NATIONAL COUNCIL ON DISABILITY

GENERAL FUND

FINANCIAL STATEMENTS

As Of And For The Years Ended September 30, 2017 and 2016
9841 Washingtonian Blvd., Suite 310, Gaithersburg, MD 20878 | Phone: 301.519.2912 | Fax: 301.519.2915

Independent Auditor’s Report

Board Members and Executive Director

National Council on Disability

Report on the Financial Statements

We have audited the accompanying balance sheet of the National Council on Disability (the Council) as 

of September 30, 2017 and 2016, and the related statements of net cost, changes in net position, and 

budgetary resources for the years then ended. In our audit of the Council for the fiscal year ended 

September 30, 2017, 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).

• One instance of non-compliance that is detailed in the Compliance with Applicable Laws and 

Regulations section of this report, the following finding was identified:

 The Council did not comply with the Prompt Payment Act. During our audit we noted one 

instance where payments to a vendor was not made within the required 30-day stipulation.

The following sections discuss in more detail our opinion, our consideration of internal control over 

financial reporting, our tests of compliance with certain provisions of applicable laws and regulations, and 

management’s and our responsibilities.

Opinion on the Financial Statements

In our opinion, the financial statements, including the accompanying notes present fairly, in all material 

respects, in conformity with U.S. generally accepted accounting principles, the financial position of the 

National Council on Disability as of September 30, 2017 and 2016, and its 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 Council’s internal control over financial 

reporting as a basis for designing our auditing procedures and to comply with the Office of Management 

and Budget (OMB) audit guidance for the purpose of expressing our opinion on the financial statements, 

but not for the purpose of expressing an opinion on internal control and compliance or on management’s 

assertion on internal control included in the Management’s Discussion and Analysis (MD&A). 

Accordingly, we do not express an opinion on internal control over financial reporting and compliance or 

on management’s assertion on the effectiveness of the entity’s internal control over financial reporting, or 

on management’s assertion on the internal control included in the MD&A. 
A control deficiency exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent or detect 

misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, 

in internal control that is less severe than a material weakness, yet important enough to merit attention by 

those charged with governance. A material weakness is a significant deficiency, or combination of 

significant deficiencies, that results in a more than 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 consideration of internal control over financial reporting was for the purpose described in the first 

paragraph of this section and would not necessarily identify all deficiencies in the Council’s internal 

control that might be material weaknesses or significant deficiencies. Given these limitations, during our 

audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. 

We did not identify any deficiencies in internal control over financial reporting that we consider to be 

material weaknesses, as defined above. 

We noted other non-reportable matters involving internal control and its operation that we will 

communicate in a separate management letter to the Council’s management.

Compliance With Applicable Laws and Regulations

As part of obtaining reasonable assurance about whether the Council’s financial statements are free from 

material misstatement, we also performed tests of its compliance with certain provisions of laws and 

regulations for fiscal year 2017. However, providing an opinion on compliance with those provisions was 

not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests 

of compliance disclosed instances of noncompliance or other matters that are required to be reported 

under Government Auditing Standards. Specifically, we noted a violation of the Prompt Payment Act, the 

details of which are presented in Exhibit A.

Consistency of Other Information

The information in the Management's Discussion and Analysis is not a required part of the financial 

statements, but is supplementary information required by U.S. generally accepted accounting principles. 

We have applied certain limited procedures, which consisted principally of inquiries of management 

regarding the methods of measurement and presentation of this information. However, we did not audit 

this information and, accordingly, we express no opinion on it.

The information in the Chairman’s Message, Performance Section, and Other Accompanying Information 

is presented for purposes of additional analysis and is not required as part of the financial statements. 

This information has not been subjected to auditing procedures and, accordingly, we express no opinion 

on it.
Responsibilities

Management’s Responsibilities. Management is responsible for the preparation of financial statements, 

establishing and maintaining effective internal control over financial reporting, and complying with laws, 

regulations, contracts, and grant agreements applicable to the Council.

Auditor’s Responsibilities. Our responsibility is to express an opinion on the financial statements based 

on our audits. We conducted our audits in accordance with auditing standards generally accepted in the 

United States of America; the standards applicable to financial audits contained in the U.S. Government 

Auditing Standards, issued by the Comptroller General of the United States; and Office of Management 

and Budget (OMB) Bulletin No. 17-03, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 17-03 require that we plan and perform the audit to obtain reasonable 

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 

the financial statements. The procedures selected depend on the auditor’s judgment, including the 

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 

In making those risk assessments, the auditor considers internal control relevant to the agency’s 

preparation and fair presentation of the financial statements in order to design audit procedures that are 

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 

the agency’s internal control. Accordingly, we do not express on such opinion. An audit also includes 

evaluating the appropriateness of accounting policies used and the reasonableness of significant estimates 

made by management, as well as evaluating the overall presentation of the financial statements. We 

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

opinion.

The Council’s written response to the instance of noncompliance or other matters identified in our audit is 

attached to our report, and was not subjected to the auditing procedures applied in the audit of the 

Council’s financial statements and, accordingly, we express no opinion on it.

Gaithersburg, Maryland

January 30, 2018
Independent Auditor’s Report

Exhibit A: Instances of Non-Compliance

Non-Compliance with the Prompt Payment Act 

Conditions: The Council does not appear to comply with the Prompt Payment Act. During our audit, we 

noted one instance where payment to the vendor was not made within the required time period.

Criteria: The Prompt Payment Act and 5 CFR Part 1315 require that payments should be made to 

vendors within 30 days from the time a proper invoice is received. 

Cause/Effect: Due to limited resources, the Council contracts certain accounting services to a third party 

service provider, those services include remitting payments to vendors. Although the invoice was 

submitted to the third party service provider within the allowed 30-day time frame, it was not soon 

enough to enable compliance. The delay in processing the invoice resulted in a violation of the Prompt 

Payment Act.

Recommendations: We recommend that the Council continue to work with the third party service provider 

to ensure invoices are remitted in sufficient time to allow the third party service provider to process 

vendor payments to ensure compliance. In addition, we recommend the Council strengthen internal 

control procedures to monitor the third party payment for timeliness. 

Management’s Response: 

The Council concurs that there was one prompt payment violation in fiscal year 2017. The Council

received and processed the payable within the prompt payment timeline; however, the time it took to 

process the payment through our financial provider extended beyond the 30-day time frame. The 

Council’s management believes this is an isolated incident given our processing rate for fiscal year 2017 

was 99.99% in compliance with the Prompt Payment Act. 

The Council will continue to work with our financial services provider to ensure invoices are remitted in 

sufficient time to allow the provider to process vendor payments to ensure compliance. 
2017 2016

Assets:

 Intragovernmental:

 Fund Balance With Treasury (Note 2) $ 1,056,279.10 $ 1,378,117.07

 Other:

 Advances and Prepayments (Note 3) 93,356.98 118,838.55

 Total Intragovernmental 1,149,636.08 1,496,955.62

 Assets With The Public:

 Accounts Receivable, net (Note 4) 2,086.28 293.23 

 Direct Loan and Loan Guarantees, Net (Note 5) 11,959.01 

 General Property, Plant and Equipment, Net (Note 6) 11,676.74 14,881.32 

Total Assets $ 1,163,399.10 $ 1,524,089.18

Liabilities: (Note 7)

 Intragovernmental:

 Accounts Payable 2,000.00

 Other: (Note 8)

 Employer Contributions and Payroll Taxes Payable 11,098.73 13,383.81 

 Total Intragovernmental 13,098.73 13,383.81 

 Liabilities With the Public:

 Accounts Payable 334,831.13 132,730.46

 Other: (Note 8)

 Accrued Funded Payroll and Leave 51,118.40 47,260.80 

 Employer Contributions and Payroll Taxes Payable 1,546.79 1,922.36 

 Unfunded Leave 83,941.25 88,710.58 

Total Liabilities $ 484,536.30 $ 284,008.01

Net Position:

749,041.03 1,301,658.19

(70,178.23) (61,577.02)

678,862.80 1,240,081.17

 Total Net Position $ 678,862.80 $ 1,240,081.17

Total Liabilities and Net Position $ 1,163,399.10 $ 1,524,089.18

 Unexpended Appropriations - All Other Funds (Consolidated

 Totals)

 Cumulative Results of Operations - All Other Funds

 (Consolidated Totals)

 Total Net Position - All Other Funds (Consolidated

 Totals)

THE NATIONAL COUNCIL ON DISABILITY

BALANCE SHEET

As Of September 30, 2017 and 2016

The accompanying notes are an integral part of these statements.

1
2017 2016

Program Costs:

 NCD:

 Gross Costs (Note 10) $ 3,818,512.37 $ 3,045,306.93

 Net Program Costs 3,818,512.37 3,045,306.93

Net Cost of Operations $ 3,818,512.37 $ 3,045,306.93

THE NATIONAL COUNCIL ON DISABILITY

STATEMENT OF NET COST

As Of And For The Years Ended September 30, 2017 and 2016

The accompanying notes are an integral part of these statements.

2
Funds From Dedicated 

Collections 

(Consolidated Totals)

All Other Funds 

(Consolidated Totals) Eliminations Consolidated Total

Cumulative Results from Operations:

Beginning Balances $ - $ (61,577.02) $ (61,577.02)

Beginning balance, as adjusted - (61,577.02) - (61,577.02)

Budgetary Financing Sources:

Appropriations used $ - $ 3,761,177.70 $ 3,761,177.70

Other Financing Sources (Non-Exchange):

Imputed financing - 48,733.46 48,733.46 

Total Financing Sources - 3,809,911.16 - 3,809,911.16

Net Cost of Operations - 3,818,512.37 3,818,512.37

Net Change $ - $ (8,601.21) $ (8,601.21)

Cumulative Results of Operations $ - $ (70,178.23) $ (70,178.23)

Unexpended Appropriations:

Beginning Balance $ - $ 1,301,658.19 $ 1,301,658.19

Budgetary Financing Sources:

Appropriations received - 3,250,000.00 3,250,000.00

Other adjustments - (41,439.46) (41,439.46)

Appropriations used - (3,761,177.70) (3,761,177.70)

Total Budgetary Financing Sources - (552,617.16) (552,617.16)

Total Unexpended Appropriations - 749,041.03 749,041.03

Net Position $ - $ 678,862.80 $ 678,862.80

THE NATIONAL COUNCIL ON DISABILITY

STATEMENT OF CHANGES IN NET POSITION

As Of And For The Years Ended September 30, 2017 and 2016

FY 2017 (CY)

The accompanying notes are an integral part of these statements.

 The accompanying notes are an integral part of these statements.

3
Funds From Dedicated 

Collections 

(Consolidated Totals)

All Other Funds 

(Consolidated Totals) Eliminations Consolidated Total

Cumulative Results from Operations:

Beginning Balances $ $ (70,864.09) $ (70,864.09)

Beginning balance, as adjusted (70,864.09) (70,864.09)

Budgetary Financing Sources:

Appropriations used $ 2,981,561.70 $ 2,981,561.70

Other Financing Sources (Non-Exchange):

Imputed financing 73,032.30 73,032.30 

Total Financing Sources 3,054,594.00 3,054,594.00

Net Cost of Operations 3,045,306.93 3,045,306.93

Net Change $ $ 9,287.07 $ 9,287.07

Cumulative Results of Operations $ $ (61,577.02) $ (61,577.02)

Unexpended Appropriations:

Beginning Balance $ 1,084,176.92 $ 1,084,176.92

Budgetary Financing Sources:

Appropriations received 3,250,000.00 3,250,000.00

Other adjustments (50,957.03) (50,957) 

Appropriations used (2,981,561.70) (2,981,561.70)

Total Budgetary Financing Sources 217,481.27 217,481.27

Total Unexpended Appropriations 1,301,658.19 1,301,658.19

Net Position $ $ 1,240,081.17 $ 1,240,081.17

THE NATIONAL COUNCIL ON DISABILITY

STATEMENT OF CHANGES IN NET POSITION

As Of And For The Years Ended September 30, 2017 and 2016

FY 2016 (PY)

 The accompanying notes are an integral part of these statements.

4
2017 2016

Budgetary Budgetary

BUDGETARY RESOURCES

Unobligated balance brought forward, Oct 1 $ 184,507.59 $ 253,092.31

Unobligated balance brought forward, Oct 1, adjusted 184,507.59 253,092.31

Recoveries of prior year unpaid obligations 241,727.75 388,156.33

Other changes in unobligated balance (+ or -) (28,633.58) (30,946.51)

Unobligated balance from prior year budget authority, net 397,601.76 610,302.13

Appropriations (discretionary and mandatory) 3,250,000.00 3,250,000.00

Total budgetary resources $ 3,860,302.13 3,647,601.76 $ 

STATUS OF BUDGETARY RESOURCES

New obligations and upward adjustments (total) (Note 11) $ 3,675,794.54 3,441,808.48 $ 

Unobligated balance, end of year:

Apportioned, unexpired account 12,278.81 52,825.94 

Unapportioned, unexpired accounts 135.53 135.53 

Unexpired unobligated balance, end of year 12,414.34 52,961.47 

Expired unobligated balance, end of year 193,378.94 131,546.12

Unobligated balance, end of year (total) 205,793.28 184,507.59

Total budgetary resources $ 3,860,302.13 3,647,601.76 $ 

CHANGE IN OBLIGATED BALANCE

Unpaid obligations:

Unpaid obligations, brought forward, Oct 1 $ 958,197.56 1,193,609.48 $ 

New obligations and upward adjustments 3,441,808.48 3,675,794.54

Outlays (gross) (-) (3,543,204.39) (3,052,226.29)

Recoveries of prior year unpaid obligations (-) (241,727.75) (388,156.33)

Unpaid obligations, end of year 850,485.82 1,193,609.48

Obligated balance, start of year (+ or -) 1,193,609.48 958,197.56

Obligated balance, end of year (+ or -) $ 850,485.82 $ 1,193,609.48

BUDGET AUTHORITY AND OUTLAYS, NET

Budget authority, gross (discretionary and mandatory) $ 3,250,000.00 3,250,000.00 $ 

Actual offsetting collections (discretionary and mandatory) (-) (12,805.88) (20,010.52)

Recoveries of prior year paid obligations (discretionary and mandatory) 12,805.88 20,010.52 

Budget authority, net (total) (discretionary and mandatory) 3,250,000.00 3,250,000.00

Outlays, gross (discretionary and mandatory) 3,543,204.39 3,052,226.29

Actual offsetting collections (discretionary and mandatory) (-) (12,805.88) (20,010.52)

Outlays, net (discretionary and mandatory) 3,530,398.51 3,032,215.77

Agency outlays, net (discretionary and mandatory) $ 3,032,215.77 3,530,398.51 $ 

THE NATIONAL COUNCIL ON DISABILITY

STATEMENT OF BUDGETARY RESOURCES

As Of And For The Years Ended September 30, 2017 and 2016

 The accompanying notes are an integral part of these statements.

5
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NATIONAL COUNCIL ON DISABILITY 

GENERAL FUND

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 comprised of a team of Presidential and Congressional appointees, an 

Executive Director appointed by the Chair, and a full-time professional staff. 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. 

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 by the Office of Management and Budget (OMB) 

in OMB Circular No. 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.” 
7 of 19 

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) 

Basis of Presentation – (Continued) 

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

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

Statement of Budgetary Resources. The balance sheet presents, as of September 30, 

2017, 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 in accordance with OMB 

Circular No. 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 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 July 2017. 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) 2017 and 2016, NCD is accountable for general fund appropriations and noyear 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. 
8 of 19 

Revenues and Other Financing Sources 

NCD receives substantially all 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 programs 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 7% of the employees’ basic 

pay to the plan. For FERS employees, NCD contributes an amount equal to 13.7% of 

the employees’ basic pay to the plan. For FERS-RAE and FRAE employees, NCD 

contributes an amount equal to 11.9% of the employees’ basic pay to the plan. 

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 
9 of 19 

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) 

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’ governmentwide, 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. 
10 of 19 

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 nonexpenditure 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 year-end 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 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. 
11 of 19 

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. 

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. 
12 of 19 

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) 

Net Position 

Net position consists of unexpended appropriations and cumulative results of 

operations. Unexpended appropriations represent amounts of budgetary authority to 

include unobligated or obligated balances not rescinded or withdrawn. Cumulative 

results of operations are 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). 

Funds from Dedicated Collections 

SFFAS 43 replaced SFFAS 27 and resulted in a significant change in the definition of 

what was previously known as "earmarked funding." SFFAS 43 states that funds 

from dedicated collections are financed by specifically identified revenues, provided to 

the government by non-federal sources, 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, benefits or 

purposes, and must be accounted for separately from the government’s general 

revenues. 

As of FY 2014 it was determined that NCD funding that previously was designated 

"earmarked" did not qualify under the new definition for "Funds 

from Dedicated Collections" and are not presented separately in these financial 

statements. 

NOTE 2 – FUND BALANCE WITH TREASURY 

All of NCD’s fund balance with treasury is coming from appropriations. No trust, 

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

annual fund, where each year is a new appropriation. This fund balance with treasury is 

a consolidated balance of one no-year fund and five annual funds (FY 2013, FY 2014, 

FY 2015, and FY 2016 and FY 2017). The annual fund for FY 2012 is cancelled and 

the remaining fund balance of $41,439.46 is given back to US Treasury during fiscal 

year 2017. 
13 of 19 

NOTE 2 – FUND BALANCE WITH TREASURY (CONTINUED) 

A. Fund Balance with Treasury 2017 2016

General Fund 1,056,279.10 1,378,117.07 

B. Status of Fund Balance with Treasury

1) Unobligated Balance

a) Available 72,278.81 52,825.94 

b) Unavailable 169,267.47 131,681.65 

 241,546.28 184,507.59 

2) Obligated Balance not yet Disbursed 814,732.82 1,193,609.48 

Total 1,056,279.10 1,378,117.07 

NOTE 3 – ADVANCES AND PREPAYMENTS 

Advances and Prepayments represents advances to Government Publishing Office 

Deposit Accounts.

2017 2016

Deferred 93,356.98 118,838.55 

Total 93,356.98 118,838.55 

NOTE 4 – ACCOUNTS RECEIVABLE, NET 

Accounts Receivable, Net from the Public represents the Accounts Receivable from 

current employees. NCD has historically collected any receivables due and thus has 

not established an allowance for uncollectible accounts. 

2017 2016

Accounts Receivable - With the Public 2,086.28 293.23 

NOTE 5 – LOANS RECEIVABLE, NET 

Loans Receivable, Net from the Public represents a Loan Receivable from a current 

employee. 

2017 2016

Loans Receivable - With the Public - 11,959.01 
14 of 19 

NOTE 6 - GENERAL PROPERTY, PLANT AND EQUIPMENT, NET 

NCD’s total cost, accumulated depreciation, and net book value for PPE for the years 

ending September 30, 2017 and 2016 are as follows. 

2017 Equipment Furniture 

& Fixtures 

Software Software in 

Development 

Total 

Cost $15,452.00 $0.00 $0.00 $0.00 $15,452.00 

Accum. 

Depr. ($3,775.26) $0.00 $0.00 $0.00 ($3,775.26)

Net Book 

Value $11,676.74 $0.00 $0.00 $0.00 $11,676.74 

2016 Equipment Furniture 

& Fixtures 

Software Software in 

Development 

Total 

Cost $15,452.00 $0.00 $0.00 $0.00 $15,452.00

Accum. 

Depr. 

($570.68) $0.00 $0.00 $0.00 ($570.68) 

Net Book 

Value 

$14,881.32 $0.00 $0.00 $0.00 $14,881.32
15 of 19 

NOTE 7 – LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

Liabilities of the NCD are classified as liabilities covered or not covered by budgetary 

resources. As of September 30, 2017, the NCD had liabilities covered by budgetary 

resources of $400,595.05 and liabilities not covered by budgetary resources of 

$83,941.25. As of September 30, 2016, the NCD had liabilities covered by budgetary 

resources of $195,297.43 and liabilities not covered by budgetary resources of 

$88,710.58. 

2017 2016

Intragovernmental

Accounts Payable 2,000.00 $ 

Employer Contributions and Payroll Taxes Payable 11,098.73 $ 13,383.81 $ 

Total Intragovernmental 13,098.73 13,383.81 

With the Public

Accounts Payable 334,831.13 132,730.46 

Accrued Funded Payroll and Leave 51,118.40 47,260.80 

Employer Contributions and Payroll Taxes Payable 1,546.79 1,922.36 

Unfunded Leave 83,941.25 88,710.58 

Total With the Public 471,437.57 270,624.20 

Total Liabilities 484,536.30 $ 284,008.01 $ 

Total liabilities not covered by budgetary resources 83,941.25 $ 88,710.58 $ 

Total liabilities covered by budgetary resources 400,595.05 195,297.43 

Total Liabilities 484,536.30 $ 284,008.01 $ 
16 of 19 

NOTE 8 – OTHER LIABILITIES 

Other liabilities with the public for the year ended September 30, 2017 and 2016 consist 

of Accrued Funded Payroll and Leave, Employer Contributions and Payroll Taxes 

Payable, and Unfunded Leave in the amounts shown below. Other Intragovernmental 

liabilities consist of Employer Contributions and Payroll Taxes Payable. 

Non-Current Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable $ - $ 11,098.73 $ 11,098.73 

Total Intragovernmental - 11,098.73 11,098.73 

Liabilities with the Public

Accrued Funded Payroll & Leave 51,118.40 51,118.40 

Employer Contributions and Payroll Taxes Payable - 1,546.79 1,546.79 

Unfunded Leave 83,941.25 83,941.25 

Total Liabilities with the Public 83,941.25 52,665.19 136,606.44 

Total Other Liabilities $ 83,941.25 $ 63,763.92 $ 147,705.17 

Non-Current Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable $ - $ 13,383.81 $ 13,383.81 

Total Intragovernmental - 13,383.81 13,383.81 

Liabilities with the Public

Accrued Funded Payroll & Leave 47,260.80 47,260.80 

Employer Contributions and Payroll Taxes Payable - 1,922.36 1,922.36 

Unfunded Leave 88,710.58 88,710.58 

Total Liabilities with the Public 88,710.58 49,183.16 137,893.74 

Total Other Liabilities $ 88,710.58 $ 62,566.97 $ 151,277.55 

FY 2016

FY 2017
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Fiscal Year Ended Minimum Lease Payments

September 30, 2018 282,076 

September 30, 2019 285,100 

September 30, 2020 288,215 

September 30, 2021 257,804 

 1,113,195

NOTE 9 - LEASES

Entity as Lessee: 

Operating Leases 

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

entered on August 29, 2012 for a period of 10-years retroactive August 22, 2011 

continuing through August 21, 2021. The lease and 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: 

NOTE 10 – COSTS AND EXCHANGE REVENUE 

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

Total Total 

2017 2016

Program A

Intragovernmental costs 816,112.39 775,846.84 

Public costs 3,002,399.98 2,269,460.09 

Total Program A costs 3,818,512.37 3,045,306.93 

Total Program A net costs 3,818,512.37 3,045,306.93 

NOTE 11 – APPORTIONMENT CATEGORIES OF NEW OBLIGATIONS AND 

UPWARD ADJUSTMENTS: DIRECT VS. REIMBURSABLE OBLIGATIONS 

Obligations for NCD are category B, which is the amount of direct obligations incurred 

against amounts apportioned under category B on the latest SF 132. 

2017 2016

Direct

Category B 3,441,808.48 3,675,794.54 

 3,675,794.54 3,441,808.48 
18 of 19 

NOTE 12 – UNDELIVERED ORDERS AT THE END OF THE PERIOD

The amount of NCD’s undelivered orders was $567,494.75 and $1,117,150.60 as of 

September 30, 2017 and 2016, respectively. 

NOTE 13 – EXPLANATION OF DIFFERENCES BETWEEN THE SBR AND THE 

BUDGET OF THE US GOVERNMENT 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, requires an explanation of material 

differences between budgetary resources available, the status of those resources and 

outlays as presented in the Statement of Budgetary Resources to the related actual 

balances published in the Budget of the United States Government (Budget). The 

Budget that will include FY 2017 actual budgetary execution information is scheduled 

for publication in February 2018, which will be available through OMB’s website at 

http://www.whitehouse.gov/omb. Accordingly, information required for such disclosure 

is not available at the time of publication of these financial statements. 

Balances reported in the FY 2016 SBR and the related President’s Budget reflected the 

following: 

FY2016

Budgetary 

Resources

New Obligations 

& Upward 

Adjustments 

(Total)

Distributed 

Offsetting 

Receipts Net Outlays

Statement of Budgetary Resources 3,860,302.13 $ 3,675,794.54 $ - $ 3,032,215.77 $ 

Budget of the U.S. Government 3,000,000.00 3,000,000.00 - $ 3,000,000.00 

Difference 860,302.13 $ 675,794.54 $ - $ 32,215.77 $ 

The difference between the Statement of Budgetary Resources and the Budget of the 

United States Government for budgetary resources, obligations incurred and net outlays 

are primarily due to rounding. A portion of the difference in the budgetary resources is 

due to expired unobligated balances being reported in the Statement of Budgetary 

Resources but not in the Budget of the United States Government.

Unpaid

Undelivered

Orders

Paid

Undelivered

Orders

Total

Undelivered

Orders

2017 449,890.77 $ 93,356.98 $ 543,247.75 $ 

2016 998,312.05 $ 118,838.55 $ 1,117,150.60 $ 
19 of 19 

NOTE 14 – RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

Budgetary resources obligated are obligations for personnel, goods, services, benefits, 

etc. made by the NCD in order to conduct operations or acquire assets. Other (i.e., 

non-budgetary) financing resources are also utilized by the NCD in its program 

(proprietary) operations. For example, spending authority from offsetting collections 

and recoveries are financial resources from the recoveries of prior year obligations (e.g., 

the completion of a contract where not all the funds were used) and refunds or other 

collections (i.e., funds used to conduct operations that were previously budgeted). An 

imputed financing source is recognized for future federal employee benefits costs 

incurred for the NCD employees that will be funded by OPM. Changes in budgetary 

resources obligated for goods, services, and benefits ordered by not yet provided 

represents the difference between the beginning and ending balances of undelivered 

orders (i.e., good and services received during the year based on obligations incurred 

the prior year represent a cost of operations not funded from budgetary resources). 

Resources that finance the acquisition of assets are budgetary resources used to 

finance assets and not cost of operations (e.g., increases in accounts receivables or 

capitalized assets). Financing sources yet to be provided represents financing that will 

be provided in future periods for future costs that are recognized in determining the net 

cost of operations for the present period. Finally, components not requiring or 

generating resources are costs included in the net cost of operations that do not require 

resources (e.g., depreciation and amortized expenses of assets previously capitalized).

 

A reconciliation between budgetary resources obligated and net cost of operations (i.e., 

providing an explanation between budgetary and financial (proprietary) accounting) is 

as follows (note: in prior years this information was presented as a separate financial 

statement (the Statement of Financing): 

2017 2016

Budgetary Resources Obligated 3,441,808.48 3,675,794.54 

Spending Authority from Recoveries and Offsetting 

Collections (408,166.85) (254,533.63) 

Imputed Financing from Costs Absorbed by Others 48,733.46 73,032.30 

Changes in Budgetary Resources Obligated for Goods, 

Services, and Benefits Ordered but Not Yet Provided (286,065.99) 573,902.85 

Resources that Finance the Acquisition of Assets 10,165.96 (8,738.22) 

Increase in Annual Leave Liability (4,769.33) (1,119.53) 

Depreciation and Amortization 3,204.58 570.68 

Net Cost of Operations 3,818,512.37 3,045,306.93 

NOTE 15 – SUBSEQUENT EVENTS 

In preparing these financial statements, management has evaluated events and 

transactions for potential recognition or disclosure through January 30, 2018, which is 

the date the financial statements were available to be issued.