U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre
 

1155 21st Street, NW, Washington, DC 20581
 

Telephone: (202) 418-5110
 

TO:	 Timothy G. Massad, Chairman 

Sharon Y. Bowen, Commissioner 

J. Christopher Giancarlo, Commissioner 

FROM:	 Miguel A. Castillo, CPA, CRMA 

Assistant Inspector General for Auditing 

DATE:	 November 14, 2016 

SUBJECT:	 Financial Statements Audit Fiscal Year (FY) 2016

The Office of the Inspector General (OIG) has concluded an audit of the Commodity 

Futures Trading Commission’s (CFTC) financial statements as of September 30, 2016. 

We contracted with the independent certified public accounting firm Allmond & 

Company, LLC (Allmond & Co.) to conduct this required audit. The contract required 

that the audit be done in accordance with U.S. generally accepted government auditing 

standards (GAGAS), the standards issued by the Comptroller General of the United 

States, and Office of Management and Budget (OMB) Bulletin No. 15-02, Audit 

Requirements for Federal Financial Statements. 

Allmond & Co. communicated an unqualified (clean) opinion on CFTC’s financial 

statements as of September 30, 2016, and determined its net costs, changes in net 

position, custodial activity, and budgetary resources for the year then ended were 

presented fairly in accordance with U.S. generally accepted accounting principles (US 

GAAP). 

Allmond & Co. also communicated that CFTC’s internal controls over financial reporting 

and compliance are sufficiently designed to detect and correct material errors in its 

financial statements and closed the material weaknesses reported in the FY 2015 

financial statement audit (relating to the recording of lease obligations). 

In reference to compliance with laws and regulations, Allmond & Co. disclosed an 

instance of noncompliance previously addressed in the FY 2015 financial statement 

audit, and recommended that CFTC complete the investigation into the potential Anti 

Deficiency Act violations associated with the recording of lease obligations. 

Management concurred with the recommendation. 

In connection with the contract, Allmond & Co. is responsible for the auditor’s report 

dated November 14, 2016, and the conclusions expressed in the report. We do not 

express opinions on the CFTC’s financial statements or internal control or on whether 

CFTC’s financial management systems substantially complied with applicable laws and 

regulations over financial reporting. 

1
 

 

Consistent with our responsibility under the Inspector General Act, we are providing 

copies of this report to appropriate Congressional committees with CFTC oversight and 

appropriation responsibilities. In addition, we will post a copy of the report on our 

public website. Attached is a copy of Allmond & Co.’s opinion letter and their 

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

cc:	 Clark Ogilvie, Chief of Staff 

Anthony C. Thompson, Executive Director 

Mary Jean Buhler, Chief Financial Officer 

A. Roy Lavik, Inspector General
 

Judith A. Ringle, Deputy Inspector General and Chief Counsel
 

2
 

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), which comprise the balance sheet as of September 30, 2016 and the related 

statements of net cost, changes in net position, custodial activity and combined statements of budgetary 

resources for the year ended, and the related notes to the financial statements (hereinafter referred to as 

the financial statements). The financial statements of CFTC as of September 30, 2015 were audited by 

other auditors whose report, dated January 15, 2016, expressed a qualified opinion on those 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 2016 financial statements of CFTC based on 

our audit. We conducted our audit 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. 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 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. 

3
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 as of September 30, 2016, and its 

net costs, changes in net position, custodial activity and budgetary resources for the year then ended in 

conformity with generally accepted accounting principles in the United States of America 

Emphasis of Matter 

The CFTC’s historical practice had been to obligate only the annual portion of lease payments due each 

fiscal year. On February 4, 2016, GAO issued Comptroller General Decision B-327242, Commodity 

Futures Trading Commission – Recording of Obligations for Multiple-Year Leases. GAO determined 

that while the CFTC had the authority to enter into multiple year leases, the agency violated the recording 

statute, 31 U.S.C. 1501(a) (1), because it did not record the total lease liability for each of its leases when 

it entered into its leasing contracts. 

As stated in Note 16 to the financial statements, CFTC restated the FY 2015 Statement of Budgetary 

Resources to reflect the unfunded lease obligations to account for the full amount of obligations 

remaining on its active leases for building space in accordance with generally accepted accounting 

principles. The restatement does not change the opinion of the predecessor auditor on the FY 2015 

financial statements. 

Other Matters 

Required Supplementary Information 

U.S. generally accepted accounting principles require that the information in the Management’s 

Discussion and Analysis and Required Supplementary Information sections be presented to supplement 

the basic financial statements. Such information, although not a part of the basic financial statements, is 

required by the Federal Accounting Standards Advisory Board who considers it to be an essential part of 

financial reporting for placing the basic financial statements in an appropriate operational, economic, or 

historical context. We have applied certain limited procedures to the required supplementary information 

in accordance with auditing standards generally accepted in the United States of America, which 

consisted of inquiries of management about the methods of preparing the information and comparing the 

information for consistency with management’s responses to our inquires, the basic financial statements, 

and other knowledge we obtained during our audits of the basic financial statements. 

Other Information 

Our audits were conducted for the purpose of forming an opinion on the basic financial statement as a 

whole. The information contained within the introductory sections (presented before the Management’s 

Discussion and Analysis section), the Message from the Chief Financial Officer, Other Information, and 

Appendix sections is presented for purposes of additional analysis and is not a required part of the basic 

4
 

 

Independent Auditors’ Report 

financial statements. Such information has not been subjected to the auditing procedures applied in the 

audit of the basic financial statements, and accordingly, we do not express an opinion or provide any 

assurance 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, 2016, we considered CFTC’s internal control over financial reporting by obtaining an understanding 

of CFTC’s internal control, determining whether internal controls 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 

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

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

the objectives described in OMB Bulletin No. 15-02. We did not test all internal control 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. 

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 misstatements on a timely basis. A significant deficiency is a control deficiency or a 

combination of control deficiencies, that adversely affects CFTC’s 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 CFTC’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 2016 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. 

However, we noted an additional matter that we will report to CFTC’s management in a separate letter. 

Exhibit II presents the status of prior year findings and recommendations. 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether CFTC’s fiscal year 2016 financial statements are 

free of material misstatements, we performed tests of its compliance with certain provisions of laws and 

regulations, with which noncompliance 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.15-02. 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. 

5
Independent Auditors’ Report 

The results of our tests of compliance as described in the preceding paragraph, disclosed an instance of 

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

Standards or OMB Bulletin No. 15-02 and which are described in Exhibit I. 

This report is intended solely for the information of CFTC’s management, OMB, and Congress. This 

report is not intended to be and should not be used by anyone other than these specified parties. 

November 14, 2016 

6
Independent Auditors’ Report 

Exhibit II 

Status of Prior Year Findings and Recommendations 

CONDITION 

Potential Anti-deficiency Act (ADA) Violation: 

CFTC continues to investigate a matter that may potentially represent a violation of the ADA related to 

the CFTC’s historical policy of entering into lease contracts and recording related obligations. A final 

determination has not yet been made and therefore the outcome of this matter is not presently known. 

CRITERIA 

Title 31 U.S. Code (U.S.C.) Section 1517 Prohibited Obligations and Expenditures states: 

(a) An officer or employee of the United States Government or of the District of Columbia 

government may not make or authorize an expenditure or obligation exceeding – 

(1) An apportionment; or 

(2) The amount permitted by regulations prescribed under section 1514(a) of this title. 

(b) If an officer or employee of an executive agency or of the District of Columbia government 

violates subsection (a) of this section, the head of the executive agency or the Mayor of the 

District of Columbia, as the case may be, shall report immediately to the President and Congress 

all relevant facts and a statement of actions taken. A copy of each report shall also be transmitted 

to the Comptroller General on the same date the report is transmitted to the President and 

Congress. 

CAUSE 

CFTC did not record its multi-year leases in accordance with applicable laws and regulations. 

EFFECT 

CFTC may not be in compliance with the ADA related to the potential instance noted. 

RECOMMENDATION 

We recommend that CFTC’s management complete the investigation into the potential ADA violation 

noted and report to the appropriate parties, as necessary. 

MANAGEMENT’S RESPONSE

Management concurs with the recommendation. 

7
Independent Auditors’ Report 

Exhibit II 

Status of Prior Year Findings and Recommendations 

The following table provides the fiscal year (FY) 2016 status of all recommendations included in the 

Independent Auditors' Report on the Commodity Futures Trading Commissions FY 2015 Financial 

Statements (January 15, 2016). 

FY 2015 

Finding 

FY 2015 Recommendation FY 2016 

Status 

Internal 

Controls 

over 

Financial 

Reporting 

Recommendation: 

(a) Improve its internal controls over financial reporting and 

compliance. Specifically, we recommend that management perform a Closed 

more detailed review of all information in the annual financial report 

including financial statements, notes, and supplementary information 

and prepare the GAO accounting and financial reporting checklist. The 

review performed should ensure all transactions and classes of 

transactions are recorded and reported in the financial statements in 

accordance with U.S. generally accepted accounting standards. Such 

review should be documented and maintained. 

(b) Develop written accounting policies and procedures that document 

the basis for all accounting positions that are significant to the financial 

statements. 

(c) Develop and implement adequate control to ensure lease obligations 

are recorded in compliance with OMB A-11, Appendix B requirements. 

(d) Update its accounting policy on the accounting for the lease 

obligation to be consistent with the guidance in OMB A-11, Appendix 

B. 

(e) Investigate the potential violation of ADA to make a final 

determination and report it, as applicable 

Closed 

Closed 

Closed 

Closed 

Potential 

AntiDeficiency 

Act 

Violation 

Recommendation: 

(a) Complete the investigation into the potential ADA violation noted. 

(b) Develop and implement sufficient policies and procedures to 

prevent future ADA violations. 

Open 

Closed 

8
 

 

 

 

 

 

FY 2016 Agency Financial Report 

Financial Highlights

The following chart is an overview of the Commission’s financial position, preceding a discussion of 

the agency’s financial highlights for fiscal year 2016: 

Financial Summary

2016 2015 

Condensed Balance Sheet Data 

Fund Balance with Treasury $ 71,891,891 $ 67,246,060 

Investments 

Accounts Receivable 

Prepayments 

Custodial Receivables, Net 

General Property, Plant and Equipment, Net 50,358,266 

Deferred Costs - 

Total Assets $ 382,199,471 $ 387,821,062 

Accounts Payable $ 10,589,674 $ 8,607,890 

FECA Liabilities 505,002 498,101 

Accrued Payroll and Annual Leave 16,647,297 15,004,112 

Custodial Liabilities 15,089,568 4,696,176 

Deposit Fund Liabilities 265,828 179,806 

Deferred Lease Liabilities 28,293,139 25,673,457 

Contingent Liabilities - 300,000 

Other - 22,397 

Total Liabilties $ 71,390,508 $ 54,981,939 

Unexpended Appropriations - All Other Funds $ 53,836,721 $ 50,997,602 

Cumulative Results of Operations - Funds from Dedicated Collections 247,550,496 267,612,410 

Cumulative Results of Operations - All Other Funds 9,421,746 14,229,111 

Total Net Position $ 310,808,963 $ 332,839,123 

Total Liabilities and Net Position $ 382,199,471 $ 387,821,062 

2016 2015 

Condensed Statements of Net Cost 

Gross Costs $ 278,141,094 $ 249,861,126 

Earned Revenue (55,123) (53,074) 

Total Net Cost of Operations $ 278,085,971 $ 249,808,052 

NET COST BY STRATEGIC GOAL

Goal One - Market Integrity and Transparency $ 72,413,587 $ 68,322,502 

Goal Two - Financial Integrity and Avoidance of Systemic Risk 85,650,480 73,918,203 

Goal Three - Comprehensive Enforcement 106,506,926 95,501,618 

Goal Four - Domestic and International Cooperation and Coordination 13,514,978 12,065,729 

Total Net Cost of Operations $ 278,085,971 $ 249,808,052 

 244,000,000 263,000,000 

 13,120 18,614 

2,847,772 2,473,459 

 15,089,568 4,696,176 

 48,357,120 

28,487 

Figure 1: Financial Summary 

9
1

2 

3 

5 

6

 

 

 

 

 

17

 

18 

1 

2

 

 

 

 

 

 

 

 

31

32. 

33 

FY 2016 Agency Financial Report 

Principal Financial Statements 

Commodity Futures Trading Commission 

BALANCE SHEETS 

As of September 30, 2016 and 2015 

2016 2015 

Assets 

Intragovernmental: 

Fund Balance With Treasury (Note 2) 

Investments (Note 3) 

Accounts Receivable, Net (Note 4) 

Prepayments (Note 1J) 

Total Intragovernmental 

$ 71,891,891 

244,000,000 263,000,000 

 2,000 -

317,135,824 

$ 67,246,060 

330,509,911 

Custodial Receivables, Net (Note 4) 

Accounts Receivable, Net (Note 4) 

General Property, Plant and Equipment, Net (Note 5) 

Deferred Costs (Note 6) 

Prepayments (Note 1J) 

Total Assets $ 382,199,471 $ 387,821,062 

Liabilities 

Intragovernmental: 

 1,241,933 263,851 

 15,089,568 4,696,176 

 11,120 18,614 

 48,357,120 50,358,266 

 - 28,487 

1,605,839 2,209,608 

BAccounts Payable 

 15,089,568 

 -

Custodial Liabilities 

Employer Contributions and Payroll Taxes Payable 

$ 1,314,250 

1,110,434 

$ 387,666 

4,696,176 

17,597,965 5,166,373 

Accounts Payable 

Actuarial FECA Liabilities (Note 9) 

Accrued Payroll 

Annual Leave 

Deposit Fund Liabilities 

Deferred Lease Liabilities (Note 10) 

Contingent Liabilities (Note 11) 

Other 

Total Liabilities $ 71,390,508 $ 54,981,939 

Net Position 

Cumulative Results of Operations - Funds from Dedicated Collections 

Total Net Position 

$ 53,836,721 

310,808,963 

$ 50,997,602 

14,229,111 

332,839,123 

Total Liabilities and Net Position $ 382,199,471 $ 387,821,062 

 82,531 

 9,275,424 8,220,224 

 421,289 415,570 

 5,479,736 5,215,273 

 10,057,127 9,788,839 

265,828 179,806 

 28,293,139 25,673,457 

 - 300,000 

 - 22,397 

. Unexpended Appropriations - All Other Funds 

 247,550,496 267,612,410 

. Cumulative Results of Operations - All Other Funds 9,421,746 

7AFECA Liabilities (Note 9) 83,713 

0 Total Intragovernmental 

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

10
 

 

 

 

 

FY 2016 Agency Financial Report 

Commodity Futures Trading Commission 

STATEMENTS OF NET COST 

For the Years Ended September 30, 2016 and 2015 

2016 2015 

Net Cost by Goal (Note 13) 

Goal One: Market Integrity and Transparency 

Gross Costs 

Less: Earned Revenue 

Net Cost of Operations -- Goal One 

Goal Two: Financial Integrity and Avoidance of Systemic Risk 

Gross Costs 

Less: Earned Revenue 

$ 72,427,941 

$ 72,413,587 

$ 85,667,457 

$ 68,337,018 

$ 68,322,502 

$ 73,933,907 

Net Cost of Operations -- Goal Two $ 85,650,480 $ 73,918,203 

Goal Three: Comprehensive Enforcement 

Gross Costs $ 106,528,039 $ 95,521,909
 

Less: Earned Revenue 

Net Cost of Operations -- Goal Three $ 106,506,926 $ 95,501,618 

Goal Four: Domestic and International Cooperation and Coordination 

Gross Costs $ 13,517,657 $ 12,068,292
 

Less: Earned Revenue 

Net Cost of Operations -- Goal Four $ 13,514,978 $ 12,065,729 

Grand Total 

Gross Costs $ 278,141,094 $ 249,861,126 

Less: Earned Revenue 

Total Net Cost of Operations $ 278,085,971 $ 249,808,052 

 (21,113) (20,291)
 

 (2,679) (2,563)

 (55,123) (53,074) 

 (14,354) (14,516) 

 (16,977) (15,704) 

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

11
 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Commodity Futures Trading Commission 

STATEMENTS OF CHANGES IN NET POSITION 

For the Years Ended September 30, 2016 and 2015 

Cumulative Results of Operations: 

Dedicated Collections All Other Funds 

2016 

Consolidated Total 

Beginning Balances, October 1 $ 267,612,410 $ 14,229,111 $ 281,841,521 

Budgetary Financing Sources: 

Appropriations Used 

Nonexchange Interest Revenue (Note 3) 489,668 - 489,668 

Other Financing Sources: 

Imputed Financing Sources (Note 8) - 5,566,143 5,566,143 

Total Financing Sources 489,668 252,727,024 253,216,692 

Net Cost of Operations (20,551,582) (257,534,389) (278,085,971) 

Net Change (20,061,914) (4,807,365) (24,869,279) 

Total Cumulative Results of Operations, September 30 $ 247,550,496 $ 9,421,746 $ 256,972,242 

Unexpended Appropriations: 

Beginning Balances, October 1 $ - $ 50,997,602 $ 50,997,602 

Budgetary Financing Sources: 

Appropriations Received 

Appropriations Used 

 Total Budgetary Financing Sources - 2,839,119 2,839,119 

Total Unexpended Appropriations, September 30 $ - $ 53,836,721 $ 53,836,721 

Net Position $ 247,550,496 $ 63,258,467 $ 310,808,963 

 - 247,160,881 247,160,881 

 - 250,000,000 250,000,000 

 - (247,160,881) (247,160,881)

(continued) 

12
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Commodity Futures Trading Commission 

STATEMENTS OF CHANGES IN NET POSITION (Continued) 

For the Years Ended September 30, 2016 and 2015 

Cumulative Results of Operations: 

Dedicated Collections All Other Funds 

2015 

Consolidated Total 

Beginning Balances, October 1 $ 274,315,312 $ 18,352,983 $ 292,668,295 

Budgetary Financing Sources: 

Appropriations Used 

Nonexchange Interest Revenue (Note 3) 58,152 - 58,152 

Other Financing Sources: 

Imputed Financing Sources (Note 8) - 6,667,523 6,667,523 

Total Financing Sources 58,152 238,923,126 238,981,278 

Net Cost of Operations (6,761,054) (243,046,998) (249,808,052) 

Net Change (6,702,902) (4,123,872) (10,826,774) 

Total Cumulative Results of Operations, September 30 $ 267,612,410 $ 14,229,111 $ 281,841,521 

Unexpended Appropriations: 

Beginning Balances, October 1 $ - $ 35,420,980 $ 35,420,980 

Budgetary Financing Sources: 

Appropriations Received 

Other Adjustments (+/-) 

Appropriations Used 

 Total Budgetary Financing Sources - 15,576,622 15,576,622 

Total Unexpended Appropriations, September 30 $ - $ 50,997,602 $ 50,997,602 

Net Position $ 267,612,410 $ 65,226,713 $ 332,839,123 

 - 232,255,603 232,255,603 

 - 250,000,000 250,000,000 

 - (2,167,775) (2,167,775) 

 - (232,255,603) (232,255,603)

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

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FY 2016 Agency Financial Report 

Commodity Futures Trading Commission 

STATEMENTS OF BUDGETARY RESOURCES 

For the Years Ended September 30, 2016 and 2015 

2015 

2016 Restated (Note 16) 

BUDGETARY RESOURCES

 Unobligated Balance Brought Forward, October 1 $ 59,758,110 $ 45,372,067

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

 Unobligated Balance Brought Forward, October 1, as Adjusted 59,758,110 46,201,237

 Recoveries of Prior Year Unpaid Obligations 4,448,160 4,061,675

 Other Changes in Unobligated Balance 507,747 (2,070,976)

 Unobligated Balance from Prior Year Budget Authority, Net 64,714,017 48,191,936

 Appropriations 250,000,000 250,000,000

 Spending Authority from Offsetting Collections 501,849 133,947 

Total Budgetary Resources $ 315,215,866 $ 298,325,883 

STATUS OF BUDGETARY RESOURCES 

New Obligations and Upward Adjustments (Note 12A) $ 270,891,918 $ 258,702,003 

Change in Unfunded Lease Obligations (Notes 10 and 16) (15,664,166) (20,134,230) 

Unobligated Balance, End of Year 

Apportioned, Unexpired Accounts 246,556,853 270,359,908 

Unapportioned, Unexpired Accounts (194,232,932) (209,897,098) 

Unexpired Unobligated Balance, End of Year 52,323,921 60,462,810 

Expired Unobligated Balance, End of Year 7,664,193 (704,700) 

Unobligated Balance, End of Year (Total) 59,988,114 59,758,110 

Total Budgetary Resources $ 315,215,866 $ 298,325,883 

CHANGE IN OBLIGATED BALANCE

 Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 60,290,903 $ 40,564,762

 Unfunded Lease Obligations Brought Forward, October 1 (Notes 10 and 16) 210,042,824 230,177,054

 Change in Unfunded Lease Obligations (Notes 10 and 16) (15,664,166) (20,134,230)

 Total Remaining Unfunded Lease Obligations 194,378,658 210,042,824 

New Obligations and Upward Adjustments 270,891,918 258,702,003 

Outlays (Gross) (265,476,500) (234,914,187) 

Recoveries of Prior-Year Unpaid Obligations (4,448,160) (4,061,675) 

Unpaid Obligations, End of Year 255,636,819 270,333,727

 Uncollected Payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (76,660) (54,225) 

Change in Uncollected Payments, Federal Sources (6,585) (22,435) 

Uncollected Payments, Federal Sources, End of Year (83,245) (76,660)

 Memorandum Entries: 

Obligated Balance, Start of Year $ 270,257,067 $ 270,687,591 

Obligated Balance, End of Year $ 255,553,574 $ 270,257,067 

BUDGET AUTHORITY AND OUTLAYS, NET 

Budget Authority, Gross $ 250,501,849 $ 250,133,947 

Actual Offsetting Collections (1,036,307) (212,554) 

Change in Uncollected Customer Payments from Federal Sources (6,585) (22,435) 

Recoveries of prior year paid obligations (discretionary and mandatory) 507,747 96,799 

Budget Authority, Net $ 249,966,704 $ 249,995,757 

Outlays, Gross $ 265,476,500 $ 234,914,187 

Actual Offsetting Collections (1,036,307) (212,554) 

Outlays, Net 264,440,193 234,701,633 

Distributed Offsetting Receipts (2,387) (6,767) 

Agency Outlays, Net $ 264,437,806 $ 234,694,866 

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

14
 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Commodity Futures Trading Commission 

STATEMENTS OF CUSTODIAL ACTIVITY 

For the Years Ended September 30, 2016 and 2015 

2016 2015 

Revenue Activity 

Sources of Cash Collections:

 Registration and Filing Fees 

Fines, Penalties, and Forfeitures 

 General Proprietary Receipts 

Total Cash Collections 

Change in Custodial Receivables 

Total Custodial Revenue 

$ 1,444,842 

2,387 

$ 491,746,289 

$ 1,575,300

$ 2,843,246,095 

6,767 

Disposition of Collections 

Amounts Transferred to:

 Department of the Treasury 

Total Disposition of Collections 

Change in Custodial Liabilities 

NET CUSTODIAL ACTIVITY 

$ (481,352,897) 

$ -

$ (2,842,768,707) 

$ -

 479,905,668 2,841,186,640

 481,352,897 2,842,768,707 

 10,393,392 477,388 

 (481,352,897) (2,842,768,707) 

 (10,393,392) (477,388) 

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

15
 

 

 

FY 2016 Agency Financial Report 

Notes to the Financial Statements 

As of and For the Years Ended

September 30, 2016 and 2015 

Note 1 Summary of Significant Accounting Policies 

A. Reporting Entity 

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

branch of the Federal Government. Congress created the CFTC in 1974 under the authorization of 

the Commodity Exchange Act (CEA) with the mandate to regulate commodity futures and option 

markets in the United States. The agency’s mandate was renewed and expanded under the Futures 

Trading Acts of 1978, 1982, and 1986; under the Futures Trading Practices Act of 1992; under the 

CFTC Reauthorization Act of 1995; under the Commodity Futures Modernization Act of 2000; and 

under the Dodd-Frank Act of 2010. Congress passed the Food, Conservation, and Energy Act of 

2008 (Farm Bill), which reauthorized the Commission through FY 2013. In the absence of formal 

reauthorization, CFTC has continued to operate through annual appropriations. 

The CFTC is responsible for ensuring the economic utility of futures markets by encouraging their 

competitiveness and efficiency, ensuring their integrity, and protecting market participants against 

manipulation, abusive trade practices, and fraud. 

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

B. Basis of Presentation 

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

operations for the CFTC, as required by the Accountability of Tax Dollars Act of 2002. They are 

presented 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 principal financial statements have been prepared in all material respects from the agency’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). The application and methods for applying these principles are appropriate for 

presenting fairly the entity’s assets, liabilities, financial position, net cost of operations, changes in 

net position, budgetary resources, and custodial activities. 

The books and records of the agency served as the source of information for preparing the financial 

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

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

should be read with the understanding that they are for a component of the U.S. Government, a 

sovereign entity. 

The Balance Sheets present the financial position of the agency. The Statements of Net Cost 

present the agency’s operating results; the Statements of Changes in Net Position display the 

16
 

 

FY 2016 Agency Financial Report 

changes in the agency’s equity accounts. The Statements of Budgetary Resources present the 

sources, status, and uses of the agency’s resources and follow the rules for the Budget of the United 

States Government. The Statements of Custodial Activity present the sources and disposition of 

collections for which the CFTC is the fiscal agent, or custodian, for the Treasury General Fund 

Miscellaneous Receipt accounts. 

Throughout these financial statements, assets, liabilities, revenues and costs have been classified 

according to the type of entity with whom the transactions were made. Intragovernmental assets 

and liabilities are those from or to other federal entities. Intragovernmental earned revenues are 

collections or accruals of revenue from other federal entities, and intragovernmental costs are 

payments or accruals to other federal entities. The CFTC does not transact business among its own 

operating units, and therefore, intra-entity eliminations were not needed. 

C. Budgetary Resources and Status 

The CFTC is funded through congressionally approved appropriations. The CFTC is responsible 

for administering the salaries and expenses of the agency through the execution of these 

appropriations. 

Congress annually enacts appropriations that provide the CFTC with the authority to obligate 

funds within the respective fiscal year for necessary expenses to carry out mandated program 

activities. All appropriations are subject to quarterly apportionment as well as Congressional 

restrictions. 

The CFTC’s budgetary resources for FY 2016 consist of: 

 Unobligated balances of resources brought forward from the prior year, 

 Recoveries of obligations made in prior years, and 

 New resources in the form of appropriations and spending authority from offsetting 

collections. 

Unobligated balances associated with resources expiring at the end of the fiscal year remain 

available for five years after expiration only for upward adjustments of prior year obligations, after 

which they are canceled and may not be used. All unused monies related to canceled 

appropriations are returned to Treasury and the canceled authority is reported on the Statements 

of Budgetary Resources and the Statements of Changes in Net Position. 

D. Entity and Non-Entity Assets

Assets consist of entity and non-entity assets. Entity assets are those assets that the CFTC has 

authority to use for its operations. Non-entity assets are those held by the CFTC that are not 

available for use in its operations. Non-entity assets held by the CFTC include deposit fund 

balances, custodial fines, interest, penalties, and administrative fees receivable. 

E. Fund Balance with Treasury 

Fund Balance with Treasury is the aggregate amount of the CFTC’s funds with Treasury in general, 

receipt, revolving, and deposit fund accounts. Appropriated funds recorded in general fund 

expenditure accounts are available to pay current liabilities and finance authorized purchases. 

Revolving fund custodial collections recorded in the deposit fund and miscellaneous receipts 

accounts of the Treasury are not available for agency use. At fiscal year-end, receipt account 

balances are returned to Treasury or transferred to the Customer Protection Fund. 

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

maintain cash held outside of Treasury. Treasury disburses funds for the agency on demand. 

Spending authority from offsetting collections is recorded in the agency’s expenditure account and 

is available for agency use subject to certain limitations. 

17
 

FY 2016 Agency Financial Report 

F. Investments 

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

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

expenses of the Customer Protection Fund. Additional details regarding Customer Protection Fund 

investments are provided in Note 3. 

G. Accounts Receivable, Net 

Accounts receivable consists of amounts owed by other federal agencies and the public to the CFTC 

and is valued net of an allowance for uncollectible amounts. The allowance is based on past 

experience in the collection of receivables and analysis of the outstanding balances. Accounts 

receivable arise from reimbursable operations, earned refunds or the Civil Monetary Sanctions 

program. 

H. General Property, Plant and Equipment, Net 

Furniture, fixtures, equipment, information technology hardware and software, and leasehold 

improvements are capitalized and depreciated or amortized over their useful lives. 

The CFTC 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. Leasehold improvements are amortized over the remaining life of the lease. The Commission’s 

assets are valued net of accumulated depreciation or amortization. 

I. Deferred Costs 

The Commission has received lease incentives, Tenant Improvement Allowances (TIA), from the 

landlords on its operating leases. These allowances can be used for construction, asset purchases, 

or rent expense, and are classified as deferred costs on the balance sheets. These costs are 

reallocated either to leasehold improvements, equipment, or if used for rent, expensed. The TIA is 

also amortized with the deferred lease liability over the life of the lease. As of September 30, 2016, 

all of the TIA that was received through FY 2012 has been used. 

J. Prepayments 

Payments to federal and non-federal sources in advance of the receipt of goods and services are 

recorded as prepayments and recognized as expenses when the related goods and services are 

received. Intragovernmental prepayments reported on the Balance Sheet were made primarily to 

the Department of Transportation (DOT) for implementation of a new integrated acquisition 

system. Prepayments to the public were primarily for software maintenance and subscription 

services. 

18
 

 

 

FY 2016 Agency Financial Report 

K. Liabilities 

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

of transactions covered by budgetary resources for which Congress has appropriated funds or 

funding, or are otherwise available from reimbursable transactions to pay amounts due. 

Liabilities include those covered by budgetary resources in existing legislation and those not yet 

covered by budgetary resources. The CFTC liabilities not covered by budgetary resources include: 

 Intragovernmental Federal Employees’ Compensation Act (FECA) liabilities, 

 Intragovernmental custodial liabilities for custodial revenue deemed collectible but not yet 

collected at fiscal year-end, 

 Annual leave benefits that will be funded by annual appropriations as leave is taken, 

 Actuarial FECA liabilities, 

 Contingent liabilities, 

 Deposit funds, 

 Deferred lease liabilities, and 

 Advances received for reimbursable services yet to be provided. 

L. Accounts Payable 

Accounts payable consists primarily of contracts for goods or services, such as operating leases, 

leasehold improvements, software development, information technology, telecommunications, and 

consulting and support services. 

M. Accrued Payroll and Benefits and Annual Leave Liability 

The accrued payroll liability represents amounts for salaries and benefits owed for the time since 

the payroll was last paid through the end of the reporting period. Total accrued payroll is 

composed of amounts to be paid to CFTC employees as well as the related intragovernmental 

payable for employer contributions and payroll taxes. The 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. 

The agency’s employees participate in the Civil Service Retirement System (CSRS) or the Federal 

Employees’ Retirement System (FERS). On January 1, 1987, FERS went into effect pursuant to 

Public Law 99-335. Most employees hired after December 31, 1983, are automatically covered by 

FERS and Social Security. Employees hired prior to January 1, 1984, could elect to either join 

FERS and Social Security or remain in CSRS. 

For employees under FERS, the CFTC contributes an amount equal to one percent of the 

employee’s basic pay to the tax deferred Thrift Savings Plan and matches employee contributions 

up to an additional four percent of pay. FERS and CSRS employees can contribute a portion of 

their gross earnings to the plan up to Internal Revenue Service (IRS) limits; however, CSRS 

employees receive no matching agency contribution. 

N. Leases 

The CFTC does not have any capital lease liabilities. The operating leases consist of commercial 

property for the CFTC’s headquarters and regional offices. Lease expenses are recognized on a 

straight-line basis. 

19
 

 

 

FY 2016 Agency Financial Report 

O. Deposit Funds 

Deposit funds are expenditure accounts used to record monies that do not belong to the Federal 

government. They are held awaiting distribution based on a legal determination or investigation. 

The CFTC Deposit Fund is used to collect and later distribute collections of monetary awards to the 

appropriate victims as restitution. The cash collections recorded in this fund are offset by a Deposit 

Fund liability. Activities in this fund are not fiduciary in nature because they are not legally 

enforceable against the government. 

P. Net Position

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

Unexpended appropriations are appropriations that have not yet been used to acquire goods and 

services or provide benefits. Appropriations are considered expended, or used, when goods and 

services have been acquired by the CFTC or benefits have been provided using the appropriation 

authority, regardless of whether monies have been paid or payables for the goods, services, or 

benefits have been established. 

Cumulative results of operations represent the excess of budgetary or other financing sources over 

expenses since inception. Cumulative results of operations are derived from the net effect of 

capitalized assets, expenses, exchange revenue, and unfunded liabilities. 

Q. Revenues 

The CFTC receives reimbursement and earns revenue for the following activities: 

	 Reimbursement for travel, subsistence, and related expenses from non-federal sources for 

attendance at meetings or similar functions that an employee has been authorized to 

attend in an official capacity on behalf of the Commission. 

 Reimbursement for Intergovernmental Personnel Act Mobility Program assignments from 

state and local governments, institutions of higher education, and other eligible 

organizations for basic pay, supplemental pay, fringe benefits, and travel and relocation 

expenses. 

 Reimbursement from non-federal sources for registration fees to cover the cost of 

expenses related to the CFTC's annual International Regulators Conference. 

R. Net Cost of Operations 

Net cost of operations is the difference between the CFTC’s expenses and its earned revenue. The 

presentation of program results by strategic goals is based on the CFTC’s current Strategic Plan 

established pursuant to the Government Performance and Results Act of 1993. 

The mission statement of the CFTC is to protect market users and the public from fraud, 

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

options, and to foster open, competitive, and financially sound futures and option markets. For FY 

2016, the mission was accomplished through the following four strategic goals, each focusing on a 

vital area of regulatory responsibility: 

	 Goal 1: Market Integrity and Transparency – The focus of Market Integrity and Transparency 

is to recognize that derivatives markets provide a means for market users to offset price risks 

inherent in their businesses and to serve as a public price discovery mechanism. 

	 Goal 2: Financial Integrity and Avoidance of Systemic Risk – The focus of Financial Integrity 

and Avoidance of Systemic Risk is to strive to ensure that Commission-registered derivatives 

20
 

 

 

 

FY 2016 Agency Financial Report 

clearing organizations (DCOs), swap dealers (SDs), major swap participants (MSPs), and 

futures commission merchants (FCMs) have the financial resources, risk management systems 

and procedures, internal controls, customer protection systems, and other controls necessary 

to meet their obligations so as to minimize the risk that the financial difficulty of any of these 

registrants, or any of their customers has systemic implications. 

	 Goal 3: Comprehensive Enforcement – Through the goal of Comprehensive Enforcement, the 

CFTC enforces the CEA and Commission regulations, and works to promote awareness of and 

compliance with these laws. 

 Goal 4: Domestic and International Cooperation and Coordination – Domestic and 

International Cooperation and Coordination focuses on how the Commission interacts with 

domestic and international regulatory authorities, market participants, and others affected by 

the Commission’s regulatory policies and practices. 

To advance its mission goals and objectives, the CFTC will achieve Commission-wide excellence by 

empowering strong, enterprise-focused leaders, maintaining a high-performing and engaged 

workforce, and ensuring effective stewardship of resources. 

S. Custodial Activity 

The CFTC collects penalties and fines levied against firms for violation of laws as described in the 

Commodity Exchange Act as codified at 7 U.S.C. § 1, et seq, and the Commodities Futures 

Modernization Act of 2000, Appendix E of P.L. 106-554, 114 Stat. 2763. Unpaid fines, penalties 

and accrued interest are reported as custodial receivables, with an associated custodial liability. 

The receivables and the liability are reduced by amounts determined to be uncollectible. Revenues 

earned and the losses from bad debts are reported to Treasury. 

Collections made by the CFTC during the year are deposited and reported into designated Treasury 

miscellaneous receipt accounts for: 

 Registration and filing fees, 

 Fines, penalties and forfeitures, and 

 General proprietary receipts. 

At fiscal year-end, custodial collections made by the CFTC are either returned to Treasury or when 

determined eligible, transferred to the Customer Protection Fund. The CFTC does not retain any 

amount for custodial activities including reimbursement of the cost of collection. 

T. Use of Management Estimates 

The preparation of the accompanying financial statements in accordance with accounting 

principles generally accepted in the United States of America requires management to make 

certain estimates and assumptions that directly affect the results of reported assets, liabilities, 

revenues, expenses, and custodial activities. Actual results could differ from these estimates. 

U. Reconciliation of Net Obligations and Net Cost of Operations 

In accordance with OMB Circular A-136, the Commission reconciles its change in budgetary 

obligations with its net cost of operations. 

V. Funds from Dedicated Collections 

The Commission’s Customer Protection Fund (CPF) was established to operate a whistleblower 

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

of the CPF and its authority to use revenues and other financing sources. Deposits into the CPF are 

21
 

 

 

 

 

 

FY 2016 Agency Financial Report 

credited from monetary sanctions collected by the Commission in a covered judicial or 

administrative action where the full judgment is in excess of $1,000,000 and the collection is not 

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

regulations, unless the balance of the CPF at the time the monetary judgment is collected exceeds 

$100 million. No new legislation was enacted as of September 30, 2016, that significantly changed 

the purpose of the fund or redirected a material portion of the accumulated balance. 

W. Reclassifications 

To conform to OMB Circular A-136, activity and balances reported on the FY 2015 Statement of 

Budgetary Resources have been reclassified to conform to the presentation in the current year. 

Note 2 Fund Balance with Treasury 

A. Reconciliation to Treasury 

There are no differences between the fund balances reflected in the CFTC Balance Sheets and the 

balances in the Treasury accounts. 

B. Fund Balance with Treasury 

Fund Balance with Treasury consists of entity assets such as appropriations, reimbursements for 

services rendered, and collections of fines and penalties. Obligation of these funds is controlled by 

quarterly apportionments made by OMB. Work performed under reimbursable agreements is 

initially financed by the annual appropriation and is subsequently reimbursed. Collections of fines 

and penalties are distributed to harmed investors, returned to Treasury, or when eligible, 

transferred to the Customer Protection Fund. 

Fund Balance with Treasury at September 30, 2016, and 2015, consisted of the following: 

2016 2015 

Appropriated Funds 

Customer Protection Fund 

Deposit Fund 

$ 66,140,651 

265,828 

$ 61,472,593 

179,806 

Total Fund Balance with Treasury $ 71,891,891 $ 67,246,060 

22

 5,485,412 5,593,661 
 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

C. Status of Fund Balance with Treasury 

Status of Fund Balance with Treasury at September 30, 2016, and 2015, consisted of the following: 

Appropriated Funds 2016 2015 

Unobligated Fund Balance

 Available $ 1,395,955 $ 937,162

 Unavailable 7,726,675 4,535,734 

Obligated Balance Not Yet Disbursed 

Total Appropriated Funds 66,140,651 61,472,593 

Customer Protection Fund 

Unobligated Fund Balance

 Available 

 Obligated Balance Not Yet Disbursed 

Total Customer Protection Fund 

Deposit Fund 265,828 179,806 

Total Fund Balance with Treasury $ 71,891,891 $ 67,246,060 

 57,018,021 55,999,697 

 1,245,271 1,302,454

 4,240,141 4,291,207 

 5,485,412 5,593,661 

Obligated and unobligated balances reported for the status of Fund Balance with Treasury differ 

from the amounts reported in the Statement of Budgetary Resources due to the fact that budgetary 

balances are supported by amounts other than Fund Balance with Treasury. These amounts 

include Customer Protection Fund investments, uncollected payments from Federal sources, and 

unfunded lease obligations. 

Note 3 Investments 

The CFTC invests amounts deposited in the Customer Protection 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 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, 2016, and 2015, were $244 million and $263 

million, respectively. Related nonexchange interest revenue for the years ended September 30, 

2016, and 2015, was $489,668 and $58,152, 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 1F, 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. 

23
 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

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 Accounts Receivable, Net 

Accounts receivable consist of amounts owed the CFTC by other Federal agencies and the public. 

Accounts receivable are valued at their net collectible values. Non-custodial accounts receivable 

are primarily for overpayments of expenses to other agencies, or vendors, and repayment of 

employee benefits. Historical experience has indicated that most of the non-custodial receivables 

are collectible and that there are no material uncollectible amounts. 

Custodial receivables (non-entity assets) are those for which fines and penalties have been 

assessed and levied against businesses or individuals for violations of the CEA or Commission 

regulations. Violators may be subject to a variety of sanctions including fines, injunctive orders, 

bars or suspensions, rescissions of illegal contracts, and disgorgements. 

An allowance for uncollectible accounts has been established and included in accounts receivable 

on the balance sheets. Although historical experience has indicated that a high percentage of 

custodial receivables prove uncollectible, the Commission determines the collectability of each 

individual judgment based on knowledge of the financial profile of the debtor obtained through the 

course of the investigation and litigation of each case, including efforts to identify and freeze assets 

at the beginning of cases, when any remaining assets are most likely to be recoverable. Accounts 

are re-estimated quarterly based on account reviews and the agency’s determination that changes 

to the net realizable value are needed. 

Accounts receivable, net consisted of the following as of September 30, 2016, and 2015: 

2016 2015 

Custodial Receivables, Net: 

Civil Monetary Penalty Interest $ 1,275,201 $ 1,037,104 

Civil Monetary Penalties, Fines, and Administrative Fees 

Less: Allowance for Loss on Interest (1,273,722) (1,037,065) 

Less: Allowance for Loss on Penalties, Fines, and Administrative Fees (615,436,261) (1,449,320,093) 

Registration and Filing Fees 1,441,020 

Net Custodial Receivables 15,089,568 4,696,176 

Other Accounts Receivable 

Total Accounts Receivable, Net $ 15,102,688 $ 4,714,790 

24

 629,255,325 1,452,575,210 

 1,269,025 

 13,120 18,614 
 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Note 5 General Property, Plant and Equipment, Net 

Property, Plant and Equipment as of September 30, 2016, and 2015, consisted of the following: 

2016 

Major Class Service Life and Method Cost 

Accumulated 

Amortization/ 

Depreciation Net Book Value 

Equipment 

IT Software 

Software In Development 

Leasehold Improvements 

5 Years/Straight Line 

5 Years/Straight Line 

Not Applicable 

Remaining Life of Lease/Straight Line 

$ 41,429,895 

$ 107,030,370 

$ (26,911,976) 

$ (58,673,250) 

-

$ 14,517,919 

 30,019,734 (19,967,855) 10,051,879 

 4,933,548 4,933,548 

 30,647,193 (11,793,419) 18,853,774 

$ 48,357,120 

2015 

Major Class Service Life and Method Cost 

Accumulated 

Amortization/ 

Depreciation Net Book Value

Equipment 

IT Software 

Software In Development 

Leasehold Improvements 

5 Years/Straight Line 

5 Years/Straight Line 

Not Applicable 

Remaining Life of Lease/Straight Line 

$ 40,993,436 

$ 103,270,938 

$ (28,242,099) 

$ (52,912,672) 

-

$ 12,751,337 

$ 50,358,266 

 29,074,565 

 - -

 (28,487) 

 13,914,869 

 2,575,619 

 30,627,318 (9,510,877) 21,116,441 

 (15,159,696) 

 2,575,619 

Depreciation and amortization expense for the years ended September 30, 2016, and 2015, totaled 

$15,439,945 and $12,679,373, respectively. 

Note 6 Deferred Costs 

The Commission receives Tenant Improvement Allowances (TIA) from its landlords. These 

allowances are used to cover the costs of building renovations, asset purchases, or rent expenses. 

The TIA is initially recorded as deferred costs on the balance sheet and is amortized with the 

deferred lease liability over the life of the lease. 

The Commission received $16,199,394 in TIA between FY 2010 and 2012, of which $14,391,636 

was used to fund leasehold improvements, and $1,807,758 was applied to rental payments. As of 

September 30, 2016, all $16,199,394 of the TIA that was received through FY 2012 has been used. 

Deferred Costs (TIA) 2016 2015 

Beginning Balance, October 1 

TIA received 

TIA used 

Balance as of September 30 

$ 28,487 

$ -

$ 64,201 

(35,714) 

$ 28,487 

25
 

 

 

FY 2016 Agency Financial Report 

Note 7 Liabilities not Covered by Budgetary Resources 

As of September 30, 2016, and 2015, the following liabilities were not covered by budgetary 

resources: 

2016 2015 

Intragovernmental - FECA Liabilities $ 83,713 $ 82,531 

Intragovernmental - Custodial Liabilities 15,089,568 4,696,176 

Annual Leave 10,057,127 9,788,839 

Actuarial FECA Liabilities 421,289 415,570 

Contingent Liabilities - 300,000 

Deposit Fund Liabilities 265,828 179,806 

Deferred Lease Liabilities 28,293,139 25,673,457 

Other - 22,397

$ 54,210,664 $ 41,158,776 

Liabilities not covered by budgetary resources of $54,210,664 and $41,158,776 represented 75.94 

and 74.86 percent of the Commission’s total liabilities of $71,390,508 and $54,981,939 as of 

September 30, 2016, and 2015, respectively. 

Note 8 Retirement Plans and Other Employee Benefits 

The CFTC imputes costs and the related financing sources for its share of retirement benefits 

accruing to its past and present employees that are in excess of the amount of contributions from 

the CFTC and its employees, which are mandated by law. The Office of Personnel Management 

(OPM), which administers federal civilian retirement programs, provides the cost information to 

the CFTC. The CFTC recognizes the full cost of providing future pension and Other Retirement 

Benefits (ORB) for current employees as required by Statement of Federal Financial Accounting 

Standards (SFFAS) 5, Accounting for Liabilities of the Federal Government. 

Full costs include pension and ORB contributions paid out of the CFTC’s appropriations and costs 

financed by OPM. The amount financed by OPM is recognized as an imputed financing source. 

This amount was $5,566,143 for the year ended September 30, 2016, and $6,667,523 for the year 

ended September 30, 2015. Reporting amounts such as plan assets, accumulated plan benefits, or 

unfunded liabilities, if any, is the responsibility of OPM. 

Liabilities for future pension payments and other future payments for retired employees who 

participate in the Federal Employees Health Benefits Program and the Federal Employees Group 

Life Insurance Program are reported by OPM rather than CFTC. 

Note 9 FECA Liabilities 

FECA provides income and medical cost protections to covered federal civilian employees injured 

on the job, to employees who have incurred work-related occupational diseases and to 

beneficiaries of employees whose deaths are attributable to job-related injuries or occupational 

diseases. The FECA program is administered by the U.S. Department of Labor (DOL), which pays 

valid claims against the CFTC and subsequently seeks reimbursement from the CFTC for these 

paid claims. Accrued FECA liabilities represent amounts due to DOL for claims paid on behalf of 

the agency. Accrued FECA liabilities at September 30, 2016, and 2015, were $83,713 and $82,531, 

respectively. 

26
 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

In addition, the Commission’s actuarial FECA liability represents the liability for future workers 

compensation benefits, which includes the expected liability for death, disability, medical, and 

miscellaneous costs for approved cases. The Commission records an estimate for the FECA 

actuarial liability using the DOL’s FECA model. The model considers the average amount of 

benefit payments incurred by the Commission for the past three fiscal years, multiplied by the 

medical and compensation liability to benefits paid ratio for the whole FECA program. Actuarial 

FECA liabilities at September 30, 2016, and 2015, were $421,289 and $415,570, respectively. 

Note 10 Leases 

The CFTC has operating leases in privately-owned buildings for its locations in Washington D.C., 

Chicago, New York, and Kansas City. The CFTC has no real property. Future estimated minimum 

lease payments are not accrued as liabilities and are expensed on a straight-line basis. 

As of September 30, 2016, future estimated minimum lease payments continue through FY 2025 

and are as follows: 

Fiscal Year Dollars 

2017 $ 19,958,881 

2018 20,352,643 

2019 20,715,734 

2020 21,087,399 

2021 21,419,962 

Thereafter 74,811,311 

Total Future Scheduled Rent Payments $ 178,345,930 

Future Lease-Related Operating Costs (Estimated) 16,032,728 

Total Future Minimum Lease Payments $ 194,378,658 

CFTC recognizes leases expenses on a straight-line basis because the Commission’s lease payment 

amounts vary at negotiated times and reflect increases in rental costs, and in some cases, 

allowances or credits from landlords. Consistent with the utility of its office space, the Commission 

records deferred lease liabilities representing expense amounts in excess of payments to date. The 

deferred lease liabilities at September 30, 2016, and September 30, 2015, were $28,293,139 and 

$25,673,457, respectively. 

CFTC’s historical practice has been to obligate only the annual portion of lease payments due each 

year. This practice is not in accordance with OMB Circular A-11, Preparation, Submission and 

Execution of the Budget; 31 U.S.C. § 1501(a)(1) (the recording statute); and previous GAO 

decisions. This error has been corrected in the financial statements with an increase in obligations 

as of September 30, 2016, and 2015 of $194,378,658 and $210,042,824, which represents the full 

amount of obligations remaining on CFTC’s active leases at the end of FY 2016 and 2015, 

respectively (see note 16 – Restatements). The failure to properly record these obligations has 

resulted in the obligation of funds in excess of appropriations in violation of the Anti-deficiency 

Act. CFTC will report all violations in accordance with the law. 

27
 

 

FY 2016 Agency Financial Report 

The following table describes the Commission’s existing lease arrangements for buildings and 

multifunction devices, including major asset categories by location and associated lease terms. 

BUILDINGS 

Location 

Washington, D.C. 

New York 

Kansas City 

Chicago 

Lease Terms 

Lease of office space from October 5, 1995, through September 30, 2025, 

subject to annual escalation amounts1 and including allowances for leasehold 

improvements and rent offsets. 

Lease of office space from November 16, 2001, through April 30, 2022, with no 

escalation clauses or option to renew. 

Lease of office space from April 1, 2011, through April 14, 2021, including 

allowances for leasehold improvements and rent offsets. 

Lease of office space from March 10, 2002, through June 30, 2022, including 

proportionate share of operating expenses and taxes for premises and 

allowances for leasehold improvements and rent offsets. 

MULTIFUNCTION DEVICES 

Location 

Washington, D.C., New 

York, and Kansas City 

Lease Terms 

Two-year rental of multifunction printers through the Government Printing 

Office with three one-year options to renew. 

Note 11 Contingent Liabilities 

The CFTC records contingent liabilities for legal cases in which payment has been deemed 

probable and for which the amount of potential liability has been estimated, including judgments 

that have been issued against the agency and which have been appealed. Additionally, the 

Commission discloses legal matters in which an unfavorable outcome is reasonably possible. In FY 

2016, the Commission was involved in one case where an unfavorable outcome is reasonably 

possible. The potential loss in this case is estimated to be $50,000. 

Note 12 Statements of Budgetary Resources 

As discussed in Note 10 – Leases above, during FY 2016, the Commission corrected a violation of 

the recording statute by recording its obligations for all future building lease payments in 

accordance with OMB Circular A-11. The recording of these previously unrecorded obligations 

resulted in negative unobligated balances in its salaries and expenses general expenditure funds 

for both FY 2016 and 2015 because budgetary resources have not been made available to the 

Commission to fund these multi-year leases (see the Combining Statements of Budgetary 

Resources in the Required Supplementary Information (RSI) section immediately following the 

notes). As discussed in Note 16 – Restatements, the Commission restated its prior year Statement 

of Budgetary Resources and affected notes to recognize the additional obligations for these 

unfunded lease obligations. The effect on the status of the Commission’s budgetary resources and 

reconciliation to the U.S. Budget is highlighted in each of the note disclosures below. 

1 If market rent were $100 per square foot with a 10 percent annual escalation and a $10 operating expense base, 

then 98 percent of the applicable market rent would be $98 per square foot with a 10 percent escalation and a $10 

operating base. 

28
A. Apportionment Categories of Obligations Incurred 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Category A funds are those amounts that are subject to quarterly apportionment by OMB, meaning 

that a portion of the annual appropriation is not available to the agency until apportioned for a 

particular quarter. Category B funds represent budgetary resources distributed by a specified time 

period, activity, project, object, or a combination of these categories. The Commission’s Category B 

funds represent amounts apportioned at the beginning of the fiscal year for the Commission’s 

Customer Protection Fund and reimbursable activities (beginning in FY 2016). For the years ended 

September 30, 2016, and 2015, the Commission incurred obligations against Category A and 

Category B funds as follows: 

2016 2015, as restated 

Direct Obligations

 Category A $ 250,934,938 $ 252,012,036

 Category B -- Customer Protection Fund 19,899,491 6,622,259

 Total Direct Obligations 270,834,429 258,634,295 

Reimbursable Obligations

 Category A - 67,708

 Category B 57,489 -

Total Reimbursable Obligations 57,489 67,708 

Total New Obligations and Upward Adjustments $ 270,891,918 $ 258,702,003 

Category A -- Change in Unfunded Lease Obligations (Notes 10 and 16) (15,664,166) (20,134,230) 

Total New Obligations, Upward Adjustments, and Change in Unfunded Lease Obligations $ 255,227,752 $ 238,567,773 

B. Undelivered Orders

The amount of budgetary resources obligated for undelivered orders as of September 30, 2016, and 

2015, consisted of the following: 

2016 2015, as restated 

Undelivered Orders	 $ 241,304,749 $ 258,984,024 

The amount of undelivered orders represents the value of unpaid and paid obligations recorded 

during the fiscal year, and upward and downward adjustments of obligations that were originally 

recorded in a prior fiscal year, including obligations for the Commission’s future lease payments 

totaling $194,378,658 and $210,042,824 as of September 30, 2016, and 2015, respectively. 

C. Explanations of Differences between the Statement of Budgetary Resources and 

Budget of the United States Government 

The CFTC had material differences between the amounts reported in the Statement of Budgetary 

Resources and the actual amounts reported in the Budget of the U.S. Government for FY 2015 

related to unrecorded obligations for operating leases (see table below). Recording the obligation 

on the Statements of Budgetary Resources results in negative amounts reported for the 

“Unobligated Balance Brought Forward, Oct 1” and “Obligations Incurred, Expired Accounts” line 

items. The negative balance reported as “Unobligated Balance Brought Forward, October 1” will 

decrease each year until the Commission’s active lease obligations are fully liquidated in FY 2025. 

The negative activity reported as “Obligations Incurred, Expired Accounts” will also continue 

through FY 2025, as long as the Commission receives appropriations language that permits it to 

use current year funding to pay its annual lease costs. While negative obligations incurred is 

abnormal activity, the Commission concluded that it was more appropriate to offset the obligations 

recorded in its unexpired account with the related decrease in unfunded lease obligations than to 

report the amount of the liquidation of the prior year lease obligation as a recovery. 

29
 Less Unfunded Lease Obligations Brought Forward, October 1 (230,177,054) 230,177,054 

 Less Change in Unfunded Lease Obligations (20,134,230) 

 Less Amount in Expired Accounts 179,604
 - - 

 Plus Rounding to Nearest Million (+/-)
 (468,162) 106,130 35,419 

FY 2016 Agency Financial Report 

Unobligated Balance 

Brought Forward, 

October 1 

Unpaid Obligations 

Brought Forward, 

October 1 

Obligations 

Incurred, Expired 

Accounts 

CFTC FY 2015 Statement of Budgetary Resources, as restated $ (224,529,288) $ 267,070,924 $ (18,169,649) 

- 

- -

Budget of the U.S. Government $ 5,000,000 $ 37,000,000 $ 2,000,000 

The Budget of the U.S. Government with actual numbers for FY 2016 has not yet been published. 

The expected publish date is February 2017. A copy of the Budget can be obtained from OMB’s 

website. 

30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Note 13 Intragovernmental Cost and Exchange Revenue by Goal 

As required by the Government Performance and Results Act of 1993, the agency’s reporting has 

been aligned with the major goals presented in CFTC’s Strategic Plan as reported in Note 1R. The 

Net Cost of Operations is derived from transactions between the Commission and public entities, 

as well as with other federal agencies. The details of the intragovernmental costs and revenues, as 

well as those with the public, are as follows: 

2016 2015 

Goal One: Market Integrity and Transparency 

Intragovernmental Gross Costs $ 10,817,024 $ 10,446,726 

Less: Earned Revenue (380) -

Intragovernmental Net Cost of Operations $ 10,816,644 $ 10,446,726 

Gross Costs With the Public $ 61,610,917 $ 57,890,292 

Less: Earned Revenue (13,974) (14,516) 

Net Cost of Operations With the Public $ 61,596,943 $ 57,875,776 

Total Net Cost of Operations -- Goal One $ 72,413,587 $ 68,322,502 

Goal Two: Financial Integrity and Avoidance of Systemic Risk 

Intragovernmental Gross Costs 

Less: Earned Revenue 

Intragovernmental Net Cost of Operations 

$ 12,794,329 

$ 12,793,880 

$ 11,302,327 

$ 11,302,327 

Gross Costs With the Public 

Less: Earned Revenue 

Net Cost of Operations With the Public 

$ 72,873,128 

$ 72,856,600 

$ 62,631,580 

$ 62,615,876 

Total Net Cost of Operations -- Goal Two $ 85,650,480 $ 73,918,203 

Goal Three: Comprehensive Enforcement 

Intragovernmental Gross Costs 

Less: Earned Revenue 

Intragovernmental Net Cost of Operations 

$ 15,909,831 

$ 15,909,272 

$ 14,602,499 

$ 14,602,499 

Gross Costs With the Public 

Less: Earned Revenue 

Net Cost of Operations With the Public 

$ 90,618,208 

$ 90,597,654 

$ 80,919,410 

$ 80,899,119 

Total Net Cost of Operations -- Goal Three $ 106,506,926 $ 95,501,618 

 (449) -

 (16,528) (15,704) 

 (559) -

 (20,554) (20,291) 

(continued) 

31
 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Note 13 Intragovernmental Cost and Exchange Revenue by Goal 

(Continued) 

2016 2015 

Goal Four: Domestic and International Cooperation and Coordination 

Intragovernmental Gross Costs 

Less: Earned Revenue 

Intragovernmental Net Cost of Operations 

$ 2,018,845 

$ 2,018,774 

$ 1,844,888 

$ 1,844,888 

Gross Costs With the Public 

Less: Earned Revenue 

Net Cost of Operations With the Public 

$ 11,498,812 

$ 11,496,204 

$ 10,223,404 

$ 10,220,841 

(2,563) 

Total Net Cost of Operations -- Goal Four $ 13,514,978 $ 12,065,729 

Grand Total 

Intragovernmental Gross Costs 

Less: Earned Revenue 

Intragovernmental Net Cost of Operations 

$ 41,540,029 

$ 41,538,570 

$ 38,196,440 

$ 38,196,440 

Gross Costs With the Public 

Less: Earned Revenue 

Net Cost of Operations With the Public 

$ 236,601,065 

$ 236,547,401 

(53,664) 

$ 211,664,686 

$ 211,611,612 

Total Net Cost of Operations $ 278,085,971 $ 249,808,052 

32

 (71) -

 (2,608) 

(1,459) -

(53,074) 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Note 14 Reconciliation of Net Obligations and Net Cost of Operations 

The schedule presented in this footnote reconciles the net obligations with the Net Cost of 

Operations. Resources Used to Finance Activities reflects the budgetary resources obligated and 

other resources used to finance the activities of the agency. Resources Used to Finance Items Not 

Part of the Net Cost of Operations adjusts total resources used to finance the activities of the entity 

to account for items that were included in net obligations and other resources but were not part of 

the Net Cost of Operations. Components Requiring or Generating Resources in Future Periods 

identifies items that are recognized as a component of the net cost of operations for the period but 

the budgetary resources (and related obligation) will not be provided (or incurred) until a 

subsequent period. Components Not Requiring or Generating Resources includes items 

recognized as part of the net cost of operations for the period but will not generate or require the 

use of resources. The Net Cost of Operations in the schedule presented in this note agrees with the 

Net Cost of Operations as reported on the Statements of Net Cost. 

2016 2015, as restated 

Resources Used to Finance Activities: 

Budgetary Resources Obligated 

New obligations and upward adjustments (total) $ 270,891,918 $ 258,702,003 

Change in Unfunded Lease Obligations (15,664,166) (20,134,230) 

Less: Spending Authority from Offsetting Collections and Recoveries (5,491,053) (4,296,665) 

Obligations Net of Offsetting Collections and Recoveries 249,736,699 234,271,108 

Less: Offsetting Receipts (2,387) (6,767) 

Net Obligations After Offsetting Receipts 249,734,312 234,264,341 

Other Resources 

Imputed Financing From Costs Absorbed by Others 5,566,143 6,667,523 

Total Resources Used to Finance Activities $ 255,300,455 $ 240,931,864 

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

Change in Budgetary Resources Obligated for Goods, Services and Benefits Ordered but not yet 

Provided before Adjustments $ 2,005,466 $ (15,537,141) 

Change in Unfunded Lease Obligations 15,664,166 20,134,230 

Resources that Fund Expenses Recognized in Prior Periods (300,000) (51,633) 

Offsetting Receipts 2,387 6,767 

Nonexchange Interest Revenue 489,668 58,152 

Resources that Fund the Acquisition of Fixed Assets (11,371,444) (9,489,542) 

Total Resources Used to Finance Items Not Part of the Net Cost Of Operations $ 6,490,243 $ (4,879,167) 

Components of Net Cost of Operations that will Require or Generate Resources in Future Periods 

Increase in Unfunded Liabilities $ 275,190 $ 413,667 

Total Components of Net Cost of Operations that will Require or Generate Resources in 

Future Periods $ 275,190 $ 413,667 

Components Not Requiring or Generating Resources: 

Depreciation and Amortization $ 15,439,945 $ 12,679,373 

(Gain)/Loss on Disposal 552,325 663,649 

Other 27,813 (1,334) 

Total Components of Net Cost of Operations that will Not Require or Generate Resources $ 16,020,083 $ 13,341,688 

Total Components of Net Cost of Operations that will Not Require or Generate Resources in the 

Current Year $ 16,295,273 $ 13,755,355 

Total Net Cost of Operations $ 278,085,971 $ 249,808,052 

33
 

 

 

FY 2016 Agency Financial Report 

Note 15 Funds from Dedicated Collections 

Funds from dedicated collections arise from disgorgement and penalty collections and are 

transferred to the Customer Protection Fund (CPF), established by the Dodd-Frank Act. The 

collections are transferred from the custodial receipt account if they are found to be eligible before 

the end of each fiscal year. In cases where the collection has been returned to the Treasury 

Department, the Commission can recover the funds directly from Treasury. The collections will 

fund the Commission’s whistleblower awards program and customer education initiatives. 

The Dodd-Frank Act provides that whistleblower awards shall be paid under regulations 

prescribed by the Commission. An important prerequisite to implementation of the whistleblower 

awards program is the issuance of rules and regulations describing its scope and procedures. The 

Commission issued final rules implementing the Act on August 25, 2011. These rules became 

effective on October 24, 2011. The Commission established the Whistleblower Office in FY 2012. 

No eligible collections were transferred during FY 2016 or FY 2015 because the fund reached its 

legislative maximum during FY 2014. The following chart presents the Fund’s balance sheets, 

statements of net costs, and statements of changes in net position as of and for the years ended 

September 30, 2016, and 2015: 

2016 2015 

Balance Sheets 

Fund Balance with Treasury 

Investments 

Prepayments 

General Property, Plant and Equipment, Net 

Total Assets 

$ 5,485,412 

$ 249,668,801 

$ 5,593,661 

$ 268,809,520 

-

Accounts Payable 

Accrued Payroll 

Accrued Annual Leave 

Contingent Liabilities 

Other 

Total Liabilties 

Cumulative Results of Operations - Funds from Dedicated Collections

Total Net Position 

$ 2,118,305 

$ 247,550,496 

1,932,814 

99,697 

85,794 

- 

- 

247,550,496 

$ 1,197,110 

$ 267,612,410 

835,464 

55,478 

- 

300,000 

6,168 

267,612,410 

Total Liabilities and Net Position $ 249,668,801 $ 268,809,520 

2016 2015 

Statements of Net Cost 

Gross Costs $ 20,551,582 $ 6,761,054 

Total Net Cost of Operations $ 20,551,582 $ 6,761,054 

2016 2015 

Statements of Changes in Net Position 

Beginning Cumulative Results of Operations, October 1 

Nonexchange Interest Revenue 

Net Cost of Operations 

 Net Change 

Total Net Position, September 30 

$ 267,612,410 

$ 247,550,496 

489,668 

(20,551,582) 

(20,061,914) 

$ 274,315,312 

$ 267,612,410 

58,152 

(6,761,054)

(6,702,902) 

34

 244,000,000 263,000,000 

 4,369 

 179,020 215,859 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016 Agency Financial Report 

Note 16 Restatements

The CFTC was granted independent leasing authority in 1974, and received authority to expend 

appropriated funds on multiple year leases in FY 1981. The CFTC’s historical practice has been to 

obligate only the annual portion of lease payments due each fiscal year. On February 4, 2016, GAO 

issued Comptroller General Decision B-327242, Commodity Futures Trading Commission – 

Recording of Obligations for Multiple-Year Leases (“Decision”). This Decision concluded that 

CFTC’s historical practice of recording multiple-year lease obligations on an annual basis violated 

the recording statute, 31 U.S.C. § 1501(a)(1). The Decision further indicated that the Commission 

needs to determine whether “the failure to properly record these obligations has resulted in the 

obligation of funds in excess of appropriations in violation of the Antideficiency Act” (ADA). After 

considering GAO’s decision, the Commission concluded that it should report a budgetary 

obligation for the full amount of the lease agreements in its statements of budgetary resources 

retrospectively. A summary of the effect of the restatement is shown below: 

2015, as Previously 2015, as 

Reported Change Restated 

BUDGETARY RESOURCES

 Unobligated Balance Brought Forward, October 1 $ 275,549,121 $ (230,177,054) $ 45,372,067 

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

Unobligated Balance Brought Forward, October 1, as Adjusted 276,378,291 (230,177,054) 46,201,237

 Recoveries of Prior Year Unpaid Obligations 4,061,675 4,061,675 

Other Changes in Unobligated Balance (2,167,775) 96,799 (2,070,976) 

Unobligated Balance from Prior Year Budget Authority, Net 278,272,191 (230,080,255) 48,191,936

 Appropriations 250,000,000 250,000,000

 Spending Authority from Offsetting Collections 230,746 (96,799) 133,947 

Total Budgetary Resources $ 528,502,937 $ (230,177,054) $ 298,325,883 

STATUS OF BUDGETARY RESOURCES

 New Obligations and Upward Adjustments (Total) (Note 12A) $ 258,702,003 $ - $ 258,702,003 

Change in Unfunded Lease Obligations (Notes 10 and 16) - (20,134,230) (20,134,230) 

Unobligated Balance, End of Year 

Apportioned, Unexpired Accounts 270,359,908 - 270,359,908 

Unapportioned, Unexpired Accounts (210,042,824) (209,897,098) 

Unexpired Unobligated Balance, End of Year 270,505,634 (210,042,824) 60,462,810 

Expired Unobligated Balance, End of Year (704,700) (704,700) 

Unobligated Balance, End of Year (Total) $ 269,800,934 $ (210,042,824) $ 59,758,110 

Total Budgetary Resources $ 528,502,937 $ (230,177,054) $ 298,325,883 

CHANGE IN OBLIGATED BALANCE

 Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 40,564,762 $ - $ 40,564,762 

 Unfunded Lease Obligations Brought Forward, October 1 (Notes 10 and 16) - 230,177,054 230,177,054 

Change in Unfunded Lease Obligations (Notes 10 and 16) - (20,134,230) (20,134,230)

 Total Remaining Unfunded Lease Obligations - 210,042,824 210,042,824 

New Obligations and Upward Adjustments (Total) 258,702,003 - 258,702,003 

Outlays (Gross) (234,914,187) - (234,914,187) 

Recoveries of Prior-Year Unpaid Obligations (4,061,675) - (4,061,675) 

Unpaid Obligations, End of Year 60,290,903 210,042,824 270,333,727

 Uncollected Payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (54,225) - (54,225) 

Change in Uncollected Payments, Federal Sources (22,435) - (22,435) 

Uncollected Payments, Federal Sources, End of Year (76,660) - (76,660)

 Memorandum Entries: -

Obligated Balance, Start of Year $ 40,510,537 $ 230,177,054 $ 270,687,591 

Obligated Balance, End of Year $ 60,214,243 $ 210,042,824 $ 270,257,067 

 145,726 

The FY 2015 Statement of Budgetary Resources has been restated to reflect the unfunded lease 

obligations shown above and discussed in Note 10. This restatement does not affect the 

Commission’s net position or the auditor’s opinion on the financial statements. See Note 10 – 

Leases for additional information on the Commission’s leases. In addition, $96,799 in refunds 

collected were reclassified from Spending Authority from Offsetting Collections to Other Changes 

in Unobligated Balance to conform to the presentation in the current year, as disclosed in Note 1W. 

35