U.S. COMMODITY FUTURES TRADING COMMISSION
 

OFFICE OF INSPECTOR GENERAL 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5110 

TO: J. Christopher Giancarlo, Chairman 

Brian D. Quintenz, Commissioner 

Rostin Behnam, Commissioner 

FROM:	 Miguel A. Castillo, CPA, and CRMA 

Assistant Inspector General for Auditing 

DATE:	 October 27, 2017 

SUBJECT: Audit of the CFTC Customer Protection Fund Financial Statements 

for Fiscal Year 2017 

Annually the Office of the Inspector General (OIG) conducts an audit of the 

CFTC Customer Protection Fund (Fund) financial statements. The Balance of 

the Fund as of September 30, 2017, was $196,336,209. We contracted with the 

independent certified public accounting firm Allmond & Company, LLC 

(Allmond & Co.) to audit the financial statements of the Fund as of September 

30, 2017, and for the year then ended, to provide negative assurance on 

internal control and compliance with laws and regulations for financial 

reporting. We required that the audit be done in accordance with U.S. Generally 

Accepted Government Auditing Standards (GAGAS). 

In its audit of the Fund, Allmond & Co. found: 

•	 The financial statements were fairly presented, in all material respects, in 

conformity with U.S. Generally Accepted Accounting Principles. 

• No material weaknesses in internal control or non-compliance with laws and 

regulations. 

In connection with the contract, we reviewed Allmond & Co.’s report and 

related documentation and inquired of its representatives. Our review, as 

differentiated from an audit in accordance with GAGAS, was not intended to 

enable us to express, and we do not express, opinions on financial statements 

or internal control or on whether the Fund complied with laws and regulations. 

Allmond & Co. is responsible for the attached auditor’s report dated October 

27, 2017 and the conclusions expressed in the report. However, our review 

disclosed no instances where Allmond & Co. did not comply, in all material 

respects, with GAGAS. 

Attached is a copy of Allmond & Co.’s unmodified (clean) opinion letter. Please 

call me if any questions at (202) 418-5084. 
cc: 	 Michael Gill, Chief of Staff 

Kevin S. Webb, Chief of Staff 

John Dunfee, Acting Special Counsel 

Christopher Ehrman, Director. Whistleblower Office 

Anthony C. Thompson, Executive Director 

Mary Jean Buhler, Chief Financial Officer 

Keith A. Ingram, Accounting Officer 

Melissa Jurgens, Acting Chief Privacy Officer 

A. Roy Lavik, Inspector General 

Judith A. Ringle, Deputy Inspector General and Chief Counsel 
 

 

 

 

 

 

 

 

 

 

Independent Auditors’ Report 

Chairman and Inspector General of 

U.S. Commodity Futures Trading Commission: 

Report on the Financial Statements

We have audited the accompanying financial statements of the U.S. Commodity Futures Trading 

Commission (CFTC) Customer Protection Fund (CPF), which comprise the balance sheet as of 

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

combined statement of budgetary resources for the year ended, and the related notes to the financial 

statements (hereinafter referred to as the financial statements). 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with U.S. generally accepted accounting principles; this includes the design, implementation, 

and maintenance of internal control relevant to the preparation of financial statements that are free from 

material misstatement, whether due to fraud or error. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on the fiscal year 2017 and 2016 financial statements of CPF 

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

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

Auditing Standards issued by the Comptroller General of the United States; and OMB Bulletin No. 17-03, 

Audit Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 17-03 

require that we plan and perform the audit to obtain reasonable assurance about whether the financial 

statements are free of material misstatement. 

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

the financial statements. The procedures selected depend on the auditors' judgment, including the 

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

In making those risk assessments, the auditor considers internal control relevant to the entity' s 

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

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

the entity' s internal control. Accordingly, we express no such opinion. 
Independent Auditors’ Report 

 

 

 

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness 

of significant accounting estimates made by management, as well as evaluating the overall presentation of 

the financial statements. 

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

audit opinion. 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the U.S. Commodity Futures Trading Commission Customer Protection Fund as of 

September 30, 2017 and 2016, and its net costs, changes in net position, and budgetary resources for the 

year then ended in conformity with general accepted accounting principles in the United States of 

America. 

Other Information 

The information in CPF’s Annual Report to Congress and the Cash Flow Analysis are not a required part 

of the basic financial statements, but are supplementary information required by the Dodd-Frank Wall 

Street Reform and Consumer Protection Act. We have applied certain limited procedures, which 

consisted principally of inquiries of management regarding the methods of measurement and presentation 

of this information. However, we did not audit this information and, accordingly, we express no opinion 

on it. 

Other Reporting Required by Government Auditing Standards

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements as of and for the year ended September 

30, 2017, we considered CPF’s internal control over financial reporting by obtaining an understanding of 

CPF’s internal control, determining whether internal control had been placed in operation, assessing 

control risk, and performing tests of control to determine auditing procedures for the purpose of 

expressing our opinion on the financial statements, but not to provide an opinion on the effectiveness of 

CPF’s internal control over financial reporting. Accordingly, we do not express an opinion on CPF’s 

internal controls over financial reporting. We limited internal control testing to those necessary to achieve 

the objectives described in OMB Bulletin No. 17-03. We did not test all internal controls relevant to 

operating objectives as broadly defined by the Federal Managers’ Financial Integrity Act of 1982. 

Our consideration of internal control over financial reporting was for the limited purpose as described in 

the paragraph above and was not designed to identify all deficiencies in internal control over financial 

reporting that might be a control deficiency, significant deficiency, or material weakness. 
Independent Auditors’ Report 

 

 

 

 

 

 

 

 

 

 

A control deficiency in internal control exists when the design or operation of a control does not allow 

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

detect and correct misstatement on a timely basis. A significant deficiency is a control deficiency or a 

combination of control deficiencies, that adversely affects CPFs’ ability to initiate, authorize, record, 

process, or report financial data reliably in accordance with generally accepted accounting principles such 

that there is more than a remote likelihood that a misstatement of the CPF’s financial statements that is 

more than inconsequential will not be prevented or detected. A material weakness is a significant 

deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a 

material misstatement of the financial statements will not be prevented or detected. 

In our fiscal year 2017 audit, we did not identify any deficiencies in internal control over financial 

reporting that we considered to be a material weakness or significant deficiency, as defined above. 

Compliance and Other Matters

As part of obtaining reasonable assurance about whether CPFs’ fiscal year 2017 financial statements are 

free of material misstatements, we performed tests of CPFs’ compliance with certain provisions of laws 

and regulations, which noncompliance with could have a direct and material effect on the determination 

of the consolidated financial statement amounts, and certain provisions of other laws specified in OMB 

Bulletin No. 17-03. However, providing an opinion on compliance with those provisions was not an 

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

The results of our tests of compliance as described in the preceding paragraph, disclosed no instances of 

noncompliance or other matters that are required to be reported herein under Government Auditing 

Standards or OMB Bulletin No. 17-03. 

Purpose of the Other Reporting Required by Government Auditing Standards

The purpose of the communication described in the Other Reporting Required by Government Auditing 

Standards section is solely to describe the scope of our testing of internal control and compliance and the 

result of that testing, and not to provide an opinion on the effectiveness of CPF's internal control or on 

compliance. This communication is an integral part of an audit performed in accordance with U.S. 

generally accepted government auditing standards in considering in internal controls and compliance with 

laws and regulations which could have a material effect on CPF’s financial statements. Accordingly, this 

communication is not suitable for any other purpose. 

October 27, 2017 

Landover, MD 
 

FINANCIAL STATEMENTS FOR THE 

CUSTOMER PROTECTION FUND 

REPORT TO CONGRESS
 

September 30, 2017 
 

 


 


 

U.S. Commodity Futures Trading Commission 

Customer Protection Fund Report to Congress: Financial Statements 

Table of Contents

Financial Statements ....................................................................................................................... 3

Notes to the Financial Statements ................................................................................................... 7 

Supplementary Schedule:
 

Cash Flow Analysis...................................................... ........................12

2 
1

2 

5 

6 

 

 

 

20 

 

 

 

 

 

32 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Balance Sheets
 

As of September 30, 2017 and 2016
 

T otal Liabilities and Net Position $ 244,260,461 $ 249,668,801 

T otal Assets $ 244,260,461 $ 249,668,801 

2017 2016 

Assets 

Intragov ernmental: 

Fund Balance With Treasury (N ote 2) $ 7,560,992 $ 5,485,412 

Inv estments (N ote 3) 

Prepay ments 

T otal Intragovernmental 

General Property , Plant and Equipment, N et (N ote 4) 

Prepay ments 

Liabilities 

Intragov ernmental: 

Employ er C ontributions and Pay roll Tax es Pay able 

T otal Intragovernmental 

Accounts Pay able 

Accrued Pay roll 

Accrued Annual Leav e 

C ontingent Liabilities (N ote 5) 

T otal Liabilities 2,118,305

Net Position 

C umulativ e Results of Operations - Funds from Dedicated C ollections 

T otal Net Position 

234,006,240 244,000,000 

 2,541,984 -

 244,109,216 249,485,412 

 136,055 179,020 

 15,190 4,369 

 21,726 16,108 

 21,726 16,108 

 2,169,637 1,932,814 

 108,530 83,589 

 124,359 85,794 

 45,500,000 -

 47,924,252 

 196,336,209 247,550,496 

 196,336,209 247,550,496 

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

3 

 
 

 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Statements of Net Cost 

For the Years Ended September 30, 2017 and 2016 

Net Costs of Operations (Note 6) 

2017 2016 

Gross C osts $ 52,752,596 $ 20,551,582 

T otal Net Cost of Operations $ 52,752,596 $ 20,551,582 

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

4 
 

 

 

 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Statements of Changes in Net Position 

For the Years Ended September 30, 2017 and 2016 

2017 2016 

Cumulative Results of Operations

Beginning Balances, October 1 $ 247,550,496 $ 267,612,410 

Budgetary Financing Sources: 

N onex change Interest Rev enue 

T otal Financing Sources

Net Cost of Operations 

Net Change 

T otal Cumulative Results of Operations, September 30 $ 196,336,209 $ 247,550,496 

 1,538,309 489,668 

1,538,309 489,668 

 (52,752,596) (20,551,582)

 (51,214,287) (20,061,914)

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

5 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Statements of Budgetary Resources
 

For the Years Ended September 30, 2017 and 2016 

2017 2016 

BUDGET ARY RESOURCES

 U nobligated Balance Brought Forw ard, October 1 $ 245,160,899 $ 264,251,379

 Recov eries of Prior Year U npaid Obligations

 Other C hanges in U nobligated Balance 

 U nobligated Balance from Prior Year Budget Authority , N et 

 Spending Authority from Offsetting C ollections 1,426,356 456,371 

T otal Budgetary Resources $ 246,952,252 $ 265,060,390 

ST AT US OF BUDGET ARY RESOURCES

 N ew Obligations and U pw ard Adjustments $ 12,177,314 $ 19,899,491 

U nobligated Balance, End of Year 

Apportioned, U nex pired Accounts 

U napportioned, U nex pired Accounts 319,397 

U nobligated Balance, End of Year (Total) 245,160,899 

T otal Budgetary Resources $ 246,952,252 $ 265,060,390 

CHANGE IN OBLIGAT ED BALANCE

 U npaid Obligations:

U npaid Obligations, Brought Forw ard, October 1 $ 4,240,141 $ 4,291,207

N ew Obligations and U pw ard Adjustments 

Outlay s (Gross) (9,542,403) 

Recov eries of Prior-Year U npaid Obligations 

U npaid Obligations, End of Year 

 M emorandum Entries:
 

Obligated Balance, Start of Year $ 4,240,141 $ 4,291,207

Obligated Balance, End of Year $ 6,595,969 $ 4,240,141
 

BUDGET AUT HORIT Y AND OUT LAYS, NET 

Budget Authority , Gross $ 1,426,356 $ 456,371 

Actual Offsetting C ollections (607,019)

Recov eries of prior y ear paid obligations (discretionary and mandatory )

Budget Authority , N et $ (105,713) $ (33,297) 

Outlay s, Gross $ 9,542,403 $ 19,715,268 

Actual Offsetting C ollections 

Agency Outlay s, N et $ 7,924,420 $ 19,108,249 

279,083 235,289

 85,914 117,351

245,525,896 264,604,019

 234,455,541 245,160,899 

 -

234,774,938 

12,177,314 19,899,491

(19,715,268)

(279,083) (235,289)
 

6,595,969 4,240,141

 (1,617,983) 

85,914 117,351 

 (1,617,983) (607,019) 

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

6 
 

 

 

 

Notes to the Financial Statements
 

For the Years Ended September 30, 2017 and 2016

Note 1. Summary of Significant Accounting Policies

A. Reporting Fund 

The Commodity Futures Trading Commission (CFTC or the Commission) is an independent agency of the 

executive branch of the Federal Government. Its mission is to “protect market users and the public from 

fraud, manipulation, and abusive practices related to the sale of commodity futures and options, and to 

foster open, competitive, and financially sound commodity futures and options markets.” 

On July 21, 2010, the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the Dodd-Frank 

Act, or the Act) was signed into law, significantly expanding the powers and responsibilities of the CFTC. 

According to Section 748 of the Act, there is established in the Treasury of the United States a revolving 

fund known as the “Commodity Futures Trading Commission Customer Protection Fund” (the Fund). 

The Fund shall be available to the Commission, without further appropriation or fiscal year limitation, for 

a) the payment of awards to whistleblowers; and b) the funding of customer education initiatives designed 

to help customers protect themselves against fraud or other violations of this Act or the rules and 

regulations thereunder. 

The Act requires CFTC to transmit to the Committee on Agriculture, Nutrition and Forestry of the Senate, 

and the Committee on Agriculture of the House of Representatives a report which includes a complete set 

of audited financial statements and supplementary information, including balance sheet, income 

statement, and cash flow analysis, no later than October 30, of each year. 

B. Basis of Presentation 

The financial statements have been prepared to report the financial position and results of operations for 

the Fund, as required by the Dodd-Frank Act. These statements have been prepared from the Fund’s 

books and records, which are a component of the Commission’s books and records, in conformity with 

U.S. generally accepted accounting principles (GAAP), as prescribed for the Federal government by the 

Federal Accounting Standards Advisory Board (FASAB) and in accordance with the form and content 

requirements contained in Office of Management and Budget (OMB) Circular A-136, Financial Reporting 

Requirements, as amended. 

The Fund was established in July 2010 and funded by transfers from CFTC’s Civil Monetary Penalties, 

Fines and Administrative Fees receipt account. These transfers do not meet the criteria of reportable 

revenue as defined by the Statement of Federal Financial Accounting Standards (SFFAS) 7, Accounting 

for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial 

Accounting. 

The financial statements report on the Fund’s financial position, changes in net position, net cost and 

budgetary resources. The books and records of the Fund served as the source of information for preparing 

the financial statements in the prescribed formats. All Fund financial statements and reports used to 

monitor and control financial resources are prepared from the same books and records. The statements 

should be read with the understanding that they relate to a fund controlled by CFTC, a component of the 

U.S. Government, a sovereign entity. 

The Balance Sheet presents the financial position of the Fund. The Statement of Net Cost presents the 

Fund’s operating results. The Statement of Changes in Net Position displays the changes in the Fund’s net 

position, and the Statement of Budgetary Resources shows the spending authority of the Fund derived 

from the deposits eligible from civil monetary collections. 

7 
 

 

C. Fund Balance with Treasury 

Fund Balance with Treasury is the aggregate amount of the Fund’s balance with the U.S. Treasury. The 

balance in the Fund is available to pay current liabilities and finance authorized operations. 

The Fund does not maintain bank accounts of its own, has no disbursing authority, and does not maintain 

cash held outside of Treasury. Treasury makes disbursements for the Fund. 

D. Investments in U.S. Government Securities

The CFTC has authority to invest amounts in the Customer Protection Fund in market-based U.S. 

Treasury securities. Market-based Treasury securities are debt securities that the U.S. Treasury issues to 

Federal entities without statutorily determined interest rates. Although the securities are not marketable, 

the terms (prices and interest rates) mirror the terms of marketable Treasury securities. Investments are 

carried at their historical cost basis which approximates fair value due to their short-term nature. 

The interest earned on the investments is a component of the Fund and is available to be used for 

expenses of the Fund. Additional details regarding investments are provided in Note 3. Investments. 

E. General Property, Plant and Equipment, Net 

The Commission capitalizes assets annually if they have useful lives of at least two years and an individual 

value of $25,000 or more. Bulk or aggregate purchases are capitalized when the individual useful lives 

are at least two years and the purchase is a value of $25,000 or more. Property, plant and equipment that 

do not meet the capitalization criteria are expensed when acquired. Depreciation for equipment and 

amortization for software is computed on a straight-line basis using a 5-year life. The Commission’s assets 

are valued net of accumulated depreciation or amortization. 

As of September 30, 2017, the Commission has capitalized as software the costs for development of a 

website for the CFTC Whistleblower Office. Additional details regarding general property, plant, and 

equipment are provided in Note 4. General Property, Plant and Equipment, Net. 

F. Liabilities 

The Fund’s liabilities consist of actual and estimated amounts that are likely to be paid as a result of 

transactions covered by the Whistleblower Incentives and Protection regulation, and will be paid from 

available balances remaining in the Fund. In addition, the salaries and operating expenses of the 

Whistleblower’s Office and Office of Customer Education and Outreach were funded through the Fund. 

Total accrued payroll is composed of amounts to be paid to Fund employees as well as the related 

intragovernmental payable for employer contributions and payroll taxes. The accrued annual leave 

liability is the amount owed to employees for unused annual leave as of the end of the reporting period. At 

the end of each quarter, the balance in the accrued annual leave account is adjusted to reflect current 

balances and pay rates. Sick leave and other types of non-vested leave are expensed as taken. Liabilities 

totaled $47,924,252 and $2,118,305 as of September 30, 2017, and 2016, respectively. The Fund’s 

liabilities are considered current liabilities. 

G. Funds from Dedicated Collections 

The Fund contains dedicated collections that can only be used to operate a whistleblower program and 

support customer education initiatives. See Note 1.A. for a description of the purpose of the Fund and its 

authority to use the revenues and other financing sources. Deposits into the Fund are credited from 

monetary sanctions collected by the Commission in covered judicial or administrative actions not 

otherwise distributed to victims of a violation of the Dodd-Frank Act or the rules and regulations 

underlying such action, unless the balance of the Fund at the time the monetary judgment is collected 

exceeded $100 million. No new legislation was enacted as of September 30, 2017, that significantly 

changed the purpose of the dedicated collections or redirected a material portion of the accumulated 

balance. 

8 
 

 

 

 

H. Revenues and Other Financing Sources

The CFTC Customer Protection Fund is funded through monetary sanctions resulting from judicial or 

administrative action brought by the Commission under the Commodity Exchange Act. All collections are 

deposited into a receipt account. Eligible collections are transferred into the Fund from the CFTC’s Civil 

Monetary Penalties, Fines and Administrative Fees receipt account. 

Congress enacted the Dodd-Frank Act that provides the CFTC with the authority to establish the Fund. 

The Fund is available to the Commission, without further appropriation or fiscal year limitation. These 

funds are considered financing sources under U.S. Treasury Department guidelines. Per the Act, no 

sanction collected by the Commission can be deposited into the Fund if the Fund’s balance exceeds $100 

million. The CFTC may request the Secretary of the Treasury to invest Fund amounts in Treasury 

obligations. No eligible collections were transferred during FY 2017 or FY 2016 because the Fund reached 

its legislative maximum during FY 2014. 

I. Intra- and Inter-Agency Relationships

The CFTC is an independent Federal agency. The Commodity Futures Trading Commission Customer 

Protection Fund is a fund within the CFTC, and these financial statements present a segment of the CFTC 

financial activity. The financial events of the Fund are consolidated into the CFTC annual financial 

statements. 

J. Use of Management Estimates 

In addition to accruals for goods and services, management estimates were used to calculate overhead 

expenses in the amount of $918,000 and $736,530 that were allocated to the Fund for the years ended 

September 30, 2017, and 2016. These amounts were derived by multiplying management’s estimated 

overhead cost per full-time equivalent (FTE) by the number of FTE charged to the Fund. 

K. Limitations of the Financial Statements 

The principal financial statements included in this report have been prepared to report the financial 

position and results of operations of the Fund, pursuant to the requirements of Section 748 of the DoddFrank Consumer Protection Act. While the statements have been prepared from the books and records of 

the CFTC in accordance with GAAP for Federal entities, these statements are in addition to the reports 

used to monitor and control the financial activity of the CFTC, which are prepared from the same books 

and records. The statements should be read with the understanding that they are for the Customer 

Protection Fund, a single fund within the CFTC. 

9 
 

 

 

 

Note 2. Fund Balance with Treasury 

The Fund Balance with Treasury by type of fund and Status of Fund Balance with Treasury as of 

September 30, 2017, and 2016, consists of the following: 

2017 2016 

Revolving Funds $ 7,560,992 $ 5,485,412 

T OT AL FUND BALANCE WIT H T REASURY $ 7,560,992 $ 5,485,412 

Revolving Funds 

Unobligated Fund Balance 

Av ailable $ 965,023 $ 1,245,271 

Obligated Balance Not Yet Disbursed 

T otal Revolving Funds 

T OT AL FUND BALANCE WIT H T REASURY $ 7,560,992 $ 5,485,412 

6,595,969 4,240,141 

 7,560,992 5,485,412 

A. Reconciliation to Treasury

There are no differences between the fund balance reflected in the Fund’s Balance Sheet and the balance 

in the Treasury account. 

B. Fund Balance with Treasury

Fund Balance with Treasury consists of collections of fines and penalties not owed to harmed investors. 

Obligation of these funds is controlled by apportionments made by OMB. Until such funds are 

apportioned by OMB for use in the current period, they are unavailable to be obligated. 

Note 3. Investments

The CFTC invests amounts deposited in the Fund in overnight short-term Treasury securities. Treasury 

overnight certificates of indebtedness are issued with a stated rate of interest to be applied to their par 

amount, mature on the business day immediately following their issue date, are redeemed at their par 

amount at maturity, and have interest payable at maturity. 

The overnight certificates are Treasury securities whose interest rates or prices are determined based on 

the interest rates or prices of Treasury-related financial instruments issued or trading in the market, 

rather than on the interest rates or prices of outstanding marketable Treasury securities. The Commission 

may invest in other short-term or long-term Treasury securities at management’s discretion 

The Commission’s investments as of September 30, 2017, and 2016, were $234 million and $244 million, 

respectively. Related nonexchange interest revenue for the years ended September 30, 2017, and 2016, 

was $1,538,309 and $489,668, respectively. 

Intragovernmental Investments in Treasury Securities 

The Federal Government does not set aside assets to pay future claims or other expenditures associated 

with funds from dedicated collections deposited into the Customer Protection Fund. The dedicated cash 

receipts collected by the Commission as a result of monetary sanctions are deposited in the U.S. Treasury, 

which uses the cash for general Government purposes. As discussed above and in Note 1.D., the 

Commission invests the majority of these funds in Treasury securities. These Treasury securities are an 

asset of the Commission and a liability of the U.S. Treasury. Because the Commission and the U.S. 

Treasury are both components of the Government, these assets and liabilities offset each other from the 

standpoint of the Government as a whole. For this reason, the investments presented by the Commission 

do not represent an asset or a liability in the U.S. Government-wide financial statements. 

10 
 

 

 

 

Treasury securities provide the Commission with authority to draw upon the U.S. Treasury to pay future 

claims or other expenditures. When the Commission requires redemption of these securities to make 

expenditures, the Government finances those expenditures out of accumulated cash balances, by raising 

taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other 

expenditures. This is the same manner in which the Government finances all expenditures. 

Note 4. General Property, Plant and Equipment, Net 

Property, Plant and Equipment as of September 30, 2017, and 2016, consisted of the following: 

2017 

Accumulated 

Amortization/ 

Major Class Service Life and Method Cost Depreciation

IT S oftw are 5 Years/Straight Line 

$ 214,824 $ (78,769) $ 136,055 

2016 

Major Class Service Life and Method Cost 

Accumulated 

Amortization/ 

Depreciation Net Book Value 

IT S oftw are 5 Years/Straight Line 

$ 214,824 $ (35,804) $ 179,020

 Net Book Value 

 214,824 (78,769) 136,055 

 214,824 (35,804) 179,020 

Note 5. Contingencies

Unasserted claims are actions or potential actions the Commission is aware of in which future events may 

result in claims against the Fund. 

As mentioned in Note 1.A. Reporting Fund, the Fund will be used to pay awards to whistleblowers if they 

voluntarily provide original information to the CFTC that leads to the successful enforcement by the CFTC 

of a covered judicial or administrative action in which monetary sanctions exceeding $1 million are 

imposed. Whistleblowers are entitled to appeal any decisions by the Commission in regards to claims 

made against the Fund. 

In accordance with Federal accounting standards, CFTC records contingent liabilities for any unasserted 

claim in which payment has been deemed probable and for which the amount of potential liability can be 

estimated. The Commission also discloses all claims for which payment is reasonably possible. As of 

September 30, 2017, the Commission has determined that it is probable that it will make whistleblower 

awards of approximately $45.5 million as a result of valid whistleblower claims on Commission-imposed 

sanctions that have already been collected. There were no unasserted claims deemed reasonably probable 

and measurable, or reasonably possible, as of September 30, 2017. 

Note 6. Intragovernmental Costs

The Statement of Net Cost presents the Customer Protection Fund’s results of operations for the activities 

to run the Whistleblower’s Office and Office of Customer Education and Outreach. Intragovernmental 

costs arise from the purchases of goods and services from other components of the Federal Government 

(including other CFTC funds). In contrast, public costs are those which arise from the purchase of goods 

and services from non-Federal entities. The Fund incurred $553,534 and $695,091 in net 

intragovernmental costs and $52,199,062 and $19,856,491 in net costs with the public for the years ended 

September 30, 2017, and 2016, respectively. The significant increase in costs with the public is primarily 

due to $45.5 million in whistleblower awards in FY 2017 compared to $11.5 million in FY 2016. 

11 
 

 

 

Supplementary Schedule 

Commodity Futures T rading Commission 

Customer Protection Fund 

Cash Flow Analysis 

For the Period from October 1, 2016 to September 30, 2017 

Cash as of October 1, 2016 $ 5,485,412 

Cash flows from operating activities 

Refunds collected 

$ (9,542,403) 

1,532,069

$ (7,924,420) 

Cash flows from investing activities

$ 10,000,000 

$ 10,000,000 

Net increase/(decrease) in cash and cash equivalents $ 2,075,580 

Cash as of September 30, 2017 $ 7,560,992 

 Redemptions of U S Treasury Securities 

Net cash flows from investing activities 

12 

 Paid Ex penses for WhistleBlow er and C onsumer Outreach Offices

 Interest earned from inv esting in U S Treasury Securities 

 85,914 

Net cash flows from operating activities