NATIONAL COUNCIL ON DISABILITY 

GENERAL FUND 

FINANCIAL STATEMENTS 

As of and for the Years Ended September 30, 2009 and 2008 
TABLE OF CONTENTS 

Independent auditors' report...................................................................................... 1-5 

Balance sheets..................................................................................................... 6 

Statements of net cost ..................................................................................... 7 

Statements of changes in net position........................................................................ 8-9 

Statements of budgetary resources............................................................................ 10 

Notes to financial statements..................................................................................... 11-27 

Appendix A – Letter of Concurrence on Draft Report 
 Tel. 202.332.3566 · Fax 202.332.3672 · www.martinwallcpa.com

1633 Q Street, NW · Suite 230 · Washington, DC 20009

Independent Auditors’ Report

Council Members and Executive Director

National Council on Disability

Washington, DC

In accordance with the Accountability of Tax Dollars Act of 2002, we are responsible for 

conducting audits of the National Council on Disability. In our audits of the National Council on 

Disability for the fiscal years ended September 30, 2009 and 2008, we found

• the financial statements are presented fairly, in all material respects, in conformity with 

U.S. generally accepted accounting principles,

• no material weaknesses in internal control over financial reporting (including 

safeguarding assets) and compliance, however, we did identify a significant deficiency in 

internal control over financial reporting,

• no reportable noncompliance with laws and regulations we tested.

The following sections discuss in more detail (1) these conclusions, (2) our conclusions on 

Management Discussion and Analysis and other supplementary information, (3) our audit 

objectives, scope and methodology, and (4) agency comments and our evaluation.

Opinion on Financial Statements

The financial statements including the accompanying notes present fairly, in all material 

respects, in conformity with U.S. generally accepted accounting principles, the National Council 

on Disability’s assets, liabilities, and net position as of September 30, 2009 and 2008; and net 

costs; changes in net position; and budgetary resources; for the years then ended.

Consideration of Internal Control

In planning and performing our audit, we considered the National Council on Disability’s 

internal controls over financial reporting and compliance. We did this to determine our 

procedures for auditing the financial statements and to comply with OMB audit guidance, not to 

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

control over financial reporting and compliance or on management’s assertion on internal control 

included in Management’s Discussion and Analysis. However, our work identified the need to 

improve certain internal controls as described below. 
2

09-01: Ineffective Process for Period-End Review of Accounts Payable and 

Undelivered Orders

Condition: The National Council on Disability lacks formal policies and procedures 

to facilitate the timely identification and estimation of accruals related to 

accounts payable, and the validation of outstanding obligations at periodend. 

Criteria: Statement of Federal Financial Accounting Standards (SFFAS) Number 1, 

Accounting for Selected Assets and Liabilities, defines accounts payable as 

“amounts owed by a federal entity for goods and services received from, 

progress in contract performance made by, and rents due to other entities.” 

SFFAS No. 1 further indicates, “[i]f invoices for those goods [or services] 

are not available when financial statements are prepared, the amounts 

owed should be estimated.

The Federal Manager’s Financial Integrity Act of 1982 (FMFIA) required 

the Government Accountability Office (GAO) to establish standards for 

internal control. GAO/AIMD-00-21.3.1, Standards for Internal Control in 

the Federal Government, provides, “[t]ransactions should be promptly 

recorded to maintain their relevance and value to management...This 

applies to the entire process or life cycle of a transaction...In addition, 

control activities help to ensure that all transactions are completely and 

accurately recorded...Internal control and all transactions and other 

significant events need to be clearly documented, and the documentation 

should be readily available for examination. The documentation should 

appear in management directives, administrative policies, or operating 

manuals and may be in paper or electronic form.”

Cause: The National Council on Disability has not developed formal policies and 

procedures to facilitate the timely identification and estimation of accruals 

related to accounts payable, and the validation of outstanding obligations 

at period-end. 

Effect: The National Council on Disability failed to identify goods and services 

received prior to year-end, which should have been accrued as of 

September 30, 2009. This oversight led to a material understatement of 

accounts payable and expenses that was identified in the course of 

conducting the audit.

This deficiency in internal control, although not considered a material weakness, represents a 

significant deficiency in the design or operation of internal control, which adversely affects the 

entity’s ability to meet the internal control objectives listed in the objectives, scope, and 

methodology, or meet OMB criteria for reporting matters under FMFIA.
3

A material weakness is a control deficiency that results in more than a remote likelihood that the 

design or operation of one or more internal controls will not allow management or employees, in

the normal course of performing their duties, to promptly detect or prevent errors, fraud, or 

noncompliance in amounts that would be material to the financial statements. Our internal 

control work would not necessarily disclose all deficiencies in internal control that might be 

material weaknesses or other significant deficiencies. 

Compliance with Laws and Regulations

Our tests of the National Council on Disability’s compliance with selected provisions of laws 

and regulations for fiscal year 2009 disclosed no instances of noncompliance that would be 

reportable under U.S. generally accepted government auditing standards or OMB audit guidance. 

However, the objective of our audit was not to provide an opinion on overall compliance with 

laws and regulations. Accordingly, we do not express such an opinion.

Consistency of Other Information

The National Council on Disability’s Management’s Discussion and Analysis, required 

supplementary information (including stewardship information), and other accompanying

information contain a wide range of information, some of which is not directly related to the 

financial statements. We do not express an opinion on this information. However, we compared 

this information for consistency with the financial statements and discussed the methods of 

measurement and presentation with National Council on Disability officials. Based on this 

limited work, we found no material inconsistencies with the financial statements, U.S. generally 

accepted accounting principles, or OMB guidance.

Objectives, Scope, and Methodology

The National Council on Disability’s management is responsible for (1) preparing the financial 

statements in conformity with U.S. generally accepted accounting principles, (2) establishing, 

maintaining, and assessing internal control to provide reasonable assurance that the broad control 

objectives of the Federal Managers’ Financial Integrity Act are met, and (3) complying with 

applicable laws and regulations.

We are responsible for obtaining reasonable assurance about whether the financial statements are 

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

principles. We are also responsible for (1) obtaining a sufficient understanding of internal control 

over financial reporting and compliance to plan the audit, (2) testing compliance with selected 

provisions of laws and regulations that have a direct and material effect on the financial 

statements and laws for which OMB audit guidance requires testing, and (3) performing limited 

procedures with respect to certain other information appearing in the Annual Financial 

Statement.
4

In order to fulfill these responsibilities, we

• examined, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements;

• assessed the accounting principles used and significant estimates made by management; 

• evaluated the overall presentation of the financial statements; 

• obtained an understanding of the entity and its operations, including its internal control 

related to financial reporting (including safeguarding assets), and compliance with laws 

and regulations (including execution of transactions in accordance with budget authority); 

• tested relevant internal controls over financial reporting, and compliance, and evaluated 

the design and operating effectiveness of internal control; 

• considered the design of the process for evaluating and reporting on internal control and 

financial management systems under the Federal Managers’ Financial Integrity Act; and

• tested compliance with selected provisions of the following laws and regulations: the 

Anti-Deficiency Act; Provisions Governing Claims of the U.S. Government (31 U.S.C. 

3711-3720E), including the Debt Collection Improvement Act of 1996 (DCIA), the 

Prompt Payment Act; the Pay and Allowance System for Civilian Employees as provided 

primarily in Chapters 51-59 of title 5, United States Code; the Civil Service Retirement 

Act, 5 U.S.C. Chapter 83; Federal Employee Health Benefits Act, 5 U.S.C. Chapter 89; 

Federal Employees Compensation Act (FECA), 5 U.S.C. Chapter 81; Federal 

Employee’s Retirement System (FERS) Act of 1986, 5 U.S.C. Chapter 84; and 

Rehabilitation Act Amendments of 1984, Public Law 98-221.

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

the Federal Managers’ Financial Integrity Act, such as those controls relevant to preparing 

statistical reports and ensuring efficient operations. We limited our internal control testing to 

controls over financial reporting and compliance. Because of inherent limitations in internal 

control, misstatements due to error or fraud, losses, or noncompliance may nevertheless occur 

and not be detected. We also caution that projecting our evaluation to future periods is subject to 

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

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

testing may not be sufficient for other purposes.

We did not test compliance with all laws and regulations applicable to the National Council on 

Disability. We limited our tests of compliance to selected provisions of laws and regulations that 

have a direct and material effect on the financial statements and those required by OMB audit 

guidance that we deemed applicable to the National Council on Disability’s financial statements 

for the fiscal year ended September 30, 2009. We caution that noncompliance may occur and not 

be detected by these tests and that such testing may not be sufficient for other purposes.

We performed our audit in accordance with U.S. generally accepted government auditing 

standards and OMB audit guidance.
5

Agency Comments and Our Evaluation

In commenting on a draft of this report (see Appendix A), the National Council on Disability 

concurred with the facts and conclusions in our report. 

Washington, DC

October 14, 2010
2009 2008

Assets:

 Intragovernmental:

 Fund Balance With Treasury (Note 2) $ 1,340,070 1,569,815 $ 

 Total Intragovernmental 1,569,815 1,340,070

 Accounts Receivable, net

Total Assets $ 1,340,070 1,569,815 $ 

Liabilities: (Note 3)

 Intragovernmental:

 Accounts Payable $ $ 27,385

 Other (Note 4) 12,512

 Total Intragovernmental 39,897

 Accounts Payable 87,812 39,518

 Other (Note 4) 154,152 145,056

 Total Liabilities 281,860 184,574

Net Position:

 Unexpended Appropriations - Earmarked Funds (Note 5) 157,762.3

 Unexpended Appropriations - Other Funds 1,225,602 1,236,871 

 Cumulative Results of Operations - Other Funds (95,410) (81,375)

 Cumulative Results of Operations

 Total Net Position 1,287,954 1,155,495 

Total Liabilities and Net Position $ 1,340,070 1,569,815 $ 

*Amounts may be off by a dollar due to rounding.

NATIONAL COUNCIL ON DISABILITY

BALANCE SHEET

As Of September 30, 2009 and 2008

The accampanying notes are an integral part of these financial statements.

6
2009 2008

Program Costs:

 Program A: (Note 7)

 Gross Costs $ 3,052,831 3,113,436 $ 

 Net Program Costs 3,113,436 3,052,831

Net Cost of Operations $ 3,052,831 3,113,436 $ 

*Amounts may be off by a dollar due to rounding.

NATIONAL COUNCIL ON DISABILITY

STATEMENT OF NET COST

For The Years Ended September 30, 2009 and 2008

The accompanying notes are an integral part of these financial statements.

7
Cumulative Results of Operations:

Beginning Balances $ (81,375) $ $ (81,375) $ 

Beginning Balances, as Adjusted $ (81,375) $ $ (81,375) $ 

Budgetary Financing Sources:

 Appropriations Used 2,933,800 110,827 3,044,627 

Other Financing Resources (Non-Exchange):

 Imputed Financing 54,774 54,774 

Total Financing Sources 2,988,574 110,827 3,099,401 

Net Cost of Operations (+/-) 3,002,609 110,827 3,113,436 

Net Change (14,035) (14,035) 

Cumulative Results of Operations $ (95,410) $ $ (95,410) $ 

Unexpended Appropriations:

Beginning Balances $ 968,281 268,590 $ $ 1,236,871 $ 

Beginning Balances, as Adjusted $ 968,281 268,590 $ $ 1,236,871 $ 

Budgetary Financing Sources:

 Appropriations Received 3,206,000 3,206,000 

 Other Adjustments (14,879) (14,879) 

 Appropriations Used (2,933,800) (110,827) (3,044,627) 

 Total Budgetary Financing Sources 257,321 (110,827) 146,494 

Total Unexpended Appropriations 1,225,602 157,762 1,383,365 

Net Position $ 1,130,192 157,762 $ $ 1,287,954 $ 

*Amounts may be off by a dollar due to rounding.

NATIONAL COUNCIL ON DISABILITY

STATEMENT OF CHANGES IN NET POSITION

For The Years Ended September 30, 2009 and 2008

2009

Earmarked 

Funds

All Other 

Funds Eliminations

Consolidated 

Total

The accompanying notes are an integral part of these financial statements.

8
NATIONAL COUNCIL ON DISABILITY

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEAR ENDED SEPTEMBER 30, 2008

Cumulative Results of Operations:

Beginning Balances $ (77,901) $ $ (77,901) $ 

Budgetary Financing Sources:

Appropriations Used 2,995,908 2,995,908 

Other Financing Resources (Non-Exchange):

Imputed Financing 53,449 53,449 

Total Financing Sources 3,049,357 3,049,357 

Net Cost of Operations (+/-) 3,052,831 3,052,831 

Net Change (3,474) (3,474) 

Cumulative Results of Operations $ (81,375) $ $ (81,375) $ 

Unexpended Appropriations:

Beginning Balances $ 1,194,999 $ $ 1,194,999 $ 

Budgetary Financing Sources:

Appropriations Received 3,113,000 3,113,000 

Other Adjustments (75,221) (75,221) 

Appropriations Used (2,995,908) (2,995,908) 

Total Budgetary Financing Sources 41,871 41,871 

Total Unexpended Appropriations 1,236,871 1,236,871 

Net Position $ 1,155,495 $ $ 1,155,495 $ 

*Amounts may be off by a dollar due to rounding.

All Other 

Funds

Consolidated 

Total

Earmarked 

Funds Eliminations

The accompanying notes are an integral part of these financial statements.

9
2009 2009 2008 2008

Non-Budgetary Non-Budgetary

Credit Program Credit Program

Budgetary Financing Accounts Budgetary Financing Accounts

Budgetary Resources:

Unobligated Balance:

 Beginning of Period $ $ 498,356 415,578 $ $

Recoveries of Prior Year Obligations 178,168 34,086

Budget Authority:

 Appropriations Received 3,206,000 3,113,000

 Earned

 Collected 500 2,736

 Subtotal $ 3,115,736 3,206,500 $ 

Permanently Not Available (75,221) (14,879) 

Total Budgetary Resources $ $ 3,572,957 3,785,368 $ $

Status of Budgetary Resources:

Obligations Incurred (Note 8)

 Direct $ $ 3,157,379 3,269,136 $ $

 Subtotal $ 3,157,379 3,269,136 $ 

Unobligated Balances 

 Apportioned 257,081 242,092

 Subtotal $ 242,092 257,081 $ 

Unobligated Balances - Not Available 173,486 259,151 

Total Status of Budgetary Resources $ $ 3,572,957 3,785,368 $ $

Change in Obligated Balances:

Obligated Balance, Net:

 Unpaid Obligations, Brought Forward, October 1 $ $ 819,039 924,491 $ $

 Total, Unpaid Obligated Balance, Brought Forward, Net $ 819,039 924,491 $ 

Obligations Incurred 3,269,136 3,157,379

Gross Outlays (-) (2,961,876) (3,017,840)

Recoveries of Prior-Year Unpaid Obligations, Actual (-) (178,168) (34,086)

Obligated Balance, Net, End of Period:

 Unpaid Obligations (+) (Note 9) 1,053,583 924,491

 Total, Unpaid Obligated Balance, Net, End of Period $ $ 924,491 1,053,583 $ $

Net Outlays:

Gross Outlays (+) 2,961,876 3,017,840

Offsetting Collections (-) (500) (2,736)

Net Outlays $ $ 3,015,104 2,961,376 $ $

*Amounts may be off by a dollar due to rounding.

NATIONAL COUNCIL ON DISABILITY

STATEMENT OF BUDGETARY RESOURCES

For The Years Ended September 30, 2009 and 2008

The accompanying notes are an integral part of these financial statements.

10
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

11

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES 

Reporting Entity

The National Council on Disability (NCD) is an independent agency of the Executive Branch of 

the United States Government that makes recommendations to the President and Congress on 

issues affecting Americans with disabilities. 

NCD was initially established in 1978 as an advisory board within the Department of Education 

(Public Law 95-602). The Rehabilitation Act Amendments of 1984 (Public Law 98-221) 

transformed NCD into an independent agency and required NCD to provide expert advice to 

Congress and the Administration. The Rehabilitation Act Amendments of 1992 and 1998 and the 

Education of the Deaf Act Technical Amendments of 1993 updated NCD’s statutory mandate. 

NCD is composed of 15 members appointed by the President and confirmed by the U.S. Senate. 

The Council members set the agency budget and establish the parameters for what it will 

support. The NCD executive director has full responsibility for carrying out the agency’s 

operations as necessary to accomplish the goals and mission of the agency as established by the 

Council members. 

NCD’s overall purpose is to promote policies, programs, practices and procedures that guarantee 

equal opportunity for all individuals with disabilities, regardless of the nature or severity of the 

disability; and to empower individuals with disabilities to achieve economic self-sufficiency, 

independent living, and inclusion and integration into all aspects of society. This mission is 

accomplished by serving as a policy agency that publishes reports and works with other federal 

agencies on policy development and implementing best practices. Strategic goals established for 

fiscal year 2009 included: 

• Goal 1: Increase Levels of Public Participation and Outreach 

• Goal 2: Advise the President and Congress about Issues of Importance to the Disability 

Community through an Annual Progress Report. 

• Goal 3: Review Programs, Practices and Policies of Other Federal Agencies and Provide 

Recommendations for Improvement. 

• Goal 4: Respond to the Needs and Priorities Identified by the Public by Completing 

Comprehensive Research Reports on Issues of Concern. 

• Goal 5: Support the Attendance and Participation of Council Members at Meetings and in 

Activities Where NCD Accomplishments and Outreach Occur. 

• Goal 6: Continue to Be Responsible Stewards of Funding Committed to the Support of 

NCD and Its Activities. 

• Goal 7: Continue to Work with the Federal Emergency Management Agency (FEMA) 

and Others Responsible for Enhancing the Safety and Security of the Nation's Disability 

Community As Mandated by the Post-Katrina Emergency Management Reform Act. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

12

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Basis of Presentation 

These financial statements have been prepared from the accounting records of NCD in 

accordance with generally accepted accounting principles (GAAP) as promulgated by the 

Federal Accounting Standards Advisory Board (FASAB), and the form and content for entity 

financial statements specified in Office of Management and Budget (OMB) Circular A-136, 

“Financial Reporting Requirements.” GAAP for Federal entities is the hierarchy of accounting 

principles prescribed in Statement of Federal Financial Accounting Standards (SFFAS) 34, “The 

Hierarchy of Generally Accepted Accounting Principles, Including the Application of Standards 

issued by the Financial Accounting Standards Board.” 

OMB Circular No. A-136 requires agencies to prepare principal statements, which include a 

Balance Sheet, Statement of Net Cost, Statement of Changes in Net Position, and Statement of 

Budgetary Resources. The balance sheet presents, as of September 30, 2009, amounts of future 

economic benefits owned or managed by NCD (assets), amounts owed by NCD (liabilities), and 

amounts which comprise the difference (net position). The Statement of Net Cost reports the full 

cost of the program, both direct and indirect costs of the output, and the costs of identifiable 

supporting services provided by other segments within NCD and other reporting entities. The 

Statement of Budgetary Resources reports an agency’s budgetary activity. 

Basis of Accounting

Transactions are recorded on the accrual accounting basis of accounting in accordance with 

OMB Circular A-136. Under the accrual basis of accounting, revenues are recognized when 

earned, and expenses are recognized when a liability is incurred, without regard to the receipt or 

payment of cash. 

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions 

that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and 

liabilities at the date of the financial statements, and the reported amounts of revenues and 

expenses during the reporting period. Actual results may differ from those estimates. 

Budgets and Budgetary Accounting

NCD follows standard federal budgetary accounting policies and practices in accordance with 

OMB Circular A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2008. 

Budgetary accounting facilitates compliance with legal constraints and controls over the use of 

federal funds. Each year, Congress provides NCD appropriations to incur obligations in support 

of agency programs. For Fiscal Years (FY) 2009 and 2008, NCD is accountable for general fund 

appropriations and no-year fund carryover. NCD recognizes budgetary resources as assets when 

cash (funds held by Treasury) is made available through warrants and when spending authority 

from the offsetting collections is incurred. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

13

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Revenues and Other Financing Sources

NCD receives substantially all of the funding needed to support its programs through 

appropriations. NCD receives annual and no-year appropriations that may be used, within 

statutory limits, for operating and capital expenditures. Appropriations are recognized as 

revenues as the related program or administrative expenses are incurred. 

Other financing sources for NCD consist of imputed financing sources which are costs financed 

by other federal entities on behalf of NCD, as required by SFFAS No. 5, “Accounting for 

Liabilities of the Federal Government. ” In certain instances, operating costs of NCD are paid 

out of funds appropriated to other federal agencies. In accordance with SFFAS 5, all expenses of 

a federal entity should be reported by that agency regardless of whether the agency will 

ultimately pay those expenses. Amounts for certain expenses of NCD, which will be paid by 

other federal agencies, are recorded in the Statement of Net Cost. A related amount is 

recognized in the Statement of Changes in Net Position as an imputed financing source. NCD 

records imputed expenses and financing sources for employee retirement plan contributions, 

group term life insurance, and health benefit costs, which are paid by the Office of Personnel 

Management (OPM). 

Personnel Compensation and Benefits

Salaries and wages of employees are recognized as accrued payroll expenses and related 

liabilities as earned. These expenses are recognized as a funded liability when accrued. 

Annual leave is accrued as it is earned by employees and is included in personnel compensation 

and benefit costs. An unfunded liability is recognized for earned but unused annual leave, since 

from a budgetary standpoint, this annual leave will be paid from future appropriations when 

employees use the leave. The amount accrued is based upon current pay rates for employees. 

Sick leave and other types of leave that are not vested are expensed when used and no future 

liability is recognized for these amounts. 

NCD’s employees participate in one of two retirement programs, either the Civil Service 

Retirement System (CSRS) or the Federal Employees Retirement System (FERS), which became 

effective on January 1, 1987. NCD and its employees both contribute to these systems. Although 

NCD funds a portion of the benefits under CSRS and FERS and makes the necessary payroll 

withholdings, it does not report assets associated with these benefit plans in accordance with 

SFFAS 5. 

For CSRS employees, NCD contributes an amount equal to 11.2% of the employees’ basic pay 

to the plan. For FERS employees, NCD contributes an amount equal to 7% of the employees’ 

basic pay to the plan. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

14

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Personnel Compensation and Benefits (continued)

Both CSRS employees and FERS employees are eligible to participate in the Thrift Savings Plan 

(TSP). The TSP is a defined contribution retirement plan intended to supplement the benefits 

provided under CSRS and FERS. For FERS employees, NCD contributes an amount equal to 1% 

of the employee’s basic pay to the TSP and matches employee contributions up to an additional 

4%. CSRS employees receive no matching contribution from NCD. 

OPM is responsible for reporting assets, accumulated plan benefits, and unfunded liabilities, if 

any, applicable to CSRS participants and FERS employees government-wide, including NCD’s 

employees. NCD has recognized an Imputed Cost and Imputed Financing Source for the 

difference between the estimated service cost and the contributions made by NCD and its 

covered employees. The estimated cost of pension benefits is based on rates issued by OPM. 

Employees are entitled to participate in the Federal Employees Group Life Insurance (FEGLI) 

Program. Participating employees can obtain “basic life” term life insurance, with the employee 

paying two-thirds of the cost and NCD paying one-third. Additional coverage is optional, to be 

paid fully by the employee. The basic life coverage may be continued into retirement if certain 

requirements are met. OPM administers the FEGLI program and is responsible for the reporting 

of related liabilities. Each fiscal year, OPM calculates the U.S. Government’s service cost for 

the post-retirement portion of basic life coverage. Because NCD’s contributions to the basic life 

coverage are fully allocated by OPM to the pre-retirement portion of coverage, the Board has 

recognized the entire service cost of the post-retirement portion of basic life coverage as an 

Imputed Cost and Imputed Financing Source. 

Assets and Liabilities

Intra-governmental assets and liabilities arise from transactions between NCD and other Federal 

entities. 

Funds with the U.S. Treasury comprise the majority of assets on NCD’s balance sheet. All other 

assets result from activity with non-federal sources. 

Liabilities represent amounts that are likely to be paid by NCD as a result of transactions that 

have already occurred. The accounts payable portion of liabilities consists of amounts owed to 

federal agencies and commercial vendors for goods, services, and other expenses received but 

not yet paid. 

Liabilities covered by budgetary or other resources are those liabilities of NCD for which 

Congress has appropriated funds, or funding is otherwise available to pay amounts due. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

15

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Fund Balance with Treasury

The U.S. Department of the Treasury (Treasury) processes NCD’s receipts and disbursements. 

Fund Balance with Treasury is the aggregate amount of the agency’s accounts with Treasury for 

which the agency is authorized to liquidate obligations, pay funded liabilities, and make 

expenditures. The fund balance is increased through the receipt of non-expenditure Treasury 

warrants for appropriations, positive non-expenditure transfers, and other expenditure inflows of 

funds. The Fund Balance with Treasury is reduced through non-expenditure Treasury Warrants 

for recissions, negative non-expenditure transfers, disbursements, and other expenditure cash 

outflows of funds. 

NCD’s funds with the U.S. Treasury are cash balances from appropriations as of the fiscal yearend from which NCD is authorized to make expenditures and pay liabilities resulting from 

operational activity. 

General Property, Plant and Equipment, Net

Property, plant, and equipment (PP&E) have been defined in the Federal Government as tangible 

items owned by the Federal Government and having an expected useful life of greater than two 

years. NCD has established the following policies for PP&E: 

PP&E is reported at acquisition cost. 

 

The capitalization threshold is $5,000 for assets with a useful life of two or more years. 

For bulk purchases, items will be capitalized when the individual useful lives are at least two 

years and the property acquired has an aggregate value of $100,000 or more. 

Acquisitions of PP&E that do not meet the capitalization criteria outlined above are recorded as 

operating expenses. General PP&E consists of items that are used by NCD to support its mission. 

Depreciation on assets is calculated using the straight-line method. Depreciation begins the 

month after the asset is placed in service. 

Useful lives are as follows: 

 Equipment - 4 years 

 Furniture - 4 years 

Maintenance, repairs and minor renovations are expensed as incurred. Expenditures that 

materially increase values, change capacities or extend useful lives are capitalized. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

16

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

General Property, Plant and Equipment, Net (continued)

The costs of any leasehold improvements financed with NCD appropriated funds is capitalized if 

the total cost exceeds $25,000. Construction costs are accumulated as “construction in-progress” 

until completion, at which time they are transferred to “leasehold improvements” and 

depreciated over 7 years or the remainder of the lease, whichever is less. 

Internal use software development and acquisition costs of $25,000 are capitalized as “software 

development-in-progress” until the development stage is completed and the software is 

successfully tested. At acceptance, “software development-in-progress” costs are reclassified as 

“internal use software” and amortized using the straight-line method over an estimated useful life 

of 4 years. Purchased commercial software that does not meet the capitalization criteria is 

expensed. Enhancements that do not add significant new capability or functionality are expensed. 

Prepaid and Deferred Charges

Payments in advance of the receipt of goods and services are recorded as prepaid charges at the 

time of prepayment and recognized as expenses when the related goods and services are 

received. 

Liabilities

Liabilities represent amounts expected to be paid as the result of a transaction or event that has 

already occurred. Liabilities covered by budgetary resources are liabilities incurred which are 

covered by realized budgetary resources as of the balance sheet date. Available budgetary 

resources include new budget authority, spending authority from the offsetting collections, 

recoveries of unexpired budget authority through downward adjustments of prior year 

obligations, and unobligated balances of budgetary resources at the beginning of the year. 

Unfunded liabilities are not considered to be covered by such budgetary resources. Examples of 

unfunded liabilities are actuarial liabilities for future Federal Employees’ Compensation Act 

(FECA) payments and annual leave. The Government, acting in its sovereign capacity, can 

abrogate liabilities arising from other than contracts. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

17

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Contingencies

The criteria for recognizing contingencies for claims are (1) a past event or exchange transaction 

has occurred as of the date of the statements; (2) a future outflow or other sacrifice of resources 

is probable; and (3) the future outflow or sacrifice of resources is measurable (reasonably 

estimated). NCD recognizes material contingent liabilities in the form of claims, legal action, 

administrative proceedings and environmental suits that have been brought to the attention of 

legal counsel, some of which will be paid by the Treasury Judgment Fund. It is the opinion of 

management and legal counsel that the ultimate resolution of these proceedings, actions and 

claims, will not materially affect the financial position or results of operations. 

Net Position

Net position consists of unexpended appropriations and cumulative results of operations. 

Unexpended appropriations represent amounts of budget authority to include unobligated or 

obligated balances not rescinded or withdrawn. Cumulative results of operations is comprised of 

the following: (1) the difference between revenues and expenses, (2) the net amount of transfers 

of assets in and out without reimbursement, and (3) donations, all since inception of the fund(s). 

 

NOTE 2 – FUND BALANCE WITH TREASURY 

All of NCD’s Fund Balance with Treasury is derived from appropriated funds. No trust, 

revolving or other fund types are used to fund NCD’s activities. NCD operates as an annual 

fund, receiving a new appropriation each year. This fund balance with treasury is a consolidated 

balance of one no-year fund and five annual funds (FY 2005, FY 2006, FY 2007, FY 2008, and 

FY 2009). The annual fund for FY 2004 was cancelled and the remaining fund balance of 

$14,879 was transferred back to the US Treasury during fiscal year 2009. 

A. Fund Balance with Treasury 2009 2008

General Funds $1,569,815 $1,340,070 

B. Status of Fund Balance with Treasury

1) Unobligated Balance

a) Available 257,081 242,092 

b) Unavailable 259,151 173,486 

2) Obligated Balance not yet Disbursed 1,053,583 924,491 

Total $1,569,815 $1,340,070 *

* Rounding 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

18

NOTE 3 – GENERAL PROPERTY, PLANT AND EQUIPMENT, NET 

Property, plant and equipment is used in NCD’s operations and consumed over time. NCD owns 

certain furniture, computer equipment and software that are not reflected on the balance sheet as 

of September 30, 2009 and 2008 because either: (1) items were were acquired several years ago, 

are still in service, but are fully depreciated and have immaterial book values, or (2) purchases 

were below the capitalization policy stated in Note 1. Therefore, these property, plant and 

equipment items are not recorded as assets as of September 30, 2009 or 2008. 

NOTE 4 – LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

Liabilities of NCD are classified as liabilities covered or not covered by budgetary resources. As 

of September 30, 2009, NCD showed liabilities covered by budgetary resources of $186,450 and 

liabilities not covered by budgetary resources of $95,410. As of September 30, 2008, NCD 

showed liabilities covered by budgetary resources of $103,199 and liabilities not covered by 

budgetary resources of $81,375. 

 

As of September 30, 2009, liabilities covered by budgetary resources is composed of Accounts 

Payable of $115,197*, Accrued Funded Payroll and Leave of $58,742*, and Employer 

Contributions and Payroll Taxes Payable of $12,512. As of September 30, 2008, liabilities 

covered by budgetary resources was composed of Accounts Payable of $39,518 Accrued Funded 

Payroll and Leave of $63,681. 

2009 2008

With the Public

Other (Unfunded leave liability) 95,410 81,375

Total liabilities not covered by budgetary resources 95,410 81,375

Total liabilities covered by budgetary resources 186,450 * 103,199

Total Liabilities $281,860 $184,574

*Rounding
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

19

NOTE 5 – OTHER LIABILITIES 

As of September 30, 2009, other liabilities with the public consisted of Accrued Funded Payroll 

and Leave of $58,742 and unfunded leave in the amount of $95,410. Other Intragovernmental 

liabilities consist of employer contributions and payroll taxes payable of $12,512. As of 

September 30, 2008, other liabilities with the public consisted of Accrued Funded Payroll and 

Leave of $63,681 and unfunded leave in the amount of $81,375. 

With the Public Non-Current Current Total

2009 Other Liabilities $95,410 $58,742 $154,152

2008 Other Liabilities $81,375 $63,681 $145,056

Intragovernmental Non-Current Current Total

2009 Other Liabilities $0 $12,512 $12,512

2008 Other Liabilities $0 $0 $0

The amounts from the above table are presented in further detail below. 

FY 2009

Non-Current Current Total

Intragovernmental

Employer Contributions & Payroll Taxes Payable $ - $ 12,512 12,512 $ 

Total Intragovernmental - 12,512 12,512 

Unfunded Leave 95,410 95,410 - 

Accrued Funded Payroll & Leave - 58,742 58,742 

Total Other Liabilities 95,410 $ 71,254 $ 166,664 $ 

FY 2008

Non-Current Current Total

Unfunded Leave $ 81,375 $ 81,375 - $ 

Accrued Funded Payroll & Leave - 63,681 63,681 

Total Other Liabilities 81,375 $ 63,681 $ 145,056 $ 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

20

NOTE 6 – LEASES 

Entity as Lessee: 

Operating Leases

NCD leases office space at 1331 F Street, NW, Washington, DC. The lease was entered into and 

became effective December 2007, and expires September 2011. The lease does not contain an 

option to renew, and the space may be vacated at any time upon four (4) months written notice. 

The following is a schedule of future minimum lease payments required by the lease: 

Fiscal Year Ended Minimum Lease Payments

September 30, 2009 240,168 $ 

September 30, 2010 241,080 

September 30, 2011 222,079 

$ 703,327
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

21

NOTE 7 – EARMARKED FUNDS 

Earmarked funds are funds that are financed by specifically identified revenues, often 

supplemented by other financing sources, which remain available over time. These specifically 

identified revenues and other financing sources are required by statute to be used for designated 

activities or purposes, and must be accounted for separately from the federal government’s 

general revenues, per Statement of Federal Financial Accounting Standard (SFFAS) 27, 

Identifying and Reporting Earmarked Funds. 

In 2007, $300,000 was appropriated to remain available until expended, for necessary expenses 

related to the requirements of the Post-Katrina Emergency Management Reform Act of 2006, as 

enacted by the Department of Homeland Security Appropriations Act, 2007 (Public Law 109-

295. It was determined during the FY09 audit that these funds should be considered earmarked, 

therefore, it was at this time that we began to reflect the funds as earmarked. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

22

NOTE 7 – EARMARKED FUNDS (CONTINUED) 

FY 2009

NCD Earmarked 

Funds

NCD Other 

Funds Total Funds

Balance Sheet as of Sept. 30

ASSETS

Fund Balance with Treasury 157,762 $ 1,412,053 $ 1,569,815 $ 

 Total Assets 157,762 $ 1,412,053 $ 1,569,815 $ 

Intragovernmental Liabilities:

Accounts Payable 27,385 $ 27,385 $ 

Other Liabilities 12,512 12,512 

Total Intragovenmental Liabilities 39,897 $ 39,897 $ 

Liabilities with the Public:

Accounts Payable 87,812 $ 87,812 $ 

Other Liabilities 154,152 $ 154,152 $ 

Total Liabilities with the Public 241,964 $ 241,964 $ 

Total Liabilites $ 281,860 281,860 $ 

Unexpended Appropriations 157,762 $ 1,225,602 $ 1,383,365 $ 

Cumulative Results of Operations (95,410) $ (95,410) $ 

 Total Liabilities and Net Position 157,762 $ 1,412,053 $ 1,569,815 $ 

Statement of Net Cost For the 

Period Ended Sept. 30

Gross Program Costs 110,827 $ 3,002,609 $ 3,113,436 $ 

Net Program Costs 110,827 $ 3,002,609 $ 3,113,436 $ 

Net Cost of Operations 110,827 $ 3,002,609 $ 3,113,436 $ 

Statement of Changes in Net Position

For the Period Ended Sept. 30

Cumulative Results of Operations:

Beginning Balances (81,375) $ (81,375) $ 

Budgetary Financing Sources:

Appropriations Used 110,827 $ 2,933,800 $ 3,044,627 $ 

Other Financing Sources

 Imputed Financing 54,774 $ 54,774 $ 

Total Financing Sources 110,827 $ 2,988,574 $ 3,099,401 $ 

Net Cost of Operations 110,827 $ 3,002,609 $ 3,113,436 $ 

Change in Net Position (14,035) $ (14,035) $ 

Cumulative Results of Operations (95,410) $ (95,410) $ 

Unexpended Appropriations:

Beginning Balances 268,590 $ 968,281 $ 1,236,871 $ 

Budgetary Financing Sources:

Appropriations Received 3,206,000 3,206,000 

Other Adjustments (14,879) (14,879) 

Appropriations Used (110,827) (2,933,800) (3,044,627) 

Total Budgetary Financing Sources (110,827) $ 257,321 $ 146,494 $ 

Total Unexpended Appropriations 157,762 $ 1,225,602 $ 1,383,365 $ 

Net Position End of Period 157,762 $ 1,130,192 $ 1,287,954 $ 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

23

NOTE 7 – INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE 

Intragovernmental costs are those of goods/services purchased from a federal entity. 

Total Total 

2009 2008

Program A

Intragovernmental costs 475,234 550,023

Public costs 2,638,202 2,502,809

Total Program A costs 3,113,436 * 3,052,831 *

Total Program A 3,113,436 * 3,052,831 *

* Rounding

NOTE 8 – APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

Apportionment is a plan, approved by OMB, to spend resources provided by one of the annual 

appropriations acts, a supplemental appropriations act, a continuing resolution, or a permanent 

law (mandatory appropriations). Resources are apportioned by Treasury Account Fund Symbol 

(TAFS). The apportionment identifies amounts available for obligation and expenditure. It 

specifies and limits the obligations that may be incurred and expenditures made (or makes other 

limitations, as appropriate) for specified time periods, programs, activities, projects, objects, or 

any combination thereof. An apportioned amount may be further subdivided by an agency into 

allotments, suballotments, and allocations. 

All of NCD’s obligations incurred are considered direct. None are reimbursable. Obligations 

incurred for NCD include both Category A and Category B apportionments, as defined by OMB 

Circular A-11, and reported on NCD’s latest SF 132. Category A apportionments distribute 

budgetary resources by fiscal quarters. Category B apportionments typically distribute budgetary 

resources by activities, projects, objects or a combination of these categories. NCD has no 

funds exempt from apportionment. The table below presents the distribution of obligations 

incurred by apportionment category. 

2009 2008

Direct

Category A 129,080 $ 3,157,379 $ 

Category B 3,140,055 - 

$ 3,157,379 3,269,135 $ 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

24

NOTE 9 – UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Undelivered orders represent the value of goods and services ordered and obligated that have not 

been received. This amount includes any orders for which advance payment has been made but 

for which delivery or performance has not yet occurred. The amount of Unpaid Obligated 

Balance, Net, End of Period includes obligations relating to Undelivered Orders (goods and 

services contracted for but not yet received at the end of the year) and Accounts Payable 

(amounts owed at the end of the year for goods and services received). 

Undelivered 

Orders

Accounts 

Payable

Unpaid Obligated Balance 

Net

2009 867,132 186,450 $1,053,582

2008 821,292 103,199 $924,491
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

25

NOTE 10 – RECONCILIATION OF NET COST OF OPERATIONS (PROPRIETARY) 

TO BUDGET (FORMERLY THE STATEMENT OF FINANCING) 

2009 2008

Resources Used to Finance Activities:

Budgetary Resources Obligated

 Obligations Incurred 3,269,135 $ 3,157,379 $ 

 Less: Spending Authority from Offsetting Collections 

 and Recoveries 178,668 36,822 

 Net Obligations 3,090,467 3,120,557

Other Resources

 Imputed Financing from Costs Absorbed by Others 54,774 53,449 

 Other Resources (+/-)

Net Other Resources Used to Finance Activities 54,774 53,449

Total Resources Used to Finance Activities 3,145,241 3,174,007

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

Change in Budgetary Resources Obligated for Goods

 Services and Benefits Ordered But Not Yet Provided 45,840 124,649 

Total Resources Used to Finance Items Not Part of the Net Cost

 of Operations 45,840 124,649

Total Resources Used to Finance the Net Cost of Operations 3,099,401 3,049,357

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

Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods:

 Increase in Annual Leave Liability 14,035 3,474 

Total Components of Net Cost of Operations that will Require or Generate 3,474 14,035 

Resources in Future Periods

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

Resources in the Current Period 3,474 14,035 

Net Cost of Operations $ 3,052,831 3,113,436 $ 

Liabilities not covered by budgetary resources total $95,410 and the change in components 

requiring or generating resources in future period shows $14,035. The $14,035 is the net 

increase of future funded expenses – leave between appropriations of annual fund 2008 and 

annual fund 2009. Accrued funded payroll liability is covered by budgetary resources and is 

included in the net cost of operations. Whereas, the unfunded leave liability includes the 

expense related to the increase in annual leave liability for which the budgetary resources will be 

provided in a subsequent period. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

26

NOTE 11 – RESTATEMENT

Unexpended Appropriations Used

A misstatement occurred on the financial statements and accompanying notes for the fiscal year 

ended September 30, 2009 as part of the audit report issued December 14, 2009. During that 

audit, an audit adjustment for a likely misstatement of $84,579 was recorded to accrue the costs 

of goods and services received during fiscal year 2009 that were not recorded. The audit 

adjustments recorded at that time were: 

 6100 Operating Expenses/Program Costs $84,579 

 2110 Accounts Payable $84,579 

 4610 Allotments – Realized Resources $30,434 

 4801 Undelivered Orders-Unpaid $54,145 

 4901 Expended Authority-Unpaid $84,579 

These adjustments did not capture the full effect on the financial statements. The above audit 

adjustment should have also included the following adjusting entries, which have now been 

recorded and are reflected on these financial statements and accompanying notes: 

 3107 Unexpended Appropriations-Used $84,579 

 5700 Expended Appropriations $84,579 

Recording this entry (3107/5700) has following effects on the financial statements: 

 Balance Sheet 

• Decrease Unexpended Appropriations – Other Funds 

• Increase Cumulative Results of Operations – Other Funds 

Statement of Changes in Net Position 

• Increase Appropriations Used 

• Increase Total Financing Sources 

• Decrease Net Change 

• Increase Cumulative Results of Operations 

• Decrease Total Budgetary Financing Sources 

• Decrease Total Unexpended Appropriations 

The error was discovered during consultations with the accounting service provider. 

Management communicated with the accounting service provider and the independent auditors, 

determined that the misstatement was material, and authorized the restatement of the financial 

statements as presented above. 

This error does not alter the audit opinion. This error resulted in a restatement of the financial 

statements. The reissued audit report is dated October 13, 2010. 
National Council on Disability 

Notes to Financial Statements 

September 30, 2009 and 2008 

27

NOTE 11 – RESTATEMENT (CONTINUED)

Earmarked Funds

In addition to the information provided above, a misstatement occurred on the financial 

statements and accompanying notes for the fiscal year ended September 30, 2009 as part of the 

audit report issued December 14, 2009 pertaining to the designation of Post-Katrina Emergency 

Management Reform Act of 2006, as enacted by the Department of Homeland Security 

Appropriations Act, 2007 (Public Law 109-295) as earmarked funds. This had the effect of 

misstating the financial statements by excluding required note disclosure for reporting earmarked 

funds separate from other funds. That disclosure is now contained in Note 7 Earmarked Funds. 

The cause of the error was management not possessing clear instructions on classification based 

on appropriation language provided. The error was discovered when additional audit procedures 

were applied when restating the financial statements for the unexpended appropriations error 

described above. Management corrected this error by contacting their OMB Examiner and 

obtaining a definitive statement that Post-Katrina Emergency Management Reform Act of 2006 

are earmarked funds. 

This error does not alter the audit opinion. This error resulted in a restatement of the financial 

statements. The reissued audit report is dated October 13, 2010. 

NOTE 12 – SUBSEQUENT EVENTS

In preparing these financial statements, management has evaluated events and transactions for 

potential recognition or disclosure through October 14, 2010, which is the date the financial 

statements were available to be issued. 
APPENDIX A – 

NATIONAL COUNCIL ON DISABILITY COMMENTS ON 

DRAFT AUDIT REPORT