the department 

of the treasury 

summary of 

performance 

and financial 

information 

fiscal year 2010 

Citizens’ 

Report 
the united states 

department

 of the treasury 

our vision 

Set the global standard in financial and economic leadership 

our mission 

Serve the American people and strengthen national security by managing the 

U.S. Government’s finances effectively, promoting economic growth and stability, and ensuring 

the safety, soundness, and security of U.S. and international financial systems 

our values 

service 

Work for the benefit of the American people 

integrity 

Aspire to the highest ethical standards of honesty, trustworthiness, and dependability 

excellence 

Strive to be the best, continuously improve, innovate, and adapt 

objectivity 

Encourage independent views 

accountability 

Responsible for our conduct and work 

community 

Dedicated to excellent customer service, collaboration, 

and teamwork while promoting diversity 
summary of 

performance 

and financial 

information 

fiscal year 2010 

citizens’ 

report 

the department 

of the treasury 
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citizens’ report — summary of performance and financial information | fiscal year 2010 

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table of contents 

Message from the Secretary of the Treasury
 1 


Message from the Assistant Secretary for Management and Chief Financial Officer
 3
 

The Department of the Treasury Organizational Chart in Fiscal Year 2010 5
 

The Treasury Department’s 2007-2012 Strategic Framework 6
 

Summary of Performance Toward Strategic Goals 7
 

Effectively Managed U S Government Finances 7
 

U S and World Economies Perform at Full Economic Potential 8
 

Prevented Terrorism and Promoted the Nation’s Security Through 


Strengthened International Financial Systems 11
 

Management and Organizational Excellence 12
 

Financial Highlights 14
 

Financial Analysis 15
 

Condensed Financial Statements 16
 

Summary of Management and Performance Challenges and High-Risk Areas 18
 

table of contents 

table of contents
 
the department of the treasury 

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1 

citizens’ report — summary of performance and financial information | fiscal year 2010 

Message froM the secretary of the treasury
 

november 15, 2010 

over the past two years, the treasury Department has taken a series of unprecedented steps to pave 

the way for the nation’s recovery from the worst recession in our lifetimes. the Department’s top 

priority has been to serve the american people by strengthening the u.s. economy, helping create 

jobs, and restoring confidence in our financial system. 

since the last report, we have made important progress on all fronts. over the past year, in addition 

to continued implementation of the recovery act, we have recovered most of our investments in the 

financial system; helped usher in a historic law to reform our financial system; crafted important new 

consumer protections; and significantly increased support for small businesses. 

there is much work still to be done to get our economy growing faster. In 2010, the private sector added more than 1.1 million 

jobs—an average of 112,000 jobs a month for 10 straight months. treasury will continue to work to build on these positive trends, 

accelerate job creation, and drive economic recovery. 

the financial system today is also much stronger—and looks much different—than it did two years ago. the firms that remain are 

in a much better position to withstand future stress. Most banks have more capital than before the crisis and more than their global 

competitors. overall, private capital has replaced public funds, and the government is winding down its financial system rescue efforts 

faster than anticipated. 

because of treasury’s careful stewardship of taxpayer dollars and the further strengthening of the financial system, the troubled 

asset relief Program will likely cost substantially less than originally thought possible. since its inception, the projected cost of this 

program has continued to decline dramatically. the Department has stopped committing new funds and has already recovered $204.1 

billion of the total $387.7 billion that has been disbursed for the program, and has received nearly $28 billion in additional profits 

from dividends, interest, warrants, and other transactions. Moving forward, further progress towards replacing public support with 

private investment will continue to demonstrate treasury’s ongoing commitment to maximize repayments to taxpayers. 

In addition to the important efforts to meet our immediate obligations, the Department worked closely with congress to pass fundamental financial reform. our financial system helped trigger the most severe economic recession in 70 years. the flaws in that system 

had to be fixed to protect future generations. In July, after months of negotiations and hard work, congress passed the Dodd-Frank 

Wall Street Reform and Consumer Protection Act—the most sweeping financial reforms since the great Depression. the President 

quickly signed it into law, and treasury immediately began implementing the new reforms. the Department is now standing up the 

consumer financial Protection bureau, conducting meetings of the financial stability oversight council, and putting in place the 

office of financial research. 

against this backdrop of dramatic change, treasury continues to pursue its goals of effectively managing u.s. government finances, 

helping u.s. and world economies perform at full economic potential, promoting the nation’s security through strengthened international financial systems, and efficiently managing the Department’s resources. 

message from the secretary 

message from the secretary 
the department of the treasury 

2 

the Department again received an unqualified opinion on our treasury consolidated financial statements, and we also received 

another unqualified opinion on the financial statements of our office of financial stability/troubled asset relief Program, which 

reflect the financial results of their second year of operations. 

We have validated the accuracy, completeness, and reliability of the financial and performance data in this report. Maintaining our 

commitment to continuous program and operational improvement, the Department also made progress in reducing management 

control weaknesses and in efforts to achieve federal financial systems and control objectives. 

timothy f. geithner 

secretary of the treasury 

message from the secretary

message from the secretary 
citizens’ report — summary of performance and financial information | fiscal year 2010 

3 

Message froM the assIstant secretary for 

ManageMent anD chIef fInancIal offIcer 

november 15, 2010 

In fiscal year 2010, the Department of the treasury built on the framework established during the 

preceding year to restore confidence in america’s financial system, ease the housing crisis, and 

provide the foundation for sustained economic recovery as treasury’s troubled asset relief Program 

and recovery act programs matured. 

challenges lie ahead as treasury works to implement myriad changes contained in major legislation 

enacted in 2010, including the broad health care reform provisions of the Patient Protection and 

Affordable Care Act; the sweeping financial reforms of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act; and the new loan programs and tax law changes in the Small Business 

Jobs and Credit Act. these programs, once implemented, will have a significant, positive impact in the lives of millions of americans. 

In fiscal year 2010, the Department of the treasury demonstrated fiscal prudence and strong management reforms as we: 

•	 launched a new performance management process, led by the treasury Deputy secretary, to review bureau and Departmental 

office missions, goals, performance measures, and budget proposals 

•	 realized $23.1 billion in net income from troubled asset relief Program (tarP) operations, resulting in reducing the cumulative net cost of the program from $41.6 billion at the end of fiscal year 2009 to $18.5 billion at the end of fiscal year 2010 

•	 Identified $315 million in efficiency savings, rescissions, and new user fees in the fiscal year 2011 budget submission, to reduce 

the cost of treasury operations 

•	 supported our veterans by achieving the Department’s goal of spending at least 3 percent of its prime contracting dollars to 


support service-disabled, veteran-owned small businesses, while generating over $200 million in procurement savings
 

•	 Improved the effectiveness and efficiency of treasury’s execution of processes and procedures through the ongoing application of 

continuous improvement techniques 

•	 Implemented the President’s open government Directive, releasing approximately 80 data sets to the public 

•	 reformed treasury’s senior executive service performance management system to strengthen the Department’s performance culture 

the Department received an unqualified audit opinion on both our office of financial stability/tarP and treasury-wide fiscal year 

2010 financial statements. treasury closed the material weakness on financial management practices at the Departmental level during 

fiscal year 2010, and made progress toward resolving the four material weaknesses remaining open as of september 30, 2010 [Irs - 

Modernization Management (due to close by 2011), computer security (due to close by 2012), and unpaid tax assessments (due to 

close by 2015) and fMs - Preparation of the government-wide financial statements (due to close by 2014)]. 

message from the asmcfo 

message from the assistant secretary for management and chief financial officer 
the department of the treasury 

4 

the complexity of systems enhancements is the major impediment to closing these weaknesses. treasury made significant progress in 

managing programs included in the government accountability office’s high-risk list and in addressing management and performance challenges identified by the Department’s Inspectors general. 

We will continue to devote special attention to these programs and challenges as we work to further improve the u.s. economy, help 

create jobs, and restore confidence in our financial system. 

Dan tangherlini 

assistant secretary for Management 

and chief financial officer 

message from the asmcfo

message from the assistant secretary for management and chief financial officer 
citizens’ report — summary of performance and financial information | fiscal year 2010 

5
 

the DePartMent of the treasury 


organIzatIonal chart In fIscal year 2010
 

Secretary 

Deputy Secretary 

Treasury Inspector 

General for Tax 

Administration (TIGTA) 

Special Inspector General 

for the Troubled Asset 

Relief Program (SIGTARP) 

Office of the Chief of Staff 

Internal Revenue 

Service (IRS) 

Bureau of Engraving 

and Printing (BEP) 

Assistant Secretary 

Tax Policy 

Alcohol and Tobacco 

Tax and Trade Bureau 

(TTB) 

Assistant Secretary 

Economic Policy 

Assistant Secretary 

Public Affairs 

Assistant Secretary 

Legislative Affairs 

Assistant Secretary 

for Management and 

Chief Financial Officer 

(ASM and CFO) 

General Counsel 

Treasurer 

United States Mint 

Office of the 

Comptroller of the 

Currency (OCC) 

Office of Thrift 

Supervision (OTS) 

Bureau of the 

Public Debt (BPD) 

Financial 

Management 

Service (FMS) 

Inspector General 

(OIG) 

Under Secretary 

Domestic Finance 

Assistant Secretary 

Financial Markets 

Assistant Secretary 

Financial Institutions 

Assistant Secretary 

Financial Stability 

Community Development 

Financial Institutions Fund 

(CDFI) 

Assistant Secretary 

Fiscal 

Under Secretary 

Terrorism and Financial 

Intelligence (TFI) 

Assistant Secretary 

Terrorist Financing 

Assistant Secretary 

Intelligence and Analysis 

Financial Crimes 

Enforcement Network 

(FinCEN) 

Under Secretary 

International Affairs 

Assistant Secretary 

International Markets 

& Development 

Senior Coordinator 

China Affairs & Strategic 

and Economic Dialogue 

(S&ED) 

Assistant Secretary 

International Finance 

organizational chart 

the department of the treasury organizational chart 
the department of the treasury 

2007–2012 strategic framework 

6 

the treasury DePartMent’s 

2007-2012 strategIc fraMeWork 

the treasury Department’s strategic framework is a summary of our goals, objectives, and outcomes. this framework provides the 

basis for performance planning and continuous improvement. the strategic plan can be found at http://www.treasury.gov/about/ 

budget-performance/strategic-plan/Pages/index.aspx 

Page Strategic Goals Strategic Objectives Value Chains** Value Chain Outcomes 

Financial 

7 

8 

11 

12 

Effectively	Managed	U.S.	

Government	Finances

U.S.	and	World	Economies	

Perform	at	Full	Economic	

Potential

Prevented	Terrorism	and	

Promoted	the	Nation’s	

Security	Through	

Strengthened	International	

Financial	Systems

Management	and	

Organizational	Excellence

Available	cash	resources	to	operate	

the	government

Improved	economic	opportunity,	

mobility	and	security	with	robust,	

real,	sustainable	economic	growth	at	

home	and	abroad

Trust	and	confidence	in	U.S.	currency	

worldwide

Pre-empted	and	neutralized	threats	

to	the	international	financial	system	

and	enhanced	U.S.	national	security

Enabled	and	effective	Treasury	

Department

Collect 

Disburse

Borrow 

Account

Invest

Strengthen

Regulate

Manufacture

Secure

Manage

•	 Revenue	collected	when	due	through	a	fair	and	uniform	

application	of	the	law	at	the	lowest	possible	cost	

•	 Timely	and	accurate	payments	at	the	lowest	possible	cost

•	 Government	financing	at	the	lowest	possible	cost	over	time

•	 Effective	cash	management

•	 Accurate,	timely,	useful,	transparent	and	accessible	financial	

information

•	 Strong	U.S.	economic	competitiveness

•	Free	trade	and	investment

•	 Decreased	gap	in	global	standard	of	living

•	 Competitive	capital	markets

•	 Prevented	or	mitigated	financial	and	economic	crises

•	 Commerce	enabled	through	safe,	secure	U.S.	notes	and	coins

•	 Removed	or	reduced	threats	to	national	security	from	

terrorism,	proliferation	of	weapons	of	mass	destruction,	

narcotics	trafficking	and	other	criminal	activity	on	the	part	of

rogue	regimes,	individuals,	and	their	support	networks

•	 Safer	and	more	transparent	U.S.	and	international	financial	

systems

•	 A	citizen-centered,	results-oriented	and	strategically	aligned	

organization

•	 Exceptional	accountability	and	transparency

Economic Security Management 

**	Value	Chains	–	Programs	grouped	by	a	common	purpose.

the treasury department’s 2007-2012 strategic framework 
citizens’ report — summary of performance and financial information | fiscal year 2010 

7 

suMMary of PerforMance toWarD 


strategIc goals 

this citizens’ report summarizes the performance information contained in the fiscal year 2010 Performance and 

accountability report (Par). the Par provides complete information on the Department of the treasury’s financial results, 

performance, audit follow-up, and management challenges. the 

Par may be found here: http://www.treasury.gov/about/budgetperformance/annual-performance-plan/Pages/default.aspx. a full 

description of performance measures and and their results are 

available in the Par appendix here: http://www.treasury.gov/ 

about/organizational-structure/offices/Mgt/Documents/2010%20 

TREASURY%20Measures_complete.pdf 

Treasury must lead the way in developing 

methods to deliver payments that are safe and 

secure in a manner that is efficient and reliable. 

— Timothy Geithner, 

United States Treasury Secretary 

EffEctivEly ManagEd 

U.S. govErnMEnt financES 

stewardship of the nation’s finances is the cornerstone of the 

missions of the Internal revenue service (Irs), the bureau 

of the Public Debt (bPD), the financial Management service 

(fMs), the alcohol and tobacco tax and trade bureau (ttb), 

and Departmental offices. In fiscal year 2010, the treasury 

made significant progress in implementing new tax provisions, 

increasing the use of paperless transactions, creating a new office 

to develop a standard electronic invoicing platform and intragovernmental transaction processing systems, and expanding 

the enforcement of tax laws. 

Key Accomplishments 

•	 Greater Use of Electronic Transactions 

In fiscal year 2010, treasury increased the use of electronic 

financial transactions. under this effort, the Irs increased 

electronic filing to nearly 70 percent of individual returns 

filed. fMs continued to expand the use of electronic fund 

transfers, reaching 85 percent of total dollar amount of 

government receipts collected electronically. bPD prepared 

to end paper-based payroll savings bonds and expanded its 

online savings bond customer base. 

•	 Improved Outreach and Automated Tools for
 

Better Taxpayer Service
 

the Irs continued to improve its automated web tools and 

services, such as “Where’s My refund?,” earned Income 

tax credit (eItc) assistant, and online videos. over 213 

million tax products were downloaded, an increase of 

almost 12 percent. the Irs and its partners also assisted 

in the preparation of 3.1 million returns for the elderly, 

disabled, and people with limited english proficiency. the 

Irs improved its response to phone inquiries from 2009 to 

2010 by 5.7 percent, reaching a 74 percent level of service. 

strategic goals 

strategic goals: effectively managed u.s. government finances 
the department of the treasury 

strategic goals 

8 

High Priority Performance Goal: 

Increase Voluntary Tax Compliance 

Reliance on a voluntary compliance tax system requires 

effective taxpayer services to enable taxpayers to understand 

and meet their tax obligations and effective enforcement to 

ensure that all businesses and individuals pay the tax they owe 

Improvement of both service and enforcement, along with 

reforms to simplify the tax law, are essential to ensure the U S 

tax system remains the most effective and fairest voluntary 

compliance system in the world 

•	 Expanded Enforcement of Tax Laws to Ensure Tax 

Compliance 

Irs continued to focus its enforcement efforts on pursuing 

high-income and high net-worth individuals and reducing 

overseas tax evasion. enforcement revenue increased 18 

percent, audits of high net-worth individuals went up more 

than five percent, and the Irs doubled its offshore presence. ttb completed more than 250 field visits to verify 

payment of floor stocks tax on tobacco products, identifying 

$10.2 million in additional tax. 

•	 Managed the Government’s Debt 

the Department strives to maintain the lowest cost of 

borrowing over time for the government. the ability of 

treasury to manage the nation’s debt is critical to functioning of government and financial markets. the Department 

conducted over 290 auctions of $8.41 trillion in marketable treasury bills, notes, bonds, and inflation-protected 

securities. auctions were oversubscribed, and in this strong 

demand environment, treasury extended the average 

maturity of the debt by six months to 58.6 months. the 

cost per auction dropped five percent, from $170,214 to 

$162,378 in fiscal year 2010. 

•	 Creation of Office of Financial Innovation and
 

Transformation (OFIT)
 

treasury created the ofIt to develop a standard electronic 

invoicing platform and intra-governmental transaction 

processing systems. these efforts are designed to lower 

transaction processing costs and increase the transparency 

of financial information. 

U.S. and World EconoMiES 

PErforM at fUll EconoMic 

PotEntial 

treasury stimulates economic growth through the development 

and implementation of policies that strengthen private sector 

growth, regulate banking and financial markets, create progrowth tax policies, advocate trade and investment, and foster 

sustained and broad-based economic development. 

the financial crisis of the last two years has required actions 

to preserve the functioning of financial and housing markets 

and restore confidence in the integrity of the financial system. 

repairing and reforming the financial system remains the 

Department’s highest priority goal. In 2010, treasury began 

implementation of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-frank act) and the Small 

Business Jobs Act of 2010, continued ongoing economic recovery 

initiatives begun in 2008 and 2009, and worked with international partners to reform the international financial system. 

High Priority Performance Goal:
 

Repair and Reform the Financial System
 

Treasury will continue its work to repair and reform the financial 

system in the following ways: 

•	 Implementing strong, comprehensive regulatory reform to 

restore stability and accountability to the financial system 

•	 Working to effectively manage and exit in a timely and 

orderly manner emergency interventions and programs set 

up in response to the financial crisis 

•	 Developing and implementing programs to support 

mortgage availability and reduce avoidable foreclosures 

•	 Devising long-term, comprehensive solutions for our nation’s 

system of housing finance 

strategic goals: u.s. and world economies perform at full economic potential 
citizens’ report — summary of performance and financial information | fiscal year 2010 

9 

Key Accomplishments 

•	 Began Implementation of the Dodd-Frank Act 

the Dodd-Frank Act, signed into law in July 2010, 

introduced wide-ranging financial reforms to better protect 

consumers, prevent financial firms from taking risks that 

threaten the economy, and provide the government more 

effective tools to manage financial crises. these reforms 

are the most comprehensive update of financial regulations since the great Depression. to implement the act, 

treasury is establishing new regulatory bodies, including 

the consumer financial Protection bureau, financial 

stability oversight council, office of financial research, 

and federal Insurance office. treasury will also oversee the 

closure of the office of thrift supervision (ots) and integration of its functions into the office of the comptroller 

of the currency (occ). 

•	 Supported Enactment of the Small Business Jobs 

Act of 2010 

treasury and the small business administration led 

efforts to pass the Small Business Jobs Act of 2010 to help 

strengthen the capacity of small businesses to create jobs 

and support economic recovery. the act creates a small 

business lending fund to provide capital to small banks 

to support new small business lending and a state small 

business credit Initiative designed to spur private sector 

lending through innovative state programs. 

•	 Managed the Troubled Asset Relief Program 

(TARP) to a Lower Lifetime Cost 

tarP, established during the height of the financial crisis 

to help unfreeze credit and capital markets and restore 

confidence in the financial system, accomplished its 

primary goals faster and at a lower cost than anticipated. to 

date, tarP has disbursed $387.7 billion in direct loans and 

equity investments; collected $204.1 billion in repayments; 

and reported $16.7 billion in dividends, interest, and fees, 

and $10.9 billion in net proceeds from the sale and repurchase of assets in excess of cost. the Department’s most 

recent analysis suggests that if the proposed restructuring of 

aIg is completed as announced, the expected lifetime cost 

of tarP could be less than $50 billion. 

•	 Prevented Avoidable Foreclosures and Helped 

Preserve Homeownership 

treasury’s housing initiatives have sought to assist 

responsible homeowners struggling in the aftermath of 

the recent financial crisis and recession. the Making 

home affordable Program (Mha), which includes the 

home affordable Modification Program (haMP), has 

helped more than 1.4 million homeowners enter trial loan 

modifications and reduce their monthly mortgage payments 

in the 18 months since the program began. treasury’s 

housing finance agency Initiative provided funding to 

more than 90 hfas to enable them to continue supporting 

housing markets. treasury provides support for fannie 

strategic goals 

strategic goals: u.s. and world economies perform at full economic potential 
the department of the treasury 

10 

strategic goals

Mae and freddie Mac through Preferred stock Purchase 

agreements to ensure that each government-sponsored 

enterprise maintains a positive net worth. to provide for 

long term stability to housing markets, the administration 

is considering reforms to the u.s. housing finance system. 

•	 Participated in Development of New Global 

Capital Standards for Banks 

one of the lessons of the financial crisis was that more 

robust capital standards must be at the heart of efforts 

to make the financial system stronger and more secure. 

treasury played a key role with global partners in strengthening capital standards by announcing new global capital 

standards – basel III – in september 2010. the new rules 

will require banks to hold enough capital to withstand 

losses similar to those witnessed during the depths of the 

financial crisis, without turning to the taxpayer for help. 

through the g-20 process, the financial stability board, 

and engagement with international standard setting bodies, 

treasury led efforts to ensure that reforms in the international financial system matched the strength of domestic 

regulatory reform initiatives. 

•	 Continued Implementation of the American 

Recovery and Reinvestment Act of 2009 

the Department continued to stimulate the u.s. economy, 

create and sustain jobs, and build the foundation for 

long-term economic growth through targeted investments and tax provisions contained in the recovery act. 

treasury is managing programs that will contribute nearly 

$300 billion in benefits to the american people through 

the year 2019. some of these benefits include the Making 

Work Pay tax credit, build america bonds, first-time 

homebuyer credit expansion, and the new Markets tax 

credit program of the community Development financial 

Institutions (cDfI) fund. 

•	 Monitored and Mitigated Risks at National Banks 

and Thrifts 

through occ and ots, treasury regulates national 

banks, savings associations, and savings and loan holding 

companies. fiscal year 2010 activity focused on monitoring and responding to adverse conditions in credit and 

financial markets, improving credit risk management at 

supervised institutions, and monitoring loan portfolios. 

ninety percent of national banks were classified as wellcapitalized, as were 95 percent of thrifts. occ completed 

96 percent of its licensing applications and notices within 

established timeframes, one percentage point above 2009. 

ots started 97 percent of its safety and soundness exams as 

scheduled, three percentage points above 2009. 

•	 Increased Access to Financial Services in 

Low-Income and Underserved Communities 

the cDfI fund provides grants, loans, and tax credits to 

cDfIs, which provide capital, credit, and financial services 

to underserved populations and economically distressed 

communities in the united states. through its various 

programs and initiatives, the fund enabled locally-based 

organizations to further economic development related to 

affordable housing, small businesses, community facilities, 

and community development financial services. the cDfI 

Program competitively awarded $104.8 million in fiscal year 

2010 to 179 cDfIs and organizations. the fund estimates 

that 80,796 jobs were created based on its awards. the percent of eligible areas served by one or more cDfI increased 

from 14.8 percent in 2009 to 16.6 percent in 2010, bringing 

financial services to more low income communities than the 

prior year. 

strategic goals: u.s. and world economies perform at full economic potential 
citizens’ report — summary of performance and financial information | fiscal year 2010 

11 

The recent financial crisis taught us an 

enduring lesson. Financial literacy is essential 

not only to the financial security of millions 

of American families, but also to the economic 

health of our nation as a whole. 

— Timothy Geithner, 

United States Treasury Secretary 

•	 Expanded Financial Literacy Programs 

the treasury’s office of financial education promotes policies and programs to empower americans with the knowledge and skills they need to make wise financial choices. 

treasury and the Department of education launched an 

enhanced nationwide “financial capability challenge” to 

improve high school students’ financial capabilities, and 

more than 76,000 students and 2,500 educators in all 50 

states participated. treasury also upgraded the financial 

literacy and education commission’s financial education 

website, www.MyMoney.gov, to make it a more powerful 

tool for consumers. 

•	 Produced Coins and Currency Notes to Meet the 

Nation’s Needs 

the u.s. Mint delivered 5.4 billion pieces of circulating 

coins to the federal reserve in fiscal year 2010. bullion 

sales achieved a record level of 35.8 million ounces. over 

the entire fiscal year, beP delivered 6.4 billion notes to the 

federal reserve, a three percent increase from 2009. beP 

unveiled a new $100 note design and began outreach in 

anticipation of its release in 2011. 

PrEvEntEd tErroriSM and 

ProMotEd thE nation’S SEcUrity 

throUgh StrEngthEnEd 

intErnational financial SyStEMS 

safeguarding u.s. financial security is the cornerstone of 

treasury’s office of terrorism and financial Intelligence 

(tfI), the treasury forfeiture fund, and the financial crimes 

enforcement network (fincen). In fiscal year 2010, the 

Department made progress in deterring those who provide 

financial support to violent extremist groups and disrupting the 

means and mechanisms by which such groups transmit money, as 

well as preventing lending and healthcare fraud. 

strategic goals 

The adoption of UNSCR 1929 has enhanced 

a global effort to hold Iran accountable for its 

actions. 

— stuart levey, 

Under Secretary for Terrorism 

and Financial Intelligence 

strategic goals: prevented terrorism and promoted the nation’s security

through strengthened international financial systems 
the department of the treasury 

strategic goals 

12 

Key Accomplishments 

•	 Combated the Spread of Nuclear Weapons 


through Sanctions on Iran
 

treasury played a primary role in the passage of the Iran 

sanctions act and united nations security council 

resolution (unscr) 1929. both measures strike at the 

heart of the Iranian government’s ability to fund and 

develop its nuclear program. 

•	 Targeted Institutions that Conspired to Defraud 

the United States 

through the coordinated work of treasury and other law 

enforcement agencies, abn aMro agreed to forfeit $500 

million and credit suisse agreed to forfeit $536 million, 

under deferred prosecution agreements. these represent 

two of the largest forfeitures in u.s. history. 

•	 Expanded Terrorist Finance Tracking and
 

Counterterrorism Efforts
 

building on successful finance threat efforts in Iraq, 

treasury helped to establish the afghan threat finance 

cell (atfc) to target terrorist and insurgent financing. 

additionally, treasury and the Department of Justice lead 

negotiations with the eu for the new terrorist finance 

tracking Program—this program has provided thousands of 

valuable leads used to prevent terrorist attacks. 

•	 Tackled Lending Fraud 

In addition to publishing advisories that benefit law enforcement agencies and regulators in preventing mortgage 

fraud, fincen played a pivotal role in the success of 

operation stolen Dreams, a 3 1⁄2 month takedown of $2.3 

billion in mortgage fraud schemes. 

ManagEMEnt and organizational 

ExcEllEncE 

treasury’s assistant secretary for Management and three 

Inspectors general lead the Department in ensuring effective 

stewardship of resources. During fiscal year 2010, treasury made 

clear improvement across areas of management: from prudently 

requesting funding, to establishing a rigorous performance 

review process. 

Key Accomplishments 

•	 Enhanced Program Performance Management 

treasury implemented data-driven quarterly performance 

meetings held by the Deputy secretary to strengthen 

bureau missions and goals and foster wise budgeting of 

taxpayer money. 

•	 Became More Open to the Public 

treasury used cutting edge process improvement techniques 

to comply more rapidly and effectively with Freedom of 

Information Act (foIa) requests. further, treasury took 

steps towards open government by posting information 

technology performance data on the federal It Dashboard 

and Data.gov to better inform the american people. 

strategic goals: management and organizational excellence 
citizens’ report — summary of performance and financial information | fiscal year 2010 

13 

•	 Maintained Effective Oversight 

During fiscal year 2010, the required workload of treasury 

oversight bodies increased significantly due to various 

requirements, such as the mandate to analyze certain failed 

financial institutions and oversight of recovery act and 

troubled asset relief Program (tarP) spending. treasury 

maintained effective program oversight to prevent fraud, 

waste, and abuse without significantly increasing resources. 

Significantly Increase the Number of Paperless 

Transactions with the Public 

Treasury is replacing outdated paper-based processes with 

electronic ones, which are expected to save more than $400 

million and 12 million pounds of paper in the first five years 

alone In fiscal year 2010, Treasury began migrating individuals 

receiving Social Security, Supplemental Security Income, 

Veterans, and Railroad Retirement Board benefits to electronic 

payments The Department also eliminated paper Federal 

Tax Deposit coupons and the paper purchase option of payroll 

savings bonds for federal employees, replacing them with 

electronic transactions 

•	 Modernized Equipment and Facilities 

better technology helps the Department’s staff to work 

more effectively and efficiently. the Department improved 

technology systems, successfully moving forward the Irs 

business system modernization and an agency-wide strategy 

for management of digital content. the Department 

improved access to physical facilities in compliance with 

homeland security Presidential Directive 12 (hsPD-12), 

minimizing the number of access badges employees need. 

•	 Improved “Best Places to Work” Ranking 

by taking action to address feedback from the governmentwide employee Viewpoint survey on human capital, 

treasury was able improve its position from 17th to 12th 

in the best Places to Work rankings by the Partnership for 

Public service. In addition, treasury implemented changes 

to the performance management process for senior officials 

to support more meaningful distinctions in ratings and 

awards. treasury’s progress helps maintain and motivate top 

talent to achieve the Department’s mission. 

strategic goals 

strategic goals: management and organizational excellence 
the department of the treasury 

14 

fInancIal hIghlIghts 

financial highlights 

Total Assets 

Dollars (in Billions) 

Total Liabilities 

Dollars (in Billions) 

Net Federal 

Debt Interest 

Costs 

Dollars (in Billions) 

Net Cost of 

Treasury 

Operations 

by Fiscal Year 

Dollars (in Billions) 

Total Budgetary 

Resources 

Dollars (in Billions) 

$14,000 $14,000

$16,000 $16,000 $8,988.0 $9,528.8 $11,117.0 $13,846.6 $15,599.3 

$8,873.1$9,407.7$10,807.3$13,418.5$15,498.2 

2006 2007 2008 2009 2010 

$12,000 $12,000

Net Outlays 

Dollars (in Billions) 

$10,000 $10,000

$8,000 $8,000

$6,000 $6,000

$4,000 $4,000

$2,000 $2,000

$0 $0 2006 2007 2008 2009 2010 

Fiscal Year Fiscal Year 

Fiscal Year Fiscal Year 

$450 $350 $390.9 $420.4 $440.9 $363.2 $390.6 

2006 2007 2008 2009 2010 

$400

$350

$300

$250

$200

$150

$100

$50

$0

$14.03$12.02$27.14$209.59$312.16

2006 2007 2008 2009 2010 

$300

$250

$200

$150

$100

$50

$0

$1,800 $900

$1,600 $800

$2,000 $1,000

$413.0$436.0$462.9$922.2$340.5 

2006 2007 2008 2009 2010 

$503.1$523.0$772.2$1,835.0$1,193.1 

$1,400 $700

$1,200 $600

$1,000 $500

$800 $400

$600 $300

$400 $200

$200 $100

$0 $0 2006 2007 2008 2009 2010 

Fiscal Year Fiscal Year 

Net Cash 

Revenue 

Received 

Dollars (in Trillions) 

$2.5

$2.0

$1.5

$1.0

$0.5

$0.0

$2.28$2.45$2.37$1.96$1.98 

2006 2007 2008 2009 2010 

Fiscal Year 

financial highlights 
citizens’ report — summary of performance and financial information | fiscal year 2010 

15 

fInancIal analysIs 


Total Assets. total assets increased from $13.9 trillion at 

september 30, 2009 to $15.6 trillion at september 30, 2010. 

the primary reason for the $1.8 trillion increase is the rise 

in the federal debt, which causes a corresponding rise in 

the “Due from the general fund of the u.s. government” 

account ($13.7 trillion). 

the majority of loans and interest receivable ($552.9 billion) included in “Intra-governmental” assets are the loans 

issued by the bureau of the Public Debt to other federal 

agencies for their own use or to private sector borrowers, 

whose loans are guaranteed by the federal agencies. 

Total Assets 3% Intra-governmental 

Loans and Interest Receivable 88% 

9% Due from the 

Other Assets General Fund 

Total Liabilities. liabilities include federal debt held by the 

public, including interest, of $9 trillion; this debt was mainly 

issued as treasury notes. liabilities also include intragovernmental liabilities totaling $6 trillion, and include $4.6 

trillion of principal and interest payable to various federal 

agencies, such as the social security trust fund. these borrowings do not include debt issued separately by other governmental agencies, such as the tennessee Valley authority 

or the Department of housing and urban Development. 

the increase in total liabilities in fiscal year 2010 over fiscal 

year 2009 ($2.1 trillion and 15.5 percent) is the result of increases in borrowings from various federal agencies ($184.7 

billion) and federal debt held by the public, including 

interest ($1.5 trillion). Debt held by the public increased 

primarily because of the need to finance budget deficits. 

Total Liabilities 12% 

Federal Debt and 

Interest Payable 

(With the Public) 

58% Other Liabilities 

30%
 

Federal Debt and
 

Interest Payable
 

(Intra-governmental)
 

Net Federal Debt Interest Costs. the increase of $27.4 

billion in net interest paid on the federal debt is due to the 

increase in the debt. total federal debt and interest payable 

increased by $1.66 trillion in fiscal year 2010. 

Net Cost of Treasury Operations. the consolidated 

statement of net cost presents the Department’s gross and 

net cost for its four strategic programs: financial, economic, 

security, and management. the majority of the net cost of 

treasury operations is in the economic program, which includes tarP activity and investments in the government 

sponsored enterprises (gses). Increased economic program 

costs accounted for substantially all of the $102.6 billion 

increase in the total net cost for fiscal year 2010. 

Total Budgetary Resources. the majority of the $641.9 

billion decrease in total budgetary resources for fiscal 

year 2010 was due to the reduction of tarP activity and 

investments in the gses. 

Net Outlays. the majority of the $581.7 billion decrease in 

net outlays was due to the reduction of tarP activity and 

investments in gses. 

Net Cash Revenue Received. net cash revenue received on 

behalf of the u.s. government increased by $12.7 billion 

for fiscal year 2010. this increase can be attributed to an 

overall improvement in the economy. 

Custodial Revenue. total net cash revenue collected by 

treasury on behalf of the federal government includes 

various taxes, primarily income taxes, user fees, fines and 

penalties, and other revenue. over 92.7 percent of the 

revenues are from income and social security taxes. 

Total Cash 

Revenue 

Received 

7% 

Other Revenue 

12% 81% 

Corporate Individual Income Income Taxes and FICA Taxes 

financial analysis 

financial analysis 
the department of the treasury 

16 

conDenseD fInancIal stateMents 

condensed financial statements 

Condensed BalanCe sheets (in millions): 

Due	From	the	General	Fund

Other	Intra-governmental	Assets

Cash,	Foreign	Currency,	and	Other	Monetary	Assets

Gold	and	Silver	Reserve

TARP	Direct	Loans	and	Equity	Investments,	Net	and	Asset	Guarantee	Program

Investments	in	Government	Sponsored	Enterprises

Investments	and	Related	Interest

Credit	Program	Receivables	and	Direct	Loans,	Net

Tax,	Other	Related	Interest	Receivables,	Net

Beneficial	Interest	in	Trust

Other	Assets

total assets 

Federal	Debt	and	Interest	Payable

Other	Intra-governmental	Liabilities

Liabilities	to	Government	Sponsored	Enterprises

Other	Liabilities

total liabilities 

Unexpended	Appropriations

Cumulative	Results	of	Operations

total net Position 

total liabilities and net Position 

$ 

$ 

$ 

$ 

2010 

13,655,637	

1,025,169

375,282

11,062

144,692

109,216

12,639

186,396

36,976

20,805

21,383

15,599,257 

13,623,731

1,424,976

359,900

89,554

15,498,161 

400,557

(299,461)

101,096 

15,599,257 

$ 

$ 

$ 

$ 

2009 

11,992,719	

923,457

341,308

11,062

239,657

64,679

13,565

184,460

30,408

23,472

21,814

13,846,601 

11,962,385	

1,275,613

91,937

88,610

13,418,545 

455,144

(27,088)

428,056 

13,846,601 

Condensed statements of net Cost (in millions): 

Net	Financial	Program	Cost

Net	Economic	Program	(Revenue)/Cost

Net	Security	Program	Cost

Net	Management	Program	Cost

total Program Cost before assumption Changes 

(Gains)/Losses	Due	To	Changes	in	Actuarial	Assumptions

total net Cost of treasury operations 

Net	Federal	Costs	(primarily	interest	on	the	Federal	Debt)

$ 

$ 

$ 

2010 

13,243	

297,234	

340

526	

311,343 

820	

312,163 

346,678 

$ 

$ 

$ 

2009 

13,055	

195,705	

322	

509	

209,591 

0	

209,591 

313,341 

Condensed statements of Changes in net Position (in millions): 

Beginning	Balance

Budgetary	Financing	Sources	

Other	Financing	Sources	(Uses)

Total	Financing	Sources

Net	Cost	of	Operations

Net	Change

Cumulative Results of operations 

Beginning	Balance

Appropriations	Received

Appropriations	Used

Other	

Total	Budgetary	Financing	Sources

total Unexpended appropriations 

net Position - Year end 

$ 

$ 

$ 

2010 

(27,088)

503,042	

(116,574)

386,468	

(658,841)

(272,373)

(299,461) 

$455,144	

456,970	

(502,439)

(9,118)	

(54,587)

400,557 

101,096 

$ 

$ 

$ 

2009 

37,743	

668,894	

(210,793)

458,101	

(522,932)

(64,831)

(27,088) 

$271,968	

855,762	

(668,153)

(4,433)

183,176	

455,144 

428,056 

condensed financial statements 
citizens’ report — summary of performance and financial information | fiscal year 2010 

condensed financial statements 17 

Condensed statements of BUdgetaRY ResoURCes (in millions): 

Unobligated	Balances,	Brought	Forward

Recoveries	of	Prior	Year	Obligations

Budget	Authority

Other	Budget	Authority

total Budgetary Resources 

Obligations	Incurred

Unobligated	Balance

Unobligated	Balance,	Not	Available

total status of Budgetary Resources 

Total	Unpaid	Obligated	Balances,	Net

Obligations	Incurred,	Net

Gross	Outlays

Recoveries	of	Prior	Year	Unpaid	Obligations,	Actual

Changes	in	Uncollected	Customer	Payments	Federal

total Unpaid obligated Balance, net, end of Year 

net outlays 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

2010 

457,588	

42,349	

929,687	

(236,543)

1,193,081 

820,838

301,811

70,432

1,193,081 

158,323

820,838	

(733,710)

(42,349)

5,087	

208,189 

340,510	

$ 

$ 

$ 

$ 

$ 

$ 

$ 

2009 

284,630	

8,096	

1,814,086	

(271,778)

1,835,034 

1,387,195	

413,998	

33,841	

1,835,034 

56,977	

1,387,195	

(1,248,916)

(8,096)

(28,748)

158,412 

922,165	

Condensed statements of CUstodial aCtivitY (in millions): 

Individual	Income	and	FICA	Taxes

Corporate	Income	Taxes

Other	Revenues

total Cash Revenue Received 

Less	Refunds

net Cash Revenue Received 

Beneficial	Interest	in	Trust

Accrual	Adjustment

total Custodial Revenue 

Amounts	Provided	to	Fund	the	Federal	Government

Amounts	Provided	to	Fund	Non-Federal	Entities

Non-cash	Revenue	-	Beneficial	Interest	in	Trust

Accrual	Adjustment

total disposition of Custodial Revenue 

net Custodial Revenue activity 

$ 

$ 

2010 

1,988,760	

277,937	

179,613	

2,446,310 

(469,937)

1,976,373 

(2,666)

6,539

1,980,246 

1,975,986	

387	

(2,666)	

6,539

1,980,246 

0 

$ 

$ 

2009 

2,036,557	

225,482	

139,648	

2,401,687 

(437,972)

1,963,715 

23,472	

(1,097)

1,986,090 

1,963,228	

487	

23,472	

(1,097)

1,986,090 

0 

Note: the complete financial statements and auditor’s report are available in the Performance and accountability report. 

condensed financial statements 
the department of the treasury 

management and performance challenges 

18 

suMMary of ManageMent anD PerforMance 

challenges anD hIgh-rIsk areas 

annually, in accordance with the Reports Consolidation Act of 2000, the treasury office of Inspector general (oIg) and the 

treasury Inspector general for tax administration (tIgta) identify the most significant management and performance challenges 

facing the Department. the government accountability office (gao) identifies high-risk areas biennially. these challenges do not 

necessarily indicate deficiencies in performance; rather, some represent inherent risks that must be monitored continuously. treasury 

made much progress on these issues in fiscal year 2010, and will continue to focus on resolving them during fiscal year 2011. 

trEaSUry-WidE ManagEMEnt challEngES – aS idEntifiEd by oig 

Management Challenge Summary of Major Issues 

transformation of financial Regulation •	 Implement	and	enforce	the	provisions	of	the	Dodd-Frank Wall Street Reform and Consumer Protection Act	and	other	

federal	consumer	financial	laws	consistently

•	 Identify	risks	to	financial	stability	that	could	arise	from	the	activities	of	large,	interconnected	financial	companies;	

respond	to	emerging	threats	to	the	financial	system;	and	promote	market	discipline

•	 Assess	and	report	on	systemic	risks

•	 Monitor	the	insurance	industry

•	 Streamline	and	improve	supervision	of	depository	institutions	and	holding	companies

management of treasury’s authorities intended 

to support and improve the economy 

•	 Protection	of	the	taxpayer	from	unnecessary	risk	associated	with	the	implementation	and	administration	of	

programs	intended	to	support	and	improve	the	economy,	including	the	provisions	of:

•	 Small Business Jobs Act of 2010 

•	 American Recovery and Reinvestment Act of 2009 

•	 Housing and Economic Recovery Act of 2008 

•	 Emergency Economic Stabilization Act of 2008 

anti-money laundering and terrorist 

financing/ Bank secrecy act Reporting 

•	 Prevent	and	detect	money	laundering	and	terrorist	financing

•	 U.S.	and	international	financial	systems	that	are	safe	and	transparent

•	 Efficient	management,	safeguarding,	and	use	of	Bank	Secrecy	Act	information

management of Capital investments •	 Effective	use	of	taxpayer	funds	for	large	capital	investments

irS ManagEMEnt challEngES – aS idEntifiEd by tigta 

Management Challenge Summary of Major Issues 

security Appropriate	physical	security	and	protection	of	financial,	personal,	and	other	information	

modernization Improve	taxpayer	service	and	efficiency	of	operations

tax Compliance initiatives Improve	compliance	and	fairness	in	the	application	of	the	tax	laws

implementing health Care and other tax law 

Changes 

Responsiveness	to	new	tax	provisions,	including	tax-related	health	care	provisions	of	the	Patient Protection and 

Affordable Care Act,	the	Recovery	Act,	and	adjusting	to	expiring	provisions

Providing Quality taxpayer service operations Improve	taxpayer	service

human Capital Enable	the	IRS	to	achieve	its	mission

erroneous and improper Payments and Credits Effective	use	of	taxpayer	funds

globalization Increase	outreach	efforts	to	foreign	governments	on	cross-border	transactions

taxpayer Protection and Rights Apply	the	tax	laws	fairly

leveraging data to improve Program 

effectiveness and Reduce Costs 

Use	resources	to	focus	on	producing	the	best	value	for	stakeholders

summary of management and performance challenges and high-risk areas 
citizens’ report — summary of performance and financial information | fiscal year 2010 

19 

high-riSk arEaS – 

aS idEntifiEd by gao 

Enforcement of the Tax Laws 

Issue: the Irs needs to improve its enforcement of tax laws, 

not only to catch tax cheats, but also to promote broader 

compliance by giving taxpayers confidence that others are 

paying their fair share. 

Goal: Improve research on noncompliance, increase the use of 

third party information reporting, focus on improving standards among tax return preparers, and increase emphasis on 

international noncompliance. 

Challenges and Actions Taken or Planned: During fiscal 

year 2010, the Irs continued to reduce opportunities 

for evasion by focusing on the many taxpayers that shift 

income abroad and engage in offshore tax evasion schemes. 

the Irs more than doubled its offshore presence. the Irs 

also began mining the information from participants in 

its offshore voluntary disclosure program started in 2009. 

the Irs also targeted specific areas of noncompliance and 

sought to improve voluntary compliance with extensive 

research. 

IRS Business Systems Modernization 

Issue: the business systems Modernization (bsM) program is 

developing and delivering a number of modernized systems 

to replace the aging business and tax processing systems 

currently in use. this effort is highly complex and scheduled to be carried out over a numbers of years, ultimately 

creating a more efficient and effective Irs. though the 

Irs experienced delays and cost overruns in the early years 

of the effort, improved practices and oversight are now 

contributing to better delivery of outcomes. 

Goal: Meet all bsM project milestones within a cost and 

schedule variance of 10 percent of the initial estimate. 

Challenges and Actions Taken or Planned: In fiscal year 

2010, Irs modernization efforts continued to focus on 

core tax administration systems designed to provide more 

sophisticated tools to taxpayers and to Irs employees. 

Irs revised its customer account Data engine (caDe) 2 

strategy to implement a new taxpayer account database for 

the 2012 filing season. 

Modernizing the Outdated U.S. Regulatory 

System 

Issue/Goal: efficient and effective implementation of financial regulatory reform legislation. 

Challenges and Actions Taken or Planned: the 

Department began implementing financial regulatory 

reform legislation and strengthened international economic 

coordination. 

In 2010, the United States Mint began to issue 56 quarter-dollar coins featuring 

designs depicting national parks and other national sites as part of the United 

States Mint America the Beautiful Quarters® Program The first five quarters 

in the series honor Hot Springs National Park in Arkansas; Yellowstone National 

Park in Wyoming; Yosemite National Park in California; Grand Canyon National 

Park in Arizona; and Mount Hood National Forest in Oregon 

management and performance challenges 

summary of management and performance challenges and high-risk areas 
the department of the treasury 

20 

This page left intentionally blank 
website information 

Treasury On-line www.treasury.gov 

Treasury Performance and Accountability Reports www.treasury.gov/about/budget-performance/ 

annual-performance-plan/Pages/default.aspx 

Alcohol and Tobacco Tax and Trade Bureau www.ttb.gov 

Community Development Financial Institutions Fund www.cdfifund.gov 

Comptroller of the Currency www.occ.treas.gov 

Bureau of Engraving & Printing www.bep.treas.gov 

Financial Crimes Enforcement Network www.fincen.gov 

Financial Management Service www.fms.treas.gov 

Internal Revenue Service www.irs.gov 

U.S. Mint www.usmint.gov 

Bureau of the Public Debt www.publicdebt.treas.gov 

Office of Thrift Supervision www.ots.treas.gov 

The Financial Stability Plan www.financialstability.gov 

Help for America’s Homeowners www.makinghomeaffordable.gov 

Recovery Act Spending www.recovery.gov 
www.TREASURY.gov