on consumer 

protection law enforcement . Consumer savings 

comprise: (a) the amount of money returned to 

consumers; and (b) an estimate of the amount of 

harm that would have occurred but for the FTC’s law 

enforcement action . To calculate this latter figure, the 

FTC assumes that the unlawful conduct would have 

continued for one year but for our action . The FTC 

also assumes that the amount of harm that would have 

occurred in that year is the same as what consumers 

lost in the past . Performance Goals 2 .1 .3 and 2 .1 .5 are 

similar measures that track the impact of antitrust 

law enforcement . The amount reported is a three-year 

rolling average (average of the current year and two 

prior year totals) .

Calculation/Formula: (Amount of money returned 

to consumers + the sum of the estimated consumer 

savings generated by law enforcement actions) / 

Annual expenditures on consumer protection law 

enforcement . The amount reported is a three-year 

rolling average (average of the current year and two 

prior year totals) .

The amount of money returned to consumers is the 

sum of refund checks cashed by consumers as the 

result of FTC enforcement actions . 

The sum of the estimated consumer savings generated 

by law enforcement actions is the estimate of harm 

that would have occurred but for the FTC’s law 

enforcement action . The FTC assumes that the 

unlawful conduct would have continued for one 

year but for our action and the amount of harm that 

would have occurred in that year is the same as what 

consumers lost in the past . This amount is estimated 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 93

APPENDICES

Data Collection:

Amount of money the FTC returned to consumers:

1 . The BCP Collection and Enforcement Database 

tracks all consumer protection judgements 

entered, all collections made on those judgements, 

and all aggregate case-by-case distributions made 

to consumers without FTC contractors .

2 . The Redress Administration Office (RAO) in 

Division of Consumer Response and Operations 

(DCRO) reconciles monthly activity reports 

submitted by the redress contractors with matter 

bank statements .

3 . RAO reconciles the monthly FMO sub-ledger with

the approved dispersals for each individual matter .

Sum of the estimated consumer savings generated 

by law enforcement actions: The consumer savings 

by case are maintained in a spreadsheet by BCP . A 

spreadsheet with the completed cases for the current 

fiscal year is reviewed quarterly by headquarters 

and regional office management to ensure that all 

applicable cases are included in the report .

Data Limitations/Response: 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 RETURNED TO CONSUMERS 

OR FORWARDED TO THE U.S. TREASURY 

RESULTING FROM FTC ENFORCEMENT 

ACTION.

Description: This goal tracks the FTC’s effectiveness 

in returning money to consumers who were 

defrauded	and	forwarding	money	to	the	U.S.	Treasury	

(e .g ., if sending money to individuals is impracticable, 

or if funds were paid as a civil penalty) . The FTC 

targets law enforcement efforts on violations that 

cause the greatest amount of consumer harm; 

the amount of money returned to consumers or 

forwarded	to	the	U.S.	Treasury	is	a	useful	indicator	

that the FTC is targeting the right defendants . The 

number reported is a three-year rolling average 

(average of the current year and two prior year totals) .

Calculation/Formula: Sum of refund checks cashed 

by consumers, plus the amount of money paid to 

the	FTC	by	defendants	and	forwarded	to	the	U.S.	

Treasury, either because sending refunds was not 

feasible or because the money was paid as a civil 

penalty . The amount reported is a three-year rolling 

average (average of the current year and two prior 

year totals) .

Definitions: N/A

Data Sources: The redress data are based on BCP’s 

collection’s	database	data	exports	from	FOCUS,	the	

agency’s financial system maintained by the Financial 

Management Office (FMO), redress contractor 

reports, and matter bank statements . The civil penalty 

data are summarized in a spreadsheet maintained by 

BCP staff in the DCRO .

Data Collection: 

1 . The BCP Collection and Enforcement Database 

tracks all consumer protection judgements 

entered, all collections made on those judgements, 

and all aggregate case-by-case distributions made 

to consumers without FTC contractors .

2 . The Redress Administration Office (RAO) 

in DCRO reconciles monthly activity reports 

submitted by the redress contractors with matter 

bank statements .

3 . RAO reconciles the monthly FMO sub-ledger 

with the approved dispersals for each individual 

matter .

4 . 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 penalties .

Data Limitations/Response: 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 .
94 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

APPENDICES

PERFORMANCE GOAL 1.2.1: RATE OF 

CONSUMER SATISFACTION WITH FTC 

CONSUMER EDUCATION WEBSITES.

Description: This measure gauges the effectiveness, 

helpfulness, and usability of the FTC’s consumer 

education websites . Consumer education serves as 

the first line of defense against deception and unfair 

practices . Well-informed consumers are better 

able to protect themselves from bad actors in the 

marketplace . This measure includes the customer 

satisfaction scores for Consumer .ftc .gov and 

Bulkorder .ftc .gov . 

Calculation/Formula: When visiting Consumer .ftc .

gov and Bulkorder .ftc .gov, consumers are given the 

option to complete a short survey to provide feedback 

on the following aspects of the site: information 

browsing, look and feel, navigation, site information, 

and site performance . The formula for the overall 

satisfaction score is proprietary to ForeSee .

Definitions: N/A

Data Sources: FTC staff can access survey results 

through ForeSee’s online portal . 

Data Collection: ForeSee conducts user surveys 

and generates the measurement based on industry 

standard practices . In FY 2017, consumers completed 

more than 3,000 surveys on consumer .ftc .gov and 

bulkorder .ftc .gov .

Data Limitations/Response: Survey data are collected 

and results calculated by third-party company 

ForeSee . Participation in the survey is voluntary .

PERFORMANCE GOAL 1.3.2: NUMBER 

OF INVESTIGATIONS OR CASES IN 

WHICH THE FTC OBTAINED FOREIGNBASED EVIDENCE OR INFORMATION OR 

ENGAGED IN OTHER MUTUAL ASSISTANCE 

THAT CONTRIBUTED TO FTC LAW 

ENFORCEMENT ACTIONS, OR IN WHICH 

THE FTC COOPERATED WITH FOREIGN 

AGENCIES AND/OR MULTILATERAL 

ORGANIZATIONS ON ENFORCEMENT 

MATTERS.

Description: The Office of International Affairs 

(OIA) works to expand cooperation and coordination 

between the FTC and international consumer 

protection partners through litigation support, 

information sharing, and building international 

consumer protection capacity . This measure counts 

the number of investigations and cases where 

information was shared between the FTC and foreign 

consumer protection agencies .

Calculation/Formula: # of FTC consumer protection 

investigations or cases where supporting evidence 

or information was obtained from foreign agencies 

+ # of foreign consumer protection investigations 

or cases where supporting evidence or information 

was provided by the FTC + # of enforcement matters 

where the FTC otherwise engaged in enforcement 

cooperation with foreign agencies or multilateral 

enforcement networks . 

Definitions: 

•	 Mutual assistance: Sharing information, including 

complaints or personally identifiable information, 

investigative assistance including obtaining 

evidence under appropriate legal authorities, 

the coordination of enforcement actions and 

priorities, or other appropriate assistance that aids 

in the enforcement of laws and rules .

•	 Multilateral organizations: Formal international 

organizations and agency-based peer networks 

that are pursuing enforcement –related 

cooperation projects and activities .

Data Sources: OIA weekly reports and internal 

tracking sheets .

Data Collection: OIA consumer protection team 

members report matters they worked on in which 

information was shared on a log maintained on an 

OIA shared drive . Managers review these matters to 

ensure that they qualify as part of the measure and 

have not been previously counted . 

Data Limitations/Response: Data are captured at 

several different points within OIA including weekly 

reports and internal tracking sheets . Data are input 

by several different staff members . Management 

review is necessary to ensure all appropriate cases 

and investigations are counted and to avoid double 

counting of particular matters . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 95

APPENDICES

STRATEGIC GOAL 2: MAINTAIN 

COMPETITION TO PROMOTE 

A MARKETPLACE FREE FROM 

ANTICOMPETITIVE MERGERS, 

BUSINESS PRACTICES, OR 

PUBLIC POLICY OUTCOMES. 

PERFORMANCE GOAL 2.1.1: PERCENTAGE 

OF FULL MERGER AND NONMERGER 

INVESTIGATIONS IN WHICH THE FTC 

TAKES ACTION TO MAINTAIN COMPETITION.

Description: This measure ensures that FTC actions 

maintain competition by preventing anticompetitive 

mergers and stopping business practices that 

restrain competition . This measure reflects actions 

taken to promote competition, including litigated 

victories, consent orders, abandoned transactions, or 

restructured transactions (either through a fix-it-first 

approach or eliminating the competitive concern) in 

a significant percentage of full merger and nonmerger 

investigations .

Calculation/Formula: The measure is calculated by 

taking the number of full investigations concluded 

with an action during the fiscal year divided by the 

total number of full investigations concluded during 

the fiscal year .

Definitions: 

•	 Action: Refers to any successful enforcement 

actions taken other than closing an investigation . 

Examples include litigated victories, consent 

orders authorized, and transactions either 

abandoned or restructured due to antitrust 

concerns raised by the FTC .

•	 Full investigation: Refers to any investigation, 

merger or nonmerger, in which the Commission 

has either issued a second request or has 

authorized staff to issue subpoenas and 

civil investigative demands to collect more 

information .

Data Sources:

•	 Public Actions: The FTC’s press releases are the 

primary source of information for public actions . 

Public actions include consent orders and litigated 

case outcomes . 

•	 Non-Public Actions: Internal communications 

from staff attorneys are used to identify actions 

that are nonpublic . Non-public actions include 

investigations that were closed because parties 

abandoned or restructured a transaction or 

because staff determined that the transaction or 

conduct was unlikely to harm competition . 

Information collected for this measure is stored 

in a database of enforcement information for the 

competition mission . This information is crossreferenced with data on second requests and 

compulsory process authorizations as recorded in the 

agency’s matter management system of record .

Data Collection: The data are entered into the BC 

Enforcement database by BC performance staff and 

reviewed monthly by analysts, attorneys, economists, 

and senior management .

Data Limitations/Response: The dataset used for 

this measure relies on accurate entry of information 

on public and non-public actions for relevant 

investigations . The risk of inaccurate data entry can 

be mitigated by crosschecking information in the 

enforcement database with other systems of record . 

However, there is still a limitation that certain nonpublic actions may be overlooked in the reporting 

process, and thus not counted in this measure .

PERFORMANCE GOAL 2.1.3: TOTAL 

CONSUMER SAVINGS COMPARED TO THE 

AMOUNT OF FTC RESOURCES ALLOCATED 

TO THE MERGER PROGRAM.

Description: This measure tracks the estimated 

amount of money that the Commission saved 

consumers by taking action against potentially 

anticompetitive mergers compared to the amount 

spent on the merger program . The amount reported 

is a five-year “rolling average” (average of the current 

year and four prior year totals) .

Calculation/Formula: Estimated consumer savings 

generated under goal 2 .1 .2 are divided by the amount 

of resources spent on the merger program for the 

current fiscal year . When available, case-specific data 

are used to generate the estimate of consumer savings . 

Otherwise, staff uses a formula of three percent of 

the volume of commerce of the relevant product 

market(s) for two years . In order to create a balanced 

performance profile, performance is reported as a 

“rolling average” over five years, compensating for 
96 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

APPENDICES

highly variable results in any individual year due to 

the influence of a few significant cases or the level of 

merger activity in that year . 

Definitions: 

•	 Consumer Savings: The estimated amount of 

money	saved	by	U.S.	consumers	as	a	result	of	FTC	

enforcement actions .

•	 Volume of Commerce: The dollar value of the 

relevant market in which the FTC is attempting to 

maintain competition in a given case . 

•	 Relevant Product Market: The marketplace for the 

purchase and sale of a particular good, service, or 

combination thereof, which is the focus of an FTC 

investigation .

Data Sources: The lead attorney estimates consumer 

savings for a particular case using the applicable 

estimation formula developed by the Bureau of 

Economics . Staff economists review all attorney 

estimates for concurrence before they are used in 

reporting . The FTC’s financial management office 

provides the amount of resources expended on the 

merger program on an annual basis .

Data Collection: The data are entered into the BC 

Enforcement database by performance staff and 

reviewed monthly by analysts, attorneys, economists, 

and senior management . 

Data Limitations/Response: The data are dependent 

on the estimates of consumer savings made by staff 

attorneys in accordance with the applicable estimation 

formulas . In order to ensure accurate estimates, 

all staff attorney estimates are shared with staff 

economists for concurrence before being used in 

reporting . 

PERFORMANCE GOAL 2.1.5: TOTAL 

CONSUMER SAVINGS COMPARED TO THE 

AMOUNT OF FTC RESOURCES ALLOCATED 

TO THE NONMERGER PROGRAM.

Description: This measure tracks the estimated 

amount of money that the Commission saved 

consumers by taking action against potentially 

anticompetitive business conduct compared to the 

amount spent on the nonmerger program . The 

amount reported is a five-year “rolling average” 

(average of the current year and four prior year 

totals) .

Calculation/Formula: Estimated consumer savings 

generated under goal 2 .1 .4 are divided by the amount 

of resources spent on the nonmerger program for 

the current fiscal year . When available, case-specific 

data are used to generate the estimate of consumer 

savings . Otherwise, staff uses a formula of one percent 

of the volume of commerce of the relevant product 

market(s) for one year . In order to create a balanced 

performance profile, performance is reported as a 

“rolling average” over five years, compensating for 

highly variable results in any individual year due to 

the influence of a few significant cases or the level of 

nonmerger activity in that year . 

Definitions: 

•	 Consumer Savings: The estimated amount of 

money	saved	by	U.S.	consumers	as	a	result	of	FTC	

enforcement actions .

•	 Volume of Commerce: The dollar value of the 

relevant market in which the FTC is attempting to 

maintain competition in a given case . 

•	 Relevant Product Market: The marketplace for the 

purchase and sale of a particular good, service, or 

combination thereof, which is the focus of an FTC 

investigation . 

Data Sources: The lead attorney estimates consumer 

savings for a particular case using the applicable 

estimation formula . Staff economists review all 

attorney estimates for concurrence before they 

are used in reporting . The FTC’s financial system 

provides the amount of resources expended on the 

nonmerger program on an annual basis .

Data Collection: The data are entered into the BC 

Enforcement database by performance staff and 

reviewed monthly by analysts, attorneys, economists, 

and senior management .

Data Limitations/Response: The data are dependent 

on the estimates of consumer savings made by staff 

attorneys in accordance with the applicable estimation 

formulas . In order to ensure accurate estimates, 

all staff attorney estimates are shared with staff 

economists for concurrence before being used in 

reporting . 
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 97

APPENDICES

PERFORMANCE GOAL 2.3.1: PERCENTAGE 

OF FTC CASES INVOLVING AT LEAST ONE 

SUBSTANTIVE CONTACT WITH A FOREIGN 

ANTITRUST AUTHORITY IN WHICH THE 

AGENCIES FOLLOWED CONSISTENT 

ANALYTICAL APPROACHES AND REACHED 

COMPATIBLE OUTCOMES.

Description: The Office of International Affairs 

(OIA) strives to ensure appropriate cooperation on 

and coordination of investigations under parallel 

review by the FTC and foreign competition agencies . 

This measure gauges the effectiveness of the FTC’s 

enforcement cooperation with foreign antitrust 

authorities pursuing parallel enforcement activities . 

Calculation/Formula: # of FTC cases, with at least 

one substantive contact with a foreign antitrust 

agency, where the foreign agency is pursuing a 

case against the same company(s) and where they 

followed consistent analytical approaches and reached 

compatible outcomes / # of FTC cases where the FTC 

had at least one substantive contact with a foreign 

antitrust agency, where the foreign agency is pursuing 

a case against the same company(s) . 

Definitions: 

•	 Followed consistent analytical approaches: The 

core analytical approaches relied on by each of 

the cooperating reviewing agencies are based 

on accepted principles of competition law, 

economics, and policy .

•	 Reached compatible outcomes: the reviewing 

agencies’ resolutions do not raise significant 

direct conflicts that impede each agency’s desired 

outcome .

Data Sources: Office of International Affairs (OIA) 

weekly reports and internal tracking sheets .

Data Collection: International antitrust team 

members monitor and report on FTC matters in 

which substantive 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 . Professional judgment from OIA senior 

management is used to make a final decision on 

compatibility for FTC measurement purposes .

Data Limitations/Response: Investigations may 

involve multiple agencies and may span over one or 

more fiscal years, such that cooperation with different 

agencies on the same transaction may be accounted 

for in separate fiscal years . Data are captured at 

several different points within OIA including weekly 

reports and internal tracking sheets . Data are input by 

several different staff members . Management review 

is necessary to ensure both that the matters reported 

included substantive contact with a foreign antitrust 

authority and that the consistency of approaches and 

compatibility of outcomes are properly assessed .

STRATEGIC GOAL 3: ADVANCE 

THE FTC’S PERFORMANCE 

THROUGH EXCELLENCE IN 

MANAGING RESOURCES, 

HUMAN CAPITAL, AND 

INFORMATION TECHNOLOGY. 

PERFORMANCE GOAL 3.2.3: THE EXTENT 

TO WHICH EMPLOYEES BELIEVE THE FTC 

CULTIVATES ENGAGEMENT THROUGHOUT 

THE AGENCY.

Description: The Employee Engagement Index 

(EEI) of the FEVS determines this measure . The 

Index gauges the extent to which employees believe 

that management listens and provides meaningful 

support and feedback in various areas that assist staff 

in supporting the overall mission of the agency . The 

index is compiled from questions across three subfactors: Leaders Lead, Supervisors, and Intrinsic Work 

Experience .

•	 Leaders Lead: Employees’ perceptions of 

leadership’s integrity as well as leadership 

behaviors such as communication and workforce 

motivation . 

•	 Supervisors: Interpersonal relationship between 

worker and supervisor, including trust, respect, 

and support . 

•	 Intrinsic Work Experience: Employees’ feelings of 

motivation and competency relating to their role 

in the workplace . 
98 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

APPENDICES

Calculation/Formula: The FEVS EEI measures 

conditions important to supporting employee 

engagement through responses to 20 questions across 

the three sub factors described above . The FEVS 

automatically calculates an agency Index score from 

responses to these 20 questions .

Definitions: 

•	 Federal Employee Viewpoint Survey (FEVS):

The FEVS is annual online survey of all federal 

agencies conducted by the Office of Personnel 

Management . It is a tool that measures 

employees’ perceptions of whether, and to what 

extent, conditions that characterize successful 

organizations are present in their agencies . The 

FEVS is offered to a sample of full-time and parttime, permanent, non-seasonal employees of 

Departments and/large agencies and the small/

independent agencies that accept an invitation to 

participate in the survey . 

Data Sources: Data are collected from the Federal 

Employee Viewpoint Survey (FEVS) . The Office of 

Personnel Management conducts the survey annually .

Data Collection: The FEVS is conducted annually, 

government-wide, usually in the late spring and 

early summer . Data are collected and compiled 

automatically . Government-wide and agency results 

are provided by the Office of Personnel Management 

in the fall following survey administration .

Data Limitations/Response: The FEVS is voluntary 

not mandatory, therefore data are limited to federal 

employees who decide to complete the survey . HCMO 

will continue to market the FEVS throughout the FTC 

and encourage employees to complete the survey .
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 99

APPENDICES

APPENDIX B: ACRONYMS

Acronym Definition

AFR Agency Financial Report 

APP Annual Performance Plan 

APR Annual Performance Report 

BC Bureau of Competition 

BCP Bureau of Consumer Protection 

CAP Corrective Action Plan

COPPA Children’s Online Privacy Protection Act 

CSRS Civil Service Retirement System 

DATA Act Digital Accountability and Transparency Act of 2014

DCRO Division of Consumer Response and Operations 

DNC Do Not Call 

DOJ Department of Justice 

DOL Department of Labor 

EEI Employee Engagement Index 

ERM Enterprise Risk Management 

FASAB Federal Accounting Standards Advisory Board 

FBwT Fund Balance with Treasury 

FCC Federal Communications Commission

FECA Federal Employees’ Compensation Act 

FEVS Federal Employee Viewpoint Survey

FedRAMP Federal Risk and Authorization Management Program 

FEGLIP Federal Employees’ Group Life Insurance Program 

FEHBP Federal Employees’ Health Benefit Program 

FERS Federal Employees’ Retirement System 

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

FERS-RAE Federal Employees’ Retirement System – Revised Annuity Employees

FISMA Federal Information Security Management Act 

FMFIA Federal Managers’ Financial Integrity Act 

FMO Financial Management Office 

FTC Federal Trade Commission 

FTE Full-Time Equivalent 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GSA General Services Administration 

HSR Hart-Scott-Rodino Act 

IBC Department of the Interior Business Center

IG Inspector General 

IPP Invoice Processing Platform

IPERIA Improper Payments Elimination and Recovery Improvement Act 

IRS Internal Revenue Service

ISP Internet Service Provider

IT Information Technology 
100 FEDERAL TRADE COMMISSION • Fiscal Year 2018 • www.ftc.gov

APPENDICES

Acronym Definition

N/A Not Applicable or Not Available 

NIST National Institute of Standards and Technology 

OFF Oracle Federal Financials 

OIA Office of International Affairs 

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPA Office of Public Affairs

OPM Office of Personnel Management 

PIO Performance Improvement Officer 

PMRO Performance Measure Reporting Official 

PP&E Property, Plant, and Equipment 

RAO Redress Administration Office 

SAT Senior Assessment Team 

SSAE Statement on Standards for Attestation Engagements 

SSP Shared Service Provider

TAS Treasury Account Symbol 

TSP Thrift Savings Plan

U.S. United States

USAID United States Agency for International Development
www.ftc.gov • Fiscal Year 2018 • FEDERAL TRADE COMMISSION 101

APPENDICES

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/about-ftc/performance

FTC Press Releases www .ftc .gov/news-events/press-releases

AGENCY FINANCIAL REPORT (AFR) SPECIFIC

The FTC welcomes comments or suggestions for improvement of its AFR . Please contact the agency to provide 

feedback or to request additional copies .

AFR Internet Site www .ftc .gov/about-ftc/performance

AFR Contact 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

CONSUMER RESPONSE CENTER

General Complaints 877-FTC-HELP (877-382-4357)

Identity Theft Complaints 877-ID-THEFT (877-438-4338)

TTY (Teletype Consumer Response Center) 866-653-4261

FTC Complaint Assistant www .ftc .gov/complaint

Identity Theft Education, Complaints, and Recovery Plan https://www .identitytheft .gov/

National Do Not Call Registry www .donotcall .gov

ACKNOWLEDGEMENTS

The FTC offers our sincerest thanks and acknowledges the following individuals who made significant 

contributions in producing this report: Tara Koslov of the Office of the Chairman; George Adam, Patricia Bak, 

Chris Bryan, Kathryn Gillis, James Hale, Lonnie Johnson, Tonia Hill, Qi Li, Nancy Moreno, Leonard Nadybal, 

Joseph O’Leska, Karen Overmier, David Rebich, David Robbins, Randall Salzer, Lori Walsh-Van Wey, Michael 

Ward, and Linda Wilson of the Office of the Executive Director; Nathan Hawthorne, Andria Jones, and Kelly 

Signs of the Bureau of Competition; Frank Gorman and Jenny Kellogg of the Bureau of Consumer Protection; 

Philip Runco and Louis Naiman of the Office of Congressional Relations; Andrew Katsaros and Andrew Loomis 

of the Office of the Inspector General; Russell Damtoft of the Office of International Affairs; Jacob Hamburger 

of the Office of Policy Planning; and Rich Custer, Betsy Lordan, and Jason Wolf of the Office of Public Affairs . 

Finally, we offer thanks to AOC Solutions, Heartland Consulting, and Graphic Visions for their contributions in 

the design and production of this report .
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