U.S. Department of the Treasury | Fiscal Year 2013

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TITLE PAGE

FY 2013
U.S. Department of the Treasury | Fiscal Year 2013

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ISSION AND GOALS
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For the online version of this report, please see: 

http://www.treasury.gov

and search for “2013 Citizen’s Report”
U.S. Department of the Treasury | Fiscal Year 2013

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TABLE OF CONTENTS

Introduction........................................................................................................................................................................ 4

Organization........................................................................................................................................................................ 4

Treasury's Fiscal Year 2012-2015 Strategic Framework and Key Performance Indicators.............................................. 8

Fiscal Year 2013 Performance by Strategic Goal...............................................................................................................10

Performance by Agency Priority Goal............................................................................................................................... 24

Highlights of Management and Performance Challenges ............................................................................................... 26

Financial Highights........................................................................................................................................................... 27

Condensed Financial Statements...................................................................................................................................... 33
U.S. Department of the Treasury | Fiscal Year 2013

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INTRODUCTION

In fiscal year 2013, the Department of the Treasury (Treasury) took a number of actions to strengthen the United 

States (U.S.) economy and job creation, help struggling homeowners, monitor risks to the financial system, encourage 

small business lending, protect taxpayers, fight financial crimes, reinforce the international competitiveness of the 

U.S., and responsibly manage the U.S. government’s financial resources, among other duties. Treasury performed 

these functions in pursuit of achieving its vital mission: maintaining a strong economy and promoting conditions that 

enable economic growth and stability at home and abroad, strengthening national security by combating threats and 

protecting the integrity of the financial system, and managing the U.S. government’s finances and resources 

effectively.

This Citizens’ Report documents Treasury’s operational and financial performance during fiscal year 2013. This 

report also demonstrates Treasury’s steady progress on the five Strategic Goals and two Agency Priority Goals

outlined in the Department’s Fiscal Year 2012 - 2015 Strategic Plan1.

ORGANIZATION

Treasury is organized into the Departmental Offices, seven operating bureaus, and three inspectors general. The 

Departmental Offices are primarily responsible for policy formulation, while the bureaus are primarily the operating 

units of the organization.

DEPARTMENTAL OFFICES

Domestic Finance works to preserve confidence in the U.S. Treasury market, effectively manage federal fiscal 

operations, strengthen financial institutions and markets, promote access to credit, and improve financial access and 

education in service of America’s long-term economic strength and stability.

International Affairs protects and supports U.S. economic prosperity and national security by working to help 

ensure the most favorable external environment for sustained jobs and economic growth in the U.S. Through 

bilateral and multilateral engagement, the office promotes global economic and financial stability, encourages 

market- determined foreign exchange rates, leverages leadership positions in the international financial institutions 

to advance U.S. policy priorities, and pursues free trade, open markets, and level playing fields for U.S. financial 

institutions doing business abroad.

Terrorism and Financial Intelligence (TFI) marshals the Department's intelligence and enforcement functions 

with the twin aims of safeguarding the financial system against illicit use and combating rogue nations, terrorist 

facilitators, weapons of mass destruction (WMD) proliferators, money launderers, drug kingpins, and other national 

security threats.

Economic Policy reports on current and prospective economic developments and assists in the determination of 

appropriate economic policies. The office is responsible for the review and analysis of domestic economic issues and 

developments in the financial markets.

Tax Policy develops and implements tax policies and programs, reviews regulations and rulings to administer the

Internal Revenue Code, negotiates tax treaties, and provides economic and legal policy analysis for domestic and 

international tax policy decisions. Tax Policy also provides revenue estimates for the President’s Budget.

 1 Treasury 2012-2015 Strategic Plan: http://www.treasury.gov/about/budget-performance/strategicplan/Documents/strategic-plan2012-2015.pdf
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Treasurer of the United States has direct oversight over the U.S. Mint and the Bureau of Engraving and Printing. 

The Treasurer also chairs the Advanced Counterfeit Deterrence Steering Committee and is a key liaison with the 

Federal Reserve. In addition, the Treasurer serves as a senior advisor to the Secretary in the areas of community 

development and public engagement. 

Other Offices

Internally, the Departmental Offices are responsible for overall management of Treasury. The Office of Management 

and the Chief Financial Officer are responsible for managing the Department’s financial resources and oversees 

Treasury-wide programs, including human capital, information and technology, acquisition, and diversity issues.

Other offices include General Counsel, Legislative Affairs, and Public Affairs. Three inspectors general—the Office of 

the Inspector General (OIG), the Treasury Inspector General for Tax Administration (TIGTA), and the Special 

Inspector General for the Troubled Asset Relief Program (SIGTARP) — provide independent audits, investigations, 

and oversight of the Department of the Treasury and its programs. 

BUREAUS

Bureaus employ approximately 96 percent of Treasury’s workforce and are responsible for carrying out specific 

operations assigned to the Department.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) collects federal excise taxes on alcohol, tobacco, 

firearms, and ammunition; and is responsible for enforcing and administering laws covering the production, use, and 

distribution of alcohol and tobacco products.

The Bureau of Engraving and Printing (BEP) develops and produces U.S. currency notes trusted worldwide.

The Financial Crimes Enforcement Network (FinCEN) safeguards the financial system from illicit use and 

combats money laundering and promotes national security through the collection, analysis, and dissemination of 

financial intelligence and strategic use of financial authorities.

The Bureau of the Fiscal Service (Fiscal Service) provides central payment services to federal program 

agencies, operates the U.S. government’s collections and deposit systems, provides government-wide accounting and 

reporting services, and manages the collection of delinquent debt owed to the U.S. government. In addition, Fiscal

Service borrows the money needed to operate the U.S. government through the sale of marketable, savings, and 

special purpose U.S. Treasury securities and accounts for and services the public debt.

The Internal Revenue Service (IRS) is the largest of the Department’s bureaus and determines, assesses, and 

collects the tax revenue in the United States.

The United States Mint (U.S. Mint) designs, mints, and issues U.S. circulating and bullion coins; prepares and 

distributes numismatic coins and other items; and strikes Congressional Gold Medals and other medals of national 

significance. The Mint maintains physical custody and protection of most of the Nation’s gold and all of its silver 

assets.

The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises national banks and 

federal savings associations to ensure a safe, sound, and competitive banking system that supports the citizens, 

communities, and economy of the United States. The OCC also supervises federal branches and agencies of foreign 

banks. Effective July 21, 2011, Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 

transferred to the OCC responsibility for the supervision of federal savings associations (thrifts) and rule making 

authority for all savings associations.
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THE DEPARTMENT OF THE TREASURY ORGANIZATIONAL CHART

Office of the Chief of Staff

Bureau of the Fiscal 

Service

United States Mint

Treasury Inspector General 

for Tax Administration

Treasurer

General Counsel

Assistant Secretary 

Management

Assistant Secretary 

Fiscal

Assistant Secretary 

Tax Policy

Alcohol and Tobacco 

Tax and Trade Bureau

Assistant Secretary

Public Affairs

Assistant Secretary 

Terrorist Financing

Assistant Secretary 

Intelligence and Analysis

Financial Crimes 

Enforcement Network

Assistant Secretary 

Financial Institutions

Office of the 

Comptroller of the 

Currency

Assistant Secretary 

Financial Stability

Assistant Secretary 

Financial Markets

Internal Revenue 

Service

Under Secretary 

Domestic Finance

Under Secretary Terrorism 

and Financial Intelligence

Under Secretary 

International Affairs

Inspector General

Secretary

Deputy Secretary Special Inspector General 

for the Troubled Asset

Relief Program

Community Development 

Financial Institutions Fund

Assistant Secretary 

International Markets 

and Development

Assistant Secretary 

International Finance

Assistant Secretary 

Economic Policy

Assistant Secretary 

Legislative Affairs

Bureau of Engraving 

and Printing

Office of Financial 

Research

Office of

Financial Stability 

Oversight Council 

Office of Foreign 

Assets Control

The Executive Office of 

Asset Forfeiture

Office of Technical 

Assistance

Departmental Office

Bureau

Inspector General
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TREASURY FISCAL YEAR 2012-2015 STRATEGIC FRAMEWORK

AND KEY PERFORMANCE INDICATORS

The strategic framework comprises the Department’s goals and objectives and forms the basis for performance 

management within the agency.

Strategic Goals Strategic Objectives

Select 

Performance 

Indicators2

Financial

Goal 1

Repair and Reform the 

Financial System and 

Support the Recovery of 

the Housing Market

• Lead the Administration’s efforts to continue to implement 

comprehensive regulatory reform to increase stability and 

strengthen accountability in the financial system

• Effectively manage and exit emergency programs

• Reform and strengthen the housing finance system

• Help prevent avoidable foreclosures and support the 

availability of affordable mortgage credit

• Clean audit opinion on 

TARP financial statements 

(OFS)

• Percentage of SIGTARP 

and GAO oversight 

recommendations 

responded to on time (OFS)

Economic

Goal 2

Enhance U.S. 

Competitiveness and 

Promote International 

Financial Stability and 

Balanced Global Growth

• Protect global economic and financial stability and 

encourage market-determined exchange rates

• Promote strong international financial standards and a 

level playing field for U.S. financial institutions

• Pursue free trade and open markets

• Encourage foreign investment in the U.S. economy while 

ensuring national security

• Enter into bilateral and multilateral tax agreements that 

encourage cross-border trade and investment, and promote 

the exchange of tax information to combat offshore tax 

evasion

• Use leadership positions in the multilateral development 

banks and the International Monetary Fund to advance 

U.S. national security and economic interests

• Provide direct assistance to developing countries working 

to improve public financial management, and strengthen 

their financial systems

• Percentage of Multilateral 

Development Bank grant 

and loan proposals 

containing satisfactory 

framework for results 

measurement (IA)

• Average number of days to 

process an original permit 

application for a new 

alcohol or tobacco business

(TTB)

 2Example performance measures are provided in this table to illustrate how performance against these goals can be quantified. A 

full discussion of all performance measures that are reported under each goal will be provided in the “Performance by Goal” sections 

of this report. 
U.S. Department of the Treasury | Fiscal Year 2013

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Strategic Goals Strategic Objectives

Select 

Performance 

Indicators

Security

Goal 3

Protect our National 

Security through 

Targeted Financial 

Actions

• Collect, analyze, and disseminate financial and other 

information concerning illicit financing and national

security threats

• Disrupt and dismantle the financial networks of those who 

threaten national security or engage in illicit financing

• Shape policy, laws, and regulations to safeguard the U.S. 

and international financial systems

• Coordinate with partners, both at home and abroad, 

including the foreign policy, law enforcement, and 

intelligence communities, to combat illicit finance 

• Assist partner countries in developing and implementing 

anti-money laundering and counter terrorist financing 

regimes compliant with international standards

• Impact of TFI programs 

and activities (TFI)

• Percentage of domestic law 

enforcement finding 

FinCEN’s analytic reports 

contribute to the detection 

and deterrence of financial 

crime (FinCEN)

Management

Goal 4

Pursue Comprehensive 

Tax and Fiscal Reform

• Develop comprehensive proposals to reform and simplify 

the tax code

• Increase voluntary tax compliance

• Promote policies to ensure a sound fiscal footing over the 

medium term

• Customer service 

representative level of 

service (IRS)

• Percent of individual 

returns processed 

electronically (IRS)

Goal 5

Manage the 

Government’s Finances 

in a Fiscally 

Responsible Manner

• Optimize the cash and debt portfolio to manage the 

Government’s borrowing costs effectively

• Expand the use of electronic transactions

• Modernize financial systems and standardize accounting 

practices

• Continuously improve our operations and processes to 

generate efficiency savings

• Attract and retain an exceptional workforce

• Percentage collected 

electronically of total dollar 

amount of U.S. government 

receipts (Fiscal Service)

• Amount of delinquent debt 

collected through all 

available tools ( Fiscal 

Service)
U.S. Department of the Treasury | Fiscal Year 2013

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FISCAL YEAR 2013 PERFORMANCE BY STRATEGIC GOAL

GOAL #1: REPAIR AND REFORM THE FINANCIAL SYSTEM AND SUPPORT THE 

RECOVERY OF THE HOUSING MARKET 

In late 2008 and early 2009, the Department of the Treasury put in place a set of emergency programs to help recover from a 

historic financial crisis, restore confidence, and restart economic growth. 

In 2010, Congress passed and the President signed into law comprehensive financial regulatory reform: the Dodd-Frank Wall 

Street Reform and Consumer Protection Act. Treasury has worked with the financial regulatory agencies to implement these 

reforms, which are helping to protect the economy and financial system by addressing key gaps and weaknesses in the pre-crisis 

regulatory system. These reforms will also help to protect consumers against fraud and abuse that in part contributed to the 

financial crisis.

Treasury has also worked to support efforts to reform the housing market. Treasury has taken leadership roles in the development 

of loan modification and refinancing programs designed to help prevent avoidable foreclosures and reduce mortgage costs for 

homeowners. At the same time, Treasury has been involved in an ongoing conversation about a path forward for the nation’s 

housing finance system and has responsibly managed the government’s investments in Fannie Mae and Freddie Mac.

SIGNIFICANT ACHIEVEMENTS

Treasury’s Office of Financial Stability (OFS) has continued to make progress in winding down the Troubled Asset Relief Program 

(TARP)3 and the emergency assistance for the financial system has primarily been replaced with private capital. OFS, on behalf of 

taxpayers, has now recovered far more of its TARP investments than most people expected when the program began. As of 

September 30, 2013, OFS had collected 96.2 percent of the $421.6 billion in program funds that were disbursed under TARP.

As OFS carefully winds down the investment programs under TARP, it continues to implement programs to help struggling 

homeowners avoid foreclosure, primarily through mortgage modifications under the Treasury housing programs. In addition to 

providing assistance to 1.8 million homeowners directly, these programs have set new standards and encouraged positive changes 

throughout the mortgage servicing industry. On May 30, 2013, the Obama Administration extended the application deadline for 

the Making Home Affordable Program through December 2015 in part to provide struggling homeowners additional time to access 

sustainable mortgage relief.

PERFORMANCE AND FACTORS AFFECTING RESULTS

For a full discussion of Treasury’s efforts to repair and reform the financial system and support the recovery of the housing market, 

please view the Agency Financial Report for OFS available at: 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Annual-Agency-Financial-Reports.aspx

EMERGING ISSUES

For a full discussion of the emerging issues facing Treasury’s efforts to repair and reform the financial system and support the 

recovery of the housing market, please view the Agency Financial Report for OFS available at the URL referenced above.

 3 Troubled Asset Relief Program: http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/Pages/default.aspx
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GOAL #2: ENHANCE U.S. COMPETITIVENESS AND PROMOTE INTERNATIONAL

FINANCIAL STABILITY AND BALANCED GLOBAL GROWTH

Treasury works bilaterally and multilaterally to foster strong and balanced global growth, promote stable international financial 

markets, encourage foreign investment in the United States while protecting national security, promote a level playing field for U.S. 

financial institutions internationally, and enhance U.S. competitiveness. This goal is supported through the operations of the 

Office of International Affairs, the Office of Tax Policy, and the TTB. Promoting international growth and stability also includes 

Treasury’s efforts to enable domestic growth and U.S. financial stability, which is supported through the efforts of the CDFI Fund, 

the U.S. Mint, and the BEP. 

SIGNIFICANT ACHIEVEMENTS

This year Treasury’s Office of International Affairs made significant progress promoting free trade, open markets, and global 

financial stability:

• As co-lead on financial services negotiations, Treasury continued to support the Administration in negotiating the

Transatlantic Trade and Investment Partnership agreement with the European Union and a Trade in Services Agreement 

with 23 other like-minded countries to liberalize services trade;

• At the U.S.-China Strategic and Economic Dialogue, China committed to undertake negotiations for a high-standard U.S.-

China Bilateral Investment Treaty that would aim to cover all phases of investment and all sectors. China also reaffirmed 

its commitment to move to a more market-determined exchange rate and; between June 2010 and October 2013, the 

Chinese currency appreciated by over 17 percent against the dollar on a real, inflation-adjusted basis;

• As part of its efforts to prevent financial instability in the Eurozone from spreading to the U.S. economy, Treasury 

encouraged European countries to implement a robust policy framework to promote economic growth and restore 

confidence in the European banking system. Over the period, Treasury saw a significant reduction in interest rates facing 

Europe’s most vulnerable economies;

• As chair of the G-8 Deauville Partnership, Treasury helped lead an effort to launch a transition fund to support projects 

contributing to economic growth and stability, trade and investment integration, and inclusive development and job

creation in the Middle East and North Africa. In fiscal year 2013, the fund approved $100 million for 24 projects in 

Jordan, Egypt, Libya, Morocco, Tunisia and Yemen, helping to directly support U.S. development and national security 

priorities in the region; and

• In fiscal year 2013, TTB worked with the Office of the U.S. Trade Representative to promote U.S. exports by working with 

foreign regulators to address barriers that block market access for U.S. products. For example, many major markets 

abroad require export certifications to accompany shipments of alcohol beverages before a product may enter those 

markets. In fiscal year 2013, TTB issued more than 12,000 export certificates for beer, wine, and distilled spirits. TTB 

also continued its work to open burgeoning markets to U.S. producers, including member economies of the Asia-Pacific 

Economic Cooperation forum, by educating their regulators about the U.S. system to help prevent those countries from 

issuing technical barriers to U.S. exports. 

Also in 2013, Treasury made progress in implementing the Foreign Account Tax Compliance Act (FATCA)4 and tax treaty 

negotiations:

 4 Foreign Account Tax Compliance Act: http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-

(FATCA)
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• The Office of Tax Policy signed eight intergovernmental agreements under FATCA, concluded negotiations with another 

15 countries, and began discussions with at numerous other countries; and

• In fiscal year 2013, Treasury signed three significant tax treaties: a protocol to the U.S.-Japan tax treaty, a protocol to the 

U.S.-Spain tax treaty, and a new tax treaty with Poland. Treasury also concluded negotiations on a new tax treaty with 

Romania and continued negotiations with Austria and Vietnam.

Treasury‘s achievements in supporting economic growth within the U.S. include:

• The Community Development Financial Institutions (CDFI) Fund’s core program (the CDFI Program) awarded $146.7 

million in funding to 148 CDFIs to provide loans, investments, financial services, and technical assistance to underserved 

populations and low-income communities. The CDFI Program awardees helped provide funds for projects that created or 

maintained 35,000 jobs; and

• The CDFI Fund completed the first round of the Bond Guarantee Program for $325 million in bonds with maturities up 

to 29.5 years that, when issued, are guaranteed by Treasury for community and economic development financing through. 

The CDFI Bond Guarantee Program was enacted through the Small Business Jobs Act of 2010, in order to provide eligible 

CDFIs with access to long-term capital by providing guarantees of bonds. As the administrator of the CDFI Bond 

Guarantee Program, the Fund completed final bond closings and issuance of guarantees during the final quarter of fiscal 

year 2013. 

Treasury also achieved progress in managing the demand for U.S. currency, thus helping to improve financial stability:

• The BEP produced sufficient quantities of the next generation $100 note needed to support the note’s initial release into 

worldwide circulation;

• The U.S. Mint met an 18 percent increase in demand for circulating coinage in fiscal year 2013 over an initial forecast of 

9.0 billion coins; and 

• In fiscal year 2013, the U.S. Mint returned $350 million to the General Fund.
U.S. Department of the Treasury | Fiscal Year 2013

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PERFORMANCE AND FACTORS AFFECTING RESULTS

International Affairs Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13 

Results

Timely review of CFIUS5 cases (%) N/A N/A N/A 100.00 100.00 Met

Monitor quality and enhance effectiveness of 

International Monetary Fund (IMF) lending 

through review of IMF country programs (%)

97.00 100.00 100.00 100.00 100.00 Met

Percentage of Multilateral Development Bank 

grant and loan proposals containing satisfactory 

framework for results measurement 

92.50 94.00 94.00 92.00 92.00 Met

Changes that result from project engagement 

(Impact) (Office of Technical Assistance 

Programs)6

3.00 3.20 3.10 3.00 3.10 Unmet

Scope and intensity of engagement (Traction) 

(Office of Technical Assistance Programs)7 3.50 3.70 3.90 3.8 3.60 Met

For both CFIUS (Treasury is the statutory Chair of the interagency committee) and IMF measures, the prioritize engagement and 

support of Treasury leadership contributed positively to the results. Several factors contributed to the Office of Technical 

Assistance Programs not realizing their fiscal year 2013 performance target for changes that result from project engagement, 

including: increased instability overseas; increased cost of overseas operations; increased cost of domestic operations; and funding 

reductions.

Alcohol Tobacco Tax and Trade Bureau (TTB) 

Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13 

Results

Average number of days to process an original 

permit application for a new alcohol or tobacco 

business

65.00 74.00 67.00 81.00 65.00 Unmet

Percentage of electronically filed Certificate of Label 

Approval applications

79.00 88.00 91.00 92.00 92.00 Met

TTB monitors its timeliness in processing permit applications through its measure of the average number of days to process an 

original permit application for a new alcohol or tobacco business. Undue delays in permit application processing impede economic 

growth, primarily in the small business sector, since taxable commodities, such as finished wine, beer, or spirits products, cannot 

 5 Committee for Foreign Investment in the United States (CFIUS) 6 Office of Technical Assistance measures are scored on a five-point scale and are averaged across all projects to provide one overall 

measure of OTA’s performance in the categories of traction and impact.

7 Ibid
U.S. Department of the Treasury | Fiscal Year 2013

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be lawfully produced without a federal permit from TTB. In fiscal year 2013, TTB targeted a 65-day turnaround time for original 

permit applications; however, given increased demand for service from a growing industry and reduced resources, TTB averaged 81 

days to process these applications. Even with greater than anticipated adoption rates for the Permits Online system, TTB does not 

anticipate achieving sustained reductions to its permit application turnaround time until the latter quarters of fiscal year 2015. 

TTB protects U.S. consumers by ensuring that the alcohol beverage products offered at retail outlets are properly labeled and

comply with federal production standards. In furtherance of Treasury’s Agency Priority Goal of increasing paperless transactions,

TTB met its performance level of 92 percent electronic filing for Certificates of Label Approval (COLA) applications. The ongoing 

rise in electronic filing is due to system improvements that track with customer feedback and which simplify the filing process for 

industry members. 

CDFI Fund Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13

Results

Awardees’ portfolio amount of CDFI 

loans/investments originated ($ millions) 

NA 1,228 1,298 1,978 1,200 Met

Number of jobs created/maintained by all CDFI 

fund programs (as reported by CDFIs)

NA 55,274 57,023 50,353 50,000 Met

Percentage of New Markets Tax Credit (NMTC) 

loans and investments that went to severely 

distressed communities

73.40 72.40 70.40 78.50 70.00 Met

A key factor that contributed to an increase in the number and amount of loans reported by CDFI awardees’ portfolios was that 

reporting awardees had a significantly larger asset base (30 percent larger) than the prior year awardees, leading to increased 

lending over the projected target. Total jobs associated with lending and investing activities as reported by both CDFI and NMTC 

Program awardees (not including construction jobs) met the performance target, largely reflecting improved data quality for 

reporting project-level job outcomes for NMTC investments (due to improvement in linking multiple investments in the same 

project). The percentage of NMTC investments made in severely distressed communities exceeded the target largely as a result of 

better targeting by Community Development Entities (and it may also reflect improved targeting using new census data). 

BEP and U.S. Mint Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13

Results

Manufacturing costs for currency (Dollar costs per 

thousand notes produced) (BEP)

44.90 34.60 43.30 50.45 55.00 Met

Customer satisfaction index (MINT) 86.1 91.7 90.0 92.6 90.0 Met

Numismatic sales units (Million Units) (MINT) NA 7.3 5.6 5.5 5.2 Met

Seigniorage per dollar issued (MINT) 0.49 0.45 0.21 0.24 0.17 Met

Manufacturing costs for currency notes (dollar costs per 1,000 notes) is an indicator of currency manufacturing efficiency and the 

effectiveness of program management. This standard is developed annually based on the past year’s performance, contracted price 

factors, and anticipated productivity improvements. Actual performance against the standard depends on BEP’s ability to meet 
U.S. Department of the Treasury | Fiscal Year 2013

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annual spoilage, efficiency, and capacity utilization goals established for a particular product line. In fiscal year 2013, the favorable 

results for this metric were driven primarily by more efficient use of currency inks in the manufacturing process and improved 

productivity in the Bureau’s currency overprinting function. 

Mint sold more than 5.5 million numismatic (or collectors’) units, a 5.8 percent increase above the fiscal year 2013 target of 5.2 

million units. The increase mainly resulted from strong Presidential $1 Coin product sales (above forecast by 23 percent); silver 

coin product sales (above forecast by 26 percent); and gold and platinum coin product sales (78 percent above forecast).

In fiscal year 2013, seigniorage per dollar coin issued was $0.24, which is above the fiscal year 2013 performance target of $0.17. 

Performance results exceeded the target mainly due to increased Federal Reserve Bank demand for quarter dollars and dimes; 

lower input costs than forecast for copper, nickel, and zinc; and reduced general and administrative expenses. 

EMERGING ISSUES

As Treasury strives to achieve its goals of enhanced U.S. competitiveness, balanced global growth, and international financial 

stability, its policy offices and bureaus face a variety of emerging issues that are environmental, operational, and managerial in 

nature.

Security conditions complicated ongoing work in North Africa and the increasing cost of overseas operations and budget 

uncertainty has the potential to reduce the effectiveness of Treasury personnel who are assigned overseas and hamper Treasury’s 

ability to undertake international travel for critical activities like trade negotiations.

The Office of Tax Policy spends a significant amount of time and resources implementing FATCA. From a technical perspective, 

the U.S. government cannot offer full reciprocity under the FATCA agreements, which complicates the law’s implementation. 

The TTB has seen sharp increases in turnaround times for permit, label, and formula applications. Even as electronic filing rates 

for applications increase, TTB cannot meet the increasing demand for TTB service given the dramatic rise in small, craft alcohol 

producers in recent years. 

The BEP faces significant manufacturing challenges caused by the complex new design of the $100 note (next generation), which 

have led to increased spoilage and quality issues. This has prompted BEP to partner with the Federal Reserve Board to develop a 

more robust quality assurance program based on best industry practices.

Finally, the U.S. Mint is facing increasing demand for circulating coinage, which required bringing on temporary workers and 

finding raw materials and supplies to meet delivery requirements. In circulating coinage, higher metal costs of one-cent and fivecent coins have raised production costs above the coins’ face value for the eighth consecutive fiscal year. Also, the decision to cease 

minting and issuing $1 coins for circulation in December 2011 created challenges to circulating financial results because of 

reduced overall seigniorage generated by circulating coinage. Despite these challenges in circulating coinage operations, the 

seigniorage increased in fiscal year 2013 compared to last year, mainly due to increased demand for quarter-dollar coins and 

reduced general and administrative expenses.

Numismatic operations have faced a trend of declining sales for some products, such as recurring annual coin sets. The Mint’s

order management system is outdated, which creates challenges to the Mint’s ability to meet numismatic customers’ expectations 

for ordering Mint products online.
U.S. Department of the Treasury | Fiscal Year 2013

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GOAL #3: PROTECT OUR NATIONAL SECURITY THROUGH TARGETED 

FINANCIAL ACTIONS

Treasury is devoted to using financial measures to track, degrade, and disrupt threats to national security from state and non-state 

actors, including terrorists, WMD proliferators, drug traffickers, rogue regimes, and transnational criminal organizations. 

As the Department works to enhance the accessibility of the financial system to legitimate users, it also works to prevent its 

exploitation by illicit actors. Financial intelligence information can help identify the infrastructure of terrorist and other illicit 

organizations that threaten U.S. national security. It is uniquely reliable and allows Treasury to track, deter, and disrupt threats. 

SIGNIFICANT ACHIEVEMENTS

The Office of Terrorism and Financial Intelligence (TFI), through its various components, supported Treasury’s strategic and 

priority goals by implementing sanctions (via Executive Order and legislation) and by conducting other enforcement, analytic, and 

capacity-building work vital to protecting our national security. 

In fiscal year 2013, TFI’s Office of Foreign Assets Control (OFAC) tallied over 500 designations under its sanctions authorities in its 

efforts against weapons of mass destruction proliferators, terrorists, narcotics traffickers, transnational organized crime, persons 

contributing to regional violence in Africa and those who support these individuals and groups. In particular, OFAC conducted a 

sustained sanctions campaign against Iran, its agents, and its front companies in response to Iran’s continued defiance of various 

United Nations Security Council resolutions. As a result, banks around the world have continued cutting off Iran from the 

international financial sector; this isolation has played an essential role in bringing Iran to the negotiating table. 

Since fiscal year 2010, OFAC has undertaken the task of implementing 16 new executive orders and a number of new laws, while 

continuing the ongoing work of administering existing programs. OFAC puts great effort into working to ensure that the public has 

clear and accurate information on its evolving sanctions programs through a robust website, telephone, and e-hotlines, and regular

public outreach conferences and events with various sectors.

In fiscal year 2013, OFAC also implemented a new online application system made available to the public for all licensing situations 

(this application has been very well received by the regulated public), settled several significant enforcement cases, and published 

an unprecedented number of guidance documents on OFAC sanctions, including implementation guidance, fact sheets, FAQs, and 

website brochures. The office also released a public search tool for its Specially Designated Nationals and Blocked Persons List that 

allows the public faster and simpler access to this list. This tool has become one of the most popular applications on the 

Treasury.gov domain. 

TFI’s Office of Terrorist Financing and Financial Crimes (TFFC) worked to strengthen global standards to combat and prevent 

financial crimes and terrorist financing. TFFC participated in or reviewed 18 mutual evaluations of various countries’ compliance 

with international anti-money laundering (AML), terrorist financing, and counter-terrorist financing (AML/CFT) standards. TFFC 

also worked with its counterparts abroad, focusing on creating effective AML/CFT frameworks and financial regulations capable of 

combating terrorist financing.

Finally, the Financial Criminal Enforcement Network (FinCEN) issued interpretive guidance to clarify applicability of the Bank 

Secrecy Act (BSA) to administrators and exchangers of convertible currency and provided reference information to partners on 

emerging payment systems; implemented new processes to identify and deter money laundering through targeted enforcement 

actions; joined other federal and state agencies in imposing a $1.9 billion enforcement action against HSBC, the largest combined 

BSA and AML penalty ever imposed against any financial institution; and continued support of high priority health and tax fraud 

investigations, including identification of key links to third-party money launderers. 
U.S. Department of the Treasury | Fiscal Year 2013

17

PERFORMANCE AND FACTORS AFFECTING RESULTS

TFI and FinCEN Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13

Results

Impact of TFI programs and activities (TFI)8

7.4 7.6 8.1 8.3 8.3 Met

Percentage of domestic law enforcement finding that 

FinCEN’s analytic reports contribute to the detection and 

deterrence of financial crime (FinCEN)

80 86 83 81 83 Unmet

Percentage of regulatory helpline customers 

understanding BSA guidance (FinCEN) 92 92 89 92 90 Met

During fiscal year 2013, TFI met its performance target of 8.3 (on a scale of 10) on its composite measure, “Impact of TFI Programs 

and Activities.” TFI will continue to achieve future performance level goals by continuing customer outreach, increasing 

production of intelligence products, and implementing IT modernization projects. 

In fiscal year 2013, TFI continued to conduct effective AML/CFT actions to protect the integrity of markets and of the global 

financial framework as they help mitigate the factors that facilitate financial abuse. TFI provided AML/CFT policy development, 

coordination, and coalition-building and worked to ensure unique access to valuable financial information and conducted allsource analysis on financial and other illicit support. 

Each of these actions was supported by critical analysis of intelligence by Treasury’s Office of Intelligence and Analysis (OIA). In 

fiscal year 2013, OIA provided intelligence analysis of regional and specific country economies, the impact of U.S. and multilateral 

sanctions, and targeted organizations and individuals that would threaten the U.S. Further, OIA focused upon enhancing 

Intelligence Community (IC) efforts to address the impact of targeted financial measures, threats to the international financial 

system, and efforts to diminish the potential to be a target for internal and external threats to national security. 

In the customer liaison area, FinCEN measures the percentage of regulatory helpline customers who understand Bank Secrecy Act 

(BSA) guidance. In fiscal year 2013, FinCEN exceeded its target by 2 percent with a 92 percent satisfaction level, continuing to 

provide timely and valuable guidance to the financial industry. Also, modernized information technology brought opportunities to 

generate efficiencies and improve effectiveness through increased use of the FinCEN website and delivery channels such as 

webinars that also positively impacted performance. 

In the intelligence area, FinCEN supports domestic law enforcement by providing analyses of BSA information. In fiscal year 2013, 

81 percent of domestic law enforcement, when surveyed, indicated that FinCEN’s analytic reports contribute to the detection and 

deterrence of financial crime, narrowly missing the 83 percent target. FinCEN attributes this missed target to decline in 

satisfaction with proactive products, likely resulting from its focus on other mission related priorities and types of products. 

FinCEN created an analyst working group to review its customers and product types and make recommendations for 

enhancements and broader dissemination for greater impact. FinCEN has also increased its emphasis on production of proactive 

 8 This composite measure consists of three program office focus areas related to its mission and strategic goals. The composite 

measure consists of customer surveys, the impact of designations and identifications, compliance with and implementation of 

sanctions, evaluation of demonstrated action in key regions against threats and vulnerabilities to the financial system, evaluation of 

the development of timely and relevant US financial and economic initiatives to advance efforts to combat national security threats, 

and review of the private sector response in taking voluntary action to identify and safeguard against terrorist financing and money 

laundering threats. 
U.S. Department of the Treasury | Fiscal Year 2013

18

products and believes it will be able to increase the percentage of customers who find its analytical products valuable with more 

focused products and targeted dissemination in the future. 

EMERGING ISSUES

TFI has been increasingly tasked with addressing the most pressing and emerging national security issues. These up-and-coming 

issues have levied many additional tasks and requirements upon Treasury. To meet these challenges, TFI has worked towards 

recruiting and retaining a flexible, multi-skill-set workforce capable of meeting and addressing the quickly changing nature of 

threats in the national security arena. This effort has resulted in a workforce with the ability to quickly change focus and positively 

address new and rising key issues and the ever-shifting complexities of combating illicit finance, disrupting and dismantling the 

financial infrastructure of terrorists, and isolating their support networks.

A more tactical emerging issue related to this goal involves FinCEN’s efforts to modernize technology to better support its mission. 

In the first quarter of fiscal year 2013, FinCEN incrementally rolled out new technology to nearly 8,000 users to include a new 

portal to access BSA tools, including the new FinCEN Query system. The new Query tool has much more powerful capabilities than 

the legacy system. As such, it introduced a significant change and learning curve for users, especially those who do not use it 

regularly. Users currently have access to web-based training, along with other support materials. FinCEN is also developing a 

comprehensive, sustainable training plan that targets external users.

GOAL #4: PURSUE COMPREHENSIVE TAX AND FISCAL REFORM

The Treasury Department leads the Administration’s efforts to create and implement a tax system that is simple, fair, and fiscally 

responsible. Treasury is committed to comprehensive reform of the tax laws, which lowers tax rates while broadening the tax base, 

makes the system fairer, improves incentives for investment and production in the U.S., and helps contribute to a balanced deficit 

reduction plan over the medium-term.

Addressing the Nation’s fiscal challenges requires reforms and fiscal policies that go beyond streamlining the corporate tax code. 

The Obama Administration has committed to pursuing a balanced approach to deficit reduction that strengthens our fiscal position 

and helps ensure that America has room to invest in education, infrastructure, and other areas critical to long term economic 

growth.

SIGNIFICANT ACHIEVEMENTS

Treasury’s Office of Tax Policy (OTP) continued implementation of the Foreign Account Tax Compliance Act (FATCA), which aims 

to combat offshore tax evasion. In fiscal year 2013, OTP worked to achieve the signing of eight intergovernmental agreements, 

concluded negotiations on another 15, and began discussions with at least 70 other countries.

In fiscal year 2013, the Internal Revenue Service (IRS) processed more than 240 million individual and business tax returns. In 

addition, after 18 years, in February 2013, the Government Accountability Office (GAO) removed the IRS Business Systems 

Modernization program from its High-Risk List. GAO concluded that the IRS had made substantial progress in addressing security 

material weaknesses over the past several years and demonstrated a commitment to sustained progress. 

Additionally, the IRS has made progress in the implementation of the Affordable Care Act by proposing regulations on insurance 

provider fees, additional Medicare tax, net investment income tax, employer responsibility provision, small business health care tax 

credit (2014 phase), and information reporting regulations for Marketplaces, insurers and employers. The IRS also issued final 

regulations on disclosure of tax data to Marketplaces, the individual responsibility provision, the patient centered outcome excise 

tax, and the medical device excise tax.
U.S. Department of the Treasury | Fiscal Year 2013

19

TTB collected more than $23 billion in excise taxes and other revenues from over 9,000 taxpayers in the alcohol, tobacco, firearms, 

and ammunition industries. The return on investment for TTB’s Collect the Revenue program consistently exceeds 400:1 and, in 

fiscal year 2013, reached 457:1. Additionally, TTB has developed an effective criminal enforcement program that draws on forensic 

auditing and advanced investigative techniques to be responsive to diversion schemes, which vary widely and change in response to 

targeted enforcement efforts. In less than three years, TTB’s criminal enforcement program has initiated 63 cases and identified 

approximately $378 million in excise tax liabilities on diverted tobacco products, as well as $116 million in seizures. TTB has 

successfully referred each of these cases for prosecution to the U.S. Attorney’s Office. 

PERFORMANCE AND FACTORS AFFECTING RESULTS

Internal Revenue Service Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13

Result

Customer service representative level of service (IRS) 74.0 70.1 67.6 60.5 70.0 Unmet

Percentage of individual returns processed electronically 

(IRS)

69.3 76.9 80.5 82.5 80.0 Met

The customer service representative level of service target for fiscal year 2013 (70 percent) was established prior to sequestration. 

When sequestration took effect, the required funding adjustment severely hampered the IRS’s ability to meet the original target. In 

addition, demand for toll-free service increased over the prior year by 7 percent, further straining reduced resources. 

IRS met its fiscal year 2013 target for processing individual returns electronically; 82.5 percent of returns were processed 

electronically (2 percent above the target). This is in large part due to IRS’s efforts to achieve Treasury’s Agency Priority Goal of 

Increasing Voluntary Tax Compliance, which is discussed in detail later in this report.

EMERGING ISSUES

Since FISCAL YEAR 2010, IRS’s appropriated funding has been reduced by almost $1 billion. In fiscal year 2011 and fiscal year

2012, the IRS budget allocation decreased by 0.2 percent and 2.5 percent, respectively. During fiscal year 2012, the IRS collected 

$2.9 trillion, using a budget of $11.8 billion, accounting for 91 percent of the total revenue that the U.S. government received that 

year. This substantial return on investment provides the funds that allow the U.S. government to operate. In fiscal year 2013, 

sequestration and an across the board rescission combined to further reduce the IRS budget by $618 million. This resulted in the 

IRS re-evaluating its operating levels to ensure critical programs continued to be delivered. The effects of sequestration have 

created significant impediments to the ability of the IRS to achieve all taxpayer service goals. The challenges created by the current 

budget climate will continue to impact the IRS’s ability to meet performance targets, including level of service.

For the TTB, a new law introducing large federal excise tax disparities among tobacco products, combined with higher prices on 

tobacco products, could result in decreased consumption of tobacco, increased illicit trade, and tax avoidance schemes by 

manufacturers. This could indicate declining TTB tax revenues in the out years, and GAO has recommended that Congress, in 

consultation with the Department of the Treasury, consider options for reducing tax avoidance due to tax differentials between 

small and large cigars. 
U.S. Department of the Treasury | Fiscal Year 2013

20

GOAL #5: MANAGE THE GOVERNMENT’S FINANCES IN A FISCALLY 

RESPONSIBLE MANNER

The Treasury Department is responsible for managing the finances of the U.S. government and maintaining public trust and 

confidence in U.S. and international economic and financial systems. Ensuring the Department is efficient, effective, accountable, 

and transparent enables the smooth, continuous operation of essential government services and enables the government to meet 

its financial obligations. To that end—and while supporting and maintaining governmental operations—during fiscal year 2013, 

Treasury focused on achieving greater cost savings for the American public, modernizing operations, and increasing productivity, 

effectiveness, and efficiency. Treasury has done this by developing systems, tools, and a culture of governing strategically, working 

smarter, and leveraging technologies.

SIGNIFICANT ACHIEVEMENTS

The Collections and Cash Management Modernization Initiative has allowed Treasury to meet its target of receiving 97 percent of 

its collections electronically. This initiative, which involved reengineering the processes that have been built over decades, allows 

the Fiscal Service to be more efficient and cost-effective in processing collections for hundreds of agency cash flows with over 400 

million transactions per year worth over $3 trillion. 

A significant management achievement includes Treasury’s Quarterly Performance Review process, which entails quarterly review 

sessions conducted with bureaus and policy offices by the Deputy Secretary, serving as the Chief Operating Officer, and the 

Assistant Secretary for Management, serving as the Performance Improvement Officer. These sessions bring key leaders together 

for regular discussions focused on management challenges and priority projects, driving accountability to make and sustain 

improvements, align expectations and priorities across the agency, and encourage data-driven decision-making. These quarterly 

reviews have been recognized by OMB and GAO as a best practice.

In addition to the quarterly performance reviews, Treasury’s “shared services first” approach to managing across organizational 

boundaries has helped improve operation effectiveness and coordination across Treasury. The Treasury Shared Services Council 

provides a portfolio-wide approach to shared services, providing additional transparency and accountability for cost and 

performance issues and a common governance structure for Treasury’s multiple shared services programs.

Finally, the Department continued multiple initiatives to broaden efficiency within its procurement operations to include 

acquisition-related savings and high risk reduction. In fiscal year 2013, the Department exceeded its internal savings goal of $97 

million by achieving more than $340 million in acquisition-related savings. Treasury also exceeded its goal of reducing high-risk 

contracting obligations by five percent. 
U.S. Department of the Treasury | Fiscal Year 2013

21

PERFORMANCE AND FACTORS AFFECTING RESULTS

Bureau of the Fiscal Service Measures

FY10 FY11 FY12 FY13

FY13 

Target

FY 13 

Result

Percentage collected electronically of total dollar 

amount of U.S. government receipts 

85.0 96.0 97.0 97.0 97.0 Met

Amount ($ billions) of delinquent debt collected 

through all available tools 

NA 6.17 6.17 7.02 6.67 Met

Percentage of Treasury payments and associated 

information made electronically 

82.2 84.3 88.3 92.5 91.0 Met

Percentage of respondents selecting the highest 

rating of customer satisfaction with Government 

Agency Investment Services 

NA 60.0 60.0 61.0 61.0 Met

In fiscal year 2013, the Fiscal Service met its target for the percentage of U.S. government receipts collected electronically. On 

December 7, 2010, Treasury published a regulation that required businesses with an annual tax liability of at least $10,000 to pay 

their taxes electronically. The new requirement, combined with the Fiscal Service’s efforts to transition taxpayers to electronic 

payments, resulted in the Fiscal Service processing approximately 138.5 million Electronic Federal Tax Payment System 

transactions during fiscal year 2013, sustaining the improved performance first reported three years ago, when the percentage of 

receipts collected electronically increased more than ten percent. With continued emphasis on the All Electronic Treasury 

initiative, the Fiscal Service has undertaken the Non-Tax Paperless Initiative, which is aimed at electronically processing 

collections and associated remittances. By processing these transactions electronically, the Fiscal Service and its agency partners 

will achieve greater efficiencies and afford the public more convenient methods for making their payments. 

The Fiscal Service collects delinquent debt owed to the U.S. government and states, including child support debt, by providing 

centralized debt collection, oversight, and operational services pursuant to the Debt Collection Improvement Act of 1996 and 

related legislation9. The Fiscal Service uses two debt collection programs: Treasury Offset Program and Cross Servicing. In fiscal 

year 2013, the Fiscal Service collected over $7.02 billion of delinquent debt, an increase of more than 13 percent over fiscal year

2012, its highest annual collection to date. Since 1997, the Fiscal Service has collected over $62 billion in delinquent debt. 

Following are some accomplishments that supported the increase in delinquent debt collections:

• In 2013, the Fiscal Service continued to expand participation in state programs: 37 states including the District of 

Columbia now participate in the Unemployment Insurance Compensation (UIC) program, 19 more states than in 

fiscal year 2012. UIC collected over $326 million (an increase of more than $194 million compared to fiscal year

2012). The Fiscal Service’s goal is to serve all 50 states and all of the territories participating in the programs. To 

realize this goal requires states to pass legislation and prioritize funding;

• In fiscal year 2013, the Fiscal Service increased the number of administrative wage garnishments, with initiated 

garnishment orders up 73 percent compared to fiscal year 2012;

• In 2013, through improved partial matching, the Fiscal Service collected over $220 million. Since the program began 

in 2010, the Fiscal Service has collected over $267 million; and

 9 Debt Collection Improvement Act of 1996: http://www.fms.treas.gov/debt/dmdcia.txt
U.S. Department of the Treasury | Fiscal Year 2013

22

• In 2013, the Fiscal Service improved call center operations – all collector agents went through a training/certification 

program and became certified collectors

In fiscal year 2013, the Fiscal Service implemented a Centralized Receivables Service (CRS) pilot – six agency programs 

implemented CRS with additional agency programs expected. In fiscal year 2013, CRS invoiced over $11.2 million in receivables

and collected over $9.8 million in current receivables. 

In support of the All Electronic Treasury initiative, the Fiscal Service continued to expand and market the use of electronic funds 

transfer to deliver federal payments, improve service to payment recipients, and reduce government program costs. In fiscal year

2013, the Fiscal Service made over 92 percent of its payments electronically, exceeding its performance goal of 91 percent. The

Fiscal Service attributes the performance outcome to considerable success in implementing its nationwide Go Direct® campaign to 

encourage current check recipients to switch to direct deposit. As a result, paper checks have declined from 10.3 million per month 

in January 2011 to 1.97 million as of September 2013, saving millions of taxpayer dollars in the years to come.

The GAIS Program strives to provide high-quality customer service, reliable transaction processing, and accurate and timely 

payment distribution. In fiscal year 2013, GAIS distributed 99 percent of its principal and interest payments accurately and timely. 

The basis for the consistent results achieved by GAIS is the commitment to maintaining strong internal controls, effective 

procedures, and a well-trained staff. These effective business practices are exhibited by routinely receiving clean audit opinions 

with no findings or material weaknesses. In fiscal year 2013, the targeted program initiatives to support the effective management 

of investments and borrowings activity consisted of enhancing case management functionality for federal investments customers, 

presenting at federal and state conferences, and conducting customer outreach through visits to various agencies and the 

distribution of a customer satisfaction survey.

Office of Management (ASM) Measures

FY 10 FY 11 FY 12 FY 13

FY 13 

Target

FY 13 

Result

Treasury-wide footprint (Square 

Footage/Thousands) 37,088 37,596 37,998 37,320 n/a n/a

Treasury-wide percentage of procurement dollars 

spent on small business

29.62 34.51 38.52 39.1510 32.00 Met

The Treasury-wide footprint is a measure of the total square footage occupied by Treasury’s owned and leased buildings. 

Management’s goal is to generally reduce total square footage over the course of several years, using space more efficiently and 

consuming fewer resources. Key strategies to reduce Treasury’s footprint include an increased adoption of telework, hoteling, and 

work-space sharing in addition to improved work-station standards and office design. 

The Treasury-wide percentage of procurement dollars spent on small businesses measures the percentage of total dollars obligated 

to small businesses and highlights Treasury’s strong efforts to ensure that small businesses have the maximum practicable 

opportunity to provide goods and services to the U.S. government. In fiscal year 2013, according to preliminary results, Treasury 

spent 38.54 percent of its procurement dollars on small businesses, exceeding its target by more than six percentage 

points. Treasury will continue to employ proven past strategies in fiscal year 2014, including targeted small business outreach, 

enhanced leadership accountability, and increased intra-agency communication. 

 10 Final data will not be available until early 2014. This data provided in this report is current as of 2/18/2014.
U.S. Department of the Treasury | Fiscal Year 2013

23

EMERGING ISSUES

Fiscal year 2013 was a challenging year from a management and planning perspective. The uncertainty stemming from the yearlong continuing resolution, implementation of sequestration, and continuity planning for the lapse in appropriations disrupted 

normal operations and hampered performance across the Department. 

Sequestration was particularly difficult. The across-the-board spending cuts forced reductions across nearly all Treasury programs, 

harming both taxpayers and federal employees. The IRS was especially affected, with sequestration reducing the agency’s ability to 

provide core taxpayer services and resulting in billions of dollars in lost revenue due to fewer tax return reviews and diminished 

fraud detection. For example, the IRS’s customer level of service (i.e. the number of taxpayers receiving assistance at assistance 

centers and response letters) for fiscal year 2013 was 60.0 percent, down from the 67.6 percent in fiscal year 2012 and the fiscal 

year 2013 planned level of 70 percent prior to sequestration. Sequestration also forced Treasury to reduce direct payments to state 

and municipal bond issuers, decrease assistance for development of renewable energy, and grant fewer and smaller grants to lowincome and disadvantaged communities. 

Sequestration had a considerable impact on Treasury employees as well, compelling Treasury bureaus to institute hiring freezes 

and reduce training and travel budgets. The IRS furloughed all employees for three days in fiscal year 2013. These personnel 

impacts can be seen through the year over year decline in Treasury employee satisfaction and engagement scores as measured by

OPM’s Federal Employee Viewpoint Survey.

As the Department continues to work towards increasing the percentage of collections received electronically, Treasury will 

continue to pursue progress despite resource and budget constraints at federal agencies; and competing priorities that reduce the 

abilities of our federal agencies partners to focus on moving to an all-electronic Treasury.
U.S. Department of the Treasury | Fiscal Year 2013

24

PERFORMANCE BY AGENCY PRIORITY GOAL

Treasury is pursuing two Agency Priority Goals for fiscal years 2012 and 2013. Performance data are available at the end of the 

calendar year in the Annual Performance Report, and reported quarterly on Performance.gov. A synopsis of these goals is provided 

below.

INCREASE VOLUNTARY TAX COMPLIANCE

Helping taxpayers understand their obligations under the tax law is critical to improving compliance and addressing the tax gap. 

Therefore, the IRS is committed to making tax law easier to access and understand. The IRS remains committed to improving 

voluntary compliance and reducing the tax gap through both taxpayer service and enforcement programs. In fiscal year 2013, the 

IRS processed 147.6 million individual tax returns, of which more than 121 million were filed electronically. However, while 

improvements were made, sequestration limited the IRS’s ability to provide service and enforcement to the level desired.

The IRS continued to increase the amount of tax information and services available to taxpayers through online and social media. 

IRS.gov provides alternative online and self-help service options. In fiscal year 2013, taxpayers viewed IRS.gov web pages 

approximately 1.9 billion times as they used the website to: 

• Get forms and publications. More than 217.5 million tax products were downloaded;

• Link to the Electronic Federal Tax Payment System (EFTPS). EFTPS processed more than 145 million electronic tax 

payments totaling more than $2.3 trillion during fiscal year 2013;

• Get answers. Taxpayers made more than 2.4 million visits to the Interactive Tax Assistant introduction page, which 

provides answers to tax law questions; and

• Check on Refunds. Taxpayers used “Where’s My Refund?” more than 200.5 million times to check on the status of their tax 

refunds, an increase of 51.6 percent from 2012.

In addition, the IRS continued efforts in fiscal year 2013 to increase voluntary compliance in a variety of ways which include:

• Announced the release of an updated smartphone application “IRS2Go 3.0”;

• Continued to expand the Virtual Service Delivery project, allowing assistors to interact with taxpayers virtually;

• Expanded its social media presence by adding Tumblr to its list of social media platforms;

• Deployed a web-based tool (“Where’s my Amended Return?”) to expand self-service features on the IRS website;

• Expanded the Law Enforcement Assistance Program, piloted in Florida in April 2012, to all 50 states and the District of 

Columbia to help law enforcement pursue identity thieves; and 

• Announced a joint plan with the tax administrations from Australia and the United Kingdom to share tax information to 

pursue international tax evasion.
U.S. Department of the Treasury | Fiscal Year 2013

25

SIGNIFICANTLY INCREASE THE NUMBER OF ELECTRONIC TRANSACTIONS WITH 

THE PUBLIC

The safety, security, efficiency, and reliability of Treasury transactions are paramount to maintaining public trust. Billions of 

transactions, including payments to benefits recipients, savings bonds purchases, and tax collections, are executed by Treasury 

each year. The paper processes associated with these transactions can be slow, insecure, inaccurate, and wasteful. In an effort to 

improve customer service, decrease the public’s vulnerability to fraud, and efficiently manage resources, Treasury approved several 

initiatives to move towards electronic transactions including electronic savings bonds, electronic benefit payments, and electronic 

tax collection. Treasury has already discontinued the issuance of paper savings bonds. Treasury has achieved its goal for benefit 

payments as more than 97 percent are made electronically. Treasury will continue to have more businesses pay taxes electronically 

rather than by paper coupon. This priority goal is related to the strategic goal of “Manage the Government’s Finances in a Fiscally 

Responsible Manner.”

PAYMENTS

In fiscal year 2013, 95.7 percent of benefit recipients were receiving their payments electronically. In support of the goal to 

increase electronic federal benefit payments, the Go Direct public education campaign conducted qualitative research with 

beneficiaries still receiving paper checks. The research was conducted to track awareness of the rule (31 CFR Part 208), which has 

helped to determine the likelihood that the remaining federal benefit check recipients would switch to an electronic payment 

method before the rule deadline of March 1, 2013.

COLLECTIONS

To achieve Treasury’s goal of increasing electronic non-tax collections and remittances, the Fiscal Service embarked on the NonTax Paperless Initiative. The goal is to raise the electronic initiated revenue collection volume rate from the current 55-60 percent 

to 70 percent by 2017. This approach will involve efforts to increase awareness of available electronic options and their value,

inform agencies about the need to transition their customers from paper to electronic, drive agency adoption of electronic 

collection processes and technologies, educate end users about the specific benefits of electronic transactions, and increase 

conversions from paper to electronic.
U.S. Department of the Treasury | Fiscal Year 2013

26

HIGHLIGHTS OF MANAGEMENT AND PERFORMANCE CHALLENGES

Annually, in accordance with the Reports Consolidation Act of 2000, OIG and TIGTA identify the most significant 

management and performance challenges facing the Department. These challenges do not necessarily indicate 

deficiencies in performance; rather, some represent inherent risks that require continuous monitoring. Treasury 

made progress on these issues in fiscal year 2013, and will continue to focus on resolving them during fiscal year 2014 

and beyond. Refer to Section C of Part 3, Other Accompanying Information, for a detailed discussion of these 

challenges, listed below.

Note: SIGTARP does not provide the Secretary with an annual report on management and performance 

challenges. SIGTARP provides oversight of the Troubled Asset Relief Program, a program that spans several federal 

agencies, only as a special inspector general while the OIG and TIGTA provide oversight of the Department and IRS, 

respectively, and report on its management and performance challenges under the Reports Consolidation Act of 

2000.

TREASURY-WIDE MANAGEMENT CHALLENGES – AS

IDENTIFIED BY OIG

• Continued Implementation of Dodd-Frank

• Management of Treasury’s Authorities Intended to Support and Improve the Economy

• Anti-Money Laundering and Terrorist Financing/Bank Secrecy Act Enforcement

• Gulf Coast Restoration Trust Fund Administration

IRS MANAGEMENT CHALLENGES – AS IDENTIFIED BY TIGTA

• Security for Taxpayer Data and IRS Employees

• Implementing the Affordable Care Act and Other Tax Law Changes

• Tax Compliance Initiatives

• Modernization

• Fraudulent Claims and Improper Payments

• Providing Quality Taxpayer Service Operations

• Human Capital

• Globalization

• Taxpayer Protection and Rights

• Achieving Program Efficiencies and Cost Savings
U.S. Department of the Treasury | Fiscal Year 2013

27

FINANCIAL HIGHLIGHTS

Figure 1

Figure 3

Figure 5

Figure 7

Figure 2

Figure 4

Figure 6

Figure 8
U.S. Department of the Treasury | Fiscal Year 2013

28

The financial highlights below are an analysis of the information included in the Department’s consolidated financial 

statements that appear within the “Annual Financial Report” section of this report. The Department’s principal 

financial statements have been prepared to report the agency’s financial position and results of operations, pursuant 

to the requirements of 31 USC 3515(b). These consolidated financial statements have been prepared from the books 

and records of the Department in accordance with generally accepted accounting principles (GAAP) for federal 

entities and the formats prescribed by OMB. The consolidated financial statements are in addition to the financial 

reports used to monitor and control budgetary resources, which are prepared from the same books and records. The 

financial statements should be read with the realization that they are for a component of the U.S. government, a 

sovereign entity.

The chart below presents changes in key financial statement line items as of and for the fiscal year ended September 

30, 2013 compared to September 30, 2012. 

Summary Financial Information (dollars in billions)

2013 2012 $ Change % Change

Total Assets $ 19,040.6 $ 17,921.9 $ 1,118.7 6.2%

Total Liabilities $ 18,599.5 $ 17,532.5 $ 1,067.0 6.1%

Total Net Position $ 441.1 $ 389.4 $ 51.7 13.3%

Total Net Cost of (Revenue From) Treasury 

Operations

$ 3.3 $ (275.2) $ 278.5 (101.2)%

Net Federal Debt Interest Costs $ 390.0 $ 399.3 $ (9.3) (2.3)%

GSEs Non-Entity Costs (Revenue) $ (126.6) $ 5.3 $ (131.9) (2488.7)%

Total Budgetary Resources $ 857.8 $ 816.1 $ 41.7 5.1%

Agency Outlays, Net $ 286.9 $ 241.3 $ 45.6 18.9%

Net Revenue Received (Custodial) $ 2,591.6 $ 2,256.2 $ 335.4 14.9%

Financial Overview. The Department’s financial performance as of and for the fiscal year ended September 30, 

2013, reflects several major trends. Most significantly, the outstanding federal debt, including interest, rose by $671.9

billion to finance the U.S. government’s operations. The Department also incurred a liability at September 30, 2013, 

totaling $248.6 billion in connection with extraordinary debt management measures undertaken by the Department 

during a debt issuance suspension period (DISP) to prevent outstanding Treasury debt from exceeding the statutory 

debt limit. Specifically, these measures included, among other things: (i) suspending investments in Treasury debt 

securities by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift 

Savings Plan (TSP), Civil Service Retirement and Disability Trust Fund (Civil Service Fund), and the Postal Service 

Retiree Health Benefits Fund (Postal Benefits Fund); and (ii) redeeming early a certain amount of Treasury debt 

securities held by the Civil Service Fund. The $248.6 billion liability reflects the Department’s obligation by statute as 

of September 30, 2013, to restore to the three funds the accumulated principal balance of Treasury debt securities 

bearing the same interest rates and maturity dates that would have been invested by these funds had the DISP not 

occurred (uninvested principal), as well as pay these funds the related lost interest on the uninvested principal. 

Additionally, the Department amended its Senior Preferred Stock Purchase Agreements (SPSPAs) with Fannie Mae 

and Freddie Mac - two Government-Sponsored Enterprises (GSEs) - in 2012, which changed, among other things, the 

basis for determining quarterly dividends that are paid by the GSEs to the U.S. government commencing with the 

quarter ending March 31, 2013. As a result of the amended SPSPAs, coupled with the GSEs’ long-term financial 

forecasts within a specific time horizon, the Department reduced its contingent liability associated with the GSE 
U.S. Department of the Treasury | Fiscal Year 2013

29

program by $9.0 billion and $288.7 billion at the end of fiscal year 2013 and 2012, respectively, via a reduction in 

expense. 

The Department’s 2013 financial performance also reflects the ongoing wind-down of the TARP programs, principally 

through sales of securities and principal repayments of loans made under these programs. TARP’s wind-down 

activity included, among other things, sales of its remaining equity investments in the AIG Investment Program, 

Public-Private Investment Program, and Capital Purchase Program. In December 2013, the Department completed

the disposition of the remaining shares of General Motors common stock held under the Automotive Industry 

Financing Program. The continued wind-down of the TARP programs in fiscal year 2013 drove significant 

fluctuations in the subsidy costs associated with these programs. Subsidy costs recorded in connection with each 

credit program represent the difference between the projected costs of the program and the future cash flows 

anticipated to be generated by the program.

Figure 9

Total Assets of $19.0 trillion at September 30, 2013 consist of a receivable due from the General Fund of the U.S. 

government of $17.1 trillion, intra-governmental loans and interest receivable of $1.1 trillion, and fund balance and 

various other assets which totaled $823.7 billion (Figure 9). The $1.1 trillion (or 6.2 percent) increase in total assets 

at the end of fiscal year 2013 over the prior year is primarily due to an increase in the “Due from the General Fund of 

the U.S. Government” account, corresponding to increases in the following liabilities: (i) a $671.9 billion increase in 

federal debt and related interest payable and (ii) a $248.6 billion additional liability for the restoration of federal debt 

principal and interest in connection with the DISP. These additions to Treasury liabilities at the end of 2013 caused a 

corresponding rise in the “Due from the General Fund of the U.S. Government” asset account which represents future 

funds required from the General Fund of the U.S. Government to pay borrowings from the public and other federal 

agencies. 

Intra-governmental loans and interest receivable represent loans issued primarily by the Fiscal Service to other 

federal agencies for their own use or for the agencies to loan to private sector borrowers whose loans are guaranteed 

by the federal agencies. This receivable grew by $179.3 billion (or 19.6 percent) to $1.1 trillion at the end of fiscal year 

2013 due to increased borrowings by various federal agencies – such as the Departments of Education, Agriculture, 

and Housing and Urban Development – to fund their existing programs. 
U.S. Department of the Treasury | Fiscal Year 2013

30

Other assets include, among other things, TARP and non-TARP credit program receivables due from, and other 

investments in certain financial institutions for which the Department provides financial assistance in an effort to 

stabilize financial markets. Other assets decreased by almost $5.1 billion primarily due to, among other things, the 

ongoing wind-down of the TARP programs through sales of securities or principal repayments of loans made under 

these programs. Offsetting this decrease was an increase in the fair value of the GSE investments, which primarily 

reflects the improved financial performance of the GSEs.

Figure 10

Total Liabilities of $18.6 trillion at September 30, 2013 principally consist of the federal debt held by the public, 

including interest, of $12.0 trillion, which were mainly issued as Treasury Notes and Bills (Figure 10). Liabilities also 

include intra-governmental liabilities totaling $6.4 trillion (of which $4.8 trillion represent principal and interest of 

federal debt in the form of Treasury securities held by federal agencies), and various other liabilities totaling $0.2

trillion. The $1.1 trillion (or 6.1 percent) increase in total liabilities at the end of fiscal year 2013 over the prior year is 

attributable to a $671.9 billion increase in federal debt, including interest, held by the public and federal agencies that 

was needed to finance the U.S. government’s budget deficits. An additional $248.6 billion of the increase is 

attributable to a liability for restoration of federal debt principal and interest as of September 30, 2013. This liability 

relates to uninvested principal and interest owed to funds due to extraordinary measures taken by the Department 

during the DISP. The increase in total liabilities is also attributable to a $159.7 billion increase in the “Due to the 

General Fund of the U.S. Government” account, primarily as a result of an increase in intra-governmental loans and 

interest receivable. The Department, through the Fiscal Service, accounts for and reports on the principal borrowings 

from and repayments to the General Fund, as well as the related interest due to the General Fund.

Total Net Position of $441.1 billion at September 30, 2013 represents the combined total of the Department’s 

cumulative results of operations and unexpended appropriations at the end of the fiscal year. The $51.7 billion (13.3 

percent) increase in the net position at the end of fiscal year 2013 was principally attributable to a $69.3 billion 

increase in budgetary financing sources driven by increased appropriations primarily to fund the Department’s 

Economic programs. 
U.S. Department of the Treasury | Fiscal Year 2013

31

Figure 11

Net Cost of (Revenue From) Treasury Operations, as presented on the Department’s Consolidated Statements 

of Net Cost, presents the Department’s gross and net costs by strategic program. There are three main categories of 

strategic programs: financial, economic, and security. The Department’s net cost of operations totaled $3.3 billion 

for 2013 compared to total net revenue from its operations of $275.2 billion for 2012. The year-over-year combined 

change of $287.5 in cost of operations is primarily driven by net revenue in fiscal 2012 associated with the 

Department’s economic programs, as described below.

Economic programs generated net revenue of $8.2 billion in 2013 compared to $288.8 billion in 2012 (Figure 11). 

The $288.8 billion in economic programs net revenue in fiscal year 2012 was driven by a $288.7 billion reduction in

the Department’s estimated future liability to the GSEs in 2012, via a reduction in expense, down to $9.0 billion at the 

end of 2012. As a result of the new dividend payment requirement under the amended SPSPAs that commenced with 

the quarter ended March 31, 2013, coupled with GSEs’ long-term financial forecasts within a specific time horizon, 

the Department reduced by $9.0 billion its estimated future liability to the GSEs in 2013, via a reduction in expense. 

Net Federal Debt Interest Costs primarily reflect interest expense on the federal debt. Federal interest costs 

declined by $9.3 billion (or 2.3 percent) in fiscal year 2013 (Figure 5) despite the rise in the overall federal debt. The 

decrease in cost is primarily attributable to a decline in the intra-governmental federal debt outstanding balance, 

coupled with a decline in the average interest rate on intra-governmental federal debt. This decrease was slightly 

offset by increased expense associated with the growth in the outstanding balance of federal debt held by the public.

GSE Non-Entity Revenue totaled $126.6 billion for 2013 compared to net cost of $5.3 billion for 2012. The 

revenue in 2013 was primarily driven by a $77.3 billion increase in preferred stock dividends, coupled with a $30.9 

billion valuation gain on GSE investments in 2013 compared to a $42.3 billion loss in 2012. These increases primarily 

stemmed from federal income tax benefits and other improvements in the GSEs’ financial performance in 2013. 

Total Budgetary Resources of $857.8 billion were higher in fiscal year 2013 (Figure 6) by $41.7 billion (or 5.1 

percent) primarily due to an increase in appropriations, offset by decreases in other changes in unobligated balances,

borrowing authority, and spending authority from offsetting collections. Appropriations increased $75.2 billion 

primarily due to increased funding needed in fiscal year 2013 to service the federal debt. Partially offsetting the 

increase in appropriations were reduced borrowing authority, spending authority from offsetting collections, and 

other changes in unobligated balances by a combined total of $34.7 billion principally due to the ongoing wind-down 

of the TARP programs. 
U.S. Department of the Treasury | Fiscal Year 2013

32

Agency Outlays, Net of $286.9 billion were higher in fiscal year 2013 (Figure 7) by $45.6 billion (or 18.9 percent) 

primarily due to fewer collections in fiscal year 2013 from the wind-down of the TARP programs, partially offset by 

increased receipts of preferred stock dividends from the GSE SPSPA program. 

Net Revenue Received (Custodial), representing net revenue collected by Treasury on behalf of the U.S. 

government, includes various taxes, primarily income taxes, as well as user fees, fines and penalties, and other 

revenue. Over 90 percent of these revenues are related to income and social security taxes. Net revenue received was

$2.6 trillion for fiscal year 2013, an increase of $335.4 billion (or 14.9 percent) over the prior fiscal year. This increase 

is attributed mainly to an increase in ordinary, capital gains, and dividend income tax rates for individuals, coupled 

with an increase in corporate income tax collections and a reduction in tax refunds.
U.S. Department of the Treasury | Fiscal Year 2013

33

CONDENSED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets (in millions): 2013 2012

Due From the General Fund $ 17,123,357 $ 16,202,179

Other Intra-governmental Assets 1,491,510 1,293,077

Cash, Foreign Currency, and Other Monetary Assets 148,506 145,551

Gold and Silver Reserves 11,062 11,062

Troubled Asset Relief Program (TARP) - Credit Program Receivables, Net 17,869 40,231

Investments in Government Sponsored Enterprises (GSE) 140,221 109,342

Non-TARP Investment in American International Group, Inc. - 2,611

Reserve Position in the International Monetary Fund 17,915 21,573

Other Credit Program Receivables, Net 17,628 19,888

Taxes, Interest and Other Receivables, Net 38,602 41,463

Other Assets 33,954 34,885

Total Assets $ 19,040,624 $ 17,921,862

Federal Debt and Interest Payable $ 16,840,466 $ 16,168,588

Other Intra-governmental Liabilities 1,551,933 1,265,487

Liability for Restoration of Federal Debt Principal and Interest 120,356 -

Other Liabilities 86,726 98,391

Total Liabilities 18,599,481 17,532,466

Unexpended Appropriations 361,295 317,509

Cumulative Results of Operations 79,848 71,887

Total Net Position 441,143 389,396

Total Liabilities and Net Position $ 19,040,624 $ 17,921,862

Condensed Consolidated Statements of Net Cost (in millions): 2013 2012

Net Financial Program Cost $ 11,166 $ 11,783 

Net Economic Program (Revenue) (8,223) (288,780)

Net Security Program Cost 1,023 1,055 

Total Net Program Cost (Revenue) before Actuarial Assumptions 3,966 (275,942)

(Gain)/Loss on Pension, ORB, or OPEB Assumption Changes (684) 695 

Total Net Cost of (Revenue From) Treasury Operations 3,282 (275,247)

Total Net Non-Entity Costs (primarily interest on the Federal Debt) 280,342 420,428 

Total Net Cost of Treasury Operations and Non-Entity Costs $ 283,624 $ 145,181

Condensed Consolidated Statements of Changes in Net Position (in millions): 2013 2012

Beginning Balance $ 71,887 $ (262,840)

Budgetary Financing Sources 456,986 429,433 

Other Financing Sources (165,401) 50,475 

Total Financing Sources 291,585 479,908 

Net Cost of Treasury Operations and Non-Entity Costs (283,624) (145,181)

Net Change 7,961 334,727 

Cumulative Results of Operations $ 79,848 $ 71,887 

Beginning Balance $ 317,509 $ 342,978 

Appropriations Received 508,448 419,130

Appropriations Used (455,216) (428,479)

Other (9,446) (16,120)

Total Budgetary Financing Sources 43,786 (25,469)

Total Unexpended Appropriations 361,295 317,509 

Net Position - Year End $ 441,143 $ 389,396 
U.S. Department of the Treasury | Fiscal Year 2013

34

Condensed Combined Statements of Budgetary Resources (in millions): 2013 2012

Unobligated Balance, Brought Forward October 1 $ 339,598 $ 368,954

Recoveries of Prior Year Unpaid Obligations & Other Changes (11,312) (27,677)

Budget Authority 529,495 474,784

Budgetary Resources $ 857,781 $ 816,061

Obligations Incurred $ 487,431 $ 476,463

Unobligated Balance, Brought Forward End of Year 370,350 339,598

Total Status of Budgetary Resources $ 857,781 $ 816,061

Unpaid Obligations, Gross, Brought Forward October 1 $ 253,173 $ 272,153

Obligations Incurred 487,431 476,463

Outlays, Gross (490,708) (482,094)

Recoveries of Prior Year Unpaid Obligations (15,484) (13,349)

Uncollected Payments From Federal Sources, Brought Forward October 1 (1,004) (1,170)

Change in Uncollected Customer Payments from Federal Sources 29 166

Obligated Balance, End of Year (Net) $ 233,437 $ 252,169

Agency Outlays, Net (Discretionary and Mandatory) $ 286,858 $ 241,318

Condensed Statements of Custodial Activity (in millions): 2013 2012

Sources of Custodial Revenue

Individual and FICA Taxes $ 2,448,546 $ 2,159,990

Corporate Income Taxes 311,994 281,462

Other Revenues 195,860 188,516

Total Revenue Received 2,956,400 2,629,968

Less Refunds (364,788) (373,752)

Net Revenue Received 2,591,612 2,256,216

Non-Cash Accrual Adjustment (959) 5,543

Non-TARP Investments in American International Group, Inc.: 

 Cash Proceeds from Sale of Stock 2,588 12,992

Non-Cash Market Adjustments (2,611) (8,251)

Total Custodial Revenue 2,590,630 2,266,500

Disposition of Custodial Revenue

Amounts Provided to Fund Non-Federal Entities 358 386

Amounts Provided to Fund the Federal Government 2,591,254 2,255,830

Non-Cash Accrual Adjustment:

Amounts to be Provided to the General Fund and Others (618) 4,000

Accrual Adjustment (341) 1,543

Non-TARP Investments in American International Group, Inc.: 

Cash Proceeds from Stock Sales Provided to Fund the Federal Government 2,588 12,992

Non-Cash Market Adjustment (2,611) (8,251)

Total Disposition of Custodial Revenue 2,590,630 2,266,500

Net Custodial Revenue $ - $ -