U.S. COMMODITY FUTURES TRADING COMMISSION 

OFFICE OF INSPECTOR GENERAL 

Three Lafayette Centre
 

1155 21st Street, NW, Washington, DC 20581
 

Telephone: (202) 418-5000
 

Facsimile: (202) 418-5522
 

TO:	 Timothy G. Massad, Chairman 

Sharon Y. Bowen, Commissioner 

J. Christopher Giancarlo, Commissioner 

FROM:	 Miguel A. Castillo, Assistant Inspector General for Auditing 

DATE:	 October 30, 2015 

SUBJECT:	 Audit of the CFTC Customer Protection Fund Financial Statements for 

Fiscal Year 2015 

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

Customer Protection Fund (Fund) financial statements. The Fund’s balance as of 

September 30, 2015 was $268,809,520. We contracted with the independent certified 

public accounting firm of Williams Adley & Company-DC, LLP (Williams Adley) to audit 

the financial statements of the Fund as of September 30, 2015, and for the year then 

ended, to provide negative assurance on internal control and compliance with laws and 

regulations for financial reporting. The contract required that the audit be done in 

accordance with U.S. generally accepted government auditing standards. 

In its audit of the Fund, Williams Adley found: 

	 The financial statements were fairly presented, in all material respects, in conformity 

with U.S. generally accepted accounting principles. 

	 There were no material weaknesses in internal control identified for the Fund. 

Williams Adley did provide a comment in the form of a management letter for 

improving the preparation of the financial statements. 

	 No instances in which the financial management systems did not substantially 

comply with the requirements of the Federal Financial Management Improvement 

Act of 1996. 

In connection with the contract, we reviewed Williams Adley’s report and related 

documentation and inquired of its representatives. Our review, as differentiated from an 

audit in accordance with U.S. generally accepted government auditing standards, 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. Williams Adley is responsible for the attached auditor’s report dated 

October 30, 2015 and the conclusions expressed in the report. However, our review 

disclosed no instances where Williams Adley did not comply, in all material respects, 

with U.S. generally accepted government auditing standards. 

Attached is a copy of Williams Adley’s unmodified (clean) opinion letter and their 

management letter. Please call me if any questions at 202 418-5084. 

CC: Clark Ogilvie, Chief of Staff 
~ l f • 11 WILLIAMS 

l ! J.. 1 ADLEY 

Independent Auditor's Report 

Chairman 

U.S. Commodity Futures Trading Commission 

Inspector General 

U.S. Commodity Futures Trading Commission 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Commodity Futures Trading Commission 

Customer Protection Fund (CPF) which comprise the Balance Sheets as of September 30, 2015 and 2014, 

and the related Statements of Net Cost, Changes in Net Position and Budgetary Resources for the years 

then ended, and the related notes to the financial statements (hereinafter referred to as the financial 

statements). 

Management's Responsibility for the Financial Statements 

CPF management is responsible for the preparation and fair presentation of the financial statements in 

accordance with accounting principles generally accepted in the United States of America; this includes 

the design, implementation, and maintenance of internal control relevant to the preparation and fair 

presentation of financial statements that are free from material misstatement, whether due to fraud or 

error. 

Auditor's Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We 

conducted our audits in accordance with auditing standards generally accepted in the United States of 

America and standards applicable to financial statement audits contained in Government Auditing 

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

Budget (OMB) Bulletin No. 15-02, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 15-02 require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are free of material misstatements. 

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

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

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

error. In making those risk assessments, we considered internal control relevant to the CPF's 

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

are appropriated in the circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the CPF's internal control. Accordingly, we express no such opinion. An audit also 

includes evaluating the appropriateness of accounting policies used and the reasonableness of 

WILLIAMS, ADLEY & COMPANY-DC, LLP 

Certified Public Accountants I Management Consultants 

1030 151

h Street, NW, Suite 350 West • Washington, DC 20005 • (202) 371-1397 • Fax: (202) 371-9161 

www.williamsadley.com 
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

our audit opinion. 

Opinion 

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

financial position of the Customer Protection Fund as of September 30, 2015 and 2014, and its net cost, 

changes in net position and budgetary resources for the fiscal years then ended, in conformity with 

accounting principles generally accepted in the United States of America. 

Emphasis of a Matter 

As discussed in Note L to the financial statements, the 2015 financial statements have been restated to 

correct a misstatement in the 2014 Statement of Budgetary Resources. Our opinion is not modified with 

respect to this matter. 

Other Information 

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

of the 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. 

Our audit was conducted for the purpose of forming an opinion on the basic financial statements of CPF 

as a whole. 

Other Reporting Required by Government Auditing Standards 

In accordance with Government Auditing Standards, we have also issued our reports dated October 30, 

2015, on our consideration of the CPF's internal control over financial reporting and our tests of its 

compliance with certain provisions of Jaws, regulations, and other matters. The purpose of those 

reports is to describe the scope of our testing of internal control over financial reporting and compliance 

and the results of that testing, and not to provide an opinion on the internal control over financial 

reporting nor on compliance. Those reports are an integral part of an audit performed in accordance 

with Government Auditing Standards and should be read in conjunction with this report in assessing the 

results of our audits. 

~'~~~~,, ~· L-1F(J·d)c, LL P

October 30, 2015 
~ l f ~ 11 WILLIAMS 

l ! A. 1 ADLEY 

Independent Auditor's Report on Compliance and Other Matters 

Chairman 

U.S. Commodity Futures Trading Commission 

Inspector General 

U.S. Commodity Futures Trading Commission 

We have audited the Principal Statements (hereinafter referred to as the "financial statements") of the 

Commodity Futures Trading Commission Customer Protection Fund (CPF) as of and for the years ended 

September 30, 2015 and 2014, and have issued our report thereon dated October 30, 2015. We 

conducted our audit in accordance with auditing standards generally accepted in the United States of 

America; standards applicable to financial audits contained in Government Auditing Standards, issued by 

the Comptroller General of the United States; and Office of Management and Budget (OMB) audit 

guidance. 

The management of the CPF is responsible for complying with laws and regulations that are applicable 

to the CPF. As part of obtaining reasonable assurance about whether the CPF's financial statements are 

free of material misstatement, we performed tests of the CPF's compliance with certain provisions of 

laws and regulations including but not limited to the Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Accountability for Tax Dollars Act, Federal Managers' Financial Integrity Act, and the 

Anti-Deficiency Act noncompliance with which could have a direct and material effect on the 

determination of the financial statements amounts, and certain provisions of other laws and regulations 

specified in the Office of Management and Budget (OMB) Bulletin No. 15-02, Audit Requirements for 

Federal Financial Statements, as amended. We limited our tests of compliance to the provisions 

described in the preceding sentence, and we did not test compliance with all laws and regulations 

applicable to the CPF. 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 described in the preceding paragraph of this report disclosed no 

instances of noncompliance or other matters that are required to be reported under Government 

Auditing Standards and OMB Bulletin No. 15-02. 

The report is intended solely for the information and use of the management of the CPF, OMB, the U.S. 

Government Accountability Office, and the U.S. Congress and is not intended to be and should not be 

used by anyone other than these specified parties. 

WILLIAMS, ADLEY & COMPANY-DC, LLP 

Certified Public Accountants I Management Consultants 

1030 151

h Street, NW, Suite 350 West • Washington, DC 20005 • (202) 371-1397 • Fax: (202) 371-9161 

www.williamsadlev.com 
WILLIAMS 

ADLEY 

Chairman 

U.S. Commodity Futures Trading Commission 

MANAGEMENT LEITER 

Inspector General 

U.S. Commodity Futures Trading Commission 

We have audited the balance sheets as of September 30, 2015 and 2014, and the related statements of 

net cost, changes in net position, budgetary resources, and custodial activity for the years then ended, 

hereinafter referred to as "financial statements", of the Commodities Futures Trading Commission 

(CFTC), Customer Protection Fund (CPF) and have issued an unmodified opinion thereon dated October 

30, 2015. 

In planning and performing our audit of the financial statements of the CPF, we considered its internal 

control over financial reporting in order to determine our auditing procedures for the purpose of 

expressing our opinion on the financial statements and not to provide assurance on internal control. We 

have not considered the internal control since the date of our report. 

In our fiscal year 2015 audit, we did not identify any deficiencies in internal control over financial 

reporting that we consider to be material weaknesses. We noted a control deficiency in financial 

reporting as discussed in Appendix I. 

We appreciate the cooperation and courtesies extended to us during the conduct of the audit. We 

would be pleased to meet with you or your staff, at your convenience, to discuss issues in this letter or 

furnish any additional information you may require. 

WILLIAMS, ADLEY & COMPANY-DC, LLP 

Certified Public Accountants/ Management Consultants 

1030 15th Street, NW, Suite 350 West• Washington, DC 20005 • (202) 371-1397 • Fax: (202) 371-9161 

www.willlamsadley.com 
APPENDIX I 

05-01 - Financial Reporting Controls Need Improvement 

We ncited that CFTC's financial reporting process should be enhanced to ensure proper 

classification of items on the Statement of Budgetary Resources. CFTC's financial reporting 

process for CPF does not include a reconciliation of the Statement of Budgetary Resources to 

the SF-133, Report on Budget Execution and Budgetary Resources to ensure the integrity of the 

numbers presented. 

Although CFTC's financial reporting process is mostly done through its core accounting system, 

certain "on top" adjusting journal entries are made manually for financial statement purposes 

using excel spreadsheets. The use of spreadsheets increases the risk of manual errors in the 

financial reporting process. 

As a result the Apportioned amount reported on the FY14 Statement of Budgetary Resource 

required reclassification. 

Recommendation: 

We recommend that CFTC enhance their financial reporting process to include a reconciliation 

between the financial statements and the SF-133 to ensure the consistency and accuracy of 

external financial reporting. 

Management Response: 

Management concurs with this finding. 
FINANCIAL STATEMENTS FOR THE 

CUSTOMER PROTECTION FUND 

REPORT TO CONGRESS
 

As of September 30, 2015 
 

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 

6 

 

 

 

 

 

 

 

32 

 

 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Balance Sheets
 

As of September 30, 2015 and 2014 

2015 2014 

Assets 

Intragov ernmental: 

Fund Balance With Treasury (N ote 2) $ 5,593,661 $ 4,448,248 

Inv estments (N ote 3) 270,000,000 263,000,000

T otal Intragovernmental 274,448,248 268,593,661

General Property , Plant and Equipment, N et 215,859 -

T otal Assets $ $ 268,809,520 274,448,248 

Liabilities 

Accounts Pay able 835,464 109,470 

Accrued Pay roll 55,478 23,466 

Other 6,168 -

C ontingent Liabilities (N ote 4) 300,000 -

T otal Liabilities 1,197,110 132,936 

Net Position 

C umulativ e Results of Operations - Funds from Dedicated C ollections 274,315,312 267,612,410

T otal Net Position 274,315,312 267,612,410

T otal Liabilities and Net Position $ 274,448,248 268,809,520

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, 2015 and 2014 

Net Costs by Goal (Note 5) 

2015 2014 

Gross C osts $ 6,761,054 $ 1,735,213 

T otal Net Cost of Operations $ 6,761,054 $ 1,735,213 

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, 2015 and 2014 

2015 2014 

Cumulative Results of Operations 

Beginning Balances, October 1 $ 274,315,312 $ 99,904,291 

Budgetary Financing Sources: 

N onex change Interest Rev enue 58,152 35,630 

Transfers-In/Out Without Reimbursement (+/-) - 176,110,604 

T otal Financing Sources 58,152 176,146,234 

Net Cost of Operations (6,761,054) (1,735,213) 

Net Change (6,702,902) 174,411,021 

T otal Cumulative Results of Operations, September 30 $ 267,612,410 $ 274,315,312 

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

5 
 

 

 

 

 

 

 

 

 

 

 

 

 

 Unpaid Obligations: 

 Memorandum Entries: 

Obligated Balance, Start of Year $ 3,670,892 $ 333,533 

 

Commodity Futures Trading Commission 

Customer Protection Fund 

Statements of Budgetary Resources 

For the Years Ended September 30, 2015 and 2014 

2015 2014 

Restated (Note 1L) 

BUDGETARY RESOURCES 

Unobligated Balance Brought Forward, October 1 $ 269,901,355 $ 98,986,699

 Adjustment to Unobligated Balance Brought Forward, October 1 829,170 -

Unobligated Balance Brought Forward, October 1, as Adjusted 270,730,525 98,986,699 

Recoveries of Prior Year Unpaid Obligations 89,205 24,004 

Unobligated Balance from Prior Year Budget Authority , Net 270,819,730 99,010,703 

Spending Authority from Offsetting Collections 53,908 175,933,234 

T otal Budgetary Resources $ 270,873,638 $ 274,943,937 

STATUS OF BUDGETARY RESOURCES 

Obligations Incurred $ 6,622,259 $ 5,042,582 

Unobligated Balance, End of Year 

Apportioned 264,251,379 11,000,257 

Unapportioned - 258,901,098 

Total Unobligated Balance, End of Year 264,251,379 269,901,355 

T otal Budgetary Resources $ 270,873,638 $ 274,943,937 

CHANGE IN OBLIGATED BALANCE 

Unpaid Obligations, Brought Forward, October 1 $ 3,670,892 $ 3 3 

Obligations Incurred 6,622,259 5,042,582 

Outlays (Gross) (5,912,739) (1,681,219) 

Recoveries of Prior-Year Unpaid Obligations (89,205) (24,004) 

Unpaid Obligations, End of Year 4,291,207 3,670,892 

Obligated Balance, End of Year $ 4,291,207 $ 

33,53

3,670,892 

BUDGET AUTHORITY AND OUTLAYS, NET 

Budget Authority, Gross $ 53,908 $ 175,933,234 

Actual Offsetting Collections (58,152) (176,146,234) 

Budget Authority, Net $ (4,244) $ (213,000) 

Outlays, Gross $ 5,912,739 $ 1,681,219 

Actual Offsetting Collections (58,152) (176,146,234) 

NET OUTLAYS $ 5,854,587 $ (174,465,015) 

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

6 
 

 

 

Notes to the Financial Statements
 

For the Years Ended September 30, 2015 and 2014 

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. 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 Customer Protection Fund investments are 

provided in Note 3. Investments. 

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. 

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, 2015, the Commission has capitalized $215,859 for the development and 

enhancement of CFTC Whistleblower and Office of Consumer Outreach websites as software in 

development. 

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 Consumer Outreach Office were funded through the Fund. Liabilities totaled 

$1,197,110 and $132,936 as of September 30, 2015 and 2014 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, 2015 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. Eligible collections of $176.1 million were transferred into the Fund as of September 30, 2014. 

No eligible collections were transferred during FY 2015 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 $386,704 that were allocated to the Fund for FY 2015. This amount was 

derived by multiplying management’s estimated overhead cost per full-time equivalent (FTE) of $48,338 

times eight FTE in 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. 

L. Restatement 

In the original presentation of its FY 2014 financial statements, the Commission misclassified $16.2 

million of unobligated balances as apportioned. SFFAS 21, Reporting Correction of Errors and Changes 

in Accounting Principles, requires restatement for the correction of a material error. This amount has 

been reclassified (restated) in the FY 2014 Statement of Budgetary Resources from the “Apportioned” to 

the “Unapportioned” components of the “Unobligated Balance, End of Year.” This change does not affect 

any other line items, the FY 2015 Statement of Budgetary Resources, or the Commission’s net position. 

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, 2015 and 2014 consists of the following: 

2015 2014 

Revolving Funds $ 5,593,661 $ 4,448,248 

T OT AL FUND BALANCE WIT H T REASURY $ 5,593,661 $ 4,448,248 

Revolving Funds 

U nobligated Fund Balance 

Av ailable $ 1,302,454 $ 777,356 

Obligated Balance N ot Yet Disbursed 4,291,207 3,670,892 

T otal Revolving Funds 5,593,661 4,448,248 

T OT AL FUND BALANCE WIT H T REASURY $ 5,593,661 $ 4,448,248 

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, they are unavailable to be obligated. 

Note 3. Investments 

In fiscal year 2012, the CFTC began investing funds 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 Commission may invest in other short-term or long-term Treasury securities at management’s 

discretion. 

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’s investments as of September 30, 2015 and 2014 were $263 million and $270 million, 

respectively. Interest earned as of September 30, 2015 and 2014 was $58,152 and $35,630, 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 

10 
 

 

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. 

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. 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 Commodity Futures Trading Commission Customer 

Protection 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. 

On September 29, 2015, the Commission announced that it expects to make an award of approximately 

$300,000 to a whistleblower for providing valuable information about violations of the Commodity 

Exchange Act (CEA). While the order granting the award can be appealed until October 29, 2015, the 

Commission has recorded a liability because it has been deemed probable that the award will be paid. 

There were no unasserted claims deemed reasonably probable and measurable, or reasonably possible, as 

of September 30, 2014. 

Note 5. 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 Consumer Outreach Office. 

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 Whistleblower’s Office and Consumer 

Outreach Office incurred approximately $340 thousand and $217 thousand in net intragovernmental 

costs and $6.421 million and $1.518 million in net costs with the public for the years ended September 30, 

2015 and 2014, respectively. 

11 
Net cash flows from operating activities $ (5,854,587) 

  Net cash flows from investing activities $ 7,000,000 

Supplementary Schedule 

Commodity Futures T rading Commission 

Cash Flow Analysis 

For the Period from October 1, 2014 to September 30, 2015 

Customer Protection Fund 

Cash as of October 1, 2014 $ 4,448,248 

Cash flows from operating activities

 Paid Ex penses for WhistleBlow er and C onsumer Outreach Offices $ (5,912,739)

 Interest earned from inv esting in U S Treasury Securities 58,152 

Cash flows from investing activities

 Redemptions of U S Treasury Securities $ 7,000,000 

Net increase/(decrease) in cash and cash equivalents $ 1,145,413 

Cash as of September 30, 2015 $ 5,593,661 

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