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TABLE OF CONTENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.1 MESSAGE FROM THE CHAIR........................................................................................................................... 1

1.2 OVERVIEW.......................................................................................................................................................... 3 

1.3 PERFORMANCE GOALS, OBJECTIVES, AND RESULTS ..............................................................................10

1.4 ANALYSIS OF THE FINANCIAL STATEMENTS............................................................................................ 15

FINANCIAL HIGHLIGHTS................................................................................................16

COMPOSITION OF AND TRENDS IN ASSETS............................................................................................... 17 

COMPOSITION OF LIABILITIES ..................................................................................................................... 18 

TRENDS IN LIABILITIES .................................................................................................................................. 19 

COMPOSITION OF AND TRENDS IN NET POSITION ..................................................................................20

COMPOSITION OF AND TRENDS IN FINANCING SOURCES ....................................................................20

COMPOSITION OF FY 2023 NET COST OF OPERATIONS........................................................................... 21 

TRENDS IN NET COST OF OPERATIONS ...................................................................................................... 22 

COMPOSITION OF AND TRENDS IN SELECTED BUDGETARY INFORMATION................................... 22 

1.5 ANALYSIS OF SYSTEMS, CONTROLS, AND LEGAL COMPLIANCE ........................................................ 25

1.6 FORWARD-LOOKING INFORMATION...........................................................................................................30

FINANCIAL SECTION

2.1 MESSAGE FROM THE CHIEF FINANCIAL OFFICER................................................................................... 31 

2.2 FY 2023 AUDITOR’S REPORT.......................................................................................................................... 33

2.3 FY 2023 FINANCIAL STATEMENTS AND NOTES......................................................................................... 41

OTHER INFORMATION

3.1 SUMMARY OF FINANCIAL STATEMENT AUDIT AND MANAGEMENT ASSURANCES....................... 61

3.2 PAYMENT INTEGRITY INFORMATION ACT REPORTING.........................................................................62

3.3 INSPECTOR GENERAL’S ASSESSMENT OF MANAGEMENT AND PERFORMANCE CHALLENGES.. 63 

 

Fiscal Year 2023 Cover Page Photo

Savannah River Site (SRS) pictured on the cover and located in Aiken, South Carolina, is a facility originally constructed to produce the 

basic materials for nuclear weapons. After the end of the Cold War, the site is primarily focused on environmental stewardship, 

environmental cleanup, waste management and disposition of nuclear materials (Source: https://www.dnfsb.gov/doe-sites/savannahriver-site). 
 1 

Management’s Discussion and Analysis 

1.1 Message from the Chair

 I am proud to present the Agency Financial Report (AFR) for 

the Defense Nuclear Facilities Safety Board (Board or DNFSB) 

for Fiscal Year (FY) 2023. The report provides a transparent 

and in-depth review of the FY 2023 strategic accomplishments, 

as well as key financial and high-level performance information 

on our resource utilization. The mission of the Board is to 

provide independent analysis, advice, and recommendations to 

the Secretary of Energy to inform the Secretary, in the role of 

the Secretary as operator and regulator of the defense nuclear 

facilities of the Department of Energy (DOE), in providing 

adequate protection of public health and safety at such defense 

nuclear facilities, including with respect to the health and safety 

of employees and contractors at such facilities. The Board is required by statute to review and 

evaluate the content and implementation of standards relating to the design, construction, 

operation, and decommissioning of DOE defense nuclear facilities, and to review the design of 

new DOE defense nuclear facilities.

DNFSB’s foundation is built on the safety expertise of its Board Members and its staff in 

support of the Board’s mission. The DNFSB workforce supports the agency’s unique mission 

within the Federal government, providing safety oversight of defense nuclear facilities to protect 

public health and safety, including to the workers and contractors at those sites. I am happy to 

report that at the end of 4th Quarter FY 2023, the agency has 116 full-time equivalent (FTE) 

staff. The DNFSB continues to hire additional staff towards its statutory ceiling of 130 FTE in 

an effort to maintain effective nuclear safety oversight of the growing defense nuclear complex. 

DNFSB is in the process finalizing its first human capital plan to guide workforce development, 

recruiting and retention practices, and succession planning. 

The Board prioritizes its safety oversight activities based on risk to the public and workers, 

types and quantities of nuclear materials, and hazards of the operations involved. In FY2023, 

the Board continued its safety oversight in four general areas: (1) DOE’s nuclear safety 

requirements and standards; (2) the integration of safety into the design and construction of new 

defense nuclear facilities and major modifications of existing facilities; (3) the safety of 

operations at existing defense nuclear facilities; and (4) DOE’s management and oversight of 

the defense nuclear complex. In the 1st Quarter of FY 2023, the Board conducted a public 

hearing to gather information on DOE’s activities at Los Alamos National Laboratory. In 

addition to the dozens of in-person attendees, the remotely available live-stream videos for each 

of the hearing sessions had between 170 and 270 unique viewers. The Board conducted 

discussions with senior management from the Office of Environmental Management and the 

National Nuclear Security Administration (NNSA) to understand plans to remove legacy 

transuranic waste, nuclear safety risks NNSA has accepted at the Plutonium Facility, and the 

state of planned safety improvements to safety system infrastructure and safety programs. 
 2 

DNFSB is committed to ensuring the appropriate use of public resources in its trust. I am 

pleased to report that, based on Federal Managers’ Financial Integrity Act (FMFIA) assessments 

and the recommendation from our Executive Committee on Internal Controls, I have concluded 

that DNFSB is in compliance with FMFIA, with no material weakness in the Board’s internal 

controls, and that the financial and performance data published in this report are complete and 

reliable. The FY 2023 AFR includes the results of the independent audit of the DNFSB’s FY 

2023 financial statements, which I am pleased to note resulted in an unmodified opinion. 

The Board remains committed to its nuclear safety mission at our nation’s defense nuclear 

facilities. I am honored to lead our dedicated employees, whose standard of excellence in 

carrying out this important mission mirrors the best of American excellence, values, and ideals. 

Joyce Connery 

Chair

November 30, 2023 
MANAGEMENT’S DISCUSSION AND ANALYSIS 3 

1.2 Overview

This Agency Financial Report (AFR) summarizes the Defense Nuclear Facilities Safety Board’s 

(Board or DNFSB) oversight activities and associated resource expenditures for the period from 

October 1, 2022, through September 30, 2023, (Fiscal Year (FY) 2023). This report was 

prepared pursuant to the requirements of the Accountability of Tax Dollars Act of 2002 and the 

Office of Management and Budget (OMB) Circular A-136, Financial Reporting Requirements, 

which provide instructions on the preparation of an AFR. In line with past practices, the Board 

has separated its financial and performance reporting. This document is the Board’s FY 2023 

AFR. The Board’s FY 2023 Annual Performance Report (APR) will be published with the 

Board’s FY 2025 Congressional Budget Justification in February 2024 and will align with the 

Board’s calendar year 2023 Annual Report to Congress. 

The Board’s performance objectives for FY 2023 and FY 2024 will be included in its FY 2025 

Congressional Budget Justification in accordance with the requirements of OMB Circular A-11.

Agencies are also required to develop performance budgets with annual performance objectives 

that show progress toward achievement of the goals and objectives in their strategic plans. The

Board’s 33rd Annual Report to Congress, published March 23, 2023, emphasized the Board’s 

achievements from calendar year 2022. It is available through the following link: 

https://www.dnfsb.gov/sites/default/files/document/27876/33rd%20Annual%20Report%20to%20

Congress%20%5B2023-100-015%5D.pdf. 

As a steward of government resources, DNFSB prepares its AFR every fiscal year to convey its 

financial position and performance results to taxpayers. It demonstrates commitments to the 

DNFSB mission, accountability, and stewardship over resources entrusted to DNFSB by the 

President of the United States, Congress, and the public. The report includes the following 

sections:

 Management’s Discussion and Analysis - A message from the Chair of the Board as well 

as a narrative composed of the overview, mission, and organization of DNFSB; a high-level

discussion of performance goals and objectives; an analysis of the financial statements; an

analysis of systems, controls, and legal compliance; and forward-looking information. 

 Financial Section - This section includes the report of the independent auditors, principal 

financial statements, and associated notes. Additionally, the Financial Section is composed 

of the message from the Chief Financial Officer.

 Other Information – The final section includes the inspector general’s assessment of 

management and performance challenges. Additionally, it includes the summary of the 

financial statement audit and management assurance.
MANAGEMENT’S DISCUSSION AND ANALYSIS 4

1.2.1 Mission

Under the Atomic Energy Act (AEA), 42 U.S.C. § 2286 et seq., the Board is charged with 

providing independent safety oversight of the Department of Energy’s (DOE) defense nuclear 

facilities complex—a complex that has served to design, manufacture, test, maintain, and 

decommission nuclear weapons, as well as other national security priorities. The act mandates 

that the Board reviews the content and implementation of DOE standards, facility and system 

designs, and events and practices at DOE defense nuclear facilities to provide independent 

analysis, advice, and recommendations to inform the Secretary of Energy in providing adequate 

protection of public health and safety at DOE defense nuclear facilities.

Congress established the Board in 1988 as an

independent establishment in the executive branch of 

government, answerable to the President and subject 

to congressional oversight and direction. Five Board 

members, appointed by the President and subject to 

confirmation by the Senate, are required to be 

“respected experts in the field of nuclear safety with a 

demonstrated competence and knowledge relevant to 

the independent investigative and oversight functions 

of the Board.” The Board is a collegial agency, 

meaning that its actions are typically determined by 

the Board as a whole. The Board’s Chair serves as 

the chief executive officer and spokesperson, 

performing these functions subject to Board policies.

The Board’s mission, as written in the legislation, is 

“to provide independent analysis, advice, and recommendations to the Secretary of Energy to 

inform the Secretary, in the role of the Secretary as operator and regulator of the defense nuclear 

facilities of the DOE, in providing adequate protection of public health and safety at such 

defense nuclear facilities, including with respect to the health and safety of employees and 

contractors at such facilities.” As noted above, the Board’s jurisdiction covers DOE’s “defense 

nuclear facilities” – a term defined in the Atomic Energy Act of 1954, as amended. The Board 

is only concerned with facilities operated by DOE that are: (1) covered by the Atomic Energy 

Act; and (2) have a function related to national defense. The phrase “defense nuclear facilities” 

thus excludes two major classes of government‐regulated nuclear facilities: DOE’s nuclear 

projects that are civilian in purpose, and commercial nuclear facilities regulated by the Nuclear 

Regulatory Commission (NRC). The Board’s oversight jurisdiction also does not extend to the

U.S. Navy’s nuclear propulsion program or to environmental hazards regulated by other federal

Opening the process gas filter on the 

Integrated Waste Treatment Unit at INL.

(Source: 33rd Annual Report to Congress)
MANAGEMENT’S DISCUSSION AND ANALYSIS 5

and state agencies. Section 1.2.3 lists the major DOE sites that the Board oversees.

The Board’s oversight mission covers all phases 

in the life of a defense nuclear facility: design, 

construction, operation, and decommissioning. 

Congress granted the Board a suite of statutory 

tools to carry out its mission. Principal among 

these is the formal Board recommendation issued 

to the Secretary. The statute requires the 

Secretary to either accept or reject the Board’s 

recommendation, and in the case of an 

acceptance, to write and execute an 

implementation plan. This process takes place on 

the public record. In cases involving an 

“imminent or severe threat” to public health and 

safety, the statute requires the Board to also send its 

recommendation to the President, who makes the 

final decision on actions to be taken, and to

the Secretary of Defense for information. In addition to recommendations, the Board is 

empowered to hold public hearings (and subpoena witnesses, if necessary), conduct 

investigations, obtain information and documents needed for the Board’s work from DOE and 

its contractors, and review and comment on DOE requirements and standards affecting safety at 

defense nuclear facilities. DOE is required by law to grant the Board “prompt and unfettered 

access to such facilities, personnel, and information as the Board considers necessary to carry 

out its responsibilities.” Finally, the statute authorizes the Board to seek assistance from other 

federal agencies (such as NRC) and from organizations outside the government (such as the 

National Academies of Sciences, Engineering, and Medicine), as needed.

1.2.2 The Board’s Legislative Mandate

The Board’s specific functions are delineated in its enabling statute at 42 United States Code 

(USC) § 2286a(b):

The Board shall review and evaluate the content and implementation of the 

standards relating to the design, construction, operation, and decommissioning 

of defense nuclear facilities of the Department of Energy (including all 

applicable Department of Energy orders, regulations, and requirements) at 

each Department of Energy defense nuclear facility. The Board shall 

recommend to the Secretary of Energy those specific measures that should be 

adopted to ensure that public health and safety are adequately protected. The 

Board shall include in its recommendations any necessary changes in the 

content and implementation of such standards, as well as matters on which 

additional data or additional research are needed.

Annular Core Research Reactor fuel element 

rack lifted over the reactor pool. (Source: 33rd

Annual Report to Congress)
MANAGEMENT’S DISCUSSION AND ANALYSIS 6

The Board shall investigate any event or practice at a Department of Energy 

defense nuclear facility that the Board determines has adversely affected, or 

may adversely affect, public health and safety.

The Board shall have access to and may systematically analyze design and 

operational data, including safety analysis reports, from any Department of Energy 

defense nuclear facility.

The Board shall review the design of a new Department of Energy defense 

nuclear facility before construction of such facility begins and shall recommend 

to the Secretary, within a reasonable time, such modifications of the design as 

the Board considers necessary to ensure adequate protection of public health 

and safety. During the construction of any such facility, the Board shall 

periodically review and monitor the construction and shall submit to the 

Secretary, within a reasonable time, such recommendations relating to the 

construction of that facility as the Board considers necessary to ensure adequate 

protection of public health and safety. An action of the Board, or a failure to act, 

under this paragraph may not delay or prevent the Secretary of Energy from 

carrying out the construction of such a facility.

The Board shall make such recommendations to the Secretary of Energy with 

respect to Department of Energy defense nuclear facilities, including operations of 

such facilities, standards, and research needs, as the Board determines are 

necessary to ensure adequate protection of public health and safety. In making its 

recommendations, the Board shall consider, and specifically assess, risk 

(whenever sufficient data exists), and the technical and economic feasibility of 

implementing the recommended measures.

 

 Glovebox Line 1 of the Recovery Glovebox Line 

(Source: 33rd Annual Report to Congress)
MANAGEMENT’S DISCUSSION AND ANALYSIS 7 

1.2.3 Major DOE Sites Subject to Board Jurisdiction

Site Location Operations Website

Hanford Site Richland, 

Washington

Management and treatment of 

radioactive wastes; facility 

decommissioning

http://www.hanford.gov

Idaho 

National 

Laboratory

45 miles west of 

Idaho Falls, 

Idaho

Storage and processing of radioactive

waste

http://www.inl.gov

Lawrence 

Livermore 

National 

Laboratory

Livermore, 

California

Research to support the nuclear 

weapons arsenal

https://www.llnl.gov

Los 

Alamos 

National 

Laboratory

Los Alamos, 

New Mexico

Research to support the nuclear 

weapons arsenal; manufacturing of

nuclear weapon components; 

disposition of legacy

transuranic waste

http://www.lanl.gov

Nevada 

National 

Security 

Site

65 miles northwest 

of Las Vegas, 

Nevada

Disposition of damaged nuclear

weapons; critical and subcritical 

experiments; waste management

http://www.nnss.gov

Pantex

Plant

17 miles northeast of 

Amarillo, Texas

Maintenance of the US nuclear 

stockpile 

http://www.pantex.com

Sandia National 

Laboratories

Albuquerque, 

New Mexico and 

Livermore, 

California

Nuclear research;support

for the weapons stockpile 

maintenance program 

http://www.sandia.gov

Savannah 

River Site

Aiken, 

South 

Carolina

Tritium extraction, recycling, and

storage; management and

treatment of radioactive wastes;

nuclear materials storage and

disposition; research and

development

http://www.srs.gov

Waste

Isolation 

Pilot Plant

26 miles east of 

Carlsbad, New 

Mexico

Disposal of transuranic waste in 

underground repository

http://www.wipp.energy.gov

Y‐12

National 

Security 

Complex/ Oak 

Ridge National 

Laboratory

Oak Ridge, 

Tennessee

Y-12: Manufacturing and 

surveillance of nuclear weapons 

components; processing of 

weapons‐grade uranium

Oak Ridge: Energy research; 

treatment and disposal of 

radioactive wastes

http://www.y12.doe.gov

http://www.ornl.gov 
MANAGEMENT’S DISCUSSION AND ANALYSIS 8 

1.2.4 Achieving our Mission and Vision 

Mission

The mission of the Board shall be to provide independent analysis, advice, and recommendations to 

the Secretary of Energy to inform the Secretary, in the role of Secretary as operator and regulator of 

the defense nuclear facilities of the DOE, in providing adequate protection of public health and

safety at such defense nuclear facilities, including with respect to the health and safety of employees 

and contractors at such facilities.

Vision

To secure a safe future for the American people through proven technical excellence and 

transparency that inspires public confidence as the defense nuclear enterprise evolves. 

Values

• Integrity

o Interactions among DNFSB staff members are open, honest, and sincere.

o Relationships are based on openness and trust.

o All aspects of work exhibit the highest ethical standards.

o Individuals take personal responsibility for actions.

o Personnel are accountable to each other for the highest standards of behavior.

o Commitments are clearly defined and fulfilled.

• Respect

o Personnel treat each other with mutual respect.

o Diverse points of view are valued and respected.

o Everyone is treated fairly and given an opportunity to contribute.

o Different opinions on issues are heard and respected.

o The Board’s decisions are heard and respected.

• Excellence

o Personnel exhibit a passion for success, both individual and collective.

o Personnel strive to be the best in achieving DNFSB’s goals.

o Excellence is a daily pursuit in all aspects of performance.

• Independence

o DNFSB’s mission is not compromised by the influence of others—it relies on the facts as 

presented and the highest level of professional judgment. 

o Independence does not imply isolation, DNFSB seeks all facts and opinions openly, and 

weighs them before arriving at conclusions. 

o DNFSB bases its decisions on objective, unbiased assessments of all information, and fully 

documents its conclusions. 

o DNFSB performs its duties publicly and transparently.
MANAGEMENT’S DISCUSSION AND ANALYSIS 9 

1.2.5 Organizational Structure

The five-member Board leads DNFSB in accomplishing its mission and determines actions 

regarding the safety aspects of the design, construction, operation, and decommissioning of 

DOE’s defense nuclear facilities.

CHAIR

Ms. Joyce L. Connery

(Term Expiration 

10/18/2024)

VICE CHAIR

Mr. Thomas A. Summers

(Term Expiration 

10/18/2025)

Board Member Board Member Board Member

Ms. Jessie H. Roberson 

(Term Expiration 

10/18/2023)

Vacant Vacant
MANAGEMENT’S DISCUSSION AND ANALYSIS 10 

1.2.6 Organizational Chart

The Board is statutorily capped at 130 federal full-time equivalent (FTE) employees and is 

currently arranged in four offices under the five-member Board. The Office of the Executive 

Director of Operations (OEDO) oversees DNFSB’s administrative and technical operations, 

provides direct support to the Board, directs external affairs, and leads DNFSB’s Equal 

Employment Opportunity program, among other duties. Most of the agency FTEs are assigned 

to the Office of the Technical Director (OTD), which carries out the safety oversight mission of 

the Board. The Office of the General Manager (OGM) is responsible for the major 

administrative functions of DNFSB, such as human resources, information technology, 

contracting, and finance. The Office of General Counsel (OGC) manages DNFSB’s

compliance with legal requirements and provides direct legal support to the Board, as well as to 

DNFSB’s other offices.

1.3 Performance Goals, Objectives, and Results

Continuous information sharing among the Board’s matrixed technical staff supports the 

interrelationship of all strategic goals. The Board’s staff has been organized specifically to 

achieve DNFSB’s performance goals and to execute its strategic plan and annual performance 

plans. Using a matrix form of organization, the Board avoids the need to establish layers of 

middle management that divert staff resources from performing health and safety reviews. The 

Board uses the interrelated technical groups staffed with technical specialists having the 

education, expertise, and experience commensurate with their designated oversight 

Board

Office of the

Executive 

Director of 

Operations

Office of the

General Counsel

Office of the

General Manager

Office of the

Technical Director
MANAGEMENT’S DISCUSSION AND ANALYSIS 11 

assignments. Depending on the urgency of an issue, the Board’s flexibility enables 

reassignment of resources among groups as necessary. Details and further discussion will be 

published in the FY 2023 Annual Performance Report to be issued with the FY 2025 

Congressional Budget Justification. 

FY 2022 – 2026 Strategic Plan and Accomplishments

In FY 2022, the Board amended its strategic plan. For FY 2022 and FY 2023, the Board

measured its results through appropriate quantitative and qualitative benchmarks and 

outcomes. 

Strategic Goal 1: Provide proactive and independent safety oversight of the defense nuclear 

complex.

Strategic Objective 1.1 Strategic Objective 1.2 Strategic Objective 1.3

Complete timely, highquality safety reviews that 

identify and analyze safety 

issues and best practices, 

and search for similar 

challenges complex-wide.

Develop and issue advice 

and recommendations 

designed to ensure safety 

and employ best practices 

within the defense nuclear 

complex.

Provide robust field 

oversight of facilities and 

projects across the 

defense nuclear complex.

Accomplishments

The DNFSB continued a principal review, Implementation of Aging Management Programs for 

Safety Systems and Supporting Infrastructure, in FY 2023. The primary objective of the review 

is to evaluate the implementation of aging management programs at defense nuclear facilities 

located at Pantex Plant, Los Alamos National Laboratory (LANL), Y-12 National Security 

Complex, Savannah River Site (SRS), and Hanford Site. During FY 2023, DNFSB completed 11 

safety reviews focused on DOE Environmental Management (DOE-EM) defense nuclear 

facilities, 15 safety reviews focused on National Nuclear Security Administration (NNSA) 

defense nuclear facilities, six cross-cutting safety reviews, and four safety reviews focused on 

defense nuclear projects. 

During FY 2023, the staff provided a total of 18 letters with staff reports or technical content to 

the Board, each of which provided a detailed basis for identified safety issues. Of the reports 

provided to the Board, four contained complex-wide or cross-cutting safety issues. 

During FY 2023, Resident Inspector (RI) positions were covered approximately 83 percent of 

the time through permanent coverage. The RIs conducted seven focus area reviews in FY 2023 
MANAGEMENT’S DISCUSSION AND ANALYSIS 12 

looking for commonalities across the complex. Topics included contract performance fees, 

control of equipment status, fire barriers, fire system inspections and testing, operator aids, 

procedure compliance, and safety system assessments. 

Strategic Goal 2: Enhance transparency of ongoing agency initiatives and the state of safety 

within the defense nuclear complex. 

Strategic Objective 2.1 Strategic Objective 2.2

Proactively sustain sound 

working relationships with 

relevant governmental and 

non-governmental entities.

Improve timely 

dissemination of 

information about the 

Board’s priorities and 

conclusions regarding the 

state of safety at defense 

nuclear facilities.

Accomplishments

During FY 2023, DNFSB staff engaged at the senior staff level with the Department of Energy 

including having weekly standing meetings between the Departmental Representative and the 

DNFSB Technical Director and Deputy Technical Director. Additionally, technical staff 

leadership held bi-weekly and periodic meetings with senior staff from the Office of 

Environmental Management, Office of Environment, Health, Safety, and Security, Office of 

Enterprise Assessments, and the National Nuclear Security Administration. 

During FY 2023, DNFSB reached out quarterly or more regularly to offer briefings to key 

congressional stakeholders. Staff hosted eight briefings with congressional staff and 

committees. These briefings were to the staffs of the House and Senate Armed Services 

Committees, the House and Senate Appropriations Committees and the Senate Committee on 

Homeland Security & Governmental Affairs. 

DNFSB conducted outreach and met with interest groups during FY 2023. DNFSB conducted 

at least nine interactions with public groups. These included Board Member and staff 

discussions with the Hanford Advisory Board, SRS Watch, Citizens for Nuclear Technology 

Awareness, Los Alamos Study Group, Nuclear Watch New Mexico, Concerned Citizens for 

Nuclear Safety, Honor our Pueblo Existence, Tewa Women United, Nevada Environmental 

Management Site-Specific Advisory Board, and the Oak Ridge Environmental Peace Alliance 

to hear about their safety concerns and inform them of Board activities and issues. DNFSB 

staff also responded to inquiries related to activities at various DOE sites.

Reports to Congress were published to the Board’s public website within one week 100 percent 

of the time. Resident Inspector weekly reports and Cognizant Engineer monthly reports were 

published to the Board’s public website within four weeks 100 percent of the time. DNFSB

issued 5 press releases in FY 2023. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 13 

Strategic Goal 3: Develop and maintain an outstanding workforce to achieve DNFSB’s 

mission.

Strategic Objective 3.1 Strategic Objective 3.2 Strategic Objective 3.3

Cultivate an agile workforce 

with the skills necessary to 

meet the mission.

Use professional 

development and training 

to accomplish the mission 

efficiently and effectively.

Ensure the agency recruits 

from a diverse, qualified 

group of potential 

applicants to secure and

maintain a high-performing 

workforce drawn from all 

segments of U.S. society.

Accomplishments

DNFSB’s Division of Human Resources (DHR) developed a detailed proposed Agency Human 

Capital Plan (HCP) incorporating cross-agency input and provided the draft HCP to the Board 

for its consideration. The HCP includes strategies on succession planning, workforce 

development, career pathing, and valuing diverse talents applicable to each office. The plan will 

be completed in FY 2024. 

DNFSB successfully reached 116 FTE in FY 2023, which was 97 percent of the staffing level 

approved by the Board. The agency established a multi-year staffing plan that identifies positions

that will be lost due to attrition and new positions that will posture the DNFSB to fully execute 

the mission. The multi-year staffing plan aligns with the DNFSB’s current work plan and fiveyear budget outlook to ensure staffing will meet mission needs.

In FY 2023, the performance measure of achieving a 90% or higher rate for DNFSB employees 

establishing or updating their individual development plans by July 31, 2023, was successfully 

achieved. DNFSB efforts for training and development for career pathing continue to progress. 

No curriculum was developed for new supervisors, but a core curriculum and training portal for 

the DNFSB Orbit site is under development with a curriculum aligned to OPM recommended 

supervisor training. 

DNFSB conducted in-person recruiting at the Rochester Institute of Technology (RIT) and 

RIT’s National Technical Institute for the Deaf in effort to recruit qualified candidates who 

have disabilities. DNFSB conducted Schedule A hiring authority training for all hiring 

managers to increase awareness and use of hiring pipelines for persons with disabilities. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 14 

Strategic Goal 4: Maximize DNFSB’s performance by pursuing excellence in DNFSB’s 

culture and operations. 

Strategic Objective 4.1 Strategic Objective 4.2

Pursue efficiency through 

continuous improvement of 

internal policies and 

procedures through testing 

and evaluation.

Establish and maintain a 

culture that encourages 

teamwork and innovation 

across DNFSB in 

accordance with core 

values.

Strategic Objective 4.3 Strategic Objective 4.4

Strengthen operational 

performance by 

modernizing DNFSB 

processes and associated 

infrastructure.

Conduct ongoing 

communications to 

reinforce the commitment 

of all employees to 

diversity, equity, 

inclusion, and 

accessibility.

Accomplishments

DNFSB staff updated three Operating Procedures, as well as one Notice during FY 2023. Staff 

work continues on several directives and supplementary documents which will be updated in the 

coming year. 

DNFSB’s core values were integrated into the two-day new employee orientation. 

DNFSB continued to make significant progress with improving the security of the DNFSB’s IT 

Infrastructure and systems. The agency is on schedule to meet the requirements of the Executive 

Order, Presidential memorandum M-2209, Moving the U.S. Government Toward Zero Trust 

Cybersecurity Principles. DNFSB identified and selected an enterprise resource planning 

system as well as an automated human resource system that will manage the day-to-day DNFSB 

business activities and streamline human resources functions. The agency is on-target for its 

transition schedule for the enterprise resource planning. 

A new Equal Employment Opportunity Directive and Operating Procedure were drafted and 

will be completed in FY 2024. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 15 

1.4 Analysis of the Financial Statements 

1.4.1 Overall Financial Condition and Financial Management

As of September 30, 2023, the financial condition of the Board was satisfactory with sufficient funds 

to meet program needs, and the Board exercised adequate control of the funds needed to conduct its 

health and safety oversight mission and ensure obligations did not exceed budget authority.

No financial management issues have arisen as of September 30, 2023, nor are there any anticipated 

financial risks expected to occur during FY 2024. 

1.4.2 Summary of Financial Results, Position, and Condition

The Board uses an economies-of-scale strategy for obtaining needed administrative support 

services, in that its goal is a proportionate saving of costs gained from any increase in level of 

productivity. The Board negotiated interagency agreements with the U.S. Department of 

Agriculture’s (USDA) National Finance Center for personnel and payroll services, and with the 

General Services Administration (GSA)’s Pegasys Financial Services (PFS) team for accounting 

services on a fee-for-service basis. As of March 28, 2023, the Federal Shared Services Provider for 

DNFSB has successfully transitioned to the GSA's Office of the Chief Financial Officer (OCFO) 

PFS team from USDA/OCFO. In August 2022, the USDA signed a Memorandum of Intent with 

GSA to divest its operations as a financial shared services provider (FSSP) and returned control of 

the financial systems and financial management support services to GSA. USDA/OCFO had 

acquired full ownership and responsibility for the management of Pegasys from FY 2016 to FY

2022. PFS prepares the Board’s financial statements in accordance with the accounting standards

codified in the Statements of Federal Financial Accounting Standards (SFFAS) and OMB Circular 

A-136, Financial Reporting Requirements. DNFSB staff have reviewed the statements sufficiently 

to provide reasonable assurance that they are consistent with the accounting data maintained by the 

Board. DNFSB’s comparative financial statements and accompanying note disclosures comprise 

the following: 

• Balance Sheets, 

• Statements of Net Cost, 

• Statements of Changes in Net Position, and

• Statements of Budgetary Resources.
MANAGEMENT’S DISCUSSION AND ANALYSIS 16 

1.4.3 Financial Highlights

 

 FY 2023 FY 2022 Change

Percentage 

Change 

Condensed Balance Sheets: 

As of September 30, 2023 and 2022

ASSETS:

Fund Balance with Treasury $ 18,656,424.13 $ 16,870,692.35 $ 1,785,731.78 11%

Accounts Receivable, Net 15,885.16 19,410.19 (3,525.03) -18%

Property, Plant, and Equipment (PP&E), Net 9,006.51 106,929.10 (97,922.59) -92%

Advances and Prepayments 49,980.00 12,625.06 37,354.94 296%

TOTAL ASSETS $ 18,731,295.80 $ 17,009,656.70 $ 1,721,639.10 10%

LIABILITIES:

Accounts Payable $ 1,446,393.34 $ 1,531,560.05 $ (85,166.71) -6%

Federal Employee and Veteran Benefits Payable 2,005,948.94 1,760,818.43 245,130.51 14%

Other Liabilities 1,537,139.15 1,324,239.03 212,900.12 16%

TOTAL LIABILITIES $ 4,989,481.43 $ 4,616,617.51 $ 372,863.92 8%

NET POSITION:

Unexpended Appropriations $ 15,668,967.81 $ 14,034,432.20 $ 1,634,535.61 12%

Cumulative Results of Operations (1,927,153.44) (1,641,393.01) (285,760.43) 17%

TOTAL NET POSITION $ 13,741,814.37 $ 12,393,039.19 $ 1,348,775.18 11%

TOTAL LIABILITIES AND NET POSITION $ 18,731,295.80 $ 17,009,656.70 $ 1,721,639.10 10%

Condensed Financing Sources:

For the Years Ended September 30, 2023 and 2022

Financing Sources:

Appropriations Received $ 41,401,000.00 $ 36,000,000.00 $ 5,401,000.00 15%

Other Adjustments (+/-) (242,976.44) (62,922.14) (180,054.30) 286%

Appropriations Used (39,485,444.11) (37,128,367.13) (2,357,076.98) 6%

TOTAL FINANCING SOURCES $ 1,672,579.45 $ (1,191,289.27) $ 2,863,868.72 -240%

Statements of Net Cost:

Gross Program Costs $ 41,357,452.83 $ 38,236,533.77 $ 3,120,919.06 8%

NET COST OF OPERATIONS $ 41,357,452.83 $ 38,236,533.77 $ 3,120,919.06 8%

Selected Budgetary Information:

For the Years Ended September 30, 2023 and 2022

TOTAL BUDGETARY RESOURCES:

Unobligated Balance from Prior Year Budget Authority, 

Net 

(discretionary and mandatory) $ 8,263,731.02 $ 10,471,891.59 $ (2,208,160.57) -21%

Appropriations (discretionary and mandatory) 41,401,000.00 36,000,000.00 5,401,000.00 15%

TOTAL BUDGETARY RESOURCES $ 49,664,731.02 $ 46,471,891.59 $ 3,192,839.43 7%

New Obligations and Upward Adjustments $ 40,134,585.09 $ 38,573,395.19 $ 1,561,189.90 4%

Agency Outlays, Net (discretionary and mandatory) $ 39,372,291.78 $ 37,256,667.99 $ 2,115,623.79 6%
MANAGEMENT’S DISCUSSION AND ANALYSIS 17

 Composition of Assets

 The composition (by percentage) of the Board’s assets changed from September 30, 2022 to

 September 30, 2023.

The Board’s assets amounted to $18.7 million as of September 30, 2023. Fund Balance with

Treasury (FBwT) makes up the majority of the Board’s assets (99.60 percent), in addition to 

small amounts allocated to Property, Plant, and Equipment, Net (PP&E) (0.05 percent), 

Accounts Receivable, Net (0.08 percent), and Advances and Prepayments (0.27 percent).

● $18.7 million of Fund Balance with the U.S. Department of the Treasury (Treasury)

is the aggregate amount of funds available to make authorized expenditures and pay 

liabilities. Fund Balance with Treasury was significantly increased from September 30, 

2022 to September 30, 2023; see the Trends in Assets section below for explanation of the

changesin Fund Balance with Treasury. 

Composition of the Board's Assets as of September 30, 2023

 

 Trends in Assets

 The Board’s assets significantly increased by $1.7 million, or 10 percent, from $17.0 million as 

 of September 30, 2022 to $18.7 million as of September 30, 2023.

 Fund Balance with Treasury (FBwT) increased by $1.8 million, from $16.9 million to $18.7 

 million. This overall increase in FBwT is attributed mainly to a $5.4 million increase in 

 appropriations during FY 2023, partially offset by increased costs for employee compensation 

 and benefits, travel, and supplies. Additionally, the Board had a net decrease in contract expenditures 

 and a decrease in rent payments due to timing of payments.
MANAGEMENT’S DISCUSSION AND ANALYSIS 18

 

 Composition of Liabilities

 The composition (by percentage) of the Board’s liabilities remained relatively consistent from 

 September 30, 2022 to September 30, 2023.

Liabilities of the Board amounted to $5.0 million as of September 30, 2023. Total 

intragovernmental liabilities comprised 13.67 percent of total liabilities, compared to 7.70

percent in FY 2022. Other than Intragovernmental Accounts Payable comprised 22.35 percent 

in FY 2023, compared to 32.11 percent in FY 2022. Federal Employee and Veteran Benefits 

Payables comprised 40.20 percent in FY 2023 compared to 38.14 percent in FY 2022. Other 

than Intragovernmental Other Liabilities comprised the remaining 23.78 percent compared to 

22.05 percent in FY 2022.

● $2.0 million of Federal Employee and Veteran Benefits Payable is comprised 

primarily of the non-federal portion of benefit accruals and unfunded liability.

● $1.5 million of Other Liabilities primarily includes accrued salaries and leave for 116

FTE employees.
MANAGEMENT’S DISCUSSION AND ANALYSIS 19

Composition of the Board's Liabilities as of September 30, 2023

 

 Trends in Liabilities

Liabilities of the Board increased by approximately $0.4 million, or 8 percent, from $4.6

million as of September 30, 2022 to $5.0 million as of September 30, 2023.

A detailed breakdown in Note 6 of the financial statements shows Intragovernmental Accounts 

Payable increased in FY 2023 due to several accruals for federal services including GSA rent. 

It accounted for $0.3 million of the accrual in FY 2023 whereas in FY 2022 the final invoice 

had been paid prior to fiscal year end close, thereby eliminating the need for an accrual. In 

addition, there was an increase in non-federal portion of Federal Employee and Veteran 

Benefits Payable mainly due to more benefit accruals and $0.2 million more unfunded leave 

liability in FY 2023. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 20

 

 Composition of and Trends in Net Position

 Net Position is the residual difference between assets and liabilities, that is composed of

 Unexpended Appropriations and Cumulative Results of Operations. Net position on the 

 simplified balance sheet is analogous to equity on private sector balance sheets, with the 

 exception that it does not measure financial success for the Board.

Unexpended Appropriations represent the total amount of unexpended budget authority that is 

classified as appropriations, both obligated and unobligated. Unexpended Appropriations are 

increased for Appropriations Received, are reduced for Appropriations Used, and are adjusted 

for other changes in appropriations, such as transfers and rescissions. Cumulative Results of 

Operations is the net result of the Department’s operations since inception.

Total Net Position increased by $1.3 million which is an 11 percent change from September 30,

2022. 

Unexpended Appropriations increased by approximately $1.7 million, from $14.0 million as 

of September 30, 2022 to $15.7 million as of September 30, 2023. While the Board utilized more

appropriations in FY 2023 than in the previous fiscal year, the additional appropriations 

authorized by Congress in FY 2023 resulted in a net increase of Unexpended Appropriations.

 Composition of and Trends in Total Financing Sources

 The composition (by percentage) of the Board’s financing sources, as reported in the Board’s 

 Consolidated Statements of Changes in Net Position remained consistent from September 30, 

 2022 to September 30, 2023. Total financing sources comprise appropriations received, offset 

 by appropriations used. The trend of the Board’s financing sources somewhat changed from 

 FY 2022 to FY 2023 due to trends in the financing source item discussed in this section.

● Appropriations Received increased by $5.4 million, or 15 percent, from $36.0

million received in FY 2022 to $41.4 million received in FY 2023 mainly due to 

Congress authorizing more for DNFSB than in FY 2022.
MANAGEMENT’S DISCUSSION AND ANALYSIS 21 

 

 

 Composition of FY 2023 Net Cost of Operations

 In FY 2023, the Board’s Net Cost of Operations amounted to $41.4 million, which consists of 

 Gross Program Costs of $41.4 million. The pie chart below shows a composition of the 

 expenditures: personnel compensation comprised approximately 47.37 percent of total 

 expenditures; personnel benefits comprised 21.45 percent of total expenditures; other 

 contractual services comprised 18.53 percent of total expenditures; and rent, communications, 

 and utilities comprised 8.02 percent of total expenditures.

FY 2023 Expenditures
MANAGEMENT’S DISCUSSION AND ANALYSIS 22

 Trends in Net Cost of Operations

 The Board’s Net Cost of Operations increased by approximately $3.2 million, or 8 percent, 

 from $38.2 million in FY 2022 to $41.4 million in FY 2023. In January 2023 all federal 

 agencies experienced an increase in federal salaries and health care costs. In the DC area, 

 federal salaries increased 4.86% and according to OPM health benefits, averaged an increase of

 6.6% for the government’s contribution; the cumulative impact to DNFSB was an increase in

 expenditures over FY 2022.

 

 Composition of and Trends in Selected Budgetary Information

 The Statement of Budgetary Resources reports information on the sources of the Board’s 

 budgetary resources for the reporting periods. Information in these statements is reported on 

 the budgetary basis of accounting, which supports compliance with budgetary controls and 

 controlling legislation. The Board receives a new two-year appropriation each year, which 

 allows for the funds to be used in the current and the following fiscal year. The Board’s total 

 budgetary resources increased by approximately $3.2 million, from $46.5 million in FY 2022 

 to $49.7 million in FY 2023, primarily due to new Appropriations being greater in FY 2023 

 as a result of Congress authorizing more than in FY 2022 as discussed in the Composition of 

 and Trends in Financing Sources section.

 
MANAGEMENT’S DISCUSSION AND ANALYSIS 23

The Board’s New Obligations and Upward Adjustments increased $1.5 million, or 4 percent, 

from $38.6 million in FY 2022 to $40.1 million in FY 2023, mainly due to increases in 

obligations related to more in federal salaries and health care costs. 

The Board’s Outlays, Net increased $2.1 million, or 5.7 percent, from $37.3 million in FY 2022

to $39.4 million in FY 2023, largely due to an increase in expenditures for salaries/benefits, 

new contracts awarded and operational travel.

 
MANAGEMENT’S DISCUSSION AND ANALYSIS 24

 

1.4.4 Coronavirus Disease 2019 Response Fund

The World Health Organization reported a novel strain of coronavirus in December 2019, and 

officially declared COVID-19 to be a pandemic on March 11, 2020. In response to the impacts of 

COVID-19, the President of the United States signed multiple bills into law to assist with 

preventing the spread of the virus and to mitigate the negative economic impacts. One such law

was the CARES Act (HR 748-240; Public Law 116-136; signed March 27, 2020). CARES Act 

provides for emergency appropriations for coronavirus health response and agency operations.

Several agencies received various levels of funding to provide support in combating coronavirus.

DNFSB did not receive any supplemental funding for COVID-19 in prior or current years;

therefore, there are no expired or unexpired funds related to COVID-19 within DNFSB’s books 

and records as of September 30, 2023. 

1.4.5 Limitation of the Financial Statements

The principal financial statements are prepared to report on the financial position, financial 

condition, and operating results of the Board, pursuant to requirements as stated in 31 USC § 

3515(b), financial statements of agencies, and Public Law 107-289, the Accountability of Tax 

Dollars Act of 2002. The statements are prepared from the records of the Board in accordance with 

federal generally accepted accounting principles (GAAP) and the formats prescribed by OMB.

Reports used to monitor and control budgetary resources are prepared from the same records. The 

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

government.
MANAGEMENT’S DISCUSSION AND ANALYSIS 25 

1.5 Analysis of Systems, Controls, and Legal Compliance

The Board is required to comply with the Federal Managers’ Financial Integrity Act (FMFIA) of 

1982, as well as other management information, initiatives, and issues. FMFIA requires that 

agencies establish controls that provide reasonable assurance of the following: 

(1) Obligations and costs comply with applicable law,

(2) Assets are safeguarded from waste, loss, unauthorized use, or misappropriation, 

and

(3) Revenues and expenditures are properly recorded and accounted for.

Additionally, FMFIA requires the Board’s Chair to provide an assurance statement on the 

adequacy of internal controls. A summary of management assurances can be found in Section 3.1 

within this AFR.

The Board’s internal control program includes the organization, policy, and procedures that help 

managers achieve intended results and safeguard the integrity of their programs. The Board 

evaluated its internal control program for the fiscal year ending September 30, 2023. Each of the 

Board’s office directors (as well as each line manager) prepares an annual assurance assertion that

identifies any control weaknesses requiring the attention of the Board’s Executive Committee on 

Internal Control (ECIC). In addition to managers’ knowledge of daily operations, these assertions 

are based on internal control activities such as internal and contractor assessments of work 

processes directed by the ECIC, as well as other activities such as financial statement audits and 

Office of Inspector General (OIG) audits and reports.

ECIC consists of the Executive Director of Operations, General Manager, Technical Director, and 

General Counsel. OIG participates as an observer. ECIC met to review the reasonable assurance 

assertions provided by the office directors and the reported internal control deficiencies. The 

results of that review are described in the FMFIA Statement of Assurance, Section 1.5.1, below. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 26

1.5.1 FMFIA Statement of Assurance

 

 

 

 

 

November 1, 2023

MEMORANDUM FOR RECORD

SUBJECT: Annual Statement of Assurance Required Under the Federal Managers’ Financial 

Integrity Act (FMFIA) for Fiscal Year 2023 

As the Chair of the Defense Nuclear Facilities Safety Board’s (DNFSB), I recognize 

DNFSB is responsible for managing risks and maintaining effective internal control to meet the 

objectives of Sections 2 and 4 of the Federal Managers’ Financial Integrity Act (FMFIA) of 

1982. The DNFSB conducted its assessment of risk and internal control in accordance with the 

Office of Management and Budget (OMB) Circular No. A-123, “Management’s Responsibility 

for Enterprise Risk Management and Internal Control” and the Green Book, GAO-14-704G, 

“Standards for Internal Control in the Federal Government.” Based on the results of the 

assessment, DNFSB can provide reasonable assurance that internal controls over operations, 

reporting, and compliance were operating effectively as of September 30, 2023. 

On October 24, 2023, our Executive Committee for Internal Controls (ECIC) identified 

that no material weaknesses or aggregate deficiencies that may constitute a material weakness 

exist within the DNFSB internal controls as of September 30, 2023. Despite some risks, control 

deficiencies, and/or weaknesses identified through line manager assurance assertions, the ECIC 

recommended an unmodified statement of assurance. 

The DNFSB is hereby reporting that no Anti-Deficiency Act (ADA) violation has been 

discovered/ identified during our assessments of the applicable processes. 

If there are any questions regarding this Statement of Assurance for Fiscal Year 2023, my 

point of contact is Ms. Katherine Herrera. She can be reached at katherineh@dnfsb.gov.

Joyce Connery

Chair
MANAGEMENT’S DISCUSSION AND ANALYSIS 27 

1.5.2 Financial Management Systems Strategy and Framework

The Board’s financial management systems strategy is to contract with GSA Pegasys Financial 

Services (PFS) for provision of U.S. Standard General Ledger compliant accounting and financial 

reporting services that comply with all federal financial systems requirements. At the same time, the 

DNFSB, OGM records all obligations and outlays in the Symplicity Financial Tracking System tool, 

which serves as an independent check on the accuracy and completeness of transactions recorded by 

PFS. The combination of PFS and Symplicity Financial Tracking System provides high-quality, 

current, and accessible accounting data; effective controls over budget execution and reporting; and 

a solid historical basis for budget projections. OGM reports regularly to the Board on budget status 

and trends. 

Because the Board contracts for and obtains accounting services from a federal shared services 

provider, GSA PFS, and does not operate a financial management system, the Board does not 

provide a management assurance related to FFMIA § 4 or Section 803(a) of the Federal Financial 

Management Improvement Act. PFS is part of GSA’s OCFO. OCFO/PFS issued a system and 

organization controls (SOC) or SOC 1 Type 2 report on September 7, 2023. It contained the 

independent service auditor’s report on the GSA PFS organization and stated that the GSA PFS 

controls operated effectively to provide reasonable assurance that the control objectives stated in 

GSA’s description of controls were achieved throughout the period July 1, 2022, to June 30, 2023, 

and customer agency controls assumed in the design of GSA controls operated effectively through 

that period. PFS issued a memorandum on October 6, 2023, stating PFS was not aware of any 

material changes to its controls that would adversely affect the auditor’s opinion that was

communicated in the GSA SOC 1 report referenced above.

1.5.3 Analysis of Legal Compliance

1.5.3.1 Digital Accountability and Transparency Act of 2014 (DATA Act)

The DATA Act expands on federal awards reporting reforms that began with the Federal Funding 

Accountability and Transparency Act of 2006. The purpose of the DATA Act is to improve the 

quality and transparency of the federal government's award data. Lawmakers have directed U.S. 

Treasury and OMB to create government-wide standards for reporting spending data associated with 

federal awards. The law also requires that this data be channeled to a central, public database so that 

it can be easily accessed and tracked throughout an award’s full lifespan. 

U.S. Treasury has provided a DATA Act broker system for agencies to upload, validate, and use to 

publish their federal spending transparency data. The basic strategy for improving the contract list is 

to compare all contract actions in the Federal Procurement Data System (FPDS) with obligation 

transactions in the agencies’ accounting systems to ensure complete and accurate obligation data in 

both systems. During FY 2023, the Board submitted and certified all its DATA Act reports in 

accordance with the reporting schedule established by the U.S. Treasury DATA Act Program 

Management Office. Additionally, the Board continued its monthly reconciliation process to 

validate obligations and outlays recorded in the accounting system and FPDS, to allow for timely 

identification and correction of differences. Data accuracy is maintained by ensuring 
MANAGEMENT’S DISCUSSION AND ANALYSIS 28 

compliant data elements are consistently recorded in the accounting system and on contract 

documents. The Board continues to strengthen and improve internal controls over DATA Act 

business processes to ensure accurate, complete, and timely submissions. 

1.5.3.2 Federal Information Security Modernization Act (FISMA)

FISMA requires an annual independent evaluation of an agency’s information security program and 

practices to determine their effectiveness. OIG’s FY 2023 independent FISMA evaluation

concluded that the Board did not have an effective information security program and provided one 

(1) new recommendation to strengthen DNFSB’s information security risk management framework 

for consistency with FISMA. To implement the report’s recommendation, the Board is making 

enhancements to adequately support the procurement, onboarding and implementation of 

requirements across all Event Logging (EL) maturity tiers to ensure events are logged and tracked 

for compliance with its information security program. In addition, DNFSB’s 21 prior year 

recommendations were closed based on inspection of evidence received during fieldwork for the 

FY 2023 FISMA audit. 

 

1.5.4 Government Accountability Office (GAO) Investigations and Reports

In accordance with OMB Circular A-50, Audit Follow-up, ensuring prompt and proper resolution 

and implementation of audit recommendations is important to Board management. 

DNFSB has no current open GAO recommendations. 

1.5.5 Compliance with the Inspector General Act of 1978

The Board is required to file a report annually under the Inspector General Act of 1978, Pub. L.

95-452, Oct. 12, 1978, 92 Stat. 1101, codified as 5 USC Appendix 3. The statute mandates that the 

report:

(A) States whether there has been established in the federal entity an office that meets the 

requirements of this section; 

(B) Specifies the actions taken by the federal entity otherwise to ensure that audits of its programs 

and operations are conducted in accordance with the standards for audit of governmental 

organizations, programs, activities, and functions issued by the Comptroller General of the 

United States, and includes a list of each audit report completed by a federal or non-federal 

auditor during the reporting period and a summary of any particularly significant findings; and 

(C) Summarizes any matters relating to the personnel, programs, and operations of the federal 

entity referred to prosecutorial authorities, including a summary description of any preliminary

investigation conducted by or at the request of the federal entity concerning these matters, and 

the prosecutions and convictions which have resulted. 

The Board reports as follows for FY 2023: 
MANAGEMENT’S DISCUSSION AND ANALYSIS 29

(A) 42 USC § 2286k provides that the NRC inspector general serve as inspector general for the 

Board.

(B) OIG conducted five assessments on Board programs in FY 2023: (1) Inspector General’s 

Assessment of the Most Serious Management and Performance Challenges Facing the Defense 

Nuclear Facilities Safety Board in Fiscal Year 2024 (DNFSB-24-A-01); (2) Audit of the 

Defense Nuclear Facilities Safety Board’s Financial Statements for Fiscal Year 2022

(DNFSB-23-A-02); (3) Audit of the DNFSB’s Fiscal Year (FY) 2022 Compliance with 

Improper Payment Laws (DNFSB-23-A-03); (4) Audit of the DNFSB’s Implementation of the

Federal Information Security Modernization Act (FISMA) of 2014 for Fiscal Year 2023 

(DNFSB-23-A-04); and (5) Audit of the DNFSB’s Freedom of Information Act Process (in 

progress).

(C) With regard to prior year audits, the Board is implementing corrective actions in response to 

recommendations from the (1) Audit of DNFSB’s Human Resources Program, (DNFSB-20-A04); (2) Independent Evaluation Report of DNFSB’s Implementation of FISMA 2014 for FY 

2019 (DNFSB-20-A-05); (3) Independent Evaluation Report of DNFSB’s Implementation of 

FISMA 2014 for FY 2020 (DNFSB-21-A-04); (4) Audit of the DNFSB’s Process for Planning 

and Implementing Oversight Activities (DNFSB-22-A-03); (5) Independent Evaluation Report 

of DNFSB’s Implementation of FISMA 2014 for FY 2021 (DNFSB-22-A-04); and (6) Audit of 

the DNFSB’s Implementation of the Federal Information Security Modernization Act (FISMA) 

of 2014 for FY 2022 (DNFSB-22-A-07).

The Board fully implemented and closed all recommendations from the Audit of the DNFSB’s 

Compliance Under the Digital Accountability and Transparency Act of 2014 (DNFSB-22-A02) and the Audit of the DNFSB’s Fiscal Year 2021 Compliance with Improper Payment Laws 

(DNFSB-22-A-06).

The Board closed one recommendation from the Independent Evaluation Report of DNFSB’s 

Implementation of FISMA 2014 for FY 2019 (DNFSB-20-A-05); three recommendations from 

the Independent Evaluation Report of DNFSB’s Implementation of FISMA 2014 for FY 2020 

(DNFSB-21-A-04); eight recommendations from the Independent Evaluation Report of 

DNFSB’s Implementation of FISMA 2014 for FY 2021 (DNFSB-22-A-04); and seven 

recommendations from the Audit of the DNFSB’s Implementation of the Federal Information 

Security Modernization Act (FISMA) of 2014 for FY 2022 (DNFSB-22-A-07).

(D) In FY 2023, the Board did not refer any matters to prosecutorial authorities.
MANAGEMENT’S DISCUSSION AND ANALYSIS 30 

1.6 Forward-Looking Information

The DNFSB faces an increasing challenge to continue oversight at defense nuclear facilities within 

the defense nuclear complex as the complex grows in size and complexity. New facilities and 

process lines are being added to support DOE mission objectives while existing facilities face aging 

infrastructure and management challenges. The DNFSB has added new staff in order to sustain 

technical competence and maintain efficient operations, but challenges remain. As costs continue to 

increase year-to-year, the DNFSB will need a corresponding budget increase to sustain a steady

state of nuclear safety oversight activities and strives to approach its statutory personnel ceiling of 

130 FTE. The DNFSB will face both a challenge recruiting the highly specialized technical staff 

and increasing operational support. Additionally, investments in IT Modernization and 

Cybersecurity are necessary to carry out essential, mission-critical activities that support the safety 

and security of DNFSB and its information management systems. The agency has engaged in 

multi-year budget planning, development of a comprehensive human capital strategy, and 

enhancements to its information technology infrastructure and systems to mitigate agency

operational risks and maintain a sound financial position. 
FINANCIAL SECTION 31 

Financial Section

2.1 Message from the Chief Financial Officer

It is my honor to join the Chair in presenting the Board’s FY 

2023 Agency Financial Report (AFR). The AFR provides 

financial data and high-level performance goals and objectives 

to demonstrate our continued commitment responsible 

stewardship of public funds. This report also fulfills several 

statutory requirements, including the Federal Managers 

Financial Integrity Act (FMFIA) of 1982, the Chief Financial 

Officers Act of 1990, the Government Management Reform Act 

of 1994, the Reports Consolidation Act of 2000, and the 

Accountability of Tax Dollars Act of 2002. I want to thank the 

Division of Budget and Finance’s (DBF) personnel for their 

diligence and excellent work compiling this report. Many thanks 

to the staff from the Office of the Executive Director of 

Operations, Office of the General Counsel, Office of the General Manager, and Office of the 

Technical Director, who partnered with DBF to ensure Board-wide financial accountability and 

transparency. 

I am proud to report that the Board's FY 2023 financial statements received an unmodified opinion 

from its independent auditors, the Board’s 18th consecutive “clean” opinion since its FY 2004 

financial statements were initially audited pursuant to the Accountability of Tax Dollars Act of 

2002. FY 2023 marked the 17th consecutive year that the Board’s unmodified opinion was coupled 

with no instances of non-compliance with laws and regulations. The independent auditor noted that

the FY 2023 financial statements of DNFSB present fairly, in all material respects, the Agency's 

financial position as of September 30, 2023, in accordance with accounting principles generally 

accepted in the United States of America. Delays with the receipt and validation of DNFSB’s FY

2023 financial statements and footnotes, which are needed for inclusion in the AFR, caused 

publication delays. 

The Board has “contracts” (through interagency agreements) with the U.S. Department of 

Agriculture’s (USDA) National Finance Center (NFC) for personnel and payroll services and the 

General Services Administration (GSA) for accounting services. The Board’s financial staff 

worked diligently with GSA personnel in preparing the FY 2023 financial statements and 

providing the necessary supporting documentation to its auditors, and credit should be given to 

both those organizations for achieving these accomplishments. 

The focus in FY 2023 was on business process improvements and enhanced compliance. Internal 

control over financial reporting was strengthened through more robust business process reviews 

and internal control testing. A complete policy refresh is underway to drive standardization and 

compliance across all financial operations. The Board launched its first Enterprise Risk 
FINANCIAL SECTION 32 

Management program. G-invoicing was implemented with participating trading partners. Most 

notably, the implementation of a new Enterprise Resource Planning (ERP) system was initiated to 

automate and integrate human resources, contracting and finance functions. These improvements 

contributed to zero findings during the Payment Information and Integrity audit and a clean 

financial audit opinion. 

In FY 2024, target areas will include integration and modernization of business operations through 

automated tools; standardization and documentation of policies and procedures to reinforce 

internal controls; and substantially complete implementation of an ERP system. DNFSB is 

dedicated to maintaining financial integrity and transparency and fostering greater financial 

management improvements. 

Omolola Fawole 

Dr. Omolola Fawole 

Chief Financial Officer

Director of the Division of Budget and Finance 

November 30, 2023 
FINANCIAL SECTION 33 

2.2 FY 2023 Auditor’s Report

 
FINANCIAL SECTION 34

 
FINANCIAL SECTION 35

 
FINANCIAL SECTION 36

 
FINANCIAL SECTION 37

 
FINANCIAL SECTION 38

 
FINANCIAL SECTION 39

 
FINANCIAL SECTION 40

 

 

 
FINANCIAL SECTION 41 

2.3 FY 2023 Financial Statements and Notes

2.3.1 Financial Statements – DNFSB General Fund

Defense Nuclear Facilities Safety Board

BALANCE SHEETS

As of September 30, 2023 and 2022
FINANCIAL SECTION 42

Defense Nuclear Facilities Safety Board

STATEMENTS OF NET COST

For the Years Ended September 30, 2023 and 2022
FINANCIAL SECTION 43

Defense Nuclear Facilities Safety Board

STATEMENT OF CHANGES IN NET POSITION

 For the Year Ended September 30, 2023

 
FINANCIAL SECTION 44 

Defense Nuclear Facilities Safety Board

STATEMENT OF CHANGES IN NET POSITION

 For the Year Ended September 30, 2022 

 
FINANCIAL SECTION 45

Defense Nuclear Facilities Safety Board

STATEMENTS OF BUDGETARY RESOURCES

For the Years Ended September 30, 2023 and 2022

 
FINANCIAL SECTION 46 

2.3.2 Financial Statement Notes – DNFSB General Fund

2.3.2.1 Note 1 – Summary of Significant Accounting Policies

2.3.2.1.1 (a) Reporting Entity

The Board is an independent federal government agency with responsibility for overseeing Department 

of Energy (DOE) defense nuclear facilities located throughout the United States. The Board is directed 

by a Chair and four other members appointed by the President. The Board’s mission as described by 

the Atomic Energy Act of 1954, as amended, is to “provide independent analysis, advice, and

recommendations to the Secretary of Energy to inform the Secretary, in the role of the Secretary as 

operator and regulator of the defense nuclear facilities of the DOE, in providing adequate protection of 

public health and safety at such defense nuclear facilities.” 

The Board is a component of the U.S. Government. For this reason, some of the assets and liabilities

reported by the entity may be eliminated for Government-wide reporting because they are offset by 

assets and liabilities of another U.S. Government entity. These financial statements should be read with

the realization that they are for a component of the U.S. Government. 

2.3.2.1.2 (b) Basis of Presentation

These financial statements have been prepared from the Board’s accounting records in accordance with

generally accepted accounting principles (GAAP) as promulgated by the Federal Accounting Standards 

Advisory Board (FASAB) and Office of Management and Budget (OMB) Circular A-136, Financial 

Reporting Requirements. GAAP for federal entities is the hierarchy of accounting principles prescribed

in the American Institute of Certified Public Accountants’ (AICPA) Statement on Auditing Standards 

No. 91, Federal GAAP Hierarchy. 

OMB Circular A-136 requires agencies to prepare principal statements, which include a Balance Sheet,

a Statement of Net Cost, a Statement of Changes in Net Position, and a Statement of Budgetary 

Resources. The Balance Sheet presents amounts of future economic benefits owned or managed by the 

Board (assets), amounts owed by the Board (liabilities), and amounts which comprise the difference 

(net position). The Statement of Net Cost reports the full cost of the Board’s operations. The Statement 

of Changes in Net Position reports the results of changes to Unexpended Appropriations and

Cumulative Results of Operations. The Statement of Budgetary Resources reports how budgetary 

resources were made available during the period and their status at the end of the period. 

2.3.2.1.3 (c) Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow certain

presentations and disclosures to be modified, if needed, to prevent the disclosure of classified 

information.
FINANCIAL SECTION 47 

2.3.2.1.4 (d) Basis of Accounting

Transactions are recorded on the accrual 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 receipt or payment of cash. 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.

2.3.2.1.5 (e) Revenues and Other Financing Sources

The Board receives funding needed to support its activities through annual congressional appropriations. 

FY 2023 and FY 2022 appropriated funds are available for obligation until September 30, 2024, and 

September 30, 2023, respectively (i.e., two-year funds). None of the appropriations is a “funds from 

dedicated collections” fund. An imputed financing source is recognized to offset costs incurred by the 

Board and funded by another federal source. Board revenue is generally recognized when goods have 

been delivered or services have been rendered.

As a component of the Government-wide reporting entity, the Board is subject to the Federal budget 

process, which involves appropriations that are provided annually and appropriations that are provided on a 

permanent basis. The financial transactions that are supported by budgetary resources, which include 

appropriations, are generally the same transactions reflected in entity and the Government-wide financial 

reports.

The Board’s budgetary resources reflect current appropriations, carryover funding and recoveries of 

prior year obligations and enable it to incur budgetary obligations, but they do not reflect assets to the 

Government as a whole. Budgetary obligations are legal obligations for goods, services, or amounts to 

be paid based on statutory provisions (e.g., Social Security benefits). After budgetary obligations are 

incurred, Treasury will make disbursements to liquidate the budgetary obligations and finance those 

disbursements in the same way it finances all disbursements, using some combination of receipts, other 

inflows, and borrowing from the public (if there is a budget deficit). 

2.3.2.1.6 (f) Budgetary Terms

The purpose of federal budgetary accounting is to control, monitor, and report on funds 

made available to federal agencies by law and help ensure compliance with the law.

The following budget terms are commonly used:

Appropriation means a provision of law (not necessarily in an appropriations act) authorizing the 

expenditure of funds for a given purpose. Usually, but not always, an appropriation provides budget 

authority.
FINANCIAL SECTION 48 

Budgetary resources mean amounts available to incur obligations in a given year. Budgetary 

resources consist of new budget authority and unobligated balances of budget authority provided in 

previous years. 

Offsetting collections mean payments to the government that, by law, are credited directly to 

expenditure accounts and deducted from gross budget authority and outlays of the expenditure 

account, rather than added to receipts. Usually, offsetting collections are authorized to be spent for 

the purposes of the account without further action by Congress. They usually result from businesslike transactions with the public, including payments from the public in exchange for goods and 

services, reimbursements for damages, and gifts or donations of money to the government and from 

intragovernmental transactions with other government accounts. The authority to spend offsetting 

collections is a form of budget authority. 

Offsetting receipts mean payments to the government that are credited to offsetting receipt accounts 

and deducted from gross budget authority and outlays, rather than added to receipts. Usually, they 

are deducted at the level of the agency and subfunction, but in some cases they are deducted at the 

level of the Government as a whole. They are not authorized to be credited to expenditure accounts. 

The legislation that authorizes the offsetting receipts may earmark them for a specific purpose and 

either appropriate them for expenditure for that purpose or require them to be appropriated in annual 

appropriations acts before they can be spent. Like offsetting collections, they usually result from 

business-like transactions with the public, including payments from the public in exchange for goods 

and services, reimbursements for damages, and gifts or donations of money to the Government, and 

from intragovernmental transactions with other Government accounts. 

Obligation means a binding agreement that will result in outlays, immediately or in the future. 

Budgetary resources must be available before obligations can be incurred legally. 

Gross outlays are the are the total payments made to liquidate an obligation (other than the 

repayment to the U.S. Treasury of debt principal) before subtracting any offsetting collections. 

Outlays are a measure of Government spending. 

Net outlays are calculated by subtracting all offsetting collections (unexpired and expired) from 

gross outlays so that the contribution of the budget account to the Federal Government’s bottom line 

(surplus or deficit) can be determined. 

For further information about budget terms and concepts, see the “Budget Concepts” chapter of the 

Analytical Perspectives volume of the President’s Budget at: 

https://www.whitehouse.gov/omb/budget/analytical-perspectives/ 

2.3.2.1.7 (g) Assets and Liabilities

Intragovernmental assets and liabilities arise from transactions between the Board and other Federal 

entities.
FINANCIAL SECTION 49 

Funds with the U.S. Treasury compose most of the assets on the Board’s balance sheet. Other assets 

result from activity with non-federal sources.

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

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

federal agencies and commercial vendors for goods, services, and other expenses incurred but not 

yet paid. 

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

Congress has appropriated funds, or funding is otherwise available to pay amounts due. Liabilities 

not covered by budgetary or other resources represent amounts owed in excess of available 

congressionally appropriated funds or other amounts. The liquidation of liabilities not covered by 

budgetary or other resources is dependent on future congressional appropriations or other funding. 

2.3.2.1.8 (h) Fund Balance with Treasury

Fund Balance with Treasury (FBwT) is an asset of the Board and a liability of the General Fund. 

The amount represents commitments by the Government to provide resources for particular

programs but does not represent assets to the government as a whole. 

When the Board seeks to use FBwT to liquidate budgetary obligations, U.S. Treasury will finance 

the disbursements in the same way it finances all other disbursements, using some combination of 

receipts, other inflows, and borrowing from the public (if there is a budget deficit). 

The U.S. Treasury processes the Board’s receipts and disbursements. Funds with the U.S. Treasury 

are cash balances from appropriations as of the fiscal year-end from which the Board is authorized to 

make expenditures and pay liabilities resulting from operational activity.

2.3.2.1.9 (i) Advances and Prepayments

Advances are cash outlays made by the Board to its employees, contractors, grantees, or others to 

cover a part or all the recipients' anticipated expenses or as advance payments for the costs of goods 

and services the Board receives. Prepayments are payments made by the Board to cover certain 

periodic expenses before those expenses are incurred. Financing payments (such as progress 

payments, performance-based payments, etc.) on work in process are generally recognized as a cost 

for work performed and not included in advances and prepayments.

2.3.2.1.10 (j) Property, Plant, and Equipment, Net

Property, Plant and Equipment (PP&E) consists of capitalized equipment, furniture and fixtures, and 

software. There are no restrictions on the use or convertibility of property, plant, or equipment. 

The Board capitalizes PP&E with a useful life of at least two years and individually costing more 

than $10,000 ($25,000 for leasehold improvements). Bulk purchases of lesser value items are 

capitalized when the cost is $25,000 or greater. 
FINANCIAL SECTION 50 

Assets are depreciated on a straight-line basis over the estimated useful life of the property. 

Information technology equipment and software are depreciated over a useful life of three years. All 

other equipment is depreciated over a five-year useful life. Furniture and fixtures are depreciated 

over a seven-year useful life and leasehold improvements over a ten-year useful life.

The Board owns no land or buildings, but does have an occupancy agreement with the General 

Services Administration (GSA). The cost approximates commercial rates for similar properties.

2.3.2.1.11 (k) Annual, Sick, and Other Leave

Annual leave is recognized as an expense and a liability as it is earned; the liability is reduced as

leave is taken. The accrued leave liability is principally long-term in nature. Sick leave and other 

types of leave are expensed as leave is taken.

2.3.2.1.12 (l) Federal Employee Benefits

The Board recognizes its share of the cost of providing future pension benefits to eligible employees 

over the period that they render service to the Board. The pension expense recognized in the 

financial statement equals the current service cost for the Board’s employees for the accounting 

period less the amount contributed by the employees. The Office of Personnel Management (OPM), 

the administrator of the plan, supplies the Board with factors to apply in the calculation of the 

service cost. These factors are derived through actuarial cost methods and assumptions. The excess 

of the recognized pension expense represents the amount being financed directly by OPM. This 

amount is considered imputed financing to the Board. 

The Board recognizes a current-period expense for the future cost of post-retirement health benefits 

and life insurance for its employees while they are still working. The Board accounts for and reports 

this expense in a manner similar to that used for pensions, with the exception that employees and the 

Board do not make current contributions to fund these future benefits.

Federal employee benefit costs paid by OPM and imputed to the Board are reported as a resource on 

the Statement of Changes in Net Position. 

2.3.2.1.13 (m) Correction of Errors

In FY 2023, the Board identified corrections needed for events that occurred in prior fiscal years. The 

adjustments were necessary to correct beginning balances for unexpended appropriations and 

cumulative results of operations reported on the Statement of Changes in Net Position. Restatement of 

prior year financial statements is not required because the errors did not result in any material 

misstatement.
FINANCIAL SECTION 51 

2.3.2.2 Note 2 – Fund Balance with Treasury

The Board’s funds with the U.S. Treasury consist only of appropriated funds. The status of these 

funds as of September 30, 2023, and 2022 is as follows: 

 

2023 2022

A. Fund Balance with Treasury 

General Fund $ 18,656,424.13 $ 16,870,692.35

B. Status of Fund Balance with Treasury 

1) Unobligated Balance

a) Available 8,388,679.51 6,810,133.43

b) Unavailable 1,141,466.42 1,088,362.97

2) Obligated Balance not yet Disbursed 9,126,278.20 8,972,195.95

Total $ 18,656,424.13 $ 16,870,692.35

2.3.2.3 Note 3 – Accounts Receivable, Net

Other than Intragovernmental Accounts Receivable, Net represents the accounts receivable from 

current employees. The Board has historically collected receivables due from employees and thus 

has not established an allowance for uncollectible accounts. 

 

2023 2022

Other than Intragovernmental Accounts Receivable $ 15,885.16 $ 19,410.19

Total Accounts Receivable, Net $ 15,885.16 $ 19,410.19

2.3.2.4 Note 4 – Property, Plant and Equipment, Net (PP&E)

The Board’s total cost, accumulated depreciation, and net book value for PP&E for the fiscal years 

ended September 30, 2023, and 2022 are as follows. The Board does not estimate for any PP&E costs. 

Depreciation expense for the fiscal years ended September 30, 2023, and 2022, was $97,922.59 and 

$107,510.26, respectively. 

In FY23 DNFSB disposed of the software with a total acquisition cost of $95,036.05 and equipment 

with a total acquisition cost of $400,978.09. The total amount of PP&E disposed in FY23 was 

$496,014.14. At the moment of disposal, the accumulated depreciation of the disposed items was equal 

to the acquisition costs, hence, no gain or loss was recognized.
FINANCIAL SECTION 52

2.3.2.5 Note 5 – Liabilities Not Covered by Budgetary Resources

Liabilities not covered by budgetary resources require future congressional action whereas liabilities 

covered by budgetary resources reflect prior congressional action. Regardless of when the

congressional action occurs, when the liabilities are liquidated, Treasury will finance the liquidation 

in the same way that it finances all other disbursements, using some combination of receipts, other

inflows, and borrowing from the public (if there is a budget deficit). The composition of liabilities 

not covered by budgetary resources as of September 30, 2023, and 2022 is as follows: 
FINANCIAL SECTION 53 

 

2023 2022

Unfunded Accrued Leave Liabilities $ 1,952,045.11 $ 1,712,089.42

Total Other than Intragovernmental Liabilities Not Covered By Budgetary Resources 1,952,045.11 1,712,089.42

Total Liabilities Not Covered by Budgetary Resources $ 1,952,045.11 $ 1,712,089.42

Total Liabilities Covered by Budgetary Resources 3,037,436.32 2,904,528.09

Total Liabilities $ 4,989,481.43 $ 4,616,617.51

Liabilities not Covered by Budgetary Resources

The Unfunded Leave represents the amount recorded for unpaid leave earned that an employee is

entitled to upon separation and that will be funded by future years’ budgetary resources. Unfunded 

Leave is part of the Federal Employee and Veteran Benefits Payable (see Note 8).

2.3.2.6 Note 6 - Intragovernmental Accounts Payable

Intragovernmental liabilities arise from transactions with other federal entities and are claims

by other federal agencies listed in the table below. The Board receives goods and services such as

background investigations, financial services, records management, and office space. 

 2023 2022

Debt to Other Federal Agencies

(1) Office of Personnel Management $ - $ 17,000.00

(2) Federal Occupational Health 11,125.77 32,007.50

(3) Defense Counterintelligence and Security 34,410.00 -

(4) GSA, OAD, Finance Division 847.50 -

(5) GSA, PBS Revenue Division-Rent 257,165.17 -

(6) Nat Information Technology Center 3,122.58 -

(7) National Archives and Records Administration 24,385.00 -

Total Intragovernmental Accounts Payable $ 331,056.02 $ 49,007.50 

2.3.2.7 Note 7 – Other Liabilities

As of September 30, 2023, and 2022, the amounts reported on the Balance Sheet as Other Liabilities 

(both Intragovernmental and Other than Intragovernmental) are current liabilities. The

Intragovernmental Other Liabilities consist of the Employer Contributions and Payroll Taxes 

Payable – Non-Reciprocal and federal amounts. Employer Contributions and Payroll Taxes Payable 

are the amounts owed to OPM and Treasury for Federal Employees Health Benefits (FEHB), 

Federal Employees’ Group Life Insurance (FEGLI), Federal Insurance Contributions Act (FICA), 

Federal Employees Retirement System (FERS), and Civil Service Retirement System (CSRS) 

contributions. The Other than Intragovernmental Other Liabilities consist of the Accrued Funded

Payroll and Leave. 
FINANCIAL SECTION 54 

2.3.2.8 Note 8 – Federal Employee and Veteran Benefits Payable

While the Board does not administer pensions or benefit programs, it records the portion of the 

liability for which it is responsible. Liabilities for federal employee and veteran benefits include the 

funded accrued payroll portion of these benefits and unfunded accrued annual leave but not the 

liabilities related to employee funded accrued salary or annual leave, which are reported in Other 

Liabilities.

 2023 2022

 Funded Accrued Payroll Benefits $ 53,903.83 $ 48,729.01 

 Unfunded Accrued Leave Liability 1,952,045.11 1,712,089.42

 Total Federal Employee and Veteran

 Benefits Payable $ 2,005,948.94 $ 1,760,818.43

2.3.2.9 Note 9 – Leases

The Board has not entered into any existing capital leases and thus has incurred no liability resulting 

from such leases. The Board has also not directly entered into any operating leases but does have an 

occupancy agreement with GSA for its headquarters space. (GSA has an operating lease with the 

building owner, the costs of which are billed to the Board. The occupancy agreement is cancellable 

with four months written notice, without penalty to the Board.) Annual costs for office space for FY 

2023 and FY 2022 amounted to $2,957,741.08 and $3,024,636.06, respectively. The Board entered 

into a new ten-year occupancy agreement effective March 8, 2016, which is due to expire on March 

7, 2026. Estimated future payments under the terms of the occupancy agreement are as follows:

Fiscal Year Ending September 30 Payment

2024 $3,083,008.00

2025 $3,099,817.00

2026 (thru March 7, 2026) $1,282,444.42

Total Estimated Future Payments $7,465,269.42

2023 2022

Intragovernmental

Employer Contributions and Payroll Taxes Payable

(Non-Reciprocal) and Other Federal Portion $ 351,021.38 $ 306,637.12

Total Intragovernmental $ 351,021.38 $ 306,637.12

Other than Intragovernmental

Accrued Funded Payroll & Leave $ 1,186,117.77 $ 1,017,601.91

Total Other than Intragovernmental $ 1,186,117.77 $ 1,017,601.91

Total Other Liabilities $ 1,537,139.15 $ 1,324,239.03 
FINANCIAL SECTION 55

2.3.2.10 Note 10 – Commitments and Contingencies

A loss contingency is an existing condition, situation, or set of circumstances involving uncertainty 

as to possible gain or loss to an entity. The uncertainty will ultimately be resolved when one or 

more future events occur or fail to occur. A loss contingency is a liability when a past event or 

exchange transaction has occurred, a future outflow or other sacrifice of resources is possible, and 

the future outflow or sacrifice of resources is measurable. For pending or threatened litigation and 

unasserted claims, a contingency is considered probable when the future confirming event or events 

are likely to occur. A contingency is disclosed in the Notes to the Financial Statements if any of the 

conditions for liability recognition are not met and there is at least a reasonable possibility that a 

loss or an additional loss may be incurred.

In the normal course of business, the Board may become involved in various legal disputes and 

claims. As of September 30, 2023, the Board had one pending litigation for which the likelihood of 

an unfavorable outcome is reasonably possible. However, the amount of any potential loss cannot 

be reasonably estimated at this time. As of September 30, 2022, no pending legal matters existed 

that were considered probable or reasonably possible, which require recognition as an accrual in the 

financial statements or require further disclosure.

The Board has not entered into any contractual arrangements which may require future financial 

obligations.

2.3.2.11 Note 11 – Inter-Entity and Program Costs

Goods and services are received from other federal entities at no cost or at a cost less than the full cost 

to the providing federal entity. Consistent with accounting standards, certain costs of the providing 

entity that are not fully reimbursed by the Board are recognized as imputed cost and are offset by

imputed revenue. The amounts of Imputed Costs and Financing Sources for FY 2023 and FY 2022 

were $1,530,605.41 and $956,508.43, respectively. Such imputed costs and revenues relate to businesstype activities (if applicable), employee benefits, and claims to be settled by the Treasury Judgement 

Fund. However, unreimbursed costs of goods and services other than those identified above are not 

included in our financial statements.

The portion of the Board’s program costs related to Intragovernmental Costs and Other than

Intragovernmental Costs are shown as follows. Intragovernmental Costs are costs incurred from 

exchange transactions with other federal entities (e.g., building occupancy agreement payments to 

GSA). Other than Intragovernmental Costs are costs incurred from exchange transactions with nonfederal entities (i.e., all other program costs).

Intragovernmental Costs Other than 

Intragovernmental Costs

Total Program Costs

FY 2023 $11,898,025.74 $29,459,427.09 $41,357,452.83

FY 2022 $10,202,812.91 $28,033,720.86 $38,236,533.77
FINANCIAL SECTION 56

The Board’s program costs/Net Cost of Operations by OMB Object Class (OC) are as follows:

OC Description FY 2023 FY 2022

11 Personnel Compensation $19,588,337.55 $17,514,624.58

12 Personnel Benefits $8,871,035.87 $7,358,453.01

21 Travel & Transportation of Persons $925,008.05 $617,013.40

22 Transportation of Things $33,001.62 $77,238.22

23 Rent, Communications, & Utilities $3,318,692.06 $3,376,025.83

24 Printing & Reproduction $7,759.04 $7,341.18

25 Other Contractual Services $7,663,405.05 $8,685,584.05

26 Supplies & Materials $657,109.02 $369,916.25

31 Acquisition of Assets $293,104.57 $230,337.25

Total $41,357,452.83 $38,236,533.77

2.3.2.12 Note 12 – Net Adjustments to Unobligated Balance Brought Forward, October 1

During the years ended September 30, 2023, and 2022, certain adjustments were made to the balance 

of unobligated budgetary resources available as of October 1, 2022, and 2021. These adjustments 

include, among other things, upward adjustments to undelivered and delivered orders that were 

obligated in a prior fiscal year. The adjustments during the years ended September 30, 2023, and 

2022 are presented below.

2023 2022

Unobligated balance, brought forward from prior year $ 7,898,496.40 $ 9,310,575.87

Adjustments made during the current year

Recoveries of prior year unpaid obligations 606,470.61 1,224,237.86

Recoveries of prior year paid obligations 1,740.45 -

Balance withdrawn to Treasury (expiring fund) (242,976.44)

 

(62,922.14)

Unobligated balance brought from prior year budget authority $ 8,263,731.02 $10,471,891.59

2.3.2.13 Note 13 – Apportionment Categories of New Obligations and Upward Adjustments: 

Direct vs. Reimbursable Obligations

The Board is subject to apportionment. All obligations are incurred under Category A (budgetary 

resources are distributed by fiscal year quarter) amounts apportioned on the latest Standard Form 

(SF)-132, Apportionment and Reapportionment Schedule.

 2023 2022

Direct

Category A $ 40,134,585.09 $ 38,573,395.19

New Obligations 40,126,275.91 37,893,406.24

Upward Adjustments 8,309.18 679,988.95
FINANCIAL SECTION 57 

2.3.2.14 Note 14 – 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 the Board’s Undelivered Orders was $6,138,821.88 and $6,080,292.92 as of September

30, 2023, and 2022, respectively. 

2023 2022

Federal Undelivered Orders $ 1,087,874.17 $ 773,301.73

Non-Federal Undelivered Orders 5,050,947.71 5,306,991.19

Total Federal/Non-Federal Undelivered Orders $ 6,138,821.88 $ 6,080,292.92

Paid Undelivered Orders – Federal

Paid Undelivered Orders- Non-Federal

$ 49,980.00

 -

$ - 

12,625.06

Unpaid Undelivered Orders - Federal 1,037,894.17 773,301.73

Unpaid Undelivered Orders - Non-Federal 5,050,947.71 5,294,366.13

Total Paid/Unpaid Undelivered Orders $ 6,138,821.88 $ 6,080,292.92

Total Undelivered Orders $ 6,138,821.88 $ 6,080,292.92

2.3.2.15 Note 15 – Explanation of Differences Between the Statement of Budgetary 

Resources and the Budget of the United States 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 2023 actual budgetary execution information 

is scheduled for publication in February 2024, 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 2022 SBR and the related President’s Budget reflected the following:

FY 2022

Budgetary

Resources 

New Obligations

& Upward

Adjustments

(Total) Net Outlays

Statement of Budgetary Resources $46,471,891.59 $38,573,395.19 $37,256,667.99

Difference 1 – Expired Unobligated Balances ($1,088,362.97) - -

Difference 2 - Rounding (+/-) ($1,383,528.62) $426,604.81 $743,332.01

Budget of the US Government $44,000,000.00 $39,000,000.00 $38,000,000.00
FINANCIAL SECTION 58 

The differences between the Statement of Budgetary Resources and the Budget of the United States 

Government are due to rounding as well as expired unobligated balances being reported in the 

Statement of Budgetary Resources but not in the Budget of the United States Government. The 

Budget of the US Government is rounded to millions. 

2.3.2.16 Note 16 – Reconciliation of Net Cost to Outlays

Reconciliation of net costs to net outlays budgetary and financial accounting information differ. 

Budgetary accounting is used for planning and control purposes and relates to both the receipt and use 

of cash, as well as reporting the federal deficit. Financial accounting is intended to provide a picture of 

the government’s financial operations and financial position, so it presents information on an accrual 

basis. The accrual basis includes information about costs arising from the consumption of assets and

the incurring of liabilities. The reconciliation of net outlays, presented on a budgetary basis, and the 

net cost, presented on an accrual basis, provides an explanation of the relationship between budgetary 

and financial accounting information.

The reconciliation serves not only to identify costs paid for in the past and those that will be paid in the 

future, but also to assure integrity between budgetary and financial accounting. The reconciliation 

explains the relationship between the net cost of operations and net outlays by presenting (1) 

components of net cost that are not part of budgetary outlays (e.g. depreciation and amortization 

expenses of assets previously capitalized, change in asset/liabilities, other financing sources); and (2) 

components of budget outlays that are not part of net cost (e.g. acquisition of capital assets); and (3) 

other temporary timing difference (e.g. prior period adjustments due to correction of error). 

The analysis below illustrates this reconciliation by listing the key differences between net cost and net

outlays for the fiscal years ended September 30, 2023, and September 30, 2022. 
FINANCIAL SECTION 59
FINANCIAL SECTION 60
OTHER INFORMATION 61 

 Other Information

3.1 Summary of Financial Statement Audit and Management Assurances 

Table 1. Summary of Financial Statement Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

N/A 0 0 N/A N/A 0

Table 2. Summary of Management Assurances1

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Audit Opinion Unmodified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

N/A 0 0 N/A N/A 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of 

Assurance

Unmodified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

N/A 0 0 N/A N/A 0

1 The Board does not provide a management assurance related to FFMIA § 4 or Section 803(a) of the Federal Financial 

Management Improvement Act as it obtains accounting service from a federal service provider and thus does not operate 

a financial management system.
OTHER INFORMATION 62 

3.2 Payment Integrity Information Act Reporting 

The Payment Integrity Information Act (PIIA) of 2019 (Public Law (P.L.) 116-117 requires 

agencies to periodically review all programs and activities to identify those susceptible to 

significant improper payments. Every year, each agency Inspector General (IG) reviews 

relevant improper payments (IP) and unknown payments (UP) reporting and records 

pertaining to the programs within an agency to determine whether the agency complies with 

PIIA and OMB guidance. 

The Board conducts periodic reviews of all programs and activities to identify those that 

may be susceptible to improper payments. In FY 2023, the Board performed a risk 

assessment of outlays exceeding $10 million. Based on OMB guidance M-21-19, annual 

IP or UP above $10,000,000 and 1.5% of the program’s total annual outlays are 

considered to be above statutory threshold. As a result, the overall DNFSB risk score is 

low, below the statutory threshold, and is deemed not susceptible to improper payments. 

Comprehensive risk assessments are not required for any DNFSB programs. Throughout 

the year, the Board maintains payment integrity by executing internal controls over each 

payment to mitigate any risk of improper payment and prevent fraud, waste and abuse. 

In FY 2023, the OIG reviewed DNFSB’s Payment Integrity Information Act (PIIA) 

program, and concluded the Board is compliant with all the applicable OMB Compliance 

Requirements listed below: 

- Published Payment Integrity Information Act with the Agency Financial Report. 

- Posted the Agency Financial Report and accompanying materials on the agency 

website.

- Conducted IP risk assessments for each program with annual outlays greater than 

$10,000,000 at least once in the last three years. 

For additional details related to the Board’s Payment Integrity Information Act Reporting, 

please visit https://paymentaccuracy.gov/. 
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3.3 Inspector General’s Assessment of Management and Performance

Challenges
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 End of AFR