FY 2015 Agency Financial Report 3 

Table of Contents

Message from the Secretary of Labor.................................................................................................... 5

Management’s Discussion and Analysis................................................................................................. 7

Program Performance Overview............................................................................................................................ 11

Financial Performance Overview............................................................................................................................ 26

Management Assurances....................................................................................................................................... 35

Financial Section..................................................................................................................................37

Message from the Chief Financial Officer .............................................................................................................. 39

Independent Auditors’ Report................................................................................................................................ 41

Annual Financial Statements.................................................................................................................................. 51

Principal Financial Statements and Notes........................................................................................................ 53

Required Supplementary Stewardship Information...................................................................................... 109

Required Supplementary Information........................................................................................................... 115

Other Information .............................................................................................................................145

Inspector General’s Top Management and Performance Challenges.................................................................. 147

Summary of Financial Statement Audit and Management Assurances............................................................... 157

Improper Payments Reporting Details................................................................................................................. 158

Schedule of Spending ........................................................................................................................................... 201

Open Government Links....................................................................................................................................... 202

Acronyms.............................................................................................................................................................. 203

This report can be found on the Internet at www.dol.gov/dol/aboutdol/.

If you have questions or comments regarding this report, contact:

AFRComments@dol.gov

or

Office of the Chief Financial Officer

U.S. Department of Labor

200 Constitution Avenue, NW, Room S-4030

Washington, DC 20210

202-693-6800

The photographs in this publication were furnished by numerous individuals. All photographs are proprietary and prior permission from the 

photographer is required for any use or reproduction of the photographs. All references to non-governmental companies or organizations, 

their services, products or resources in this report are offered for informational purposes and should not be construed as an endorsement by 

the Department of Labor of any of the companies or organizations, or their services, products or resources. The Department of Labor does 

not endorse, takes no responsibility for, and exercises no control over non-governmental organizations’ Web sites mentioned in this report, 

or their views or contents; nor does it vouch for the accuracy of the information contained on other organizations’ Web sites.

FY 2015 Agency Financial Report 5 

Message from the Secretary of Labor

I like to call the Department of Labor the “department of opportunity.” 

Now in our second century, we continue to empower workers and 

their families, expanding opportunity for all and building a stronger 

America through shared prosperity. That work continued in 2015: 

implementing the Workforce Innovation and Opportunity Act to 

help more people get the tools to succeed in 21st century careers; 

investing in training programs like apprenticeships that allow more 

people to punch their ticket to the middle class; proposing a new 

overtime rule that would help some 5 million working people get a fair 

day’s pay for an honest day’s work; continuing efforts to enhance 

retirement security with a new proposal to protect consumers from 

conflicted investment advice; and so much more.

To learn more about our agenda and everything we’re doing to 

execute it, I encourage you to visit DOL.gov and read our Fiscal Year 

(FY) 2014-18 Strategic Plan. The Strategic Plan provides a five-year 

outline of the specific, measurable and strategic outcomes and goals 

toward which we are working.

We will reach those goals, however, only if we deploy our resources 

smartly and strategically. That is why I am pleased to present the U.S. 

Department of Labor’s FY 2015 Agency Financial Report (AFR). This is 

our annual publication to Congress and the people demonstrating our 

operational record and financial stewardship of public funds. The 

report explains how we spend our budget dollars, highlighting both 

our key accomplishments and our plans for the future. It is with 

tremendous pride that I report that an independent audit of our 

financial statements has once again resulted in an unmodified “clean” 

opinion.

I am also pleased to report that the Department can offer a statement 

of reasonable assurance that the financial and performance data in 

this report are reliable and complete per Office of Management and 

Budget (OMB) guidance. Our assessment of internal controls and 

compliance of our financial management systems is outlined in the 

Management Assurances in the Management’s Discussion and 

Analysis section of this report. 

In addition to transparency tools like this financial report, we analyze 

our programs to determine whether we are providing taxpayers with 

the best possible return on their investment. We have a strong and 

ambitious evaluation agenda, allowing us to assess the impact of our 

programs on the lives of workers and their families. By measuring these 

results, we can strengthen those initiatives that work and change the 

ones that don’t. For more about our overview of performance, turn to 

the Program Performance Overview part of the Management 

Discussion and Analysis section of this AFR. For in-depth performance 

information, please see the Department’s Annual Performance Report 

and Budget on our website. 

Thomas E. Perez

U.S. Secretary of Labor

The Department of Labor’s 

Mission:

“To foster, promote, and 

develop the welfare of the wage 

earners, job seekers, and 

retirees of the United States; 

improve working conditions; 

advance opportunities for 

profitable employment; and 

assure work-related benefits and 

rights.”

The Department of Labor’s 

Strategic Goals:

1: Prepare workers for better 

jobs.

2: Improve workplace safety and 

health.

3: Promote fair and high-quality 

work environments.

4: Secure retirement, health, and 

other employee benefits and, for 

those not working, provide 

income security.

5: Produce timely and accurate 

data on the economic conditions 

of workers and their families.

7 United States Department of Labor

Management’s Discussion and Analysis

(Unaudited)

FY 2015 Agency Financial Report 9

The Department of Labor's (DOL or the Department) annual Agency Financial Report (AFR) provides fiscal data and 

summary performance results that enable the President, Congress, and American people to assess the 

Department’s accomplishments for each fiscal year (October 1 through September 30). This report provides an 

overview of programs, accomplishments, challenges, and management’s accountability for the resources entrusted 

to the Department. The report is prepared in accordance with the requirements of Office of Management and 

Budget (OMB) Circular No. A-136, Financial Reporting Requirements.

Mission Statement and Organizational Structure

DOL’s mission remains as relevant today as at the Department’s founding in 1913:

“To foster, promote and develop the welfare of the job seekers, wage earners and retirees 

of the United States; improve working conditions; advance opportunities for profitable 

employment; and assure work related benefits and rights.”

The Department accomplishes this mission through component agencies and offices that administer various 

statutes and programs. These programs are carried out through a network of regional offices and smaller field, 

district, and area offices, as well as through grantees and contractors.

US Department of Labor Organizational Chart
Management’s Discussion and Analysis

(Unaudited)

10 United States Department of Labor

Certificate of Excellence in Accountability Reporting

In May 2015, DOL received the Certificate of Excellence in Accountability Reporting (CEAR) from the Association of 

Government Accountants (AGA) for its FY 2014 Agency Financial Report. The CEAR Program was established by the 

AGA, in conjunction with the Chief Financial Officers Council, to further performance and accountability reporting. 

Receiving the CEAR Award represents a significant accomplishment for a federal agency. FY 2014 reporting marked 

the 14th year the Department received this award.

U.S. Department of Labor Headquarters: Frances Perkins Building

DOL Headquarters, Frances Perkins Building

Washington, D.C., USA
(Unaudited)

FY 2015 Agency Financial Report 11

Program Performance Overview

The Program Performance Overview presents the Department’s performance goals, objectives and results. It 

discusses key performance measures and program priorities. This section includes results for measures related to 

spending as reported in the following Financial Section. Performance results for outcome measures reported under 

the Government Performance and Results Act are included in the Annual Performance Report, which will be 

published in February 2016 with the FY 2017 Congressional Budget Justification. A third report, the Summary of 

Performance and Financial Information for Fiscal Year 2015, will be available on February 16, 2016. All three reports 

will be posted at http://www.dol.gov/dol/aboutdol/#budget.

The Department’s current five-year Strategic Plan - http://www.dol.gov/_sec/stratplan/ includes five Strategic

Goals and 10 Strategic Objectives that support the Secretary’s vision of promoting and protecting opportunity for all 

workers and employers. These goals are presented in the following table:

STRATEGIC GOAL 1: Prepare workers for better jobs.

1.1. Advance employment opportunities for US workers in the 21st century demand sectors and occupations using 

proven training models through increased employer engagement and partnerships.

1.2. Provide marketable skills and knowledge to increase workers’ incomes and help them overcome barriers to the 

middle class through partnerships among business, education, labor, community organizations, and the workforce 

system.

1.3. Advance workers’ rights, acceptable work conditions, and livelihoods, particularly for the world’s vulnerable 

populations.

STRATEGIC GOAL 2: Improve workplace safety and health.

2.1. Secure safe and healthy workplaces, particularly in high-risk industries.

STRATEGIC GOAL 3: Promote fair and high-quality work environments.

3.1. Break down barriers to fair and diverse work-places and narrow wage and income inequality.

3.2. Protect workers’ rights.

3.3. Secure wages and overtime.

STRATEGIC GOAL 4: Secure retirement, health, and other employee benefits and, for those not working, provide 

income security.

4.1. Provide income support when work is impossible or unavailable and facilitate return to work. 

4.2. Improve health benefits and retirement security for all workers.

STRATEGIC GOAL 5: Produce timely and accurate data on the economic conditions of workers and their families.

5.1. Provide sound and impartial information on labor market activity, working conditions and price changes in the 

economy for decision making, including support for the formulation of economic and social policy affecting virtually 

all Americans.

The goal structure incorporates the Department’s commitment to measuring results that positively impact the dayto-day lives of working families. Reporting performance for these measures allows the public and the Department 

to track progress in implementation of the strategic goals and objectives.

The program performance overview organizes DOL program agencies into five categories that report FY 2015

performance data. The Department’s mission is also supported by administrative, policy, legal, public affairs, and 

Congressional liaison offices.
Management’s Discussion and Analysis

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12 United States Department of Labor

Employment and Training

Employment and Training Administration (ETA)

Veterans’ Employment and Training Service (VETS)

Worker Protection

Office of Federal Contract Compliance Programs (OFCCP)

Occupational Safety and Health Administration (OSHA)

Wage and Hour Division (WHD)

Employee Benefits Security Administration (EBSA)

Mine Safety and Health Administration (MSHA)

Office of Labor-Management Standards (OLMS)

Policy

Women’s Bureau (WB)

Office of Disability Employment Policy (ODEP)

Bureau of International Labor Affairs (ILAB)

Benefits

Office of Workers’ Compensation Programs (OWCP)

Federal-State Unemployment Insurance (UI) Program (administered by ETA)

Statistics

Bureau of Labor Statistics (BLS)

The following section presents a brief description of the programs administered by each agency, the most recent 

results for key performance measures, and a brief statement of forward-looking information. The Department 

tracks performance through over 400 output and outcome measures. The selected measures below are most 

representative of agency activities.

EMPLOYMENT & TRAINING

Employment and Training Administration (ETA)

ETA provides employment assistance, labor market information, and job training through the administration of 

programs authorized by the Workforce Investment and Opportunity Act (WIOA) for adults, youth, dislocated 

workers, and other targeted populations. ETA administers Job Corps; Trade Adjustment Assistance (TAA); 

Employment Services (ES), authorized under the Wagner-Peyser Act; Foreign Labor Certification activities; the 

Community Service Employment for Older Americans program (CSEOA); and Apprenticeship programs. These 

programs support the Department’s Strategic Goal 1, Prepare workers for better jobs and the associated Strategic 

Objectives 1.1, Advance employment opportunities for US workers in the 21st century demand sectors and 

occupations using proven training models through increased employer engagement and partnerships, and 1.2, 

Provide marketable skills and knowledge to increase workers’ incomes and help them overcome barriers to the 

middle class through partnerships among business, education, labor, community organizations, and the workforce 

system. ETA also supports the Department’s Strategic goal 3, Promote fair and high-quality work environments and

the associated Strategic Objective 3.3, Secure wages and overtime.

Percent of Grant Reports Issued by Regional Offices – The ETA Regional Offices monitor grants to ensure compliance 

with Federal statutes and regulations and assess performance progress through enhanced desk monitoring reviews 

and on-site monitoring reviews. ETA’s strategy is to monitor 100% of all grants within a four year period, attempting 

to monitor each and every grant at least once during the 3-4 year life of a grant. In FY 2015, ETA Regional Offices 

monitored 29.49% of all active grants assigned to the regions, compared to 28.45% in FY2014, 32.48% in FY 2013 

and 25.00% in FY 2012.
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 13

Strategic Goal 1: Prepare workers for better jobs

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Percent of Grant Monitoring Reports Issued by 

Regional Offices -- -- 25.00% 32.48% 28.45% 29.49%

Looking Forward: In FY 2016, ETA will continue to monitor 26% of all active grants; as of October 1, 2015, ETA has a 

portfolio of 2,486 active grants. In accordance with the priority DOL places on industry-recognized credentials, ETA 

continues to focus on increasing the percentage of training program completers who attain industry-recognized 

credentials by 10% by September 30, 2017. In addition to the credential goal, ETA announced a new priority goal to 

double the number of apprentices in the U.S. over the next five years. Through the American Apprenticeship Grants

– $175 million awarded to 46 applicants on September 9, 2015 – ETA will build on successful Registered 

Apprenticeship models, drive ongoing innovation, and support state and regional strategies to expand quality 

apprenticeships.

Veterans’ Employment and Training Service (VETS)

VETS is committed to the nation’s responsibility to meet the employment, training, and job security needs of 

Americans who have served in uniform. VETS prepares America's veterans, service members and their spouses for 

meaningful careers, provides them with employment resources and expertise, protects their employment rights, 

and promotes their employment opportunities. VETS supports the Department’s Strategic Goal 1, Prepare workers 

for better jobs and the associated Strategic Objectives 1.1, Advance employment opportunities for US workers in the 

21st century demand sectors and occupations using proven training models through increased employer 

engagement and partnerships. The Jobs for Veterans State Grants (JVSG) program, which is part of the American 

Job Center (AJC) public workforce system, assists veterans in overcoming significant barriers to employment, 

facilitating their transition into the civilian workforce. This program provides intensive services to veterans, which 

include the development of an individual development plan, career counseling, skill assessment, and resume and 

interview preparation. A recently-completed analysis of AJC services by the Department’s Chief Evaluation Office 

found veterans in AJC employment programs, particularly those in JVSG, are doing better than non-veterans on a 

number of dimensions, including receiving services more quickly (consistent with priority of service), becoming 

employed, staying employed, and having higher earnings. VETS also tracks timeliness and quality measures for its 

Uniformed Services Employment and Reemployment Rights Act (USERRA) program. To provide prompt resolution 

for both claimants and employers, VETS strives to complete USERRA investigations within 90 days. For cases that 

require investigation beyond 90 days, investigators ensure claimants are consulted to approve an extension. 

Additionally, VETS conducts a review of a sampling of cases each quarter to ensure that cases meet the quality 

standards set by the agency.

In FY 2015, the timeliness of investigations remained consistent with previous years, recovering from a three-year 

low in FY 2014, which was the result of the government shutdown. The quality of investigations continues to 

increase as well, as quality reviews become institutionalized in the work of individual investigators nationwide. In FY 

2015, VETS convened a workgroup to analyze the quality review process and recommend changes for consideration 

in FY 2016.

Strategic Goal 1: Prepare workers for better jobs

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Percent of USERRA Investigations 

Completed Within 90 Days 84% 87% 89% 89.6% 88.0% 88.5%

Percent of Closed USERRA Cases Meeting 

Agency’s Quality Standard -- -- 83% 83% 91.5% 91.7%

Looking Forward: VETS has a goal to increase the percent of participants who receive intensive services from 

Disabled Veterans’ Outreach Program (DVOP) specialists to 90% by September 30, 2016. VETS remains on track to 
Management’s Discussion and Analysis

(Unaudited)

14 United States Department of Labor

meet this goal, as the agency works with the Employment and Training Administration to implement the Workforce 

Innovation and Opportunity Act. This act made significant changes to the public workforce system designed to 

improve coordination between workforce programs and to modify program performance measures.

WORKER PROTECTION

Office of Federal Contract Compliance Programs (OFCCP)

OFCCP ensures that nearly 200,000 Federal contractor facilities and locations provide equal employment 

opportunities leading to a fair and diverse workplace. OFCCP administers and enforces three legal authorities that 

require equal employment opportunity: Executive Order 11246, as amended; Section 503 of the Rehabilitation Act 

of 1973, as amended; and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) of 1974, as amended. 

Together, these legal authorities ban discrimination and require Federal contractors and subcontractors to take 

affirmative action to ensure that all individuals have an equal opportunity for employment, without regard to race, 

color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran.

Additionally, federal contractors and subcontractors are prohibited from, under certain circumstances, taking 

adverse employment actions against applicants and employees for asking about, discussing, or sharing information 

about their pay or the pay of their co-workers. OFCCP supports the Department’s Strategic Goal 3, Promote fair and 

high-quality work environments and the associated Strategic Objective 3.1, Break down barriers to fair and diverse 

work-places and narrow wage and income inequality. 

OFCCP’s compliance evaluations and complaint investigations play a critical role in measuring Federal contractor 

compliance with legal obligations under these authorities. In FY 2015, OFCCP conducted fewer compliance 

evaluations to focus its resources on larger and more complex systemic discrimination cases in both compensation 

and hiring, and used the Mega Project strategy, focusing on construction projects that include a greater number of 

Federal contractor and subcontractor workers. These larger cases require additional time and resources, more 

sophisticated fact-finding and analysis, and have greater potential to impact more workers. With this strategy, 

OFCCP completed fewer evaluations from FY 2014 to FY 2015, but the number of impacted employees increased 

from 9,268 in FY 2013 to 16,040 in FY 2015.

Strategic Goal 3: Promote fair and high quality work environments

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Compliance Evaluations 4,960 4,014 4,017 4,345 3,985 2,718

Looking Forward: In FY 2016, OFCCP will continue to emphasize the strategic priority of investigating a greater 

proportion of systemic discrimination cases, particularly systemic pay discrimination cases. OFCCP will also focus on 

Mega Construction Projects, which have the potential for better success in increasing the representation of 

minorities, women, people with disabilities, and protected veterans in skilled trades through effective recruitment 

and training.

Occupational Safety and Health Administration (OSHA)

OSHA is authorized by the Occupational Safety and Health Act of 1970 to assure safe and healthful conditions for 

working men and women by setting and enforcing standards and providing training, outreach, education and 

technical assistance. OSHA aims to reduce the number of work related illnesses, injuries, and fatalities and 

contributes to the broader goal to promote competitiveness of our nation's economy. OSHA supports the 

Department’s Strategic Goal 2, Improve workplace safety and health, and Strategic Goal 3, Promote fair and highquality work environments, and related Strategic Objectives 2.1, Secure safe and healthy workplaces, particularly in 

high-risk industries and 3.2, Protect workers’ rights. The most recent data for key measures of OSHA’s activity – the 

number of safety and health inspections – are presented in the table below.

Safety inspections conducted in general industry and construction take place in a variety of high-hazard industries, 

such as the chemical and refinery industries; industries that generate combustible dust; oil and gas well drilling; 

commercial construction; highway, street, bridge, and tunnel construction; arborist and logging work; water, sewer, 
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 15

pipeline, communications (including telecommunications), and power line construction; power distribution and 

generation; wind energy; forging; steel manufacturing; food manufacturing; grain handling; demolition; 

warehouses; and health care facilities. There are a multitude of serious safety hazards that workers can be exposed 

to in these industries.

Health inspections are conducted in general industry and construction and address hazards such as chemical 

hazards, biological hazards (e.g., blood borne pathogens and tuberculosis), physical hazards (e.g., noise, radiation, 

and heat and cold stress), and ergonomic hazards (e.g., patient handling, repetitive motion, excessive force, and 

awkward postures). Safety and health inspections increased from FY 2008 through FY 2012, but dropped from FY 

2013 to FY 2015 due to sequestration and decreasing OSHA resources. In FY 2015, OSHA increased its percentage of 

health inspections with a preliminary result of 6,905 inspections conducted, which was an increase of 87 from the 

previous year. OSHA met 97% of its inspection goal for safety with 28,834 inspections conducted. OSHA allocated 

significant enforcement resources to employer-reported incidents resulting from OSHA’s new recordkeeping and 

reporting regulation, which requires employers to report to OSHA all work-related hospitalizations, amputations, 

and losses of an eye. The new recordkeeping requirements also increased the number of employer referrals, which 

OSHA addressed through rapid response investigations (RRI) as well as unprogrammed inspections. This reduced 

the time and resources available for programmed inspection activity. The RRI activity that began in January 2015 

effectively doubled OSHA’s referral load, adding a workload of almost 4,000 referral investigations for the fiscal 

year.

OSHA administers the whistleblower protection provisions of Section 11(c) of the Occupational Safety and Health 

Act (OSH Act). Section 11(c) prohibits any person from discharging or in any manner retaliating against any 

employee because the employee has exercised rights under the OSH Act. In addition, OSHA's Whistleblower 

Programs protect workers from retaliation under 21 other whistleblower protection statutes protecting employees 

who report violations of various airline, commercial motor carrier, consumer product, environmental, financial 

reform, food safety, health care reform, nuclear, pipeline, public transportation agency, railroad, maritime, and 

securities laws. In FY 2015, OSHA completed more than 3,200 whistleblower investigations, awarding more than 

$24 million to complainants including 75 reinstatements.

Strategic Goal 2: Ensure workplaces are safe and healthy

Strategic Goal 3: Promote fair and high-quality work environments

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Total Number of Safety Inspections Conducted 34,320 33,341 33,580 31,948 29,345[r] 28,834*

Total Number of Health Inspections Conducted 6,649 7,317 7,381 7,280 6,818[r] 6,905*

[r] Indicates revised result from the FY 2014 AFR

* Preliminary results. Final FY 2015 results will be included in the FY 2017 Congressional Budget Justification.

Looking Forward: In FY 2016, OSHA will continue to target the most hazardous worksites and focus on complex 

hazards that require significant resources, such as fatality and catastrophe investigations, cases that involve process 

safety management hazards, and investigations of serious and prevalent hazards under OSHA’s General Duty 

Clause. OSHA will implement the Enforcement Weighting System (EWS), which assigns a higher enforcement unit 

value to these complex inspections noted above, moving the focus from the simple number of inspections 

completed to the quality and complexity of inspections completed. The EWS will allow OSHA to better manage its 

resources to make the greatest impact.

Wage and Hour Division (WHD)

WHD is responsible for administering and enforcing laws that establish the minimum standards for wages and 

working conditions. Collectively, these labor standards cover most private, state, and local government 

employment. They protect over 135 million workers in more than 7.3 million establishments throughout the U.S. 

and its territories.

WHD investigators, supervisors, analysts, technicians and administrative employees enforce and administer the 

minimum wage, overtime and child labor provisions of the Fair Labor Standards Act (FLSA); the prevailing wage 
Management’s Discussion and Analysis

(Unaudited)

16 United States Department of Labor

requirements and wage determination provisions of the Davis Bacon and Related Acts (DBRA) and Service Contract 

Act (SCA); the wages and working conditions under the Migrant and Seasonal Agricultural Worker Protection Act 

(MSPA); and the Employee Polygraph Protection Act (EPPA). WHD also enforces the field sanitation and temporary 

labor camp standards in agriculture and certain employment standards and worker protections of the Immigration 

and Nationality Act (INA). WHD’s enforcement responsibilities directly contribute to the Department’s Strategic 

Goal 3, Promote fair and high–quality work environments, and related Strategic Objectives 3.2, Protect workers’ 

rights, and 3.3, Secure wages and overtime.

Since FY 2010, WHD has undergone a significant change in how the agency carries out the mission. Fragmentation 

of employment relationships and the scope and complexity of industry structures (i.e., fissuring) combined with the 

growth of the contingent workforce present complex enforcement challenges that require new levels of 

coordination and strategy.

To be effective in securing compliance, WHD continues to prioritize conducting directed investigations focused on 

new business models characterized by the use of subcontracting, franchising, temporary employment, labor 

suppliers, independent contracting, and a contingent workforce. These business models, where companies 

outsource key aspects of their production, often lead to less compliance with wage and hour related statutes. The 

first measure below is directed investigations as a percentage of all investigations conducted. In FY 2015, WHD fell 

below FY 2014 performance (by less than 2 percentage points) for “Percent of Directed Investigations,” but still 

maintained increases from the four years prior to FY 2013. Moving forward, WHD is focused on the challenge of 

advancing strategic enforcement while identifying areas for increased efficiency.

The second and third measures reflect WHD’s commitment to focusing on those industries with a history of 

violations that employ vulnerable workers. Since FY 2010, the agency has maintained a high percent of overall 

investigations in priority industries. In FY 2008, WHD found back wages of $57.5 million in certain low-wage 

industries for 76,900 workers. In FY 2015, WHD found more than $74 million in those low wage industries for over 

102,000 workers. The average amount of back wages per employee rose from $785 in FY 2009 to $890 in FY 2014 

to $1026 in FY 2015—a significant increase for low wage workers. For example, those average back wages 

represent nearly four times the earnings for a typical work week for waiters or waitresses, the equivalent of over 

two and a half paychecks for a janitor, and nearly three and a half paychecks for a cashier. WHD prioritized low 

wage industries in both complaint and directed investigations while increasing the back wage recoveries per worker 

in those industries.

Strategic Goal 3: Promote fair and high-quality work environments 

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Percent of Directed Investigations 27%[r] 29% 41% 44% 44% 42%

Percent of Directed Investigations in Priority 

Industries 82% 82% 85% 83% 83%[r] 84%

Percent of Complaint Investigations in 

Priority Industries 63%[r] 65%[r] 67% 68% 67% 67%

[r] Revised

Looking Forward: The modern workplace in many industries is no longer a brick and mortar company owned and 

operated by a single employer. Fragmentation of employment relationships and the scope and complexity of 

industry structures combined with the growth of the contingent workforce present complex enforcement 

challenges that require new levels of coordination and strategy. WHD has three strategic priorities to meet these 

challenges:

1. Ensuring that the regulatory agenda of providing a fair day’s pay for a hard day’s work is fully and properly 

implemented;

2. Building a strategic enforcement system that supports the agency’s mission, vision, and values; and
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 17

3. Providing support for key initiatives such as government contracts, addressing the fissured workplace, and 

modernizing WHD’s approach in program enforcement areas.

The agency's priorities are supported by performance measures to monitor the organization’s progress in achieving 

strategic enforcement and compliance outcomes. WHD has used a balance of measures to evaluate whether the 

agency is effective, productive, and consistent in applying new policies and strategies. WHD has consistently 

prioritized enforcement resources in those industries defined by their fissured structures. The increased level of 

directed investigations has increased the agency’s presence in those priority industries. By focusing on priority 

industries, WHD also increases the likelihood of detecting instances of misclassification of employees as 

independent contractors.

Employee Benefits Security Administration (EBSA)

EBSA is charged with protecting more than 143 million workers, retirees and their families who are covered by 

nearly 677,000 private retirement plans, 2.3 million health plans, and similar numbers of other welfare benefit 

plans. Together, these plans hold estimated assets of $8.7 trillion. EBSA’s proactive enforcement, outreach and 

education programs protect the most vulnerable populations while ensuring broad compliance with the Employee 

Retirement Income Security Act of 1974 (ERISA) and related laws. In particular, the primary objectives of EBSA’s 

enforcement program are to improve compliance with ERISA; recover losses and unjust profits resulting from 

misconduct by plan fiduciaries and service providers; and increase the deterrent impact of the Agency’s 

enforcement efforts on employee benefit plans, participants and beneficiaries. EBSA supports the Department’s 

Strategic Goal 4, Secure retirement, health, and other employee benefits and, for those not working, provide income 

security, and related Strategic Objective 4.2, Improve health benefits and retirement security for all workers.

EBSA’s enforcement program seeks to detect and correct violations that result in monetary recoveries for employee 

benefit plans, participants and beneficiaries or in other corrective remedies including, but not limited to, significant 

broad-based reforms for large plans or common service providers. In FY 2014, EBSA developed measures designed 

to increase the effectiveness of its enforcement program while avoiding reliance on raw case numbers. As a result, 

EBSA replaced its cases closed measures in FY 2015 with the three measures listed below that track investigation 

timeliness. The measures’ FY 2015 targets were based on five year historical data and EBSA’s FY 2015 results fell 

near or surpassed these targets. In particular, criminal investigations exhibited greater efficiencies than expected. 

EBSA focused its FY 2015 enforcement resources on National Projects and the Major Case Enforcement Priority. The 

Major Case Enforcement Priority concentrates a significant portion of the Agency’s enforcement resources on those 

cases likely to have the greatest impact on the protection of plan assets and participants’ benefits.

Strategic Goal 4: Secure retirement, health, and other employee benefits and, 

for those not working, provide income security

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Civil Non-Major Case Timeliness – % of Non-Major Civil 

Cases Closed or Referred for Litigation in the fiscal year 

within 30 Months of Case Opening except for case 

categories covered in the measure immediately below

-- -- -- -- -- 84.00%

% of Delinquent Employee Contribution, Abandoned 

Plan, Bonding, Health-Part 7 Violation, and other 

Reporting and Disclosure Non-Fiduciary Breach Cases 

Closed or Referred for Litigation in the fiscal year within 

18 Months of Case Opening

-- -- -- -- -- 71.00%

Criminal Case Timeliness – % of Criminal Cases Closed or 

Referred for Litigation in the fiscal year within 18 

Months of Case Opening

-- -- -- -- -- 87.00%
Management’s Discussion and Analysis

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18 United States Department of Labor

Looking Forward: In FY 2016, EBSA will continue to implement performance measurement changes designed to 

increase the effectiveness of its enforcement program. Enforcement program changes will focus on the overlapping 

and related areas of: effective targeting, prompt detection and pursuit of violations; the successful pursuit of 

monetary recoveries; non-monetary results that promote compliance with ERISA; and the aggressive and timely 

pursuit of participant tips and complaints.

Mine Safety and Health Administration (MSHA)

MSHA protects the safety and health of the nation’s miners under the provisions of the Federal Mine Safety and 

Health Act of 1977, as amended by the Mine Improvement and New Emergency Response (MINER) Act of 2006. 

MSHA focuses on the prevention of death, disease, and injury from mining and on promoting safe and healthful 

workplaces for the Nation’s miners. MSHA supports the Department’s Strategic Goal 2, Improve workplace safety 

and health and Strategic Goal 3, Promote fair and high-quality work environments, and related Strategic Objectives 

2.1, Secure safe and healthy workplaces, particularly in high-risk industries and 3.2, Protect workers’ rights.

MSHA is required to conduct four complete inspections annually at active underground mines and two complete 

inspections annually at active surface mines. The table below shows the number of inspections for Coal vs. Metal 

and Nonmetal mine types. Fluctuations in the number of inspections over time reflect variation in the number of 

mines operating during any given time period. In FY 2015, MSHA performed all mandated inspections.

Supports Strategic Goal 2: Improve workplace safety and health, and 

Strategic Goal 3: Promote fair and high-quality work environments 

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Regular Mandated Coal Mine Inspections 5,121 5,139 5,117 4,658 4,176 4,130

Regular Mandated Metal and Nonmetal Mine 

Inspections 16,127 16,269 16,620 16,624 16,253 16,862

Looking Forward: By September 30, 2016, MSHA aims to reduce worker fatality rates in mining by five percent 

based on a rolling five-year average. MSHA will use the following strategies in pursuit of achieving this target: 

increasing inspection and enforcement effectiveness, strengthening and modernizing training and education, 

improving mine emergency response preparedness, strengthening health and safety regulations, increasing efforts 

to protect miners from discrimination and supporting open government.

Office of Labor-Management Standards (OLMS)

OLMS protects the rights of American workers by administering the Labor-Management Reporting and Disclosure 

Act (LMRDA) and related laws, which safeguard union democracy and financial integrity, and promote financial 

transparency. OLMS supports the Department’s Strategic Goal 3, Promote fair and high-quality work-life 

environments, and related Strategic Objective 3.2, Protect workers’ rights.

OLMS focuses audit resources by using advanced targeting techniques to identify the labor unions most likely to be 

subject to a violation of the law. The success of audit targeting strategies is measured by “Percent of Audits 

Resulting in a Criminal Case (Fallout Rate).” Since the implementation of this performance measure, OLMS has 

increased the fallout rate considerably, reaching its highest percentage to date in FY 2014.

Timely resolution of union election complaints is a paramount goal of the LMRDA, and OLMS gauges its progress 

against this goal through the “Days to Resolve Union Officer Election Complaints” measure. In 2009 OLMS 

established a baseline and since that point has dramatically reduced the average number of elapsed days per case. 

OLMS continues to exceed this goal.

OLMS is also making it easier for unions, employers, and consultants to file the financial and activity reports 

required under the LMRDA, and it tracks its success in these efforts through the “Percent of LMRDA Required Forms 

Filed Electronically” measure. OLMS continues to use existing outreach tools (e.g., seminars, compliance assistance 

incidental to an audit, and its newly rebooted Voluntary Compliance Partnership program) to introduce and 

encourage union leaders and other filers to use web-based forms.
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 19

Strategic Goal 3: Promote fair and high quality work environments

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Percent of Audits Resulting in a Criminal Case 

(Fallout Rate) -- 14.9% 13.8% 20.9% 21.7% 21.46%

Number of Days to Resolve Union Officer 

Election Complaints 81 79 71 71 72 70

Percent of LMRDA Reports Filed Electronically -- 21.4% 37.8% 42.4% 45.0% 49.0%

Looking Forward: These results measure progress in the three OLMS high priority programs. In the future, OLMS 

will focus its efforts on continued improvements. For its fallout measure, OLMS will continue to refine the targeting 

techniques in an effort to continue saving resources directed at audits and redirecting these saved resources to 

high priority programs. And while efforts to work closely and cooperatively with the Office of the Solicitor have 

resulted in dramatic improvement in election case processing, OLMS will explore additional areas of mutual 

cooperation. OLMS continues to enhance efforts to coordinate work between the National Office and field staff by 

identifying new means of communications and extending existing channels to more efficiently process election 

cases. In the past, these efforts have expedited processing and OLMS believes that by enhancing this coordination 

and looking for additional areas of increased efficiency, the number of elapsed days can be further reduced. Finally, 

in FY 2015, OLMS allocated greater resources to its Voluntary Compliance Partnership (VCP) program, a cooperative 

effort with 43 international and national unions designed to provide targeted outreach to their affiliates, with one 

goal being fostering greater use of the electronic filing capabilities of the OLMS web site.

POLICY

Women’s Bureau (Bureau)

The mission of the Women’s Bureau is to develop policies and standards and conduct inquiries to safeguard the 

interests of working women, advocate for their equality and economic security for themselves and their families, 

and promote quality work environments. The Bureau is the only Federal office dedicated to serving and promoting 

the interests of women in the workforce. The Bureau supports the Department’s Strategic Goal 3, Promote fair and 

high-quality work environments and Strategic Objective 3.1, Break down barriers to fair and diverse work places and 

narrow wage and income inequality.

The Bureau conducts research to identify and formulate practices and policies that support working women and 

inform strategic interventions and recommends these practices and policies within DOL and the Federal 

government, national organizations and local communities. It identifies trends, data gaps, policy and programmatic 

needs, and promising practices.

Looking Forward: In FY 2016, the Bureau will continue to serve as a strategic coordinator of issue/policy experts, 

practitioners, businesses and inter- and intra- agency collaborators to elevate the issue of paid leave, as well as to 

advance and improve women’s earning power through opportunities for preparation and training for women in 

growth and in-demand careers and by advocating for fair and equal wages. The Bureau will continue its ongoing 

public awareness and education efforts, including revamping and revising its popular women’s employment rights 

guide and promoting women’s presence in apprenticeships and non-traditional occupations.

Office of Disability Employment Policy (ODEP)

ODEP uses data and evidence to promote the adoption and implementation of policy strategies and effective 

practices to increase the number and quality of job opportunities for people with disabilities. Based on research 

and evaluation, ODEP develops or identifies effective policy and practices, conducts outreach to share this critical 

information, and provides technical assistance to all levels of government, service providers and non-governmental 

organizations, and employers to aid them in adoption and implementation. These ODEP activities support the 

Department’s Strategic Goal 3, Promote fair and high-quality environments and the associated Strategic Objective 

3.1, Break down barriers to fair and diverse work-places and narrow wage and income inequality.
Management’s Discussion and Analysis

(Unaudited)

20 United States Department of Labor

ODEP’s key performance measures are the numbers of “Policy Outputs”, “Effective Practices”, and “Formal and 

Informal Collaborations.” “Policy Outputs” include documents recommending or putting in place a significant policy 

change or an interpretation of existing policy related to disability employment. “Effective Practices” are technical 

assistance and informational materials developed to aid entities in adopting and implementing proven practices. 

“Formal and Informal Collaborations” are working relationships between ODEP and governmental and nongovernmental entities that help ODEP increase its reach and impact. 

ODEP has produced a steady stream of policy outputs, capitalizing on interest by states in implementing effective 

practices that prioritize competitive, integrated employment and increased interest by employers in hiring people 

with disabilities spurred by new regulations. The majority of ODEP work in 2015 was in conducting outreach and 

providing technical assistance on revised legislations such as the Workforce Innovation and Opportunity Act (WIOA) 

and new regulations such as those implementing Section 503 of the Rehabilitation Act. As a result, “Policy Outputs” 

have increased and the FY 2015 result for “Effective Practices” was the highest in five years.

Strategic Goal 3: Promote fair and high quality work environments

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Policy Outputs 35 42 39 54 114[r] 146

Effective Practices 23 44 131 192 153[r] 193

Formal and Informal Collaborations1 -- -- -- -- -- 364 1 In 2015 ODEP combined the number of formal agreements with the number of informal collaborations as this combined measure is a better measure of 

ODEP’s efforts that foster partnerships to ensure policy development and adoption.

[r] Indicates revised result from the FY 2014 AFR

Looking Forward: With the signing of the WIOA, the issuance of updated regulations for Section 503 of the 

Rehabilitation Act, and the Executive Order to increase hiring of people with disabilities that helps the Government 

fulfill its responsibilities under Section 501 of the Rehabilitation Act, there are significant legislative and regulatory 

successes that have the potential to improve the employment of people with disabilities. In order to capitalize on 

these opportunities, ODEP will target its strategic approaches to compel the entities responsible for executing the 

new requirements – state agencies, workforce boards, federal contractors, and federal agencies – to adopt 

effective practices and policies that help the nation achieve the goals of the legislation, regulations and Executive 

Order.

Bureau of International Labor Affairs (ILAB)

In the global economy, working conditions and compliance with international labor standards shape the 

opportunities for American and foreign workers. Addressing worker rights and livelihoods overseas helps level the 

global playing field for American workers, while protecting and promoting the rights of all workers. The Secretary’s 

vision of promoting and protecting opportunity requires an inclusive growth strategy to help improve working 

conditions, raise living standards, protect workers’ ability to exercise their rights, and the elimination of workplace 

exploitation of children and other vulnerable populations.

ILAB has three major strategies for achieving its goal: (1) promoting labor standards through an integrated 

approach of policy, research, and technical assistance; (2) combatting child labor, forced labor and human 

trafficking through research and evidence-based programming; and (3) improving workers’ rights through targeted 

labor policy engagement, including monitoring and enforcement of labor provisions of free trade agreements. ILAB 

supports the Department’s Strategic Goal 1, Prepare workers for better jobs, and Strategic Objective 1.3, Advance 

workers’ rights, acceptable work conditions, and livelihoods, particularly for the world’s vulnerable populations.

Looking Forward: ILAB has adopted a multi-pronged strategy to promote worker rights particularly for vulnerable 

populations through efforts to amend laws, strengthen monitoring and enforcement, improve industrial relations, 

effectively engage companies, and raise awareness about worker rights and exploitative practices of child labor and 

forced labor. In FY 2016, ILAB will increase its efforts to monitor and enforce labor provisions of free trade 
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 21

agreements and promote worker rights through technical assistance, continue oversight of over $300 million in 

grants for 68 projects operating in 60 countries, represent the United States in various international meetings, and 

provide relevant research on forced labor and the worst forms of child labor.

BENEFITS

Office of Workers’ Compensation Programs (OWCP)

OWCP is composed of four separate programs that provide workers’ compensation benefits supporting the 

Department’s Strategic Goal 4, Secure retirement, health, and other benefits and, for those not working, provide 

income security, and Strategic Objective 4.1, Provide income support when work is impossible or unavailable and 

facilitate return to work:

• The Federal Employees' Compensation Act (FECA) Program provides wage-loss compensation, payment for 

medical treatment, return to work assistance, and vocational rehabilitation to civilian employees of the 

Federal government injured at work and to certain other designated groups. In the event of death, FECA 

provides ongoing monetary compensation to dependents.

• The Longshore and Harbor Workers' Compensation Act (Longshore) Program oversees the provision of 

similar benefits to injured private sector workers engaged in certain maritime and related employment, and 

by extension to contractors working overseas for the U.S. government under the Defense Base Act.

• The Black Lung Benefits Program oversees the provision of monetary compensation and medical benefits to 

coal mine employees who are totally disabled due to pneumoconiosis arising out of coal mine employment, 

and monetary benefits to their eligible dependent survivors.

• The Energy Employees Occupational Illness Compensation Program Act (Energy Program) provides 

compensation and medical benefits to employees or survivors of employees of the Department of Energy 

(DOE) and DOE contractors or subcontractors who worked on the nation’s nuclear weapons program and 

became ill due to exposure to radiation or toxic substances.

One of the Federal Employees’ Compensation Act program’s principal focus areas is to provide disability 

management intervention and rehabilitative and placement services to assist with injury recovery and to facilitate 

the return to work of the individuals who sustained an injury or illness. The participation of Federal employers was 

reinforced in recent years by Executive Order (EO) 13548 and successive government-wide initiatives, including the

Safety, Health, and Return to Employment (SHARE) initiative (2004-2008), and the ProtectingOur Workers and Ensuring 

Reemployment(POWER) initiative (2010-2014).

EO 13548 of July 26, 2010, directed Federal agencies to make special efforts to recruit and hire people with 

disabilities and to ensure the retention of those who are injured on the job. Under the EO, agencies are to work to 

improve, expand, and increase successful return-to-work outcomes by increasing the availability of job 

accommodations and light- or limited-duty jobs and removing disincentives for FECA claimants to return to work. 

The SHARE and POWER initiatives set specific performance targets for (non-Postal Service) Federal employers for 

the periods 2004 to 2008 and 2010 to 2014 including: 

• Reduction of total injury and lost-time injury rates; 

• Improved analysis and reporting of on-the-job injuries; 

• Reduction of Federal agency lost-production-day rates; 

• Increase in the percentage of employees who suffer a serious workplace injury or illness who return to 

work; and

• Required electronic and timely submission of Notices of Injury and Wage-Loss Claims by Federal employers.

Federal agencies responded to these initiatives and continue to work constructively with DOL to improve workplace 

safety, improve injury case management and increase returns to work. Although the “Government-Wide Lost

Production Days (LPD) Rate in Non-Postal Agencies” favorably declined in 2015, the measure is better indicator of 

government-wide performance rather than OWCP program performance because of the number of factors involved 

that are not under OWCP’s or DOL’s control. The unfavorable decline in the “Government-Wide Share of Injured 

Workers Returned to Work Within Two Years of Injury” is reflective of the reduction of federal agency resources 
Management’s Discussion and Analysis

(Unaudited)

22 United States Department of Labor

from Return-to-Work (RTW) due to sequestration and budget reductions and the lack of attention to RTW by 

agencies. Without the forcing function of a Presidential initiative, such as POWER which expired in 2014, OWCP’s 

ability to drive RTW improvement is limited. 

The Longshore and Harbor Workers’ Compensation Act program focuses on employer performance to ensure that 

injury reports and first payment of benefits are timely and that disputed claims are resolved as quickly as possible. 

The measure, “Percent of First Payment of Compensation Issued Within 30 days for Defense Base Act Cases” 

monitors the improvement of insurance carriers and providers in providing compensation to workers injured on the 

job. Performance results for this measure reflect an improvement of over 20% since FY 2009. In FY 2015, the 

Longshore program began holding quarterly performance calls with industry carriers/employers and mutual 

insurance companies. These calls were designed to focus attention on the First Payment of Compensation 

measure/result and to share best practices. The FY 2015 result for this measure is 67%, four percentage points 

higher than the FY 2014 result and 24% higher than FY 2009 result. The program expects performance in this area 

to continue to improve in FY 2016.

For a number of years, the Black Lung program has monitored the timeliness of black lung disease claim processing 

through its “Average Time to Render Proposed Decision and Order (PDO) on Black Lung (BL) Claims” measure. With 

the passage of The Patient Protection and Affordable Care Act (PPACA) of 2010, which reinstated two provisions in 

the Black Lung Benefits Act favorable to claimants, the program experienced a significant increase in the number of 

claims filed in 2010, which led to the claim processing time increasing from 2010 through 2012. Incoming claims 

volume surged again in 2014, exceeding the level seen in 2010, and the processing time once again began to 

increase.

In FY 2015, the agency placed increased emphasis on the balance of workload, quality, and timeliness, including

new quality control initiatives, specifically the additional development of medical evidence to ensure that the best 

and most accurate decisions were issued and a focused quality review process. These changes led to an average 

processing time of 273 days in FY 2015, up from 234 in FY 2014. In the second half of FY 2015, the agency began a 

data analysis project which identified the cases involving an identified Responsible Operator (coal company) as 

comprising approximately one half of the overall workload. These cases require significant time and effort to 

develop with quality sufficient to withstand likely appeals by the Responsible Operators. Given the changes in the 

Black Lung program and the enhanced emphasis on quality control, the program is developing new processing time 

performance measures which distinguish among case types. This approach will provide OWCP leadership with 

better information to manage the program and increase its overall performance.

The Energy Employees Occupational Illness Compensation Act program has joint timeliness measures with the 

Department of Energy and the National Institute for Occupational Safety and Health (NIOSH), as each partner 

agency has a role in final claims decisions. The “Average Number of Days Between Filing Date and Final Decision for 

Cases Sent to NIOSH When a Hearing is Held” focuses on shortening the overall time to make claims decisions 

through improving program coordination. A priority focus for the program is to reduce the time required to process 

cases that are sent to NIOSH for dose reconstruction and require an oral hearing. The average number of days 

between filing date and final decision for cases sent to NIOSH when a hearing was held was 497 days to date in FY 

2015, representing a slight increase from FY 2014, but still significantly less than FY 2011 and FY 2012.
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 23

Strategic Goal 4: Secure retirement, health benefits, and other benefits 

and, for those not working, provide income security

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Government-Wide LPD Rate in Non-Postal Agencies 

(FECA) 34.6 33.8 34.8 34.6 31.8 30.4

Government-Wide Share of Injured Workers Returned 

to Work Within Two Years of Injury (FECA) 89.7% 91.6% 91.5% 91.9% 90.7% 89.7

Percent of First Payment of Compensation issued 

Within 30 days for Defense Base Act Cases (Longshore) 55% 56% 63% 67% 63% 67%

Average number of days to process Black Lung Claims 

(Black Lung) 210 238 262 221 234 273

Average Number of Days Between Filing Date and Final 

Decision for Cases Sent to NIOSH When a Hearing is 

Held (Energy)

-- 619 552 452 469 497

Looking Forward: In FY 2016, OWCP will consider expansion of the reemployment opportunities for injured 

workers, increasing the number of injured workers placed in jobs when they cannot be reemployed by their dateof-injury Federal employer, and using Labor for America’s candidate bank to expand the use of assisted 

reemployment and increase placement with employers in the public and private sectors. The agency will continue 

outreach to Black Lung program customers and medical provider communities to improve the quality of medical 

evidence submitted with claims, foster a better understanding of the claims decisions issued, and expand the pool 

of higher-credentialed physicians available for diagnostic examinations which will increase the credibility of initial

eligibility decisions.

In addition, OWCP will continue to focus on customer service. It will provide training for OWCP staff on working 

with difficult customers and customers facing challenging circumstances. It also will work on improving the 

customer service survey initiative started in FY 2015.

Federal-State Unemployment Insurance (UI) Program (administered by ETA)

The Federal-State UI Program, authorized under the Federal Unemployment Tax Act and Title III of the Social 

Security Act, provides temporary, partial wage replacement for unemployed workers, providing them with income 

support when suitable work is unavailable. This program supports Strategic Goal 4, Secure retirement, health, and 

other employee benefits and, for those not working, provide income security and the associated Strategic Objective 

4.1 Provide income support when work is impossible or unavailable and facilitate return to work. To be eligible for 

benefits, unemployed workers must meet eligibility requirements established by state laws that conform to federal 

law, including that they have worked recently, be involuntarily unemployed, and be able and available for work. 

The “Total Unemployment Rate,” calculated using Bureau of Labor Statistics data, is the sum of the (not seasonally 

adjusted) unemployment level for October through September divided by the sum of the (not seasonally adjusted) 

labor force level for October through September.

One of the key measures for this program is Percent of All Intrastate First Payments Made within 21 Days after the 

Last Day of the First Compensable Week (First Payment Timeliness). Although the “First Payment Timeliness” 

performance has improved when compared to FYs 2013 and 2014, this performance is still below the acceptable 

level of performance for this measure – 87%. Reasons for the states’ inability to achieve the “First Payment 

Timeliness” performance standard include state staff layoffs, high state staff turnover, and technology issues. The 

staff layoffs are a consequence of the reduction in administrative funding resulting from lower workloads due to 

expiration of the Emergency Unemployment Compensation program and an improved economy. States have 

experienced a high turnover of staff leaving them with a less experienced and trained staff to make claim eligibility 

determinations which led to workload backlogs in the claims-taking and adjudication units. Additionally, several 

states have reported technology issues following system modernization implementation efforts or because they 
Management’s Discussion and Analysis

(Unaudited)

24 United States Department of Labor

have antiquated technology systems. ETA continues to provide intensive technical assistance and monitoring to 

underperforming states. The table below provides historical data, along with unemployment statistics.

Strategic Goal 4: Secure retirement, health benefits, and other benefits

and for those not working, provide income security

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Total Unemployment Rate 9.7% 9.2% 8.3% 7.6% 6.5% 5.4%

First Payment Timeliness 82.2% 84.0% 83.7% 81.0% 79.0% 83.5%

Looking Forward: During the past year, ETA has been engaged in reengineering its Program Accountability 

processes for the UI program. This new annual process will identify states that are not meeting performance and/or 

integrity measures or have operational issues with regard to program administration. Please refer to the Training 

and Employment Notice No. 3-15 for details on this reengineering effort:

http://wdr.doleta.gov/directives/attach/TEN/TEN_03-15.pdf.

In FY 2016, using the states’ performance on the core measures including the first payment timeliness measure 

data, ETA will identify and work with all states failing to meet the performance standard to include corrective action 

plans to achieve first payment timeliness in their State Quality Service Plans. In addition, using the reengineered 

methodology for identifying “High Priority” states, ETA will identify states with the poorest overall performance and 

provide them intensive technical assistance and increased monitoring to support performance improvement. ETA 

UI staff will work with these states to develop comprehensive Corrective Action Plans (CAPs) designed to improve 

performance. Examples of ETA’s customized technical assistance strategies to support performance improvement 

for the poor performing states include:

• Work collaboratively with the state(s) to conduct enhanced analysis of all relevant data (including 

performance data) to inform strategic approaches to performance improvement. The data analysis may 

also involve examining data in similarly situated states.

• Deploy a team of experts from ETA, and possibly other state experts, to conduct a thorough review of the 

state’s administrative and business processes relevant to the poor performance using state-of the-art 

business process analysis and process mapping tools, resulting in recommendations and an action plan the 

state will implement, as appropriate.

• Engage high-level state officials to bring focus to the egregious performance and promote prioritizing state 

resources to support performance improvement.

• Enhanced monitoring and follow-up that may include additional reporting by the state in area(s) of 

performance deficiency and on-site visits by ETA or partnering with state staff to assess process changes

ETA, in collaboration with the National Association of State Workforce Agencies’ Information Technology Support 

Center (ITSC), continues to diligently work with individual states and state consortia to provide appropriate 

technical assistance in support of their information technology modernization efforts. Pending availability of 

funding in future years, ETA will continue to support the states’ system modernization efforts.

STATISTICS

Bureau of Labor Statistics (BLS)

BLS supports the Department’s Strategic Goal 5, Produce timely and accurate data on the economic conditions of 

workers and their families, and Strategic Objective 5.1, Provide sound and impartial information on labor market 

activity, working conditions, and price changes in the economy for decision making, including support for the 

formulation of economic and social policy affecting virtually all Americans.

BLS produces accurate, objective, relevant, timely, and accessible statistics reflecting labor market activity, working 

conditions, and price changes in the economy. Its mission is to collect, analyze, and disseminate essential economic 

information to support the public and private decision-making that forms the basis of our democratic, free-
Program Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 25

enterprise system. Policies and decisions based on BLS data affect virtually all Americans, and the wide range of BLS 

data products is necessary to fulfill the diverse needs of a broad customer base.

BLS strives to ensure that its data products are readily accessible to its customers through the internet, most 

commonly through www.bls.gov, and meet users’ needs. BLS uses the average number of website page views to 

track the dissemination of its data. In addition, BLS uses the American Customer Satisfaction Index (ACSI) to 

measure customer feedback with its website. The ACSI survey prompts users for feedback while they are on the 

www.bls.gov website regarding the extent to which the website meets their needs. BLS uses these results to 

improve the website, to better serve its stakeholders, and to measure mission achievement.

In FY 2015, BLS reached 100 percent of the underlying timeliness, accuracy, and relevance targets for all of its 

Principal Federal Economic Indicators (PFEIs). BLS experienced fewer average website page views when compared 

to FY 2014, averaging approximately 17 million page views each month. BLS also scored lower in the ACSI when 

compared to FY 2014, with a year-end score of 75. Results for the five performance measures are shown in the 

table below.

Strategic Goal 5: Produce timely and accurate data on the economic conditions

of workers and their families

Performance Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Percentage of Timeliness Targets 

Achieved for the Principal Federal 

Economic Indicators (PFEIs) 1

100% 100% 100% 100% 100% 100%

Percentage of Accuracy Targets 

Achieved for the PFEIs 1 100% 100% 100% 100% 95% 100%

Percentage of Relevance Targets 

Achieved for the PFEIs 1 100% 100% 90% 100% 100% 100%

Average number of BLS website page 

views each month (Dissemination) 2 N/A N/A N/A N/A 17,423,845 16,965,254

Customer Satisfaction with the BLS 

website through the American 

Customer Satisfaction Index (Mission 

Achievement) 3

75 75 77 77 77 75

1 Measure is new beginning in FY 2014. The FY 2010 – 2013 results are shown for trend comparison purposes. 2 In FY 2015, BLS replaced its dissemination measure due to a change in software. The FY 2014 result is shown for trend comparison purposes. 3 ACSI Score is calculated on a 100 point scale.

Looking Forward: BLS will continue to report timeliness, accuracy, and relevance for its PFEIs, track dissemination 

with its website page views measure, and use the ACSI to measure customer feedback with its website. BLS also will 

continue to evaluate its targets in the interest of continuous improvement.
Management’s Discussion and Analysis

(Unaudited)

26 United States Department of Labor

Financial Performance Overview

Sound financial management is an integral part of the Department's efforts to deliver services and administer 

programs. With the Department's emphasis on internal controls, accurate financial information delivery to key 

decision makers, and transparent and accountable reporting, the Department's stakeholders can be confident that 

resources are used efficiently and effectively.

DOL's internal control program and centralized processes for reporting financial data help to ensure the relevance 

and reliability of financial performance data. DOL's comprehensive internal control program has the objective of 

providing, on a continuing basis, reasonable assurance that all financial, non-financial, performance, statistical 

records, and related reports are reliable. DOL's internal control program helps ensure that appropriate internal 

controls are in place for financial performance management and that agencies institute sound, effective internal 

control policies and procedures for financial performance measurement and regular evaluation of their processes. 

Financial performance is evaluated during comprehensive ongoing financial management reviews and corrective 

actions are implemented as required to resolve audit findings and increase efficiency. These business processes 

help to ensure that reported financial performance information is relevant and reliable.

In FY 2015 and FY 2014, DOL used managerial cost accounting for costing programs and performance indicator 

results in accordance with the Federal Accounting Standards Advisory Board’s (FASAB) Statement of Federal 

Financial Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and Concepts, as amended by 

SFFAS No. 30, Inter-Entity Cost Implementation. The statements outline the standards for Federal entities to 

provide “reliable and timely information on the full cost of Federal programs, their activities, and outputs.” This 

information can be used to allocate resources and evaluate program performance. Managerial cost accounting 

directly supports the sections of the AFR that address Net Program Cost in the Statements of Net Cost. Total Net 

Cost of DOL activities was $46.4 billion for FY 2015 and $55.7 billion for FY 2014. 

Analysis of Financial Statements and Stewardship Information

The principal financial statements summarize the Department's financial position, net cost of operations, and 

changes in net position, and provide information on budgetary resources and social insurance. 
Financial Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 27

Figure 1: Summary of Selected Financial Data for FY 2015 and FY 2014

(Dollars in billions) 2015 2014 Amount Percent

Financial position

Total assets $ 66.2 $ 60.1 $ 6.1 10.1%

 Funds with U.S. Treasury 11.6 13.0 (1.4) (10.8)%

Investments 44.6 36.2 8.4 23.2%

Total liabilities $ 37.7 $ 47.0 $ (9.3) (19.8)%

Debt 18.5 26.7 (8.2) (30.7)%

Net cost of operations

Net cost of operations $ 46.4 $ 55.7 $ (9.3) (16.7)%

Income maintenance 37.6 47.0 (9.4) (20.0)%

Employment and training 6.2 6.3 (0.1) (1.6)%

Budgetary resources

 Appropriations $ 46.9 $ 59.4 $ (12.5) (21.0)%

 Borrowing authority - 2.7 (2.7) (100.0)%

 Obligations incurred 54.7 69.9 (15.2) (21.7)%

Summary of Selected Financial Data

Change

Financial Position

The Department's Balance Sheet presents DOL’s financial position through the identification of agency assets, 

liabilities, and net position, as shown below. The Department's total assets increased from $60.1 billion at the end 

of FY 2014 to $66.2 billion at the end of FY 2015, an increase of 10.1%, primarily due to an increase in investments.

Investments increased primarily due to net inflows in the Unemployment Trust Fund (UTF) in excess of immediate 

program needs for benefit payments and administrative costs. (See Figure 2 on next page for reported Assets by 

Type for FY 2015 and FY 2014.) The decrease of $(1.4) billion for Funds with U.S. Treasury is primarily due to the 

decrease in appropriations.
Management’s Discussion and Analysis

(Unaudited)

28 United States Department of Labor

Figure 2: Assets by Type for FY 2015 and FY 2014

$11.6 

$44.6

$7.4 $1.4 $1.3 

$13.0 

$36.2 

$7.5 $2.2 $1.3 

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

Funds with U.S.

Treasury

Investments Accounts

Receivable

Advances Property, Plant

and Equipment

ASSETS ($ in Billions)

2015 - $66.2 2014 - $60.1

Liabilities decreased from $47.0 billion at the end of FY 2014 to $37.7 billion at the end of FY 2015, a decrease of 

(19.8)%. This decrease was primarily due to a decrease in intra-governmental debt of (30.7)% due to 

Unemployment Trust Fund (UTF) repayments of borrowings from the General Fund of the Treasury as tax 

collections by the states exceeded the requirements for benefit payments.

Figure 3: Liabilities by Type for FY 2015 and FY 2014

* OIC = Occupational Illness Compensation.
Financial Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 29

Net Cost of Operations 

The Department's net cost of operations for the year ended September 30, 2015, was $46.4 billion, a decrease of 

$(9.3) billion [(16.7)%] from FY 2014. This decrease was attributable to the decreases in the program costs 

discussed below:

Figure 4: Net Cost of Operations by Program for FY 2015 and FY 2014

1

The Department’s Net Cost of Programs include costs not assigned to specific programs, which were $0.02 billion and 

$0.03 billion for FY 2015 and FY 2014, respectively.

Income Maintenance programs continue to comprise the major portion of departmental costs. These programs 

include unemployment benefits paid to covered individuals who are out of work and seeking employment, as well 

as payments to individuals who qualify for disability benefits due to injury or illness suffered on the job, and the 

costs to administer these programs. Income maintenance net costs were $37.6 billion in FY 2015, a decrease of 

(20.0)% from FY 2014. This decrease was primarily due to decreases in unemployment benefits provided under 

existing legislation, and lower levels of unemployment as compared to FY 2014.

Employment and Training programs comprise DOL’s second largest cost. These programs are designed to help 

individuals deal with the loss of a job, identify new occupational opportunities, find training to acquire different 

skills, start a new job, and make long-term career plans, as well as connect employers to workers with the skills 

they need. Employment and training costs were $6.2 billion in FY 2015, a decrease of (1.6)% from FY 2014. This 

decrease was due to reductions in appropriated amounts for the 2015 program year for various programs.

Budgetary Resources

The Statements of Budgetary Resources report the budgetary resources available to DOL to effectively carry out the 

activities of the Department during FY 2015 and FY 2014, as well as the status of these resources at the end of each 

fiscal year. During FY 2015, the Department’s appropriations decreased $(12.5) billion [(21.1)%] primarily due to 

decreases in transfers to the UTF for Emergency Unemployment Compensation due to decrease in benefits costs; 

also, the Department’s borrowing authority decreased $(2.7) billion [(100.0)%], which is consistent with the lower 
Management’s Discussion and Analysis

(Unaudited)

30 United States Department of Labor

balance of intra-governmental debt at the end of FY 2015. The Department had total obligations incurred of $54.7

billion in FY 2015, a decrease of $(15.2) billion [(21.8)%] from FY 2014. This decrease was primarily due to decreases 

in total obligations incurred for income maintenance programs as noted above.

Social Insurance and the Black Lung Disability Benefit Program

FASAB has classified the Black Lung Disability Benefit Program as a social insurance program that is required to 

report a Statement of Social Insurance (SOSI) and a Statement of Changes in Social Insurance Amounts (SCSIA) for

the Black Lung Disability Trust Fund (BLDTF); these are sustainability statements.

The SOSI reports for the projection period (which begins on September 30 of the reporting year and ends 

September 30, 2040), for all current and future participants, the actuarial present value of future benefits and the 

present value of estimated future administrative costs, less the present value of estimated future coal excise tax 

income. For FY 2011 through FY 2015 as presented in the SOSI, the present value of the estimated future coal 

excise tax income has been greater than the sum of the actuarial present value of the estimated future benefits and 

the present value of estimated future administrative costs. This amount is also called the open and closed group 

measure.

Figure 5: Black Lung Disability Benefit Program - Table of Key Measures for FY 2015 and FY 2014

(Dollars in millions) 2015 2014 Amount Percent 

 Total assets $ 54.9 $ 129.4 $ (74.5) (57.6)%

 Less: total liabilities (5,699.1) (5,884.7) $ 185.6 3.2% 

 Net position (assets net of liabilities) $ (5,644.2) $ (5,755.3) $ 111.1 1.9% 

 Net cost of operations $ (382.8) $ (388.6) $ 5.8 1.5% 

 Total financing sources 493.9 527.5 $ (33.6) (6.4)%

 Net change of cumulative results of operations $ 111.1 $ 138.9 $ (27.8) (20.0)%

 Open and closed group measure,

 beginning of year $ 4,482.8 $ 4,620.3 $ (137.5) (3.0)%

 Open and closed group measure,

 end of year $ 1,596.7 $ 4,482.8 $ (2,886.1) (64.4)%

Social insurance

Black Lung Disability Benefit Program – Table of Key Measures

 Change 

Financial position 

Costs and changes in net position

The increase in the net cost of operations for the year ended September 30, 2015 of $5.8 million [1.5%] from FY

2014 was mainly due to lower benefit and interest costs. FY 2015 total financing sources decreased $(33.6) million 

[(6.4)%] from FY 2014 mainly due to decreases in tax collections. The resulting net change of cumulative results of 

operations for FY 2015 was $111.1 million, a decrease of $(27.8) million [(20.0)%] from FY 2014.

Total assets decreased $(74.5) million [(57.6)%] at the end of FY 2015 primarily due to a decrease in the Funds with 

U.S. Treasury balance from repayments of debt. Liabilities decreased $185.6 million [3.2%] at the end of FY 2015

due to repayments of debt. The resulting net position (deficit) decreased $111.1 million at the end of FY 2015.
Financial Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 31

At the end of FY 2015, the open and closed group measure decreased by $(2,886.1) million [(64.4)%] primarily due 

to projected lower coal excise tax revenues which reflect, among other things, regulation pursuant to the Clean 

Power Plan, as well as higher administrative costs.

At the end of FY 2014, the open and closed group measure decreased $(137.5) million [(3.0)%] primarily due to 

changes in projected coal excise tax revenues, future benefits costs, and interest rates used for discounting cash 

flows.

The total of open and closed group measure plus fund assets as of September 30, 2015, of $1,651.6 million

represents a projected net positive cash flow that may be used to liquidate the liabilities of the BLDTF, which were 

$5,699.1 million as of September 30, 2015.

Refer to Notes 1-W and 21, and Required Supplementary Information (RSI) for additional information on the SOSI, 

including the summary section; SCSIA; the Black Lung Disability Benefit Program; its reported activity and balances; 

and projections and sensitivity analysis in constant dollars through 2040.

Limitations on the Principal Financial Statements

As required by the Government Management Reform Act of 1994 (31 USC 3515(b)), the principal financial 

statements report the Department's financial position and results of operations. While the statements have been 

prepared from the Department's books and records in accordance with U.S. Generally Accepted Accounting 

Principles (GAAP) for Federal entities and the formats prescribed by OMB, the statements are in addition to the 

financial reports used to monitor and control budgetary resources, which are prepared from the same books and 

records. The statements should be read with the realization that they are a component of the U.S. Government, a 

sovereign entity, and that liabilities reported in the financial statements cannot be liquidated without legislation 

providing resources to do so.

Reducing Improper Payments

Improved financial performance through the reduction of improper payments (IP) continues to be a key financial 

management focus of the Federal government. At DOL, developing strategies and the means to reduce IP is a 

matter of good stewardship. Accurate payments lower program costs.

The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments Elimination and 

Recovery Act of 2010 (IPERA) and the Improper Payment Elimination and Recovery Improvement Act of 2012 

(IPERIA),1 requires federal agencies to identify and reduce IP and report annually on their efforts according to 

guidance promulgated by the Office of Management and Budget in OMB Circular A-123, Appendix C, Requirements 

for Effective Measurement and Remediation of Improper Payments. The Department performs testing to estimate 

the rates and amounts of IP, establishes IP reduction targets in accordance with OMB guidance, and develops and 

implements corrective actions.

IPERA Section 2(a) requires agency heads to “review all programs to identify risk susceptibility for improper 

payments every three years.” The last Department-wide risk assessment was performed in FY 2014 based on 

criteria prescribed in IPERA Section 2(a)3(b):

Scope. — In conducting the reviews ... the head of each agency shall take into account those risk factors that 

are likely to contribute to a susceptibility to significant improper payments, such as —

(i) Whether the program or activity reviewed is new to the agency;

(ii) The complexity of the program or activity reviewed;

(iii) The volume of payments made through the program or activity reviewed;

(iv) Whether payments or payment eligibility decisions are made outside of the agency, such as by a state 

or local government;

 1 IPIA, Public Law (P.L.) 107-300 (2002); IPERA, P.L. 111-204 (2010); IPERIA, P.L. 112-248 (2013). All three laws are codified at 31 U.S.C. 3321 

note.
Management’s Discussion and Analysis

(Unaudited)

32 United States Department of Labor

(v) Recent major changes in program funding, authorities, practices, or procedures;

(vi) The level, experience, and quality of training for personnel responsible for making program eligibility 

determinations or certifying that payments are accurate; and

(vii Significant deficiencies in the audit report of the agency or other relevant management findings that 

might hinder accurate payment certification.

Based on DOL’s FY 2014 department-wide risk assessment, two DOL Programs, the Unemployment Insurance (UI) 

and the Federal Employees’ Compensation Act (FECA) benefit programs, are required to provide IP rate 

estimates in FY 2015, based on the susceptibility threshold in statute:

• Either potential estimated improper payments greater than 1.5% of outlays and greater than $10 million1, 

or

• Potential estimated improper payments of more than $100 million, regardless of percentage2.

One DOL program area, the Workforce Investment Act (WIA) of 1998 Title I programs (WIA Programs), provided

estimates based on inclusion in Exhibit 57B, Section 57, of OMB Circular A-11 (2002)3

. Although Section 57 was 

rescinded in 2003, these programs continued to provide IP information beyond that which is required by IPIA.

On July 22, 2014, the President signed the Workforce Innovation and Opportunity Act (WIOA) into law. WIOA 

supersedes the Workforce Investment Act of 1998. Funding under WIA ended on June 30, 2015. The Department 

remains strongly committed to mitigating IPs for all DOL programs authorized under WIOA.

In addition to these programs, DOL was required to report an IP estimate for funds provided in response to 

Hurricane Sandy through the Disaster Relief Appropriations Act (Public Law 113-2), signed on January 29, 2013. 

Section 904(b) of the Act provides that all programs and activities receiving funds under this Act shall be deemed to 

be “susceptible to significant improper payments” for the purposes of IPIA, notwithstanding IPIA section 2(a).” All 

DOL Hurricane Sandy funds were outlayed in FY 2014, therefor there is no Hurricane Sandy related reporting for FY 

2015.

DOL has implemented various corrective actions to address the causes and to reduce IP in these programs. Like 

many other Federal agencies, the Department faces challenges in meeting its IP reduction and recovery targets, 

particularly with programs that are sensitive to economic fluctuations and natural disasters.

Furthermore, meeting IP reduction and recovery targets for programs such as UI are contingent upon the 

cooperation and support of state agencies and other outside stakeholders who are responsible for the day-to-day 

administration and management of these programs’ payments and activities. As compared to other Federal benefit 

programs, a variety of complexities related to administration of the UI program create significant challenges in 

controlling IP. These complexities include state unemployment insurance laws under which the program is 

administered; structural impediments such as the legal requirement to pay UI benefits “when due” causing states 

to make payments before all eligibility information has been received and verified; aging IT systems; and varying 

state resource capacities.

 1 IPERA §2(a)(3)(A)(ii)(I)

2 IPERA §2(a)(3)(A)(ii)(II)

3 In July 2001, OMB issued Section 57, Information on Erroneous Payments, as part of the 2002 revision to Circular A-11, Preparation, 

Submission, and Execution of the Budget. Exhibit 57B of Section 57 listed programs required “. . . to provide improper payment data, 

assessments and action plans with initial budget submission beginning in 2003.” All “benefit programs” exceeding obligations of $2 billion 

were included on Exhibit 57B.
Financial Performance Overview

(Unaudited)

FY 2015 Agency Financial Report 33

DOL Programs Required to Submit Improper Payments Estimates 

Program Requirement 

Based on...

Estimated Rate

FY 15 FY 14

Unemployment 

Insurance (UI) 1

Risk analysis Improper Payment Rate (Overpayments 

plus Underpayments):

10.73% 11.57%

 Overpayment Rate 10.29% 11.16%

 Underpayment Rate 0.44% 0.41%

Net Improper Payment Rate (Improper 

Payment Rate Minus Amounts 

Recovered by States)

7.28% 8.65%

Improper Payment Rate Minus “Work 

Search” Errors

7.95% 7.85%

Federal 

Employees’ 

Compensation 

Act (FECA) 1

Risk analysis Improper Payment Rate (Overpayments 

plus Underpayments)

2.87% 2.5%

Workforce 

Investment Act 

(WIA) Title I 

Programs

Inclusion in Exhibit 

57B of OMB Circular 

A-11 (2002)

Rate of funds with Possible Eligibility 

Issues under Single Audit Act

<0.88% <1.5%

Note: 1 Covers the 12-month period from July 1, 2014 through June 30, 2015.

See the Improper Payments Reporting Details in the Other Information section of this report for detailed 

information on payment integrity.
Management’s Discussion and Analysis

(Unaudited)

34 United States Department of Labor

Financial Management Systems and Strategy

The Department strives to maintain and enhance financial management systems, processes, and controls that 

ensure financial accountability and transparency, provide financial management data and information to decision 

makers, and comply with Federal laws, regulations, and policy. The New Core Financial Management System 

(NCFMS) is the system of record for the Department’s financial activities in supporting accountability and 

transparency.

During FY 2015, the Department used the Enterprise Service Center (ESC), a franchise fee chartered organization 

within the Federal Aviation Administration (FAA) an independent agency of the Department of Transportation 

(DOT), to operate and maintain NCFMS. ESC already provides similar services through its standard financial 

management system and is an approved Federal Shared Service Provider (FSSP) listed within the Federal Financial 

Management Services Catalog (FMSC) published by Department of the Treasury’s Office of Financial Innovation and 

Technology (OFIT). During the year, ESC completed modernization projects necessary to ensure ongoing operations 

for NCFMS. The Department observes that these projects have contributed to the stable transition and operations 

by ESC. NCFMS is operated and maintained in conformance with the service level agreement between the 

Department and ESC, and at a predictable cost.

Using Treasury OFIT Federal Agency Migration Evaluation (FAME) process the Department selected ESC as its 

preferred FSSP and began the FAME discovery process to determine the Department’s fit, gaps, estimated 

implementation schedule, and cost to migrate to the ESC standard financial system listed within the FMSC. The 

Department’s FAME risks are reduced by having the same FSSP as the operator of the DOL NCFMS and the target 

financial management systems. The Department’s FAME activities align with the Financial Management Line of 

Business (FMLoB) strategy to consolidate financial management systems within approved federal shared services 

providers.


Financial Section

FY 2015 Agency Financial Report 39

Geoffrey Kenyon

Principal Deputy Chief 

Financial Officer

Department of Labor

OCFO's Mission

“The Office of Chief 

Financial Officer (OCFO) is 

responsible for the 

financial leadership of DOL 

and its primary duty is to 

uphold strong financial 

management and 

accountability while 

providing timely, accurate, 

and reliable financial 

information and enhancing 

internal control.”

Message from the Chief Financial Officer

For FY 2015, I’m proud to announce the Department of the Labor (DOL) 

received an unmodified opinion on its consolidated financial statements 

for the 19th year. This achievement is a reflection of DOL’s commitment 

to excellence in financial management, transparency, and 

accountability. The three cornerstones of the Office of the Chief 

Financial Officer (OCFO); demonstrating financial stewardship, providing 

outstanding customer service, and enhancing financial performance, 

operations, and systems, are all reflected by delivering quality reporting 

to uphold our accountability. The Department’s award-winning Agency 

Financial Report (AFR) provides extensive program, performance, and 

financial information, which demonstrates our never ending 

commitment to sound financial stewardship.

OCFO AT A GLANCE

In the last fiscal year, DOL has faced numerous challenges. In late FY 

2014, our financial management system provider collapsed into 

bankruptcy. This presented an enormous challenge to the Department. 

DOL led a multi-agency effort to secure these legacy systems, reintegrate 

them for continued use, and begin the process of transition to a new 

shared services provider. While the dangers of a sudden system failure 

have passed, we have continued to monitor the situation to ensure 

strong financial stewardship. We know the transfer of financial data and 

incorporating completely new systems will require constant focus and be 

a strain to our resources, both in terms of budget and human capital.

This will be a difficult task requiring the concerted efforts of the entire 

Department and numerous federal partner agencies. As we move along 

in this process, I want to take this moment to recognize the herculean 

efforts of the Department’s staff who overcame these challenges while 

at the same time completing year-end close-outs; thus ensuring the 

continued integrity of our financial reporting during the busiest time of 

the year. This was an amazing feat and testament to the hard work of 

DOL staff.

LOOKING FORWARD

While we continue to make significant progress there is still more work 

to be done in the area of information technology general controls over 

key financial and support systems as identified by our independent auditors as a material weakness. The 

Department recognizes the importance of implementing adequate safeguards to protect information and 

information systems and will endeavor to eliminate this weakness in FY 2016. In the coming fiscal year we also look 

forward to taking on new challenges, risks, and opportunities. DOL has begun ramping up efforts to comply with the 

Digital Accountability and Transparency Act (DATA Act). The DATA Act increases fiscal transparency by making 

Federal spending data accessible, searchable and reliable. It will also afford Federal agencies and taxpayers the 

opportunity to better understand the impact of Federal funds in improving the lives of the American public. This 
Message from the Chief Financial Officer

40 United States Department of Labor

large undertaking is set to be up and running by May 2017 and will be challenging in terms of time and resources on 

the Department. 

In FY 2015, OCFO was successful in planning and procurement activities related to the implementation of the 2nd

Generation Government-wide Electronic Travel System (ETS2). ETS2 builds on the success of the first generation 

ETS, enabling the Department in its mission to ensure a strengthened travel operations environment, complete 

with a robust funds management platform, comprehensive reporting capabilities, and improved internal controls. 

We expect implementation of ETS2 in FY 2016 will result in travel efficiencies while delivering a transparent, easy to 

use travel service and system.

I am proud of the Department's financial management accomplishments in FY 2015 and commend the efforts of 

the Department’s financial and accounting staff. Their high standards of professionalism, dedication to customer 

service, and pride in financial stewardship have helped this Department continue to achieve results on behalf of 

workers. We will continue to work hard to serve the American people in an accountable and transparent manner.

Thank you for taking the time to review this report; we hope that you find this document both informative and 

helpful.

Geoffrey Kenyon

Principal Deputy Chief Financial Officer

November 19, 2015
FY 2015 Agency Financial Report 41 

Independent Auditors’ Report

Secretary and Inspector General

U.S. Department of Labor

Report on the Financial Statements

We have audited the accompanying financial statements of the U.S. Department of Labor (DOL), which 

comprise the consolidated financial statements and the sustainability financial statements. The consolidated 

financial statements comprise the consolidated balance sheets as of September 30, 2015 and 2014, and the 

related consolidated statements of net cost and changes in net position and combined statements of budgetary 

resources for the years then ended, and the related notes to the consolidated financial statements.

The sustainability financial statements comprise the statements of social insurance as of September 30, 2015, 

2014, 2013, 2012, and 2011; and the statements of changes in social insurance amounts for the years ended 

September 30, 2015 and 2014; and the related notes to the sustainability financial statements.

Management’s Responsibility for the Financial Statements

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

are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions 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; the 

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) 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 from material misstatement. 

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

financial statements. The procedures selected depend on the 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. 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 our 

audit opinions.

KPMG LLP

Suite 12000

1801 K Street, NW

Washington, DC 20006

KPMG LLP is a Delaware limited liability partnership, 

the U.S. member firm of KPMG International Cooperative

(“KPMG International”), a Swiss entity.
Financial Section 

42 United States Department of Labor 

Opinions on the Financial Statements

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

the financial position of the U.S. Department of Labor as of September 30, 2015 and 2014, its net costs, 

changes in net position, and budgetary resources for the years then ended in accordance with U.S. generally 

accepted account principles.

Also, in our opinion, the sustainability financial statements referred to above present fairly, in all material 

respects, the U.S. Department of Labor’s social insurance information as of September 30, 2015, 2014, 2013, 

2012, and 2011 and its changes in social insurance amounts for the years ended September 30, 2015 and 

2014, in accordance with U.S. generally accepted accounting principles.

Emphasis of Matter

As discussed in Notes 1-W and 1-Y to the financial statements, the sustainability financial statements are 

based on management’s assumptions. These sustainability financial statements present the actuarial present 

value of DOL’s future expenditures to be paid to or on behalf of participants, the present value of estimated 

future income to be received from excise taxes, and the present value of estimated future expenditures for 

administrative costs during a projection period ending in 2040. The sustainability financial statements are 

intended to aid users in assessing whether future resources will likely be sufficient to sustain public services 

and to meet obligations as they come due. The statements of social insurance and changes in social insurance 

amounts are based on income and benefit formulas in current law and assume that scheduled benefits will 

continue after the related trust fund is exhausted. The sustainability financial statements are not forecasts or 

predictions. The sustainability financial statements are not intended to imply that current policy or law is 

sustainable. In preparing the sustainability financial statements, management considers and selects 

assumptions and data that it believes provide a reasonable basis to illustrate whether current law or policy is 

sustainable. Assumptions underlying such sustainability information do not consider changes in policy or all 

potential future events that could affect future income, future expenditures, and sustainability. Because of 

the large number of factors that affect the sustainability financial statements and the fact that future events 

and circumstances cannot be estimated with certainty, even if current policy is continued, there will be 

differences between the estimates in the sustainability financial statements and the actual results, and those 

differences may be material. Our opinion is not modified with respect to this matter.

Other Matters

Management has elected to reference to information on websites or other forms of interactive data outside 

the Agency Financial Report to provide additional information for the users of its financial statements. Such 

information is not a required part of the basic financial statements or supplementary information required by 

the Federal Accounting Standards Advisory Board. The information on these websites or the other interactive 

data has not been subjected to any of our auditing procedures, and accordingly, we do not express an opinion 

or provide any assurance on it.

Required Supplementary Information

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

and Analysis, Required Supplementary Information, and Required Supplementary Stewardship 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 
Independent Auditors’ Report

FY 2015 Agency Financial Report 43

information and comparing the information for consistency with management’s responses to our inquiries, 

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

statements. We do not express an opinion or provide any assurance on the information because the limited 

procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

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

The information in the Message from the Secretary of Labor, Message from the Chief Financial Officer, and 

Other Information section is presented for purposes of additional analysis and is not a required part of the 

basic 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.

Report on Compliance with Federal Financial Management Improvement Act of 1996 (FFMIA)

We have examined DOL’s compliance with the following requirements of Section 803(a) of FFMIA as of 

September 30, 2015: 

• Federal financial management systems requirements;

• Applicable Federal accounting standards; and

• The United States Government Standard General Ledger at the transaction level.

Management is responsible for compliance with those requirements. Our responsibility is to express an 

opinion on DOL’s compliance based on our examination. 

Our examination was conducted in accordance with attestation standards established by the American 

Institute of Certified Public Accountants and the standards applicable to attestation engagements contained 

in Government Auditing Standards issued by the Comptroller General of the United States, and, accordingly, 

included examining, on a test basis, evidence supporting DOL’s compliance with the requirements of Section 

803(a) of FFMIA and performing such other procedures as we considered necessary in the circumstances. 

We believe that our examination provides a reasonable basis for our opinion. Our examination does not 

provide a legal determination on DOL’s compliance with specified requirements.

In our opinion, the U.S. Department of Labor complied, in all material respects, with the aforementioned 

requirements as of September 30, 2015, based on the criteria set forth in OMB Circular No. A-123, Appendix 

D, Compliance with the Federal Financial Management Improvement Act of 1996. 

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, 2015, we considered DOL’s internal control over financial reporting (internal control) to 

determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our 

opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of 

DOL’s internal control. Accordingly, we do not express an opinion on the effectiveness of DOL’s internal 

control. We did not test all internal controls relevant to operating objectives as broadly defined by the Federal 

Managers’ Financial Integrity Act of 1982. 

Our consideration of internal control was for the limited purpose described in the preceding paragraph and 

was not designed to identify all deficiencies in internal control that might be material weaknesses or 
Financial Section 

44 United States Department of Labor 

significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that have 

not been identified. However, as described in Exhibit I, we identified certain deficiencies in internal control 

that we consider to be a material weakness.

A 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 material weakness is a deficiency, or a combination of deficiencies, in 

internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial 

statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, 

yet important enough to merit attention by those charged with governance. We consider the deficiencies 

described in Exhibit I to be a material weakness.

DOL management did not report the material weakness Lack of Sufficient Information Technology General 

Controls over Key Financial and Support Systems in its Management Assurances, included in the 

Management’s Discussion and Analysis section of the accompanying Agency Financial Report.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether DOL’s financial statements are free from material 

misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, 

and grant agreements, exclusive of those referred to in the Report on Compliance with Federal Financial 

Management Improvement Act of 1996 (FFMIA), noncompliance with which could have a direct and material 

effect on the determination of financial statement amounts. 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 disclosed an instance of noncompliance that is required to be reported under 

Government Auditing Standards or OMB Bulletin No. 15-02, and is described in Exhibit II.

DOL’s Responses to Findings

DOL’s responses to the findings identified in our audit are described in Exhibits I and II. DOL’s responses

were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, 

we express no opinion on the responses.

Purpose of the Other Reporting Required by Government Auditing Standards

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

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

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

compliance. Accordingly, this communication is not suitable for any other purpose.

Washington D.C.

November 19, 2015
Independent Auditors’ Report

Material Weakness

Exhibit I

FY 2015 Agency Financial Report 45

1. Lack of Sufficient Information Technology General Controls over Key Financial and Support 

Systems

Management charged with oversight and accountability for the U.S. Department of Labor (DOL) 

information technology (IT) control environment had not taken appropriate action to address ongoing 

pervasive deficiencies that had been identified in multiple information systems and reported to 

management as a material weakness or significant deficiency since fiscal year (FY) 2003. This control 

environment included both the general and application controls that support the completeness, accuracy, 

and validity of financial information. Additionally, management did not have sufficient procedures in 

place to ensure the performance of IT controls that functioned effectively in the past did not deteriorate. 

In summary, during our FY 2015 testing of significant DOL financial and support systems in the four 

DOL agencies responsible for them, we identified 28 new control deficiencies, 34 previously-reported 

deficiencies that were not corrected or not corrected timely, and 25 previously-reported deficiencies for 

which DOL agencies completed sufficient corrective action in FY 2015.

We classified the deficiencies identified into the following categories: account management, system 

access settings, system audit log reviews, configuration management, and vulnerability management.

The first two categories summarize the identified deficiencies related to controls that were designed to 

help prevent unauthorized access to IT systems. Control deficiencies related to account management 

increase the risk that current employees, separated employees, and/or contractors may obtain 

unauthorized or inappropriate access to financial systems and/or data. Such access could lead to 

unauthorized activities and/or inappropriate disclosures of sensitive data. System access setting control 

deficiencies may be exploited, in either a singular fashion or in combination, by a malicious user, which 

may affect the confidentiality, integrity, and/or availability of DOL systems and data. The specific 

deficiencies identified in these two categories were as follows: 

Account Management 

• Certain user accounts were not timely removed for separated users, and certain 

separated users had active system accounts;

• Personnel activities were not consistently controlled through effective segregation of 

incompatible duties and responsibilities;

• Account management controls were not consistently performed, as evidenced by roles 

that were improperly authorized or provisioned; incomplete access re-certifications;

and incomplete or missing access requests, rules of behavior, non-disclosure 

agreements, and modification forms; and

• Shared, generic, and multiple user accounts for the same user existed on one DOL 

system.

System Access Settings 

• Inactive accounts were not consistently disabled in a timely manner; and

• Certain password settings did not comply with the Office of the Chief Information 

Officer Computer Security Handbook.
Financial Section

Material Weakness

Exhibit I

 46 United States Department of Labor 

System Audit Logs Reviews 

The system audit logs reviews category represents controls designed to detect unauthorized access to IT 

systems. Although DOL had certain detective controls in place to partially mitigate the aforementioned 

account management and system access settings risks, we identified certain audit logs were not generated 

or reviewed timely. The lack of effective and timely system audit log reviews may allow for unauthorized 

or inappropriate activities to go undetected by management for lengthy periods of time.

Configuration Management

Controls related to configuration management are designed to provide reasonable assurance that changes 

to information system resources are authorized and systems are configured and operated securely and as 

intended. Although DOL had designed controls to establish accountability and responsibility for 

configuration management, including monitoring and tracking of changes, we identified certain 

segregation of incompatible duties weaknesses in the development and production environments and 

instances where configuration changes and patches did not follow the DOL configuration management 

process. The lack of strong change controls may allow for unauthorized or inappropriate changes to be 

applied and go undetected by management, resulting in lower assurance that the information system will 

operate as intended and that the data is reliable, valid, and complete.

Vulnerability Management

Controls related to vulnerability management are designed to prevent weaknesses in IT systems from 

being exploited. Such controls include proactively monitoring system vulnerabilities, timely patching 

related security issues, and configuring IT systems in compliance with baseline security requirements. 

During our FY 2015 audit procedures, we identified numerous critical and high-risk operating system 

patches and configurations that were not implemented.

Vulnerabilities that are not remedied in a timely manner may result in information leaks or system threats. 

These vulnerabilities may also disrupt normal system processes, allow inappropriate access, prevent 

updates from being implemented, and jeopardize the integrity of financial information. Additionally, 

vulnerabilities that are not remedied or mitigated can present an opportunity to circumvent account 

management, system access settings, and audit logging controls.

Collectively, the aforementioned IT control deficiencies pose a significant risk to the integrity of DOL’s 

data, which could ultimately impact DOL’s ability to accurately and timely perform its financial 

reporting duties. The specific nature of these deficiencies, their specific causes, and the systems impacted 

by them, have been communicated separately to management. These deficiencies were the result of issues 

in the design, implementation, or monitoring of departmental procedures and controls. DOL agencies 

have not invested the necessary level of effort and resources to perform root cause analyses to address 

issues previously reported, and to ensure that certain IT policies and procedures are developed, 

implemented, and operating effectively.

The National Institute of Standards and Technology Special Publication 800-53, Revision 4, Security

and Privacy Controls for Federal Information Systems and Organizations, provides federal information 
Independent Auditors’ Report

Material Weakness

Exhibit I

FY 2015 Agency Financial Report 47

systems standards and guidelines for controls that include, but are not limited to, the controls in which 

deficiencies were identified.

To address the deficiencies noted above, we recommend the Chief Information Officer: 

a) Conduct appropriate root cause analyses over previously identified issues; 

b) Coordinate efforts among the DOL agencies to develop procedures and controls to address 

account management, system access settings, system audit log reviews, configuration 

management, and vulnerability management control deficiencies in financial and support 

systems;

c) Monitor the agencies’ progress to ensure that procedures and controls are appropriately 

implemented and maintained; and

d) Coordinate with the applicable agencies to ensure that sufficient resources are available to 

develop, implement, and monitor the procedures and controls that address account 

management, system access settings, system audit log reviews, configuration management, 

and vulnerability management control deficiencies in financial and support systems.

Management’s Response: The Department recognizes and prioritizes the importance of implementing 

adequate safeguards to protect information and information systems. To secure the way users gain access 

to the Department’s networks, management provided resources to enable the Office of the Chief 

Information Officer (OCIO) Identity and Access Management (IAM) program to successfully deploy a 

Public Key Infrastructure (PKI) across the DOL enterprise enabling all DOL employees the ability to 

logon to the network with their PIV cards in Q4 FY 2014. The Department was able to quickly build 

upon this success and adjust its IAM project schedule to accelerate the enforcement of PIV Card logon 

in response to the Federal Chief Information Officer’s Cyber Sprint directive. To date, the Department

has enforced PIV card logon for 96% of its privileged users and 93% of its general users. To strengthen 

the automation of its Information Security Continuous Monitoring (ISCM) program, the Department 

deployed four additional security monitoring tools expanding the Department and its agencies’ ability to 

identify, detect, and in some instances remediate technical vulnerabilities on a near real-time basis 

resulting in a 77% decrease in vulnerabilities across DOL systems.

 

Management is in full agreement with the recommendations outlined in the report and concurs that there 

are opportunities to strengthen the identified security control procedure deficiencies. The OCIO will 

immediately enhance its engagement with and oversight of DOL Agency risk management programs and 

will accelerate its release schedule of the FY 2016 Priority Cybersecurity Action Dashboard (PCAD). 

The PCAD, scheduled for release in December, will cover high priority security items that require 

Agency attention, including: outstanding security vulnerabilities and patches, outstanding OIG-identified

security concerns, and deferred Plans of Actions and Milestones targets. The Dashboard will outline 

recommended corrective actions and will be monitored, updated and released on a continuous 

basis. Additionally, DOL executive management and IT leadership will receive routine briefings 

outlining Agency progress in addressing the items outlined in the PCAD.

 

The OCIO will also require agencies to develop and implement a Corrective Action Plan to address the 

specific security control deficiencies outlined in the audit report. Agencies will be required to provide 

written justification for any corrective actions that cannot be completed within 90 days. The OCIO will 
Financial Section

Material Weakness

Exhibit I

 48 United States Department of Labor 

develop an Enterprise Corrective Action Plan outlining short and long term strategies to identify the root 

cause of the repetitive occurrence of the security control procedure deficiencies and to design enterprise 

solutions to enable the agencies to systematically address weaknesses in their security control 

implementation.

 

In addition, and building on the technical security programs reviewed above, the OCIO will perform a 

comprehensive review of DOL computer security policies and procedures to identify and modify any 

areas requiring improvements in FY 2016. The OCIO will continue implementation of its ISCM program 

to automate additional DOL ISCM capabilities in alignment with the Department’s ISCM strategy. 

Lastly, the OCIO IAM team will continue its efforts to acquire and begin the deployment of an identity 

management solution with the ultimate goal of automating DOL’s account provisioning and deprovisioning processes to address the outstanding account management issues. 

Auditors’ Response: Follow-up procedures will be conducted in FY 2016 to determine whether 

corrective actions have been developed and implemented.
Independent Auditors’ Report

Compliance and Other Matters

Exhibit II

FY 2015 Agency Financial Report 49

1. Noncompliance with the Antideficiency Act

In FY 2015, DOL completed its investigation related to obligations and expenditure of funds in excess 

of amounts appropriated for the Office of Job Corps (OJC), Job Corps Operations account and reported 

the results in accordance with the Antideficiency Act on November 10, 2015. The investigation resulted 

in two confirmed violations of the Antideficiency Act — one impacting Program Year (PY) 2009 (July 

1, 2009 through June 30, 2010) appropriations and the other impacting PY 2010 (July 1, 2010 through 

June 30, 2011) appropriations.

The PY 2009 violation was caused by lack of sufficient controls over financial reporting and budgetary 

accounting, including inadequate fund control procedures as previously reported by DOL’s Office of 

Inspector General and the Government Accountability Office. At the time that the PY 2010 violation 

occurred, OJC lacked proper controls to prevent, or detect and correct, improper generation and electronic 

processing of a contract action with an incorrect accounting code.

Because of the lack of sufficient controls over financial reporting and budgetary accounting during 

FYs 2009 through 2011, DOL violated the Antideficiency Act. The two violations identified above 

amounted to approximately $6.1 million of obligations and expenditures in excess of amounts 

appropriated.

United States Code, Title 31, Section 1341, Limitations on expending and obligating amounts, states:

(a)(1)An officer or employee of the United States Government or the District of Columbia 

government may not –

(A) make or authorize an expenditure or obligation exceeding an amount available in 

an appropriation or fund for the expenditure or obligation.

To address the issues noted above, we recommend the Assistant Secretary for Employment and Training 

continue to develop and implement appropriate policies and procedures to prevent future violations.

Management’s Response: The Department continues to develop and implement appropriate policies and 

procedures to prevent Anti-deficiency Act violations. For new initiatives impacting the Office of Job 

Corps, the Employment and Training Administration (ETA) developed a Standard Operating Procedure 

(SOP) for use of prior year funds clearly stating the correct action and role of each party involved such 

as the Budget Analyst, first-line Supervisor, Division Director and the ETA Comptroller. The SOP 

requires the Comptroller to approve prior year obligations that are not for standard contract close-out 

expenses and incentive fee payments. Along with the SOP, ETA has written a policy memo reconfirming 

the proper use of prior year funds and official exceptions to the rule. ETA also mandated an all-day 

training session on internal controls emphasizing each staff’s role in the review and approval of 

procurement actions. These new safeguards and policies will strengthen internal controls and improve 

the financial operation of ETA. 

Auditors’ Response: Follow-up procedures will be conducted in FY 2016 to determine whether 

corrective actions have been developed and implemented.

51

Annual Financial Statements

53

Principal Financial Statements and Notes
Financial Section

PRINCIPAL FINANCIAL STATEMENTS

54 United States Department of Labor

Principal Financial Statements Included in This Report

The principal financial statements included in this report have been prepared in accordance with the requirements 

of the Chief Financial Officers Act of 1990 (P.L. 101-576), the Government Management Reform Act of 1994, and 

OMB Circular No. A-136, Financial Reporting Requirements. The responsibility for the integrity of the financial 

information included in these statements rests with management of the Department. The audit of DOL’s principal 

financial statements was performed by KPMG LLP. The auditors’ report accompanies the principal financial

statements.

The Department’s principal financial statements for FY 2015 and 2014 consist of the following: 

• The Consolidated Balance Sheets, which presents as of September 30, 2015 and 2014, those resources owned

or managed by DOL that are available to provide future economic benefits (assets); amounts owed by DOL that

will require payments from those resources or future resources (liabilities); and residual amounts retained by

DOL, comprising the difference (net position).

• The Consolidated Statements of Net Cost, which presents the net cost of DOL operations for the years ended

September 30, 2015 and 2014. DOL’s net cost of operations includes the gross costs incurred by DOL less any

exchange revenue earned from DOL activities. The classification of gross cost and exchange revenue by

program and program agency is presented in Note 15 to the consolidated financial statements.

• The Consolidated Statements of Changes in Net Position, which presents the change in DOL’s net position

resulting from the net cost of DOL operations, budgetary financing sources other than exchange revenue, and

other financing sources for the years ended September 30, 2015 and 2014.

• The Combined Statements of Budgetary Resources, which presents the budgetary resources available to DOL,

change in obligated balance, and budget authority and net outlays of budgetary resources for FYs 2015 and

2014; and the status of these resources as of September 30, 2015 and 2014.

• The Statements of Social Insurance, which presents the net present value of projected cash inflows and cash

outflows of the Black Lung Disability Trust Fund (BLDTF) as of September 30, 2015, 2014, 2013, 2012, and 2011;

the net present value of these cash flows is also known as the open and closed group measure. The summary

section presents the total of open and closed group measure plus fund assets (Funds with U.S. Treasury and

receivables).

• The Statements of Changes in Social Insurance Amounts, which presents the net change in the open and

closed group measure of the BLDTF for the years ended September 30, 2015 and 2014, and provides

information about the change.
Annual Financial Statements

CONSOLIDATED BALANCE SHEETS

As of September 30, 2015 and 2014

(Dollars in Thousands)

FY 2015 Agency Financial Report 55 

2015 2014

ASSETS

Intra-governmental

Funds with U.S. Treasury (Note 1-C and 2) $ 11,568,982 $ 13,004,346

Investments (Note 1-D and 3) 44,644,478 36,151,884

Accounts receivable (Note 1-E and 4) 5,616,399 5,618,751

Advances (Note 1-G and 6) 11,831 3,410

Total intra-governmental 61,841,690 54,778,391

Accounts receivable, net of allowance (Note 1-E and 4) 1,747,211 1,888,592

Property, plant and equipment, net

 of accumulated depreciation (Note 1-F and 5) 1,294,528 1,290,869

Advances (Note 1-G and 6) 1,343,733 2,162,421

Total assets $ 66,227,162 $ 60,120,273

LIABILITIES AND NET POSITION

Liabilities (Note 1-I and 12)

Intra-governmental

Accounts payable $ 22,324 $ 19,444

Debt (Note 1-J and 8) 18,527,186 26,695,818

Other liabilities (Note 9) 348,713 259,716

Total intra-governmental 18,898,223 26,974,978

Accounts payable 259,334 276,003

Accrued benefits (Note 1-K and 10) 1,301,844 1,220,941

Future workers' compensation benefits (Note 1-L and 11) 1,479,265 1,495,446

Energy employees occupational illness compensation benefits (Note 1-M) 14,832,013 15,970,176

Accrued leave (Note 1-N) 115,177 122,368

Other liabilities (Note 9) 850,517 944,596

Total liabilities 37,736,373 47,004,508

Contingencies (Note 13)

Net position (Note 1-R)

Funds from dedicated collections

Cumulative results of operations (Note 21) 27,153,317 11,304,501

All other funds

Unexpended appropriations 7,991,121 9,272,731

Cumulative results of operations (6,653,649) (7,461,467)

Total net position - all other funds 1,337,472 1,811,264

Total net position 28,490,789 13,115,765

Total liabilities and net position $ 66,227,162 $ 60,120,273

The accompanying notes are an integral part of these statements.
Financial Section

CONSOLIDATED STATEMENTS OF NET COST

For the Years Ended September 30, 2015 and 2014

(Dollars in Thousands)

56 United States Department of Labor

 2015 2014

NET COST OF OPERATIONS (Note 1-S and 15)

CROSSCUTTING PROGRAMS

Income maintenance

Gross Cost $ 41,384,332 $ 50,757,490

 Less earned revenue (3,757,686) (3,806,525)

 Net Program Cost 37,626,646 46,950,965

Employment and training

Gross Cost 6,245,765 6,267,289

 Less earned revenue (13,496) (251)

 Net Program Cost 6,232,269 6,267,038

Labor, employment and pension standards

Gross Cost 864,880 785,094

 Less earned revenue (11,834) (4,406)

 Net Program Cost 853,046 780,688

Worker safety and health

Gross Cost 1,055,674 1,046,288

 Less earned revenue (4,432) (4,560)

 Net Program Cost 1,051,242 1,041,728

OTHER PROGRAMS

Statistics

Gross Cost 645,560 635,677

 Less earned revenue (28,823) (17,196)

 Net Program Cost 616,737 618,481

COSTS NOT ASSIGNED TO PROGRAMS

 Gross Cost 17,825 30,394

 Less earned revenue not attributed to programs (572) (296)

 Net cost not assigned to programs 17,253 30,098

Net cost of operations $ 46,397,193 $ 55,688,998

The accompanying notes are an integral part of these statements.
Annual Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION

For the Years Ended September 30, 2015 and 2014

(Dollars in Thousands)

FY 2015 Agency Financial Report 57 

Funds from Funds from 

Dedicated All Other Dedicated All Other

Collections Funds Total Collections Funds Total

Cumulative results of operations, beginning $ 11,304,501 $ (7,461,467) $ 3,843,034 $ (5,038,568) $ (7,932,846) $ (12,971,414)

Budgetary financing sources (Note 1-T)

Appropriations used - 9,964,324 9,964,324 - 15,624,282 15,624,282

Non-exchange revenue (Note 16)

Employer taxes 49,628,888 - 49,628,888 53,150,871 - 53,150,871

Interest 1,194,863 - 1,194,863 1,206,326 - 1,206,326

Reimbursement of 

 unemployment benefits and other 1,902,743 7,389 1,910,132 2,171,480 5,820 2,177,300

Total non-exchange revenue 52,726,494 7,389 52,733,883 56,528,677 5,820 56,534,497

Transfers without reimbursement (Note 17) (3,682,768) 3,925,290 242,522 1,039,871 (816,448) 223,423

Other financing sources (Note 1-U)

Imputed financing from 

 costs absorbed by others 2,868 105,537 108,405 3,284 117,263 120,547

Transfers without reimbursement (Note 17) - 4,544 4,544 - 6,498 6,498

Other - 149 149 - (5,801) (5,801)

Total financing sources 49,046,594 14,007,233 63,053,827 57,571,832 14,931,614 72,503,446

Net cost of operations (33,197,778) (13,199,415) (46,397,193) (41,228,763) (14,460,235) (55,688,998)

Net change 15,848,816 807,818 16,656,634 16,343,069 471,379 16,814,448

Cumulative results of operations, end of year 27,153,317 (6,653,649) 20,499,668 11,304,501 (7,461,467) 3,843,034

 Unexpended appropriations, beginning - 9,272,731 9,272,731 - 9,346,932 9,346,932

Budgetary financing sources (Note 1-T)

Appropriations received (Note 18-F) - 10,450,010 10,450,010 - 16,856,873 16,856,873

Appropriations used - (9,964,324) (9,964,324) - (15,624,282) (15,624,282)

Appropriations transferred - (294) (294) - - -

Other adjustments - (1,767,002) (1,767,002) - (1,306,792) (1,306,792)

Subtotal - (1,281,610) (1,281,610) - (74,201) (74,201)

 Unexpended appropriations, end of year - 7,991,121 7,991,121 - 9,272,731 9,272,731

Net position $ 27,153,317 $ 1,337,472 $ 28,490,789 $ 11,304,501 $ 1,811,264 $ 13,115,765

2015 Consolidated 2014 Consolidated

The accompanying notes are an integral part of these statements.
Financial Section

COMBINED STATEMENTS OF BUDGETARY RESOURCES

For the Years Ended September 30, 2015 and 2014

(Dollars in Thousands)

58 United States Department of Labor

(Note 18) 2015 2014

BUDGETARY RESOURCES

Unobligated balance brought forward, October 1 $ 4,611,740 $ 4,655,078

Recoveries of prior year unpaid obligations 564,577 436,816

Other changes in unobligated balance (1,373,066) (299,604)

Unobligated balance from prior year budget authority, net 3,803,251 4,792,290

Appropriations (discretionary and mandatory) 46,890,818 59,435,713

Borrowing authority (discretionary and mandatory) - 2,700,000

Spending authority from offsetting collections (discretionary and mandatory) 7,442,482 7,604,889

Total budgetary resources $ 58,136,551 $ 74,532,892

STATUS OF BUDGETARY RESOURCES

Obligations incurred $ 54,689,093 $ 69,921,152

Unobligated balance, end of year

 Apportioned 2,767,119 2,979,755

 Exempt from apportionment 41,804 46,795

 Unapportioned 638,535 1,585,190

 Total unobligated balance, end of year 3,447,458 4,611,740

Total budgetary resources $ 58,136,551 $ 74,532,892

CHANGE IN OBLIGATED BALANCE

Unpaid Obligations:

Unpaid obligations, brought forward, October 1 $ 14,053,217 $ 14,992,121

Obligations incurred 54,689,093 69,921,152

Less: outlays (gross) (54,976,902) (70,423,240)

Less: recoveries of prior year unpaid obligations $ (564,577) (436,816)

Unpaid obligations, end of year 13,200,831 14,053,217

Uncollected Payments: 

Uncollected payments, Federal sources, brought forward, October 1 (2,017,703) (1,946,057)

Change in uncollected payments, Federal sources 320,077 (71,646)

Uncollected payments, Federal sources, end of year (1,697,626) (2,017,703)

Obligated balance, start of year $ 12,035,514 $ 13,046,064

Obligated balance, end of year $ 11,503,205 $ 12,035,514

BUDGET AUTHORITY AND OUTLAYS, NET

Budget authority, gross (discretionary and mandatory) $ 54,333,300 $ 69,740,602

Less: actual offsetting collections (discretionary and mandatory) (7,762,559) (7,533,243)

Less: change in uncollected customer payments from Federal 

sources (discretionary and mandatory) 320,077 (71,646)

Budgetary authority, net (discretionary and mandatory) $ 46,890,818 $ 62,135,713

Outlays, gross (discretionary and mandatory) $ 54,976,902 $ 70,423,240

Actual offsetting collections (discretionary and mandatory) (7,762,559) (7,533,243)

Outlays, net (discretionary and mandatory) 47,214,343 62,889,997

Distributed offsetting receipts (1,058,051) (6,482,060)

Agency outlays, net (discretionary and mandatory) $ 46,156,292 $ 56,407,937

The accompanying notes are an integral part of these statements.
Annual Financial Statements

STATEMENTS OF SOCIAL INSURANCE

As of September 30, 2015, 2014, 2013, 2012, and 2011

(Dollars in Thousands)

FY 2015 Agency Financial Report 59 

2015 2014 2013 2012 2011

BLACK LUNG DISABILITY BENEFIT PROGRAM (Note 1-W)

Actuarial present value of future benefit payments

 during the projection period to disabled coal miners

 and dependent survivors $ 1,898,939 $ 1,876,522 $ 1,953,763 $ 2,181,654 $ 1,951,755

 

Present value of estimated future administrative costs 

 during the projection period 1,242,920 942,107 920,740 963,995 935,444

Actuarial present value of future benefit payments and 

 present value of estimated future administrative costs during 

 the projection period for current and future participants 3,141,859 2,818,629 2,874,503 3,145,649 2,887,199

 

Less the present value of estimated future excise tax

 income during the projection period 4,738,572 7,301,416 7,494,800 7,804,178 7,607,428

Excess of present value of estimated future excise tax

 income over actuarial present value of future benefit 

 payments and present value of estimated future administrative

 costs during the projection period for current and future 

 participants (open and closed group measure) $ 1,596,713 $ 4,482,787 $ 4,620,297 $ 4,658,529 $ 4,720,229

 

Trust fund net position deficit at start 

 of projection period (Note 1-W and 21) $ (5,644,208) $ (5,755,352) $ (5,894,222) $ (5,977,619) $ (6,099,261)

Summary Section

Open and closed group measure $ 1,596,713 $ 4,482,787 $ 4,620,297 $ 4,658,529 $ 4,720,229

Add: Funds with U.S. Treasury and receivables from

 benefit overpayments (Note 21) 54,859 129,376 145,794 102,498 63,814

Total of open and closed group measure

 plus fund assets (Note 1-W) $ 1,651,572 $ 4,612,163 $ 4,766,091 $ 4,761,027 $ 4,784,043

For the Projection Period Ending September 30, 2040

The accompanying notes are an integral part of these statements.
Financial Section

STATEMENTS OF CHANGES IN SOCIAL INSURANCE AMOUNTS

For the Years Ended September 30, 2015 and 2014 

(Dollars in Thousands)

60 United States Department of Labor

BLACK LUNG DISABILITY BENEFIT PROGRAM (Note 1-W)

Open and Closed Group Measure

2015 2014

Excess of present value of estimated future excise tax income over actuarial

 present value of future benefit payments and present value of estimated future

 administrative costs during the projection period for current and future participants

 (open and closed group measure), beginning of year $ 4,482,787 $ 4,620,297 

Reasons for changes in the open and closed group measure during the year:

 Changes in the assumptions about beneficiaries, including

 costs, number, type, age and life expectancy 25,406 120,126

 Changes in assumptions about coal excise tax revenues (2,726,804) (443,815)

 Changes in assumptions about Federal civilian pay raises for income benefits 4,431 7,245

 Changes in assumptions about medical cost inflation for medical benefits (1,652) (1,179)

 Changes in assumptions about administrative costs (253,365) (13)

 Changes in assumptions about interest rates 65,910 180,126 

Net change in open and closed group measure (2,886,074) (137,510)

Open and closed group measure, end of year $ 1,596,713 $ 4,482,787 

The accompanying notes are an integral part of these statements.

The accompanying notes are an integral part of these statements.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 61 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

DOL, a cabinet level agency of the Executive Branch of the United States Government, was established in 1913, to 

promote the welfare of the wage earners of the United States. Today the Department’s mission remains the same: 

To foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; 

improve working conditions; advance opportunities for profitable employment; and assure work-related benefits 

and rights. 

DOL accomplishes this mission through the execution of its congressionally approved budget, operating under four 

major budget functions: (i) education, training, employment, and social services; (ii) health (occupational health and 

safety); (iii) income security; and (iv) veterans benefits and services (veterans education and training). DOL is 

organized into program agencies, which administer the various statutes and programs for which the Department is 

responsible. DOL’s program agencies are shown below.

1. Program Agencies

• Employment and Training Administration (ETA)

- Office of Job Corps

• Office of Workers’ Compensation Programs (OWCP)

• Occupational Safety and Health Administration (OSHA)

• Bureau of Labor Statistics (BLS)

• Mine Safety and Health Administration (MSHA)

• Employee Benefits Security Administration (EBSA) 

• Veterans’ Employment and Training Service (VETS)

• Wage and Hour Division (WHD)

Other Program Agencies

• Office of Federal Contract Compliance Programs (OFCCP)

• Office of Labor-Management Standards (OLMS)

• Departmental Management

- Office of the Secretary - Office of the Deputy Secretary

- Office of the Assistant Secretary for - Office of Inspector General

Administration and Management - Office of the Solicitor

- Office of the Assistant Secretary for Policy - Office of Public Affairs

- Office of Congressional and - Office of the Chief Financial Officer

Intergovernmental Affairs - Office of Disability Employment Policy

- Women’s Bureau - Bureau of International Labor Affairs

The Pension Benefit Guaranty Corporation (PBGC), wholly owned by the Federal government and whose Board of 

Directors is chaired by the Secretary of Labor, has been designated by OMB as a separate reporting entity for 

financial statement purposes and has been excluded from these financial statements.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

62 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

A. Reporting Entity - Continued

2. Major programs

• Income maintenance

• Employment and training

• Labor, employment and pension standards 

• Worker safety and health

• Statistics 

The table below shows the relationship between the Department’s strategic goals and its major programs.

 

3. Fund accounting structure

DOL’s financial activities are accounted for by Federal account symbol, using individual funds and fund 

accounts within distinct fund types to report to the U.S. Department of the Treasury’s (Treasury) Bureau of 

the Fiscal Service and to OMB. For financial statement purposes, DOL funds are further classified as funds 

from dedicated collections, fiduciary funds, and all other funds, and are discussed below:

 

Funds from dedicated collections

Funds from dedicated collections are financed by specifically identified revenues, which can be 

supplemented by other financing sources, both of which remain available over time. These revenues and 

financing sources are required by statute to be used for designated purposes and must be accounted for 

separately from the Government’s general revenues. DOL’s funds from dedicated collections are disclosed 

in Note 21 and are discussed below:

Unemployment Trust Fund (UTF) was established under the authority of Section 904 of the Social Security 

Act of 1935, as amended, to receive, hold, invest, and disburse monies collected under the Federal 

Unemployment Tax Act (FUTA), as well as state unemployment taxes collected by the states and 

transferred to the Fund, and unemployment taxes collected by the Railroad Retirement Board and 

transferred to the Fund. The Federal Additional Unemployment Compensation fund is a component of the 

UTF and provided a $25 weekly supplement to the unemployment compensation of eligible claimants. 

 

 Major Programs

Strategic Goals Income 

Maintenance

Employment 

and Training

Labor, 

Employment 

and Pension 

Standards

Worker 

Safety and 

Health Statistics

1: Prepare workers for better jobs • •

2: Improve workplace safety and health •

3: Promote fair and high-quality work 

environments •

4: Secure retirement, health, and other employee 

benefits and, for those not working, provide 

income security 

• •

5: Produce timely and accurate data on the 

economic conditions of workers and their 

families 

•
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 63 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

A. Reporting Entity - Continued

3. Fund accounting structure - continued

Funds from dedicated collections - continued

Black Lung Disability Trust Fund (BLDTF) was established under Part C of the Black Lung Benefits Act, to 

provide compensation and medical benefits to coal miners who suffer total disability due to 

pneumoconiosis (Black Lung disease), and compensation benefits to their dependent survivors for claims 

filed subsequent to June 30, 1973. Claims filed from the origination of the program until June 30, 1973, are 

paid by the Special Benefits for Disabled Coal Miners fund. (See Note 1.A.3 – All other funds.) 

Gifts and Bequests Fund uses miscellaneous funds received by gift or bequest to support various activities 

of the Secretary of Labor. 

Panama Canal Commission Compensation Fund, was established to provide for the accumulation of funds 

provided by the Commission to pay its workers compensation obligations under the Federal Employees’

Compensation Act (FECA).

H-1B Funds provide demonstration grants to regional and local entities to provide technical skills training to 

unemployed and incumbent workers. The funds are supported by fees paid by employers applying for 

foreign workers under the H-1B temporary alien labor certification program authorized by the American 

Competitiveness and Workforce Improvement Act of 1998.

Fiduciary funds

Fiduciary funds are used to account for DOL’s fiduciary activities, which involve the collection or receipt and 

subsequent disposition of cash or other assets in which non-Federal entities have an ownership interest 

that the Department must uphold. Fiduciary assets are not assets of DOL or the Federal Government, and 

accordingly, are not recognized on the Department’s balance sheet. The fiduciary assets held by DOL and 

the fiduciary activities related to these assets are disclosed in Note 22 to these financial statements. DOL’s 

fiduciary funds are discussed below.

Wage and Hour and Public Contracts Restitution Fund, a deposit fund established by the Fair Labor 

Standards Amendments of 1949, receives deposits from employers assessed by the Department for unpaid 

minimum wages or unpaid overtime compensation owed to employees as a result of labor law violations, 

and pays these wages directly to the affected employees. 

Longshore and Harbor Workers’ Compensation Act Trust Fund, established under the authority of the 

Longshore and Harbor Workers’ Compensation Act, provides medical benefits, compensation for lost 

wages, and rehabilitation services for job-related injuries and diseases or death to private sector workers 

engaged in certain maritime and other employment covered by extensions such as the Defense Base Act. 

The Act authorizes the Department to assess insurance carriers on behalf of these beneficiaries.

District of Columbia Workmen’s Compensation Act Trust Fund, established under the authority of the 

District of Columbia Workmen’s Compensation Act, provides compensation and medical payments to the 

District of Columbia employees for work-related injuries or death which occurred prior to July 26, 1982. 

The Act authorizes the Department to assess insurance carriers on behalf of these beneficiaries.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

64 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

A. Reporting Entity - Continued

3. Fund accounting structure - continued

Fiduciary funds - continued

Davis-Bacon Act Trust Fund established under the Davis-Bacon Act, provides payment for claims relating to 

violations of the Davis-Bacon Act and Contract Work Hours and Safety Standards Act. Effective November 

21, 2013, responsibility for administrating this fund was transferred from the Government Accountability 

Office (GAO) to the Department of Labor. The Department investigates violation allegations to determine if 

federal contractors owe additional wages to covered employees. If the Department concludes that a 

violation has occurred, the Department collects the amount owed from the contracting federal agency, 

deposits the funds into an account with the U.S. Treasury, and remits payment to the claimant. 

All other funds 

Salaries and Expenses include appropriated funds which are used to carry out the missions and functions of 

the Department, except where specifically provided for from other departmental funds.

Training and Employment Services provides for a flexible, decentralized system of Federal and local training 

programs and other services for the economically disadvantaged and others, designed to lead to 

permanent gains in employment, through grants to states and Federal programs, authorized by the 

Workforce Investment Act (WIA) , Workforce Innovation and Opportunity Act (WOIA), and the Job Training 

Partnership Act. 

Office of Job Corps supports the administration and management of the Job Corps program, which helps atrisk youth who need and can benefit from intensive education and training services to become more 

employable, responsible, and productive citizens. 

State Unemployment Insurance and Employment Service Operations (SUIESO) includes grants to states for 

administering the Unemployment Compensation (UC) and Employment Service (ES) programs. UC

Programs provide administrative grants to state agencies which pay unemployment benefits to eligible 

individuals and collect state unemployment taxes from employers. The ES Program is a nationwide system 

providing no-fee ES to individuals seeking employment and to employers seeking workers. ES funding 

allotments for state activities are determined upon a demographically based funding formula established 

under the Wagner-Peyser Act, as amended.

Payments to the Unemployment Trust Fund was initiated as a result of amendments to the Emergency 

Unemployment Compensation (EUC) law, which provided general fund financing to the UTF to pay EUC 

benefits and the related administrative costs. This account is currently used to provide general fund 

financing for EUC benefits and administrative costs under the Supplemental Appropriations Act of 2008, as 

extended by the Recovery Act and other authorizing legislation.

Advances to the Unemployment Trust Fund and Other Funds provides advances to other accounts within 

the UTF to pay UC whenever the balances in these accounts prove insufficient or whenever 

reimbursements to certain accounts, as allowed by law, are to be made. This account also makes advances 

to the Federal Unemployment Benefits and Allowances account to pay the cost of benefits and services 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 65 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

A. Reporting Entity - Continued

3. Fund accounting structure - continued

All other funds - continued

under the Trade Adjustment Assistance (TAA) for Workers program; and provides loans to the BLDTF to 

make disability payments whenever the fund balance proves insufficient.

Revolving fund for Advances to Employment Security Administration Account (ESAA), Unemployment Trust 

Fund was established under the authority of Social Security Act Section 901(e), to advance amounts to ESAA 

in the event that balances in this account prove insufficient to cover expenditures relating to administrative 

costs associated with the administration of the UTF. 

Federal Unemployment Benefits and Allowances provides for payment of benefits, training, job search, 

relocation allowances, and employment and case management services (and state administrative expenses 

for all benefits other than trade readjustment allowances, reemployment adjustment assistance, and 

alternative TAA) as authorized by the Trade Act of 1974. 

Short-Time Compensation provides grants to states to implement or improve short-time compensation 

programs as authorized by the Middle Class Tax Relief and Job Creation Act. Short-time compensation 

programs allow employers to voluntarily reduce the number of hours worked by employees in lieu of 

layoffs and permits employees to collect a pro rata portion of the UC which would otherwise be payable to 

the employee if the employee was unemployed. 

Community Service Employment for Older Americans (CSEOA) provides part-time work experience in 

community service activities to unemployed, low income persons aged 55 and over.

Federal Employees’ Compensation Act Special Benefit Fund provides wage replacement benefits and 

payment for medical services to covered Federal civilian employees injured on the job, Federal employees 

and certain other workers who have incurred a work-related illness or injury, and survivors of employees 

whose death is attributable to a job-related injury. The Fund also provides for vocational rehabilitation of 

injured employees to facilitate their return to work. Under extensions of FECA, benefits are also paid to 

certain groups related to War Hazards, non-Federal law enforcement officers, Job Corps enrollees, and 

certain Federally-supported volunteers. Section 10(h) of the amended Longshore and Harbor Workers’ 

Compensation Act and the District of Columbia Workmen’s Compensation Act authorized payments from 

the Special Benefit fund for 50% of the annual increase in benefits for compensation and certain related 

benefits.

Energy Employees Occupational Illness Compensation Fund was established to adjudicate, administer, and 

pay claims for benefits under the Energy Employees Occupational Illness Compensation Program Act

(EEOICPA) of 2000. The Act authorizes compensation payments and the reimbursement of medical 

expenses to employees of the Department of Energy (DOE) or of private companies under contract with 

DOE, who suffer from specified diseases as a result of their work in the nuclear weapons industry. The Act 

also authorizes compensation to the survivors of these employees under certain circumstances. The Act 

was amended by the Ronald Reagan National Defense Authorization Act of 2005 to provide coverage to 

additional claimants. 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

66 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

A. Reporting Entity - Continued

3. Fund accounting structure - continued

All other funds - continued

Special Benefits for Disabled Coal Miners was established under the Federal Mine Safety and Health Act to 

pay benefits to coal miners disabled from pneumoconiosis and to their widows and certain other 

dependents. Part B of the Act assigned processing of claims filed from the origination of the program until 

June 30, 1973, to the Social Security Administration (SSA), after which time DOL began processing new 

claims under Part C. SSA continued to administer Part B claims until DOL permanently assumed 

responsibility effective October 1, 2003. 

Working Capital Fund (WCF) maintains and operates a program of centralized services in the national office 

and the field. The Fund is paid in advance by the agencies, bureaus, and offices for which centralized 

services are provided at rates which cover the full cost of operations.

General fund receipt accounts hold non-entity receipts and accounts receivable from DOL activities which 

by law cannot be deposited into funds under DOL control. The Treasury automatically transfers all fund 

balances in these receipt accounts to the General Fund of the Treasury at the end of each fiscal year. 

Deposit funds account for monies held by DOL as an agent for others or monies held temporarily by DOL 

until ownership is determined. 

4. Inter-departmental relationships

DOL and Treasury are jointly responsible for the operations of the UTF and the BLDTF. DOL is responsible 

for the administrative oversight and policy direction of the programs financed by these trust funds. 

Treasury acts as custodian over monies deposited into the funds and also invests amounts in excess of 

disbursing requirements in Treasury securities on behalf of DOL. DOL consolidates the financial results of 

the UTF and the BLDTF into these financial statements.

B. Basis of Accounting and Presentation

These financial statements present the financial position, net cost of operations, changes in net position and 

budgetary resources of DOL, and estimated and actuarial projections, and changes therein, for the Department’s 

Black Lung social insurance program, in accordance with U.S. GAAP and the form and content requirements of OMB 

Circular No. A-136. To ensure that the Department’s financial statements are meaningful, other liabilities as defined 

by OMB Circular No. A-136 have been disaggregated on the balance sheet. These include energy employees 

occupational illness compensation benefits, accrued leave, and other liabilities. Except as described in the following 

paragraphs, the financial statements have been prepared from the books and records of DOL, and include the 

accounts of all funds under the control of the DOL reporting entity. All inter-fund balances and transactions have 

been eliminated, except in the Statements of Budgetary Resources, which are presented on a combined basis, as 

required by OMB Circular No. A-136. 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 67 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

B. Basis of Accounting and Presentation - Continued

DOL is a party to allocation transfers with other Federal agencies as both a transferring (parent) entity and a 

receiving (child) entity. Allocation transfers are delegations by one department of its authority to obligate budget

authority and outlay funds to another agency as prescribed by law. OMB Circular No. A-136 requires the parent to 

report all budgetary and proprietary activity in its financial statements. DOL (parent entity) allocates appropriations 

to the U.S. Department of Agriculture and the U.S. Department of the Interior (child entities) to provide funds for 

youth training programs. Accordingly, all activity for these allocation accounts is included in the DOL financial 

statements. DOL (child entity) receives allocated appropriations from the U.S. Department of State to support 

international HIV/AIDS relief efforts and the Executive Office of the President of the United States to support an 

unemployment insurance (UI) financial data access project (parent entities). Accordingly, activity for these 

allocation accounts is excluded from the DOL financial statements and reported by the parent agencies.

U.S. GAAP encompasses both accrual and budgetary transactions. Under accrual accounting, revenues are 

recognized when earned and expenses are recognized when incurred. Budgetary accounting facilitates compliance 

with legal constraints on, and controls over, the use of Federal funds. These financial statements are different from 

the financial reports, also prepared by DOL pursuant to OMB directives, used to monitor DOL’s use of budgetary 

resources. The Department’s compliance with U.S. GAAP includes the implementation in FY 2015 of SFFAS 44, 

“Accounting For Impairment Of General Property, Plant, And Equipment Remaining In Use.” This has an immaterial 

impact on DOL’s financial statements. 

Throughout these financial statements, assets, liabilities, earned revenue, and costs have been classified according 

to the type of entity with whom the transactions were made. Intra-governmental assets and liabilities are those 

from or to other Federal entities. Intra-governmental earned revenue represents collections or accruals of revenue 

from other Federal entities, and intra-governmental costs are payments or accruals to other Federal entities. 

C. Funds with U.S. Treasury 

DOL’s cash receipts and disbursements are processed by the U.S. Treasury. Funds with U.S. Treasury represent 

obligated and unobligated balances available to finance allowable expenditures, and restricted balances, including 

amounts related to expired authority and amounts not available for use by DOL. (See Note 2)

D. Investments 

Funds from Dedicated Collections

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

DOL’s funds from dedicated collections. The cash receipts collected from the public for funds from dedicated 

collections are deposited in the U.S. Treasury, which uses the cash for general government purposes. Interest 

earning Treasury securities are issued to DOL’s funds from dedicated collections as evidence of the receipts. These 

Treasury securities are assets to DOL and liabilities to the U.S. Treasury. Because DOL and the U.S. Treasury are 

both parts of the U.S. Government, these assets and liabilities offset each other from the standpoint of the 

government as a whole. For this reason, they do not represent an asset or a liability in the U.S. Government-wide 

financial statements. Treasury securities provide DOL with authority to draw upon the U.S. Treasury to make future 

benefit payments or other expenditures. When DOL requires redemption of these securities to make expenditures, 

the government finances those expenditures out of accumulated cash balances, by raising taxes or other receipts, 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

68 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

D. Investments – Continued

by borrowing from the public or repaying less debt, or by curtailing other expenditures, just as the government 

finances all other expenditures.

Balances held in the UTF are invested in non-marketable, special issue Treasury securities (certificates of

indebtedness and bonds) available for purchase exclusively by Federal government agencies and trust funds. 

Special issues are purchased and redeemed at face value (cost), which is equivalent to their net carrying value on

the Consolidated Balance Sheet. Interest rates and maturity dates vary. The UTF special issue Treasury bonds may 

be redeemed, in whole or in part, prior to their maturity date and continue to accrue interest until fully redeemed. 

Balances held in the Panama Canal Commission Compensation Fund are invested in marketable Treasury securities. 

These investments are stated at amortized costs that equal their net carrying value on the Consolidated Balance 

Sheet. Discounts and premiums are amortized using the effective interest method. Interest rates and maturity 

dates vary. Management expects to hold these marketable securities until maturity; therefore, no provision is 

made in the financial statements for unrealized gains or losses. (See Note 3)

E. Accounts Receivable, Net of Allowance

Accounts receivable consists of intra-governmental amounts due to DOL, as well as amounts due from the public. 

(See Notes 4 and 23)

1. Intra-governmental accounts receivable

The Federal Employees Compensation (FEC) account within the UTF provides unemployment compensation

to eligible Federal employees (UCFE) and ex-service members (UCX). DOL recognizes as accounts receivable 

amounts due from other Federal agencies for unreimbursed UCFE and UCX benefits. DOL’s FECA Special 

Benefit Fund provides workers’ compensation benefits to eligible Federal workers on behalf of other 

Federal agencies. DOL recognizes as accounts receivable amounts due from other Federal agencies to the 

Special Benefit Fund for unreimbursed FECA benefits. 

DOL also has receivables from other Federal agencies for work performed on their behalf under various 

reimbursable agreements.

2. Accounts receivable due from the public

DOL recognizes as accounts receivable state unemployment taxes due from covered employers and 

reimbursements of benefits paid on behalf of other employers. Also recognized as accounts receivable are 

benefit overpayments made by DOL to individuals not entitled to receive the benefit.

DOL recognizes as accounts receivable amounts due from the public for fines and penalties levied against 

employers by OSHA, MSHA, WHD, and EBSA and for amounts due from grantees and contractors for grant 

and contract costs disallowed by ETA and other agencies. 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 69 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

E. Accounts Receivable, Net of Allowance - Continued

3. Allowance for uncollectible accounts

Accounts receivable due from the public are stated net of an allowance for uncollectible accounts. The 

allowance is estimated based on an aging of account balances, past collection experience, and/or an 

analysis of outstanding accounts at year-end. Intra-governmental accounts receivable are considered fully 

collectible.

F. Property, Plant and Equipment, Net of Accumulated Depreciation

The majority of DOL’s property, plant and equipment (PP&E) is general purpose PP&E held by Job Corps centers 

owned and operated by DOL through a network of contractors. Internal use software is considered general purpose 

PP&E. 

DOL’s capitalization thresholds for assets with a useful life of 2 years or longer and the related depreciable lives are 

displayed in the following table.

Capitalization Threshold Years

Structures, facilities and improvements $500,000 20 - 50

Furniture and equipment $50,000 2 - 36

Internal use software and software in development $500,000 2 - 15

Construction-in-progress $500,000 -

Land $500,000 -

Internal use software development costs are capitalized as software in development until the development stage 

has been completed and successfully tested. Upon completion and testing, they are reclassified as internal use 

software and amortized over their estimated useful lives. 

PP&E purchases and additions are stated at cost. Normal repairs and maintenance are charged to expense as 

incurred. PP&E are depreciated over their estimated useful lives using the straight-line method of depreciation. 

Furniture and equipment include a capital lease for the financial management system.

Job Corps center construction costs are capitalized as construction-in-progress until completed. Upon completion 

they are reclassified as structures and facilities and depreciated over their estimated useful lives. Structures and 

facilities also includes a capital lease for a Job Corps facility. Leasehold improvements made at Job Corps centers 

and DOL facilities leased from the General Services Administration (GSA) are capitalized as construction-in-progress

until completed. Upon completion, they are reclassified as improvements to leased facilities, and amortized over 

the remaining life of the lease or the useful life of the improvements, whichever is shorter, using the straight-line 

method of amortization. DOL operating leases have one-year terms with multiple option years. The leases are 

cancelable by the government upon appropriate notice as specified in the lease agreements. Historically, these 

leases have not been canceled and DOL has no intention to cancel these leases in the near term. (See Note 5)

G. Advances

DOL advances consist primarily of payments made to State Employment Security Agencies (SESA) and to grantees 

and contractors to provide for future DOL program expenditures. These advance payments are recorded by DOL as 

an asset, which is reduced when actual expenditures or the accrual of estimated expenditures are recorded by DOL. 

(See Note 6)
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

70 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

H. Non-entity Assets

Assets held by DOL which are not available to DOL for obligation are considered non-entity assets. DOL holds nonentity assets for the Railroad Retirement Board and for transfer to the U.S. Treasury. (See Note 7)

I. Liabilities

Liabilities represent probable amounts to be paid by DOL as a result of past transactions and are recognized when 

incurred, regardless of whether there are budgetary resources available to pay them. However, the liquidation of 

these liabilities will consume budgetary resources and cannot be made until available resources have been 

obligated. For financial reporting purposes, DOL’s liabilities are classified as covered or not covered by budgetary 

resources. 

Liabilities are classified as covered by budgetary resources if budgetary resources are available to pay them. 

Liabilities are also considered covered by budgetary resources if they are to be funded by permanent indefinite 

appropriations, which have been enacted and signed into law and are available for use as of the balance sheet date, 

provided that the resources may be apportioned by OMB without further action by the Congress and without a 

contingency having to be met first. Liabilities are classified as not covered by budgetary resources if budgetary 

resources are not available. These classifications differ from budgetary reporting, which categorizes liabilities as 

obligated, consuming budgetary resources, or unobligated, not consuming budgetary resources. Unobligated 

liabilities include those covered liabilities for which available budgetary resources have not been obligated, as well 

as liabilities not covered for which budgetary resources are not available to pay them. (See Note 12)

J. Debt

DOL’s debt consisted of the following:

1. Unemployment Trust Fund advances from U.S. Treasury

UTF advances from U.S. Treasury outstanding as of September 30, 2015 and 2014, represent borrowings 

from the General Fund of the U.S. Treasury pursuant to the authority of Sections 905(d) and 1203 of the 

Social Security Act (42 USC 1323). These advances were appropriated in FY 2015 through three continuing 

resolutions with P.L. 113-164, P.L. 113-202 and P.L. 113-203 and an appropriations act P.L. 113-235; and 

appropriated in FY 2014 through two continuing resolutions with P.L. 113-46 and P.L. 113-73 and an 

appropriations act P.L. 113-76. These repayable advances bear interest rates ranging between 2.375% and 

3.000%, which is equal to the average rate of interest, computed as of the end of the calendar month next 

preceding the date of such advance, borne by all interest bearing obligations of the United States then 

forming part of the public debt; except that in cases in which such average rate is not a multiple of oneeighth of 1 percent, the rate of interest shall be the multiple of one-eighth of 1 percent next lower than such 

average rate in accordance with Section 905(d) and Section 1203 of the Social Security Act. Interest on the 

repayable advances is due on September 30th of each year or upon the repayment of an advance. Advances 

are repaid by transfers from the UTF to the General Fund of the U.S. Treasury when the Secretary of the 

Treasury, in consultation with the Secretary of Labor, has determined that the balances in the UTF allow 

repayment. (See Note 8)
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 71 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

J. Debt - Continued

2. Black Lung Disability Trust Fund borrowings from U.S. Treasury

The Energy Improvement and Extension Act of 2008 (P.L. 110-343, section 113), enacted October 3, 2008, 

authorized restructuring of the BLDTF debt by the repayment at market value the fund’s outstanding 

repayable Advances from U.S. Treasury, using the proceeds from borrowings from Treasury’s Bureau of the 

Fiscal Service and a one-time appropriation. Pursuant to this authority, in FY 2009, the BLDTF borrowed 

from Treasury $6.496 billion which was structured into 32 discounted instruments with sequential annual 

September 30th maturities over the 32-year period 2009 through 2040, bearing interest rates ranging from 

1.412% to 4.556%. Interest on each instrument accrues until its September 30th maturity date or the 

instrument’s prepayment, whichever occurs first. These debt payments are to be made from the excise 

taxes assessed on mined coal. In the event that the BLDTF cannot repay a discounted instrument when it 

matures, or make benefit payments or other authorized expenditures, the Act authorizes the issuance of 

one-year discounted instruments to finance these activities. The BLDTF issued additional debt on 

September 30, 2014 (due September 30, 2015) bearing an interest rate of 0.11%, and on September 30, 

2015 (due September 30, 2016) bearing an interest rate of 0.33%. (See Note 8)

K. Accrued Benefits

The financial statements include a liability for unemployment, workers’ compensation, and disability benefits due 

and payable from various DOL funds, as discussed below. (See Note 10)

1. Unemployment benefits payable

The UTF provides benefits to unemployed workers who meet state and Federal eligibility requirements. 

Regular and extended unemployment benefits are paid from state accounts within the UTF, financed 

primarily by a state unemployment tax on employer payrolls. Fifty percent of the cost of extended 

unemployment benefits is paid from the Extended Unemployment Compensation Account (EUCA) within 

the UTF, financed by a Federal unemployment tax on employer payrolls. The Recovery Act provided for a 

100% Federal funding of Extended Benefits (EB) through December 2009. This 100% Federal funding 

provision, which was extended several times, phased out on January 1, 2014.

The Recovery Act also provided for Federal Additional Unemployment Compensation (FAUC), a $25 weekly 

supplement entirely funded from Treasury General Fund revenues, payable through December 2009, to 

individuals who were entitled under state law to otherwise receive any type of UC. FAUC benefits were 

extended several times, with phase-out of benefit eligibility by December 2010. Although the vast majority 

of FAUC activity has ceased, states are still reporting residual transactions related to the program on 

monthly reports.

EUC benefits, also paid from EUCA, were first authorized by the Supplemental Appropriations Act of 2008.

These benefits were extended by the Recovery Act and other authorizing legislation through January 1, 

2014, and were funded entirely from General Fund appropriations.

Unemployment benefits to unemployed Federal workers are paid from the FEC account within the UTF, 

which is then reimbursed by the responsible Federal agency. 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

72 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

K. Accrued Benefits - Continued

1. Unemployment benefits payable - continued

A liability is recognized for unpaid unemployment benefits applicable to the current period and for benefits 

paid by states that have not been reimbursed by the fund. DOL also recognizes a liability for Federal 

employees’ unpaid unemployment benefits for existing claims filed during the current period, payable in 

the subsequent period, to the extent reimbursable by other Federal entities. 

2. Federal employees disability and 10(h) benefits payable

The FECA Special Benefit Fund provides income and medical cost protection to covered Federal civilian 

employees injured on the job, employees who have incurred a work-related occupational disease and 

beneficiaries of employees whose death is attributable to a job-related injury or occupational disease. The 

fund is reimbursed by other Federal agencies for the FECA benefit payments made on behalf of their 

workers. The fund assumes the liability for unreimbursed (non-chargeable) FECA benefits. The fund also 

provides 50% of the annual cost-of-living adjustments for pre-1972 compensation cases under the authority 

of Section 10(h) of the Longshore and Harbor Workers’ Compensation Act and the District of Columbia 

Workmen’s Compensation Act. A liability for FECA benefits payable by the Special Benefit Fund to the 

employees of DOL and other Federal agencies and for Section 10(h) benefits is accrued to the extent of 

unpaid benefits applicable to the current period.

3. Black lung disability benefits payable

The BLDTF and Special Benefits for Disabled Coal Miners fund provide compensation and medical benefits 

for eligible coal miners who are totally disabled due to pneumoconiosis (black lung disease). DOL 

recognizes a liability for disability benefits to the extent of unpaid benefits applicable to the current period.

4. Energy employees occupational illness compensation benefits payable

The Energy Employees Occupational Illness Compensation Fund provides benefits to eligible current or 

former employees of the DOE and its contractors suffering from designated illnesses incurred as a result of 

their work with DOE. Benefits are also paid to certain survivors of those employees and contractors, as well 

as to certain beneficiaries of the Radiation Exposure Compensation Act (RECA). DOL recognizes a liability for 

disability benefits to the extent of unpaid benefits applicable to the current period.

L. Future Workers’ Compensation Benefits

The financial statements include an actuarial liability for future workers’ compensation benefits payable by 

DOL to its employees, to employees of the Panama Canal Commission and to enrollees of the Job Corps, as 

well as benefits not chargeable to other Federal agencies, which must be paid by DOL’s FECA Special Benefit 

Fund. The liability includes the expected payments for death, disability, medical, and miscellaneous costs 

for approved compensation cases, as well as a component for incurred but not reported claims. The liability 

is determined using historical benefit payment patterns related to injury years to predict the future 

payments. 

The actuarial methodology provides for the effects of inflation and adjusts historical payments to constant 

dollars by applying wage inflation factors (cost-of-living adjustments or COLA) and medical inflation factors 

(consumer price index-medical or CPIM) to the calculation of projected benefits. 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 73 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

L. Future Workers’ Compensation Benefits - Continued

In FY 2015, DOL refined the approach for selecting the COLA factors, CPIM factors, and discount rate by averaging 

the COLA rates, CPIM rates, and interest rates for the current and prior four years. Using averaging renders 

estimates that reflect historical trends over five years instead of conditions that exist in one year. In FY 2014, DOL 

selected the COLA and CPIM factors based on one year. 

The COLAs and CPIMs used in the projections for FY 2015 and FY 2014 were as follows:

 COLA CPIM 

 FY 2015 2014 2015 2014 

2015 N/A 1.73 % N/A 2.93 %

2016 1.64 % 2.17 % 2.94 % 3.76 %

2017 1.47 % 2.13 % 2.98 % 3.86 %

2018 1.33 % 2.23 % 3.09 % 3.90 %

2019 1.43 % 2.30 % 3.39 % 3.90 % 

2020+ 1.65 % 2.30 % 3.69 % 3.90 % 

DOL selected the interest rate assumptions whereby projected annual payments were discounted to present value 

based on interest rate assumptions on the U.S. Department of the Treasury’s Yield Curve for Treasury Nominal 

Coupon Issues (the TNC Yield Curve) to reflect the average duration of income payments and medical payments. For 

FY 2015, based on averaging the TNC Yield Curves for the current and prior four years, the average durations and 

interest rate assumptions were 14.9 years and 3.134% for income payments and 9.8 years and 2.496% for medical 

payments. For FY 2014, based on the TNC Yield Curve for one year, the average durations and interest rate 

assumptions were 15.1 years and 3.455% for income payments and 9.9 years and 2.855% for medical payments. 

M. Energy Employees Occupational Illness Compensation Benefits 

The Energy Employees Occupational Illness Compensation Fund, established under the authority of the EEOICPA, 

provides benefits to eligible current or former employees of DOE and its contractors, or to certain survivors of those 

employees and contractors, as well as benefits to certain beneficiaries of RECA. DOL is responsible for adjudicating 

and administering claims filed under the EEOICPA. Effective July 31, 2001, compensation of $150,000 and payment 

of medical expenses from the date a claim is filed are available to covered individuals suffering from designated 

illnesses incurred as a result of their work with DOE.

The Ronald Reagan National Defense Authorization Act of 2005 amended EEOICPA to include Subtitle E –

Contractor Employee Compensation. The amended program grants workers’ compensation benefits to covered 

employees and their families for illness and death arising from exposure to toxic substances at a DOE facility. The 

amendment also makes it possible for uranium workers as defined under Section 5 of RECA to receive 

compensation under Part E for illnesses due to toxic substance exposure at a uranium mine or mill covered under 

that Act.

Projected payments were discounted to present value based on interest rate assumptions on the TNC Yield Curve 

to reflect the average duration of compensation payments and medical payments. In FY 2015, DOL refined the 

approach for selecting interest rate assumptions by averaging interest rates for the current and prior four years.

Using averaging renders estimates that reflect historical trends over five years instead of conditions that exist in 

one year. In FY 2014, DOL selected interest rate assumptions based on one year.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

74 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

M. Energy Employees Occupational Illness Compensation Benefits - Continued

For FY 2015, the average durations were 9.2 years for compensation payments and 17.0 years for medical 

payments. As of September 30, 2015, the undiscounted liability was $21.7 billion discounted to a present value 

liability of $14.8 billion based on an interest rate of 2.387% for compensation payments and 3.282% for medical 

payments projected over a 58-year period.

For FY 2014, the average durations were 8.9 years for compensation payments and 16.7 years for medical 

payments. As of September 30, 2014, the undiscounted liability was $23.5 billion discounted to a present value 

liability of $16.0 billion based on an interest rate of 2.661% for compensation payments and 3.560% for medical 

payments projected over a 58-year period.

The estimated liability includes the expected compensation and estimated medical payments for approved 

compensation cases and cases filed pending approval, as well as claims incurred but not yet filed. The actuarial 

projection methodology provided an estimate of the ultimate number of reported cases as a result of estimating 

future reported claims from the historical patterns of reported claims and subsequent claim approval rates. Medical 

payments were derived by estimating an average benefit award per living employee claimant. 

N. Accrued Leave

A liability for annual and compensatory leave is accrued as leave is earned and paid when leave is taken. The 

balance of leave earned but not taken will be paid from future funding sources. Sick leave and other types of nonvested leave are expensed as taken.

O. Employee Health and Life Insurance Benefits

DOL employees are eligible to participate in the contributory Federal Employees Health Benefit Program (FEHBP) 

and the Federal Employees Group Life Insurance Program (FEGLIP). DOL matches the employee contributions to 

each program to pay for current benefits. During FY 2015, DOL’s contributions to the FEHBP and FEGLIP were 

$113.4 million and $2.4 million, respectively. During FY 2014, DOL’s contributions to the FEHBP and FEGLIP were 

$111.0 million and $2.4 million, respectively. These contributions are recognized as current operating expenses.

P. Other Retirement Benefits

DOL employees eligible to participate in the FEHBP and the FEGLIP may continue to participate in these programs 

after their retirement. DOL recognizes a current operating expense for the future cost of these other retirement 

benefits (ORB) at the time the employee’s services are rendered. This ORB expense must be financed by the U.S. 

Office of Personnel Management (OPM). Using cost factors supplied by OPM, DOL recorded ORB imputed costs and 

imputed financing sources of $72.1 million in FY 2015 and $68.2 million in FY 2014.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 75 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Q. Employee Pension Benefits

DOL employees participate in either the Civil Service Retirement System (CSRS) or the Federal Employees 

Retirement System (FERS). For employees participating in CSRS, 7.0% of their gross earnings is withheld and 

transferred to the Civil Service Retirement and Disability Fund. DOL contributes an additional 7.0% of the employee 

gross earnings to the Civil Service Retirement and Disability Fund. P.L. 112-96, Section 5001, the “Middle Class Tax 

Relief and Job Creation Act of 2012,” changed the employee and employer contributions for new employees 

participating in FERS. Employees designated by OPM as FERS Revised Annuity Employees (RAEs) were, in general, 

new employees hired on or after January 1, 2013. The Bipartisan Budget Act of 2013, section 401, further changed 

the employee and employer contributions for new employees participating in FERS. Employees designated by OPM 

as FERS Further Revised Annuity Employees (FRAEs) were, in general, hired on or after January 1, 2014. The 

percentages of employee contribution/withholding and DOL contribution under FERS, FERS RAE, and FERS FRAE in 

FY 2015 and FY 2014 are presented in the table below.

Percentage of Gross Earnings

FY 2015 FERS FERS RAE FERS FRAE

Employee contribution/withholding 0.8% 3.1% 4.4%

DOL contribution 13.2% 11.1% 11.1%

FY 2014 FERS FERS RAE FERS FRAE

Employee contribution/withholding 0.8% 3.1% 4.4%

DOL contribution 11.9% 9.6% 9.6%

These totals are transferred to the Federal Employees’ Retirement Fund. The CSRS and FERS retirement funds are 

administered by OPM. DOL contributions to the CSRS and FERS are recognized as current operating expenses. FERS 

participants are also covered under the Federal Insurance Contribution Act (FICA) and are subject to withholdings. 

DOL makes matching FICA contributions, recognized as current operating expenses. DOL’s matching contributions 

were $121.0 million in FY 2015 and $117.3 million in FY 2014.

The Thrift Savings Plan (TSP) is a defined contribution retirement savings and investment plan for employees 

covered by either CSRS or FERS. CSRS participants may contribute up to $18,000 and $17,500 of their gross pay to 

the TSP during calendar years 2015 and 2014, respectively, but there is no departmental matching contribution. 

FERS participants may contribute up to $18,000 and $17,500 of their gross pay to the TSP during calendar years 

2015 and 2014, respectively. CSRS and FERS participants aged 50 years or older may also contribute an additional 

$6,000 and $5,500 each calendar year in “catch-up” contributions during calendar years 2015 and 2014, 

respectively, but there is no departmental matching on “catch-up” contributions. For employees covered under 

FERS, DOL contributes 1% of the employees’ gross pay to the TSP. DOL also matches employees’ contributions 

dollar-for-dollar on the first 3% of pay contributed each pay period and 50 cents on the dollar for the next 2% of pay 

contributed. DOL contributions to the TSP are recognized as current operating expenses. Employee and employer 

contributions to the TSP are transferred to the Federal Retirement Thrift Investment Board. (See Note 14) 

DOL recognizes the full cost of providing future CSRS and FERS pension benefits to covered employees at the time 

the employees’ services are rendered. The pension expense recognized in the financial statements equals the 

service cost for covered DOL employees, less amounts contributed by these employees. Service cost represents the 

actuarial present value of benefits attributed to services rendered by covered employees during the accounting 

period. 

The measurement of service cost requires the use of actuarial cost methods to determine the percentage of the 

employees’ basic compensation sufficient to fund their projected pension benefit. These percentages (cost factors) 

are provided by OPM, and applied by DOL to the basic annual compensation of covered employees to arrive at the

amount of total pension expense to be recognized in DOL’s financial statements. 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

76 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Q. Employee Pension Benefits - Continued

The excess of total pension expense over the amount contributed by the Department and by DOL’s employees 

represents the amount of pension expense which must be financed directly by OPM. DOL recognized an imputed 

cost and an imputed financing source equal to the excess amount. DOL does not recognize in its financial 

statements FERS or CSRS assets, accumulated plan benefits or unfunded liabilities, if any, applicable to its 

employees. (See Note 14)

R. Net Position

DOL’s net position consists of the following:

1. Cumulative results of operations

Cumulative results of operations include the accumulated historical difference between expenses 

consuming budgetary resources and financing sources providing budgetary resources in DOL’s trust, 

revolving, and special funds; liabilities not consuming budgetary resources net of assets not providing 

budgetary resources; and DOL’s net investment in capitalized assets. 

2. Unexpended appropriations

Unexpended appropriations include the unobligated balances and undelivered orders of DOL’s appropriated 

funds. Unobligated balances associated with appropriations that expire at the end of the fiscal year remain

available for obligation adjustments, but not new obligations, until those appropriations are cancelled, five 

years after the appropriations expire. Unexpired multi-year and no-year appropriations remain available to 

DOL for obligation in future periods. 

S. Net Cost of Operations 

1. Operating costs 

Full operating costs are comprised of all direct costs consumed by programs and those indirect costs which 

can be reasonably assigned or allocated to programs. Full costs are reduced by exchange (earned) revenues 

to arrive at net program cost. The full and net operating costs of DOL’s major programs are presented in the 

Consolidated Statements of Net Cost, and are also reported by program agency and major program. (See 

Note 15)

2. Earned revenues

Earned revenues arise from exchange transactions which occur through the provision of goods and services 

for a price, and are deducted from the full cost of DOL’s major programs to arrive at net program cost. 

Earned revenues are recognized by DOL to the extent reimbursements are payable from other Federal 

agencies and from the public, as a result of costs incurred or services performed on their behalf. Major 

sources of DOL’s earned revenue include reimbursements to the FECA Special Benefit Fund from Federal 

agencies for the costs of disability compensation and medical care provided to or accrued on behalf of their 

employees and reimbursements to the UTF from Federal agencies for the cost of unemployment benefits 

provided to or accrued on behalf of their former employees. (See Note 15)
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 77 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

T. Budgetary Financing Sources

Budgetary financing sources other than earned revenues provide funding for the Department’s net cost of 

operations and are reported on the Consolidated Statements of Changes in Net Position. These financing sources 

include appropriations received, less appropriations transferred and not available, non-exchange revenue, and 

transfers without reimbursement, as discussed below:

1. Appropriations received, appropriations used, appropriations transferred, and adjustments

DOL receives financing sources through congressional appropriations to support its operations. A financing 

source is recognized for these appropriated funds received, less appropriations transferred, or adjusted due 

to rescission, cancellation, sequestration, or return of permanent indefinite authority. Appropriations are 

considered used as a financing source when goods and services are received or benefits are provided.

2. Non-exchange revenues

Non-exchange revenues arise primarily from the Federal government’s power to demand payments from 

the public. Non-exchange revenues are recognized by DOL on the Consolidated Statements of Changes in 

Net Position and are discussed below. (See Note 16)

Employer taxes 

Employer tax revenues are recognized on a modified cash basis, to the extent of cash transferred by the 

collecting entity to DOL, plus the change in inter-entity balances between the collecting entity and DOL. 

Inter-entity balances represent revenue received by the collecting entity, net amounts due to the collecting 

entity and adjustments made to previous transactions by the collecting entity which have not been 

transferred to DOL. 

Federal and state unemployment taxes represent non-exchange revenues collected from employers based 

on wages paid to employees in covered employment. Federal unemployment taxes are collected by the 

Internal Revenue Service and transferred to designated accounts within the UTF. State unemployment taxes 

are collected by each state and deposited in separate state accounts within the UTF. Among other things, 

Federal unemployment taxes are used to pay the Federal share of extended unemployment benefits and to 

provide for Federal and state administrative expenses related to the operation of the UI program, 

employment services including veterans’ ES, and foreign labor certifications (FLC). Additional Federal

collections from states with advances from the fund that have been outstanding for more than two years 

are used to reduce states’ outstanding advance balances. State unemployment taxes are restricted in their 

use to the payment of unemployment benefits.

Black Lung Disability Trust Fund excise tax

Black Lung Disability Trust Fund excise tax revenues are recognized on a modified cash basis, to the extent of 

warrants posted by Government-Wide Accounting and the Bureau of the Fiscal Service Funds into the 

BLDTF. These taxes are imposed on coal sold by producers from mines located in United States. (See Note 

1.W)

Interest

The UTF, the Panama Canal Commission Compensation Fund, and the Energy Employees Occupational 

Illness Compensation Fund receive interest on fund investments. The UTF receives interest from states that 

had accounts with loans payable to the Federal Unemployment Account (FUA) at the end of the prior fiscal 

year. Interest is also earned on Federal funds in the possession of non-Federal entities. Interest is 

recognized as non-exchange revenue when earned. 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

78 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

T. Budgetary Financing Sources – Continued

2. Non-exchange revenue - continued

Reimbursement of unemployment benefits and other

The UTF receives reimbursements from state and local government entities and non-profit organizations for 

the cost of unemployment benefits provided to or accrued on behalf of their employees. These 

reimbursements are recognized as non-exchange revenue when earned. 

3. Transfers without reimbursement

Transfers recognized as budgetary financing sources by DOL include transfers from the Department of 

Homeland Security H-1B Nonimmigrant Petitioner Account to H-1B Funds in ETA and WHD. There are also 

transfers between DOL entities, primarily for the administration of the UI program and of appropriations for 

extended unemployment benefits. (See Note 17)

U. Other Financing Sources

Other financing sources include items that do not represent budgetary resources. 

1. Imputed financing from costs absorbed by others

A financing source is imputed by DOL to provide for pension and other retirement benefit expenses 

recognized by DOL but financed by OPM. (See Notes 1-P, 1-Q, and 14)

2. Transfers without reimbursement

Transfers recognized as other financing sources by DOL include the transfers of property from the GSA. (See 

Note 17)

V. Custodial Activity

DOL collects and transfers to the General Fund of the U.S. Treasury custodial non-exchange revenues for penalties 

levied against employers by OSHA, MSHA, WHD, and EBSA for regulatory violations; and for FECA administrative 

costs assessed against government corporations in excess of amounts reserved to finance capital improvements in 

the FECA Special Benefit Fund; and for ETA collections and administrative charges and restitution payments. These 

collections are not available to the agencies for obligation or expenditure. Penalties and other assessments are 

recognized as custodial non-exchange revenues when collected or subject to collection. (See Note 20)

W. Significant Assumptions Used in the Statements of Social Insurance and Statements of Changes in 

Social Insurance Amounts 

1. Program Background

The Black Lung Disability Benefit Program provides for compensation, medical, and survivor benefits for 

eligible coal miners who are totally disabled due to pneumoconiosis (black lung disease) arising out of their 

coal mine employment and the BLDTF provides benefit payments when no responsible mine operator can 

be assigned the liability. The OWCP administers the program.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 79 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

W. Significant Assumptions Used in the Statements of Social Insurance and Statements of Changes in 

Social Insurance Amounts - Continued

1. Program Background - continued

The Federal Coal Mine Health and Safety Act sets Black Lung benefits at 37.5% of the base salary of a 

Federal employee at level GS-2, Step 1. Black lung disability benefit payments are funded by excise taxes 

from coal mine operators based on the domestic sale of coal, as are the fund’s administrative costs. These 

taxes are collected by the Internal Revenue Service and transferred to the BLDTF, which was established 

under the authority of the Black Lung Benefits Revenue Act, and administered by the U.S. Department of 

the Treasury.

P.L. 110-343, Division B-Energy Improvement and Extension Act of 2008, enacted on October 3, 2008, 

among other things, restructured the BLDTF debt by refinancing the outstanding high interest rate 

repayable advances with low interest rate discounted debt instruments similar in form to zero-coupon 

bonds, plus a one-time appropriation. This Act also allowed that any subsequent debt issued by the BLDTF 

may be used to make benefit payments, other authorized expenditures, or to repay debt and interest from 

the initial refinancing. (See Notes 1-J and 8)

2. Significant Assumptions

The significant assumptions used in the projections for the Statements of Social Insurance (SOSI) are the 

coal excise tax revenue estimates, the tax rate structure, the number of beneficiaries, life expectancy, 

Federal civilian pay raises, medical cost inflation, and the interest rates used to discount future cash flows. 

These assumptions affect the amounts reported on the SOSI, summary section and the Statements of 

Changes in Social Insurance Amounts (SCSIA).

Treasury’s Office of Tax Analysis provides estimates of future receipts of the black lung excise tax. Its 

estimates are based on projections of future coal production and sale prices prepared by the Energy 

Information Administration (EIA) of the U.S. Department of Energy. In FY 2015, EIA projections of future 

coal production and sale prices reflect, among other things, regulation pursuant to the Clean Power Plan.

Treasury’s Office of Tax Analysis provides the first 10 years of tax receipt estimates. In FY 2015, DOL refined 

the approach for selecting the growth rate for tax receipt estimates for the remaining years to enhance 

consistency of future tax receipts over the projection period. For FY 2015, the growth rate is based on the 

average EIA growth rates for future coal production that reflect, among other things, regulation pursuant to 

the Clean Power Plan. For FYs 2011 through 2014, the remaining years of future tax receipts were estimated 

using a growth rate based on both historical tax receipts and the Treasury’s estimated tax receipts.

The coal excise tax rates of $1.10 per ton of underground-mined coal and $0.55 per ton of surface-mined 

coal sold, with a cap of 4.4% of sales price, continue until the earlier of December 31, 2018 (used in all 

presentations) or the first December 31 in which there exists no (1) balance of repayable debt described in 

section 9501 of the Internal Revenue Code and (2) unpaid interest on the debt. At that time, the tax rates 

revert to $0.50 per ton of underground-mined coal and $0.25 per ton of surface-mined coal sold, with a 

limit of 2.0% of sales price.

The beneficiary population data is updated from information supplied by the program. The beneficiary 

population is a nearly closed universe in which attrition by death exceeds new entrants by a ratio of more 

than ten to one. Projections for new participants are included in the overall projections and are considered 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

80 United States Department of Labor

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

W. Significant Assumptions Used in the Statements of Social Insurance and Statements of Changes in 

Social Insurance Amounts - Continued

2. Significant Assumptions - continued

immaterial. Therefore, the difference between the open group measure and the closed group measure due 

to new participants is immaterial and the same measure is presented for both the open group and the 

closed group.

SSA life tables are used to project the life expectancies of the beneficiary population. OMB supplies 

assumptions for future monthly benefit rate increases based on increases in the Federal pay scale and future 

medical cost inflation based on increases in the CPIM, which are used to calculate future benefit costs.

During the current projection period, the future benefit rate (annualized for the fiscal year) increases 3.03% 

in 2016, 3.25% in 2017, 3.02% in 2018, and 3.00% in each year thereafter and medical cost increases 3.4% in 

2016, 3.7% in 2017, 3.8% in 2018, and 3.9% in each year thereafter. Estimates for administrative costs for 

the first 10 years of the projection period are supplied by DOL’s Budget Office, based on current year 

enacted amounts, while later years are based on the number of projected beneficiaries.

The projection period ends September 30, 2040, because the primary purpose of the BLDTF, which was 

established in 1978, is to compensate the victims of coal mine dust exposures which occurred prior to 1970.

By the end of FY 2040, not only the disabled miners and their widows in that class, but also virtually all of 

their eligible dependent disabled adult children will be deceased.

For FY 2015 and FY 2014, DOL’s approach for selecting the interest rate assumptions used to discount 

projected annual cash flows enhanced matching between the timing of cash flows and interest rates and 

increased comparability; the approach had been refined in FY 2014.

For FY 2015, projected annual cash flows were discounted to present value based on Treasury rates that 

reflect the average duration of cash flows between 10.3 and 11.2 years for income payments, medical 

payments, administrative expenses, and coal excise tax collections. The interest rate used to discount FY 

2015 projections is 2.25% for income payments, medical payments, administrative expenses, and coal excise 

tax collections.

For FY 2014, projected annual cash flows were discounted to present value based on Treasury rates that 

reflect the average duration of cash flows between 10.4 and 12.2 years for income payments, medical 

payments, administrative expenses, and coal excise tax collections. The interest rates used to discount FY 

2014 projections were 2.50% for income payments and 2.63% for medical payments, administrative 

expenses, and coal excise tax collections.

For FY 2013, projected annual cash flows were discounted to present value based on OMB’s interest rate 

assumptions which were interpolated to reflect the average duration of cash flows. For FYs 2011 and 2012, 

the projections were discounted using an interest rate published by Treasury as of the start of the projection 

period for Treasury loans to government agencies for loans with a duration that approximated the 

projection period. The valuation date for the FY 2015 and FY 2014 information presented in the SOSI, 

including the summary section, and in the SCSIA is September 30, 2015 and 2014, respectively.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 81 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

W. Significant Assumptions Used in the Statements of Social Insurance and Statements of Changes in 

Social Insurance Amounts - Continued

3. Significant Assumptions – continued

The accumulated deficit of all past disbursements over past cash receipts, including interest on investments, 

is ($5.64) billion, the amount of the trust fund net position deficit at the start of the projection period, 

September 30, 2015. The excess of the present value of estimated future excise tax income over the 

actuarial present value of future benefit payments and present value of estimated future administrative 

costs during the projection period for current and future participants (open and closed group measure) is 

calculated by adding the outflows of: 

(a) actuarial present value of future benefit payments during the projection period to disabled coal 

miners and dependent survivors; and

(b) present value of estimated future administrative costs during the projection period;

and then subtracting the inflows of:

(c) the present value of estimated future excise tax income during the projection period

As a result of changes in the assumptions above:

– in FY 2015, the open and closed group measure decreased by ($2,886.1) million primarily due to 

projected lower coal excise tax revenues and higher administrative costs, offset in part due to lower 

beneficiary costs and the change in interest rates used to discount the cash flows from 2.50% and 2.63% 

in FY 2014 to 2.25% for income payments, medical payments, administrative expenses, and coal excise 

tax collections in FY 2015; and

– in FY 2014, the open and closed group measure decreased by ($137.5) million primarily due to projected 

lower coal excise tax revenues, offset in part due to lower beneficiary costs and the change in interest 

rates used to discount the cash flows from between 2.79% and 2.95% in FY 2013 to 2.50% for income 

payments and 2.63% for medical payments, administrative expenses, and coal excise tax collections in FY 

2014.

X. Tax Exempt Status

As an agency of the Federal government, the Department is exempt from all taxes imposed by any governing body 

whether it is a Federal, state, commonwealth, local, or foreign government. 

Y. Application of Critical Accounting Estimates

The financial statements are based on the selection of accounting policies and the application of significant 

accounting estimates, some of which require management to make significant assumptions. 

Estimates and assumptions affect the reported amounts of assets and liabilities and the reported amounts of 

revenues and expenses during the reporting period. Actual results could differ from those estimates.

Estimates and assumptions also affect the amounts reported on the SOSI and the SCSIA. Further, the estimates are 

based on current conditions that may change in the future. Actual results could differ materially from the estimated 

amounts. The financial statements include information to assist in understanding the effect of changes in 

assumptions to the related information.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

82 United States Department of Labor

NOTE 2 - FUNDS WITH U.S. TREASURY

Funds with U.S. Treasury as of September 30, 2015, consisted of the following:

(Dollars in thousands) Revolving funds Trust funds Special funds General funds Other Total

Unobligated Balance Available $ 8,909 $ 163 $ 265,528 $ 2,492,462 $ - $ 2,767,062

Unobligated Balance Unavailable 8,078 - 51,489 578,968 - 638,535

Obligated Balance Not Yet Disbursed 133,044 11,927 467,573 7,482,001 - 8,094,545

Non-Budgetary Fund Balance with Treasury - 63,629 220 66 - 63,915

Total Entity Assets 150,031 75,719 784,810 10,553,497 - 11,564,057

Non-entity Assets - (1,050) - - 5,975 4,925

Fund Balance with Treasury $ 150,031 $ 74,669 $ 784,810 $ 10,553,497 $ 5,975 $ 11,568,982

Funds with U.S. Treasury as of September 30, 2014, consisted of the following:

(Dollars in thousands) Revolving funds Trust funds Special funds General funds Other Total

Unobligated Balance Available $ 1,761 $ 163 $ 345,638 $ 2,632,358 $ - $ 2,979,920

Unobligated Balance Unavailable 21,868 - 55,114 1,508,208 - 1,585,190

Obligated Balance Not Yet Disbursed 87,385 12,910 327,939 7,911,976 - 8,340,210

Non-Budgetary Fund Balance with Treasury - 97,577 239 292 - 98,108

Total Entity Assets 111,014 110,650 728,930 12,052,834 - 13,003,428

Non-entity Assets - (2,577) - - 3,495 918

Fund Balance with Treasury $ 111,014 $ 108,073 $ 728,930 $ 12,052,834 $ 3,495 $ 13,004,346

Obligated and unobligated balances differ from the amounts reported on the Combined Statements of Budgetary 

Resources because budgetary balances are supported by amounts other than Fund Balance with Treasury, such as 

investments. Non-Budgetary Fund Balance with Treasury consists of amounts included in Fund Balance with 

Treasury but excluded from the Department’s budgetary resources, such as sequestered budget authority.

The negative fund balance reported as of September 30, 2015 and 2014, relates to the UTF and is the result of the 

timing of processing the investments and redemptions of UTF. The investments and redemptions relating to the last 

business day of the month are not processed until the first day of the next month. This results in a negative cash 

position for the preceding business day when the disbursements are greater than the receipts to the fund.

Annual and multi-year budget authority expires at the end of its period of availability. During the first through the 

fifth expired years, the unobligated balance is unavailable and may be used to adjust obligations and disbursements 

that were recorded before the budgetary authority expired or to meet a legitimate or bona fide need arising in the 

fiscal year for which the appropriation was made. The unobligated balance for no-year budget authority may be 

used to incur obligations indefinitely for the purpose specified by the appropriation act. No-year budget authority 

unobligated balances, except those specifically exempt, are subject to the annual apportionment and allotment 

process.

Unobligated Balance Available as of September 30, 2015 and 2014, includes $491.7 million and $486.6 million, 

respectively, of funds apportioned for use in the subsequent year period.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 83 

NOTE 3 - INVESTMENTS

Investments as of September 30, 2015, consisted of the following:

Face Premium Interest Net Market

(Dollars in thousands) Value (Discount) Receivable Value Value

Unemployment Trust Fund

Non-marketable

Special issue U.S. Treasury Bonds

 2.250% maturing June 30, 2017 $ 33,635,788 $ - $ 189,201 $ 33,824,989 $ 33,635,788

 2.375% maturing June 30, 2016 3,751,987 - 22,277 3,774,264 3,751,987

Special issue Certificate of Indebtedness

 2.250% maturing June 30, 2016 6,980,612 - 22,049 7,002,661 6,980,612

$ 44,368,387 - $ 233,527 $ 44,601,914 $ 44,368,387

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

 4.50% maturing November 11, 2015 41,641 220 703 42,564 41,641

$ 44,410,028 $ 220 $ 234,230 $ 44,644,478 $ 44,410,028

Entity investments $ 44,302,725 $ 220 $ 233,665 $ 44,536,610 $ 44,302,725

Non-entity investments 107,303 - 565 107,868 107,303

$ 44,410,028 $ 220 $ 234,230 $ 44,644,478 $ 44,410,028
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

84 United States Department of Labor

NOTE 3 - INVESTMENTS - Continued

Investments as of September 30, 2014, consisted of the following:

Face Premium Interest Net Market

(Dollars in thousands) Value (Discount) Receivable Value Value

Unemployment Trust Fund

Non-marketable

Special issue U.S. Treasury Bonds

 2.375% maturing June 30, 2016 $ 3,751,987 $ - $ 22,277 $ 3,774,264 $ 3,751,987

Special issue Certificate of Indebtedness

 2.375% maturing June 30, 2015 32,167,350 - 162,657 32,330,007 32,167,350

 35,919,337 - 184,934 36,104,271 35,919,337

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

 4.250% maturing November 15, 2014 46,631 239 743 47,613 46,631

$ 35,965,968 $ 239 $ 185,677 $ 36,151,884 $ 35,965,968

Entity investments $ 35,838,676 $ 239 $ 185,022 $ 36,023,937 $ 35,838,676

Non-entity investments 127,292 - 655 127,947 127,292

$ 35,965,968 $ 239 $ 185,677 $ 36,151,884 $ 35,965,968
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 85 

NOTE 4 - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

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

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits $ 281,752 $ - $ 281,752

Due for workers' compensation benefits 5,332,848 - 5,332,848

Other 1,799 - 1,799

 5,616,399 - 5,616,399

Entity assets

State unemployment taxes 1,268,232 (852,937) 415,295

Due from reimbursable employers 588,308 (47,827) 540,481

Benefit overpayments 3,482,077 (2,870,462) 611,615

Other 7,218 - 7,218

 5,345,835 (3,771,226) 1,574,609

Non-entity assets

Fines and penalties 218,643 (46,041) 172,602

 5,564,478 (3,817,267) 1,747,211

$ 11,180,877 $ (3,817,267) $ 7,363,610

The September 30, 2015 intra-governmental balance due for workers’ compensation benefits includes a $1.4 billion 

receivable from the U.S. Postal Service (USPS). Section 8147 of Title 5 of the U.S.C. mandates that USPS reimburse 

the FECA Special Benefits Fund by October 15, 2015 for benefits incurred on its behalf and administration costs. 

The October 2015 USPS reimbursement excluded $68 million; however, DOL considers the USPS intra-governmental 

receivable to be fully collectible.

Accounts receivable, net as of September 30, 2014, consisted of the following:

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits $ 348,885 $ - $ 348,885

Due for workers' compensation benefits 5,262,857 - 5,262,857

Other 7,009 - 7,009

 5,618,751 - 5,618,751

Entity assets

State unemployment taxes 1,294,831 (870,938) 423,893

Due from reimbursable employers 718,016 (69,204) 648,812

Benefit overpayments 3,912,278 (3,212,275) 700,003

Other 11,699 - 11,699

 5,936,824 (4,152,417) 1,784,407

Non-entity assets

Fines and penalties 222,614 (118,429) 104,185

 6,159,438 (4,270,846) 1,888,592

$ 11,778,189 $ (4,270,846) $ 7,507,343
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

86 United States Department of Labor

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment, net as of September 30, 2015, consisted of the following:

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities $ 1,583,712 $ (677,031) $ 906,681

Improvements to leased facilities 398,274 (298,875) 99,399

 1,981,986 (975,906) 1,006,080

Furniture and equipment

Equipment held by contractors 136,107 (127,904) 8,203

Furniture and equipment 51,928 (34,588) 17,340

 188,035 (162,492) 25,543

Internal use software and software in development 262,788 (134,172) 128,616

Construction-in-progress 34,773 - 34,773

Land 99,516 - 99,516

$ 2,567,098 $ (1,272,570) $ 1,294,528

2015

Property, plant and equipment, net as of September 30, 2014, consisted of the following:

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities $ 1,435,293 $ (630,328) $ 804,965

Improvements to leased facilities 398,288 (288,939) 109,349

 1,833,581 (919,267) 914,314

Furniture and equipment

Equipment held by contractors 146,748 (134,906) 11,842

Furniture and equipment 40,540 (31,773) 8,767

 187,288 (166,679) 20,609

Internal use software and software in development 248,404 (115,839) 132,565

Construction-in-progress 123,847 - 123,847

Land 99,534 - 99,534

$ 2,492,654 $ (1,201,785) $ 1,290,869

2014
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 87 

NOTE 6 - ADVANCES

Advances as of September 30, 2015 and 2014, consisted of the following:

(Dollars in thousands) 2015 2014

Intra-governmental

Advances $ 11,831 $ 3,410

Advances to states for UI benefit payments 1,341,940 2,155,414

Other 1,793 7,007

 1,343,733 2,162,421

$ 1,355,564 $ 2,165,831

NOTE 7 - NON-ENTITY ASSETS

Non-entity assets as of September 30, 2015 and 2014, consisted of the following:

(Dollars in thousands) 2015 2014

Intra-governmental

Funds with U.S. Treasury $ 4,925 $ 918

Investments 107,868 127,947

 112,793 128,865

Accounts receivable, net of allowance 172,602 104,185

Total non-entity assets 285,395 233,050

Total entity assets 65,941,767 59,887,223

$ 66,227,162 $ 60,120,273

NOTE 8 - DEBT

Debt during FY 2015 consisted of the following:

Balance at Balance at

September 30, Additional Repayment of Interest September 30,

(Dollars in thousands) 2014 Borrowing Debt Change 2015

Intra-governmental debt to Treasury

Unemployment Trust Fund

 Advances from U.S. Treasury $ 20,823,599 $ 300,000 $ (8,265,085) $ (18,449) $ 12,840,065

Black Lung Disability Trust Fund

 Borrowing from U.S. Treasury 5,872,219 585,000 (891,768) 121,670 5,687,121

$ 26,695,818 $ 885,000 $ (9,156,853) $ 103,221 $ 18,527,186

Debt during FY 2014 consisted of the following:

Balance at Balance at

September 30, Additional Repayment of Interest September 30,

(Dollars in thousands) 2013 Borrowing Debt Change 2014

Intra-governmental debt to Treasury

Unemployment Trust Fund

 Advances from U.S. Treasury $ 29,695,634 $ 2,700,000 $ (11,578,829) $ 6,794 $ 20,823,599

Black Lung Disability Trust Fund

 Borrowing from U.S. Treasury 6,026,639 496,000 (798,383) 147,963 5,872,219

$ 35,722,273 $ 3,196,000 $ (12,377,212) $ 154,757 $ 26,695,818
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

88 United States Department of Labor

NOTE 8 - DEBT - Continued

For the year ended September 30, 2015, interest expense for the UTF was $517.6 million, of which $479.9 million 

was paid, plus an additional interest payment of $56.1 million for interest accrued through September 30, 2014. For 

the year ended September 30, 2014, interest expense for the UTF was $780.3 million, of which $724.1 million was 

paid, plus an additional interest payment of $49.4 million for interest accrued through September 30, 2013.

For the year ended September 30, 2015, interest expense for the BLDTF was $216.0 million, of which $121.7 million 

was capitalized interest and $94.3 million was paid. For the year ended September 30, 2014, interest expense for 

the BLDTF was $223.8 million, of which $148.0 million was capitalized interest and $75.8 million was paid.

NOTE 9 - OTHER LIABILITIES

Other liabilities as of September 30, 2015 and 2014, consisted of the following:

(Dollars in thousands) 2015 2014

Intra-governmental

Non-entity receivables due to U.S. Treasury $ 172,894 $ 104,011

Accrued payroll and other liabilities 175,819 155,705

Total intra-governmental 348,713 259,716

Grant accruals 689,283 793,703

Capital lease liability 38,867 40,379

Environmental and disposal liability 33,393 31,063

Accrued payroll and other liabilities 88,974 79,451

Total other liabilities with the public 850,517 944,596

$ 1,199,230 $ 1,204,312

The amounts above are current liabilities, except for the capital leases and environmental and disposal liabilities. 

NOTE 10 - ACCRUED BENEFITS

Accrued benefits as of September 30, 2015 and 2014, consisted of the following:

(Dollars in thousands) 2015 2014

State regular and extended unemployment benefits payable $ 646,421 $ 543,540

Federal extended unemployment benefits payable 79,421 95,567

Federal emergency unemployment benefits payable 207,508 204,952

Federal employees' unemployment benefits payable 155,880 174,759

Federal additional unemployment benefits payable 25,812 28,340

Total unemployment benefits payable 1,115,042 1,047,158

Black lung disability benefits payable 20,623 22,381

Federal employees' disability and 10(h) benefits payable 134,697 121,686

Energy employees occupational illness compensation benefits payable 31,482 29,716

$ 1,301,844 $ 1,220,941
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 89 

NOTE 11 - FUTURE WORKERS' COMPENSATION BENEFITS

DOL’s liability for future workers’ compensation benefits as of September 30, 2015 and 2014, consisted of the 

following: 

(Dollars in thousands) 2015 2014

Projected gross liability of the Federal government

 for future FECA benefits $ 35,333,800 $ 36,550,420

Less liabilities attributed to other agencies:

U.S. Postal Service (15,736,693) (16,022,491)

Department of the Navy (2,217,153) (2,412,365)

Department of Homeland Security (2,506,660) (2,539,846)

Department of Veterans Affairs (2,243,606) (2,263,351)

Department of the Army (1,749,103) (1,866,670)

Department of Justice (1,654,319) (1,679,244)

Department of the Air Force (1,286,627) (1,395,204)

Department of Transportation (934,144) (999,991)

Department of Agriculture (893,121) (954,753)

Department of Defense, Other (803,782) (856,734)

Department of the Interior (774,798) (821,633)

Department of the Treasury (587,144) (615,139)

Tennessee Valley Authority (387,274) (427,367)

Social Security Administration (329,399) (348,538)

Department of Health and Human Services (271,198) (288,214)

Department of Commerce (209,304) (226,371)

General Services Administration (121,818) (132,817)

Department of Energy (95,810) (102,200)

Department of State (88,176) (96,054)

Department of Housing and Urban Development (68,657) (74,365)

National Aeronautics and Space Administration (43,072) (47,600)

Environmental Protection Agency (46,165) (49,060)

Small Business Administration (31,691) (34,627)

Agency for International Development (24,731) (26,520)

Office of Personnel Management (22,825) (25,692)

Department of Education (14,549) (16,328)

Nuclear Regulatory Commission (6,040) (6,669)

National Science Foundation (1,215) (1,330)

Other (705,461) (723,801)

 (33,854,535) (35,054,974)

$ 1,479,265 $ 1,495,446

Projected liability of the Department of Labor for future FECA benefits

FECA benefits not chargeable to other Federal agencies payable by

 DOL's Federal Employees' Compensation Act Special Benefit Fund $ 1,223,125 $ 1,217,382

FECA benefits due to eligible workers of DOL and Job Corps enrollees 218,055 234,974

FECA benefits due to eligible workers of the Panama Canal Commission 38,085 43,090

$ 1,479,265 $ 1,495,446
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

90 United States Department of Labor

NOTE 12 - LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

Liabilities not covered by budgetary resources as of September 30, 2015 and 2014, consisted of the following:

(Dollars in thousands) 2015 2014

Intra-governmental

Debt $ 18,527,186 $ 26,695,818

Future workers' compensation benefits 150,736 106,167

Accrued annual leave 109,125 116,755

Other liabilities 67,969 64,320

 327,830 287,242

Total liabilities not covered by budgetary resources 18,855,016 26,983,060

Total liabilities covered by budgetary resources 18,881,357 20,021,448

$ 37,736,373 $ 47,004,508

NOTE 13 - CONTINGENCIES

The Department is involved in various lawsuits incidental to its operations. In the opinion of management, the 

ultimate resolution of pending litigation will not have a material effect on the Department’s financial position.

NOTE 14 - PENSION EXPENSE 

Pension expense in FY 2015 consisted of the following:

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System $ 8,855 $ 23,746 $ 32,601

Federal Employees' Retirement System 171,759 12,545 184,304

Thrift Savings Plan 57,630 - 57,630

$ 238,244 $ 36,291 $ 274,535

Pension expense in FY 2014 consisted of the following:

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System $ 10,417 $ 27,197 $ 37,614

Federal Employees' Retirement System 151,085 25,104 176,189

Thrift Savings Plan 55,252 - 55,252

$ 216,754 $ 52,301 $ 269,055
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 91 

NOTE 15 - NET COST OF OPERATIONS

Note 15 A and B present detailed cost and revenue information by program and program agency (responsibility 

segment) in support of the summary information presented in the Consolidated Statements of Net Cost for FY 2015 

and FY 2014, respectively. Note 15 C presents a further breakdown of this cost and revenue information for DOL’s 

two largest program agencies, ETA, and the OWCP. (See Note 1-A.1 and 1-S)
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

92 United States Department of Labor

NOTE 15 - NET COST OF OPERATIONS - Continued

A. Consolidating Statements of Net Cost by Program Agency

Net cost of operations by program agency for the year ended September 30, 2015, consisted of the following:

Employment Office of Workers' Office Occupational

and Training Compensation of Safety and Health

(Dollars in thousands) Administration Programs Job Corps Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental $ 632,423 $ 307,848 $ - $ -

With the public 36,839,537 3,595,476 - -

 Gross cost 37,471,960 3,903,324 - -

Intra-governmental earned revenue (704,239) (3,051,212) - -

Public earned revenue - (1,172) - -

 Less earned revenue (704,239) (3,052,384) - -

Net program cost 36,767,721 850,940 - -

 Employment and training

Intra-governmental 46,026 - 32,142 -

With the public 4,326,986 - 1,572,810 -

 Gross cost 4,373,012 - 1,604,952 -

Intra-governmental earned revenue (12,854) - (104) -

Public earned revenue - - - -

 Less earned revenue (12,854) - (104) -

Net program cost 4,360,158 - 1,604,848 -

 Labor, employment and pension

 standards

Intra-governmental - - - -

With the public - - - -

 Gross cost - - - -

Intra-governmental earned revenue - - - -

Public earned revenue - - - -

 Less earned revenue - - - -

Net program cost - - - -

 Worker safety and health

Intra-governmental - - - 134,341

With the public - - - 480,133

 Gross cost - - - 614,474

Intra-governmental earned revenue - - - -

Public earned revenue - - - (1,210)

 Less earned revenue - - - (1,210)

Net program cost - - - 613,264

OTHER PROGRAMS

 Statistics

Intra-governmental - - - -

With the public - - - -

 Gross cost - - - -

Intra-governmental earned revenue - - - -

Public earned revenue - - - -

 Less earned revenue - - - -

Net program cost - - - -

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - -

 Less earned revenue not attributed to programs - - - -

Net cost not assigned to programs - - - -

Net cost of operations $ 41,127,879 $ 850,940 $ 1,604,848 $ 613,264
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 93 

Bureau of Mine Safety Employee Benefits Veterans' Wage and Other

Labor and Health Security Employment Hour Program 

Statistics Administration Administration and Training Division Agencies Total

$ - $ - $ 492 $ 33 $ - $ - $ 940,796

 - - 2,108 141 - 6,274 40,443,536

 - - 2,600 174 - 6,274 41,384,332

 - - (997) (66) - - (3,756,514)

 - - - - - - (1,172)

 - - (997) (66) - - (3,757,686)

 - - 1,603 108 - 6,274 37,626,646

 - - - 13,662 8 - 91,838

 - - - 253,374 - 757 6,153,927

 - - - 267,036 8 757 6,245,765

 - - - (208) - (330) (13,496)

 - - - - - - -

 - - - (208) - (330) (13,496)

 - - - 266,828 8 427 6,232,269

 - 83 58,382 419 100,795 63,561 223,240

 - 180 170,478 7,881 212,265 250,836 641,640

 - 263 228,860 8,300 313,060 314,397 864,880

 - - (6,822) (45) - (4,967) (11,834)

 - - - - - - -

 - - (6,822) (45) - (4,967) (11,834)

 - 263 222,038 8,255 313,060 309,430 853,046

 - 135,551 - - - - 269,892

 - 305,645 - - - 4 785,782

 - 441,196 - - - 4 1,055,674

 - (1,347) - - - - (1,347)

 - (1,875) - - - - (3,085)

 - (3,222) - - - - (4,432)

 - 437,974 - - - 4 1,051,242

 216,033 - - - - - 216,033

 429,517 - - - - 10 429,527

 645,550 - - - - 10 645,560

 (28,364) - - - - - (28,364)

 (459) - - - - - (459)

 (28,823) - - - - - (28,823)

 616,727 - - - - 10 616,737

 - - - - - 17,825 17,825

 - - - - - (572) (572)

 - - - - - 17,253 17,253

$ 616,727 $ 438,237 $ 223,641 $ 275,191 $ 313,068 $ 333,398 $ 46,397,193
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

94 United States Department of Labor

NOTE 15 - NET COST OF OPERATIONS - Continued

B. Consolidating Statements of Net Cost by Program Agency 

Net cost of operations by program agency for the year ended September 30, 2014, consisted of the following:

Employment Office of Workers' Office Occupational

and Training Compensation of Safety and Health

(Dollars in thousands) Administration Programs Job Corps Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental $ 889,609 $ 307,020 $ - $ -

With the public 45,040,591 4,509,356 - -

 Gross cost 45,930,200 4,816,376 - -

Intra-governmental earned revenue (831,755) (2,964,728) - -

Public earned revenue (310) (9,490) - -

 Less earned revenue (832,065) (2,974,218) - -

Net program cost 45,098,135 1,842,158 - -

 Employment and training

Intra-governmental 41,310 - 28,677 -

With the public 4,415,412 - 1,508,563 -

 Gross cost 4,456,722 - 1,537,240 -

Intra-governmental earned revenue (99) - (24) -

Public earned revenue - - - -

 Less earned revenue (99) - (24) -

Net program cost 4,456,623 - 1,537,216 -

 Labor, employment and pension

 standards

Intra-governmental - - - -

With the public - - - -

 Gross cost - - - -

Intra-governmental earned revenue - - - -

Public earned revenue - - - -

 Less earned revenue - - - -

Net program cost - - - -

 Worker safety and health

Intra-governmental - - - 119,419

With the public - - - 481,052

 Gross cost - - - 600,471

Intra-governmental earned revenue - - - (376)

Public earned revenue - - - (1,846)

 Less earned revenue - - - (2,222)

Net program cost - - - 598,249

OTHER PROGRAMS

 Statistics

Intra-governmental - - - -

With the public - - - -

 Gross cost - - - -

Intra-governmental earned revenue - - - -

Public earned revenue - - - -

 Less earned revenue - - - -

Net program cost - - - -

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - -

 Less earned revenue not attributed to programs - - - -

Net cost not assigned to programs - - - -

Net cost of operations $ 49,554,758 $ 1,842,158 $ 1,537,216 $ 598,249
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 95 

Bureau of Mine Safety Employee Benefits Veterans' Wage and Other

Labor and Health Security Employment Hour Program 

Statistics Administration Administration and Training Division Agencies Total

$ - $ - $ 396 $ 26 $ - $ - $ 1,197,051

 - - 1,716 114 - 8,662 49,560,439

 - - 2,112 140 - 8,662 50,757,490

 - - (227) (15) - - (3,796,725)

 - - - - - - (9,800)

 - - (227) (15) - - (3,806,525)

 - - 1,885 125 - 8,662 46,950,965

 - - - 10,967 9 2,734 83,697

 - - - 252,220 48 7,349 6,183,592

 - - - 263,187 57 10,083 6,267,289

 - - - (53) - (75) (251)

 - - - - - - -

 - - - (53) - (75) (251)

 - - - 263,134 57 10,008 6,267,038

 - 77 56,671 332 86,258 59,158 202,496

 - 168 163,999 7,650 214,867 195,914 582,598

 - 245 220,670 7,982 301,125 255,072 785,094

 - - (230) (10) (5) (1,359) (1,604)

 - - (2) - (2,800) - (2,802)

 - - (232) (10) (2,805) (1,359) (4,406)

 - 245 220,438 7,972 298,320 253,713 780,688

 - 125,790 - - - - 245,209

 - 320,027 - - - - 801,079

 - 445,817 - - - - 1,046,288

 - (312) - - - - (688)

 - (2,026) - - - - (3,872)

 - (2,338) - - - - (4,560)

 - 443,479 - - - - 1,041,728

 222,862 - - - - - 222,862

 412,815 - - - - - 412,815

 635,677 - - - - - 635,677

 (17,196) - - - - - (17,196)

 - - - - - - -

 (17,196) - - - - - (17,196)

 618,481 - - - - - 618,481

 - - - - - 30,394 30,394

 - - - - - (296) (296)

 - - - - - 30,098 30,098

$ 618,481 $ 443,724 $ 222,323 $ 271,231 $ 298,377 $ 302,481 $ 55,688,998
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

96 United States Department of Labor

NOTE 15 - NET COST OF OPERATIONS – Continued

C. Statements of Net Cost - Employment and Training Administration and Office of Workers’ Compensation 

Programs

Net cost of operations for the year ended September 30, 2015, consisted of the following:

Employment Office of Workers'

and Training Compensation

(Dollars in thousands) Administration Programs

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 31,742,589 $ 3,296,197

Grants 3,930,663 -

Interest 518,896 215,960

Administrative and other 1,279,812 391,167

 Gross cost 37,471,960 3,903,324

Less earned revenue (704,239) (3,052,384)

Net program cost 36,767,721 850,940

 Employment and training

Grants 4,122,522 -

Administrative and other 250,490 -

 Gross cost 4,373,012 -

Less earned revenue (12,854) -

Net program cost 4,360,158 -

Net cost of operations $ 41,127,879 $ 850,940

Net cost of operations for the year ended September 30, 2014, consisted of the following:

Employment Office of Workers'

and Training Compensation

(Dollars in thousands) Administration Programs

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 39,588,100 $ 4,213,783

Grants 4,243,834 -

Interest 781,245 223,823

Administrative and other 1,317,021 378,770

 Gross cost 45,930,200 4,816,376

Less earned revenue (832,065) (2,974,218)

Net program cost 45,098,135 1,842,158

 Employment and training

Grants 4,166,872 -

Administrative and other 289,850 -

 Gross cost 4,456,722 -

Less earned revenue (99) -

Net program cost 4,456,623 -

Net cost of operations $ 49,554,758 $ 1,842,158
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 97 

NOTE 16 - NON-EXCHANGE REVENUE

Non-exchange revenues reported on the Consolidated Statements of Changes in Net Position in FY 2015 and 

FY 2014 consisted of the following:

(Dollars in thousands) 2015 2014

Employer taxes

Unemployment Trust Fund

State unemployment taxes $ 40,157,002 $ 44,100,597

Federal unemployment taxes 8,919,451 8,469,495

 49,076,453 52,570,092

Black Lung Disability Trust Fund excise taxes 552,435 580,779

 49,628,888 53,150,871

Interest

Unemployment Trust Fund 1,193,972 1,205,037

Other 891 1,289

 1,194,863 1,206,326

Reimbursement of unemployment benefits and other 1,910,132 2,177,300

$ 52,733,883 $ 56,534,497

NOTE 17 - TRANSFERS WITHOUT REIMBURSEMENT

Transfers from other Federal agencies in FY 2015 and FY 2014 consisted of the following:

(Dollars in thousands) 2015 2014

Budgetary financing sources

From H-1B Nonimmigrant Petitioner Account, Department of Homeland Security and other $ 242,522 $ 223,423

Other financing sources

From General Services Administration 4,544 6,498

$ 247,066 $ 229,921

The balance of $242.5 million and $223.4 million in budgetary financing sources for FY 2015 and FY 2014, reflect the 

elimination of intra-DOL transfers of ($3.7) billion and $1 billion, respectively.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

98 United States Department of Labor

NOTE 18 - STATUS OF BUDGETARY RESOURCES

A. Apportionment Categories of Obligations Incurred

Obligations incurred reported on the Combined Statements of Budgetary Resources in FY 2015 and FY 2014

consisted of the following:

(Dollars in thousands) 2015 2014

Direct obligations

Category A $ 4,632,926 $ 4,840,064

Category B 8,988,042 14,883,429

Exempt from apportionment 37,611,645 47,125,978

Total direct obligations 51,232,613 66,849,471

Reimbursable obligations

Category A 331,222 293,824

Category B 3,125,258 2,777,857

Total reimbursable obligations 3,456,480 3,071,681

$ 54,689,093 $ 69,921,152

B. Permanent Indefinite Appropriations

DOL’s permanent indefinite appropriations include trust funds, the FAUC Fund, the Panama Canal Commission 

Compensation Fund, the Energy Employees Occupational Illness Compensation Fund, ETA and WHD H-1B funds, 

ETA’s Advances and Payments to the UTF, Short-Time Compensation, and portions of State Unemployment 

Insurance and Employment Service Operations and Federal Unemployment Benefits and Allowances. These funds 

are described in Note 1-A.3. As of September 30, 2015 and 2014, the Department returned unobligated, indefinite 

authority to Treasury in the amount of $2.1 billion and $1.35 billion, respectively. 

C. Legal Arrangements Affecting Use of Unobligated Balances

UTF receipts are reported as budget authority in the Combined Statements of Budgetary Resources. The portion of 

UTF receipts collected in the current year in excess of amounts needed to pay benefits and other valid obligations is 

classified as temporarily not available pursuant to public law at September 30. Therefore, these excess receipts are 

reported as a reduction to Appropriations and Unobligated Balances – Exempt from Apportionment in the 

Combined Statements of Budgetary Resources. Conversely, when obligations exceed receipts in the current year, 

amounts are drawn from the temporarily unavailable collections to increase current year Appropriations and 

Unobligated Balances – Exempt from Apportionment on the Combined Statements of Budgetary Resources to cover 

these obligations. All excess receipts are reported as assets of the UTF and are included in the Consolidated Balance 

Sheets.

The cumulative amounts of excess UTF receipts are denoted as unavailable collections in the Budget of the United 

States Government. The cumulative amount of these excess receipts as of September 30, 2015 and 2014,

reclassified from unobligated balances to UTF unavailable collections is presented on the following page.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 99 

NOTE 18 - STATUS OF BUDGETARY RESOURCES - Continued

C. Legal Arrangements Affecting Use of Unobligated Balances - Continued

(Dollars in millions) 2015 2014

Unemployment Trust Fund unavailable collections, beginning $ 31,807 $ 24,378

Budget authority from current year appropriations $ 45,088 $ 50,493

Budget authority from current year borrowing authority - 2,700

Less: obligations (36,275) (45,764)

Excess of budget authority over obligations 8,813 7,429

Unemployment Trust Fund unavailable collections, ending $ 40,620 $ 31,807

D. Explanation of Differences between the Combined Statement of Budgetary Resources and the Budget 

of the United States Government for FY 2014

The Budget of the United States Government with actual amounts for the year ended September 30, 2015, has not 

been published as of the issue date of these financial statements. This document will be available in February 2016 

at OMB’s website.

A reconciliation of budgetary resources, obligations incurred, distributed offsetting receipts, and net outlays, as 

presented in the Combined Statement of Budgetary Resources (SBR) for FY 2014, to amounts included in the 

Budget of the United States Government for the year ended September 30, 2014, is shown below.

(Dollars in millions)

 Budgetary 

Resources 

 Obligations 

Incurred 

Distributed 

Offsetting 

Receipts Net Outlays

Combined Statement of Budgetary Resources $ 74,533 $ 69,921 $ 6,482 $ 62,890

Pension Benefit Guaranty Corporation reported separately 22,938 6,008 - 230

Fiduciary activity 191 130 - 129

Expired accounts (1,568) (131) - -

Other (2) (2) - 1

Budget of the United States Government $ 96,092 $ 75,926 $ 6,482 $ 63,250

E. Undelivered Orders

Undelivered orders as of September 30, 2015 and 2014, were as follows:

(Dollars in thousands) 2015 2014

Undelivered orders $ 10,726,781 $ 12,075,285
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

100 United States Department of Labor

NOTE 18 - STATUS OF BUDGETARY RESOURCES - Continued

F. Appropriations Received

Appropriations from the Consolidated Statements of Changes in Net Position and the Combined Statements of 

Budgetary Resources are reconciled below.

(Dollars in millions) FY 2015 FY 2014

Appropriations Received, Consolidated Statements of Changes in Net Position $ 10,450 $ 16,857

Receipts recognized as revenue in current or prior years

Unemployment Trust Fund 44,239 54,645

Black Lung Disability Trust Fund 628 598

Other funds from dedicated collections 240 221

Repayment of debt from appropriated receipts

Unemployment Trust Fund (7,965) (11,579)

Black Lung Disability Trust Fund (307) (302)

Return of permanent indefinite authority (321) (901)

Reduction for sequestration, across the board reductions, and other (73) (103)

 36,441 42,579

Appropriations, Combined Statements of Budgetary Resources $ 46,891 $ 59,436

G. Borrowing Authority

As of September 30, 2015 and 2014, P.L. 113-235 and P.L. 113-76 (128 Stat. 352 dated January 17, 2014), 

respectively, granted borrowing authority for repayable advances and other debt in the amount of “such sums as 

may be necessary” to (1) the UTF for advances as authorized by sections 905(d) and 1203 of the Social Security Act 

and (2) the BLDTF for advances as authorized by section 9501(c)(1) of the Internal Revenue Code. Although section 

9501 of the Internal Revenue Code and P.L. 113-76 use the terminology “advance," the Treasury has interpreted 

this to mean any debt owed by the BLDTF to the Bureau of the Fiscal Service.

Borrowing authority for the UTF was $300 million (of which all was repaid) and $2.7 billion for FY 2015 and FY 2014, 

respectively. The borrowing authority was used to allow states to borrow, as necessary, from the Federal 

government to pay unemployment benefits. 

Borrowing authority for the BLDTF was $585 million and $496 million for FY 2015 and FY 2014, respectively. The 

borrowing authority was applied to repay debt of $585 million and $496 million for FY 2015 and FY 2014, 

respectively.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 101 

NOTE 19 - RECONCILIATION OF BUDGETARY RESOURCES OBLIGATED TO NET COST OF OPERATIONS 

(Dollars in thousands) FY 2015 FY 2014

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $ 54,689,093 $ 69,921,152

Recoveries of prior year unpaid obligations (564,577) (436,816)

Less: spending authority from offsetting collections (7,442,482) (7,604,889)

Obligations, net of offsetting collections and recoveries 46,682,034 61,879,447

Other resources

Imputed financing from costs absorbed by others 108,405 120,547

Transfers without Reimbursement 4,544 6,498

Exchange revenue not in budget (773,760) (738,077)

Total resources used to finance activities 46,021,223 61,268,415

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 received or provided 1,383,527 (444,498)

Resources that finance the acquisition of assets (87,620) (93,847)

Transfers that do not affect the net cost of operations (39,807) (5,012,892)

Total resources used to finance items not part of the net cost of operations 1,256,100 (5,551,237)

Total resources used to finance the net cost of operations 47,277,323 55,717,178

Components of the net cost of operations that will not require or generate

 resources in the current period

Components requiring or generating resources in other periods

Increase (decrease) in annual leave liability (7,191) 691

Increase (decrease) in benefits liabilities (1,178,056) (189,774)

Increase in capitalized interest 121,670 147,963

Others 10,674 (75,871)

Total (1,052,903) (116,991)

Components not requiring or generating resources

Depreciation and amortization 82,619 71,683

Revaluation of assets and liabilities 853,461 904,334

Benefit overpayments (763,307) (887,206)

Total 172,773 88,811

Total components of the net cost of operations that will not

 require or generate resources in the current period (880,130) (28,180)

Net cost of operations $ 46,397,193 $ 55,688,998
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

102 United States Department of Labor

NOTE 20 - CUSTODIAL REVENUE

Custodial revenues in FY 2015 consisted of the following:

Net Cash Increase

Collections (Decrease) in

and Transfers to Amounts to

U.S. Treasury be Collected Total

(Dollars in thousands) General Fund and Transferred Revenues

Civil monetary penalties

Occupational Safety and Health Administration $ 103,060 $ 76,803 $ 179,863

Mine Safety and Health Administration 70,207 (787) 69,420

Employee Benefits Security Administration 18,159 (642) 17,517

Wage and Hour Division 35,721 1,667 37,388

 227,147 77,041 304,188

Other custodial activity

Employment and Training Administration

 and other agencies 5,739 (9,719) (3,980)

$ 232,886 $ 67,322 $ 300,208

Custodial revenues in FY 2014 consisted of the following:

Net Cash Increase

Collections (Decrease) in

and Transfers to Amounts to

U.S. Treasury be Collected Total

(Dollars in thousands) General Fund and Transferred Revenues

Civil monetary penalties

Occupational Safety and Health Administration $ 102,966 $ (5,714) $ 97,252

Mine Safety and Health Administration 79,869 (5,480) 74,389

Employee Benefits Security Administration 21,688 506 22,194

Wage and Hour Division 32,734 (16) 32,718

 237,257 (10,704) 226,553

Other custodial activity

Employment and Training Administration

 and other agencies 3,219 (326) 2,893

$ 240,476 $ (11,030) $ 229,446
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 103 

NOTE 21 – FUNDS FROM DEDICATED COLLECTIONS

DOL is responsible for the operation of certain funds from dedicated collections. Other funds from dedicated 

collections include Gifts and Bequests, Panama Canal Commission Compensation Fund, and H-1B Funds. The 

financial position of the funds from dedicated collections as of September 30, 2015, is shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury $ 37,332 $ 37,192 $ 785,047 $ 859,571

Investments 44,601,914 - 42,564 44,644,478

Accounts receivable

Due from other Federal agencies

 for UCFE and UCX benefits 281,752 - - 281,752

Other - - 6,033 6,033

Total intra-governmental 44,920,998 37,192 833,644 45,791,834

Accounts receivable, net of allowance

State unemployment tax 415,295 - - 415,295

Due from reimbursable employers 540,481 - - 540,481

Benefit overpayments 564,823 17,667 - 582,490

Other 69 - 3 72

Advances 1,323,196 - 1 1,323,197

Other - - 498 498

Total assets $ 47,764,862 $ 54,859 $ 834,146 $ 48,653,867

Liabilities

Intra-governmental

Accounts payable to DOL agencies $ 1,689,100 $ - $ 54 $ 1,689,154

Debt 12,840,065 5,687,121 - 18,527,186

Amounts held for the Railroad

 Retirement Board 106,819 - - 106,819

Other - 1 9,967 9,968

Total intra-governmental 14,635,984 5,687,122 10,021 20,333,127

Accounts payable - - 5,221 5,221

Future workers' compensation benefits - - 38,085 38,085

Accrued benefits 1,089,230 11,945 - 1,101,175

Other liabilities - - 22,942 22,942

Total liabilities 15,725,214 5,699,067 76,269 21,500,550

Net position

Cumulative results of operations 32,039,648 (5,644,208) 757,877 27,153,317

Total liabilities and net position $ 47,764,862 $ 54,859 $ 834,146 $ 48,653,867
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

104 United States Department of Labor

NOTE 21 - FUNDS FROM DEDICATED COLLECTIONS - Continued

The net results of operations of the funds from dedicated collections for the year ended September 30, 2015, are 

shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits $ (31,754,445) $ (162,347) $ - $ (31,916,792)

Grants - - (113,853) (113,853)

Interest (518,896) (215,958) - (734,854)

Administrative and other (1,064,603) (4,451) (71,121) (1,140,175)

 (33,337,944) (382,756) (184,974) (33,905,674)

Earned revenue 707,896 - - 707,896

Net cost of operations (32,630,048) (382,756) (184,974) (33,197,778)

Net financing sources

Taxes 49,076,453 552,435 - 49,628,888

Interest 1,193,972 840 51 1,194,863

Reimbursement of unemployment benefits and other 1,902,743 - - 1,902,743

Imputed financing - - 2,868 2,868

Transfers-in

Department of Homeland Security - - 257,443 257,443

DOL entities 42,485 - - 42,485

Transfers-out

DOL entities (3,905,721) (59,375) - (3,965,096)

Other - - (17,600) (17,600)

 48,309,932 493,900 242,762 49,046,594

Change in net position 15,679,884 111,144 57,788 15,848,816

Net position, beginning of period 16,359,764 (5,755,352) 700,089 11,304,501

Net position, end of period $ 32,039,648 $ (5,644,208) $ 757,877 $ 27,153,317
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 105 

NOTE 21 - FUNDS FROM DEDICATED COLLECTIONS - Continued

The financial position of the funds from dedicated collections as of September 30, 2014, is shown below. See Note 

2 for the explanation of the negative FBWT.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury $ (4,064) $ 111,966 $ 729,190 $ 837,092

Investments 36,104,271 - 47,613 36,151,884

Accounts receivable

Due from other Federal agencies

 for UCFE and UCX benefits 348,885 - - 348,885

Other - - 3,060 3,060

Total intra-governmental 36,449,092 111,966 779,863 37,340,921

Accounts receivable, net of allowance

State unemployment tax 423,893 - - 423,893

Due from reimbursable employers 648,812 - - 648,812

Benefit overpayments 655,009 17,410 - 672,419

Other 84 - 2 86

Advances 2,134,502 - - 2,134,502

Other - - 652 652

Total assets $ 40,311,392 $ 129,376 $ 780,517 $ 41,221,285

Liabilities

Intra-governmental

Accounts payable to DOL agencies $ 1,983,842 $ - $ 1 $ 1,983,843

Debt 20,823,599 5,872,219 - 26,695,818

Amounts held for the Railroad

 Retirement Board 125,370 - - 125,370

Other - 1 10,238 10,239

Total intra-governmental 22,932,811 5,872,220 10,239 28,815,270

Accounts payable - - 4,204 4,204

Future workers' compensation benefits - - 43,090 43,090

Accrued benefits 1,018,818 12,508 - 1,031,326

Other liabilities - - 22,894 22,894

Total liabilities 23,951,629 5,884,728 80,427 29,916,784

Net position

Cumulative results of operations 16,359,763 (5,755,352) 700,090 11,304,501

Total liabilities and net position $ 40,311,392 $ 129,376 $ 780,517 $ 41,221,285
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

106 United States Department of Labor

NOTE 21 – FUNDS FROM DEDICATED COLLECTIONS - Continued

The net results of operations of the funds from dedicated collections for the year ended September 30, 2014, are

shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits $ (39,597,023) $ (164,812) $ - $ (39,761,835)

Grants - - (94,112) (94,112)

Interest (781,245) (223,823) - (1,005,068)

Administrative and other (1,117,028) - (77,940) (1,194,968)

 (41,495,296) (388,635) (172,052) (42,055,983)

Earned revenue 827,220 - - 827,220

Net cost of operations (40,668,076) (388,635) (172,052) (41,228,763)

Net financing sources

Taxes 52,570,092 580,779 - 53,150,871

Interest 1,205,037 1,223 66 1,206,326

Reimbursement of unemployment benefits and other 2,171,480 - - 2,171,480

Imputed financing - - 3,284 3,284

Transfers-in

Department of Homeland Security - - 237,624 237,624

DOL entities 5,015,034 - - 5,015,034

Transfers-out

DOL entities (4,141,947) (54,497) - (4,196,444)

Other - - (16,343) (16,343)

 56,819,696 527,505 224,631 57,571,832

Change in net position 16,151,620 138,870 52,579 16,343,069

Net position, beginning of period 208,143 (5,894,222) 647,511 (5,038,568)

Net position, end of period $ 16,359,763 $ (5,755,352) $ 700,090 $ 11,304,501
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

FY 2015 Agency Financial Report 107 

NOTE 22 - FIDUCIARY ACTIVITY

The schedule of fiduciary activity and net assets for the fiduciary funds for the year ended and as of September 30, 

2015, is shown below.

Longshore District of

Wage and Hour and Harbor Columbia

and Public Workers' Workmen's

Contracts Compensation Compensation Davis-Bacon Total

Restitution Act Trust Act Trust Act Trust Fiduciary

(Dollars in thousands) Fund Fund Fund Fund Funds

Fiduciary activity

Assessments $ 70,814 $ 112,528 $ 7,259 $ - $ 190,601

Transfer of funds from GAO - - - - -

Investment earnings - 8 1 - 9

Administrative and other - 5 (1) 7 11

Transfer of funds to Treasury (20,293) (2,177) - - (22,470)

Disbursements to beneficiaries (52,778) (114,639) (7,826) (7) (175,250)

Increase (decrease) in fiduciary net assets (2,257) (4,275) (567) - (7,099)

Fiduciary net assets, beginning of year 164,152 20,560 2,764 - 187,476

Fiduciary net assets, end of year $ 161,895 $ 16,285 $ 2,197 $ - $ 180,377

Fiduciary assets

Cash $ 158,375 $ 95 $ 1 $ 5,270 $ 163,741

Investments - 51,900 3,837 - 55,737

Other assets 3,520 3,007 834 - 7,361

Less: liabilities - (38,717) (2,475) (5,270) (46,462)

Total fiduciary net assets $ 161,895 $ 16,285 $ 2,197 $ - $ 180,377

The schedule of fiduciary activity and net assets for the fiduciary funds for the year ended and as of September 30, 

2014, is shown below.

Longshore District of

Wage and Hour and Harbor Columbia

and Public Workers' Workmen's

Contracts Compensation Compensation Davis-Bacon Total

Restitution Act Trust Act Trust Act Trust Fiduciary

(Dollars in thousands) Fund Fund Fund Fund Funds

Fiduciary activity

Assessments $ 71,778 $ 119,053 $ 6,111 $ - $ 196,942

Transfer of funds from GAO - - - 5,277 5,277

Investment earnings - 12 2 - 14

Administrative and other - 32 2 (5,277) (5,243)

Transfer of funds to Treasury (17,643) (2,142) - - (19,785)

Disbursements to beneficiaries (39,767) (119,084) (8,197) - (167,048)

Increase (decrease) in fiduciary net assets 14,368 (2,129) (2,082) - 10,157

Fiduciary net assets, beginning of year 149,784 22,689 4,846 - 177,319

Fiduciary net assets, end of year $ 164,152 $ 20,560 $ 2,764 $ - $ 187,476

Fiduciary assets

Cash $ 162,542 $ 1 $ 2 $ 5,277 $ 167,822

Investments - 58,693 4,432 - 63,125

Other assets 1,610 2,467 42 - 4,119

Less: liabilities - (40,601) (1,712) (5,277) (47,590)

Total fiduciary net assets $ 164,152 $ 20,560 $ 2,764 $ - $ 187,476
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2015 and 2014

108 United States Department of Labor

Note 22 - FIDUCIARY ACTIVITY - Continued

The FY 2014 audits were performed on the Longshore and Harbor Workers’ Compensation Act Trust Fund and the 

District of Columbia Workmen’s Compensation Act Trust Fund and are available on DOL's website.

NOTE 23 - MATERIAL CONCENTRATION OF RISK

The Division of FEC within OWCP administers the payment of workers' compensation benefits to federal and postal 

workers for employment-related injuries and occupational diseases. Federal agencies and the U.S. Postal Service 

(USPS) reimburse the FECA Special Benefit Fund for payments made on behalf of its workers. In Note 11, Future 

Workers’ Compensation Benefits, the USPS liability as of September 30, 2015, of $15.7 billion represents the largest 

portion of the total projected gross liability of the Federal government for future FECA benefits attributed to other 

agencies of $33.8 billion as of September 30, 2015. 

In October 2014, USPS timely reimbursed the FECA Special Benefit Fund for costs incurred on its behalf during the 

12 months ended June 30, 2014. In October 2015, USPS reimbursed the FECA Special Benefit Fund nearly $1.4 

billion for costs incurred on its behalf during the 12 months ended June 30, 2015, but excluded $68 million from its 

reimbursement. The USPS disclosed its lack of liquidity in its FY 2014 audited financial statements and it’s FY 2015 

interim unaudited financial statements. The USPS’s portion of the FECA actuarial liability as of September 30, 2015, 

together with the USPS’s poor financial condition, represent a material concentration of risk for the Department. 

NOTE 24 - SUBSEQUENT EVENTS

Except for the USPS October 2015 reimbursement to the FECA Special Benefit Fund as disclosed in Note 4 and Note 

23, management has determined that there are no subsequent events requiring accrual or disclosure through 

November 19, 2015.
Required Supplementary Stewardship Information

(Unaudited)
Financial Section

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

110 United States Department of Labor

STEWARDSHIP INVESTMENTS IN HUMAN CAPITAL

Stewardship investments are made by DOL on behalf of the nation, providing long-term benefits that cannot be 

measured in traditional financial reports. These investments are made for the general public, and are intended to 

maintain or increase national economic productive capacity. DOL’s stewardship investments are in human capital, 

reported as employment and training expenses in DOL’s net cost of operations. Within DOL, the Employment and 

Training Administration (ETA), including the Office of Job Corps (OJC), and the Veterans’ Employment and Training 

Service (VETS) administer training programs that invest in human capital.

Employment and Training Administration, Including the Office of Job Corps

ETA, including the Office of Job Corps, incurred total net costs of $42.7 billion in FY 2015. The majority of these 

costs consisted of unemployment benefits, which totaled $31.7 billion in FY 2015, a decrease of $7.9 billion (-19.9%) 

over the previous fiscal year. Also included in ETA’s total net costs were investments in human capital of $4.4

billion, which provided services to over 8.2 million participants in FY 2015. These investments were made through 

job training programs authorized by the Workforce Investment Act of 1998 (WIA), Title V of the Older Americans 

Act, as amended, the Trade Act of 1974, as amended, the Health Care and Education Reconciliation Act of 2010, the 

National Apprenticeship Act of 1937, the American Recovery and Reinvestment Act of 2009 (ARRA) and other 

legislation.

Within ETA the Office of Job Corps also invests in human capital through WIA’s Job Corps training program. OJC’s 

investment in human capital in FY 2015 was $1.6 billion, providing services to 109.5 thousand participants in 

primarily residential settings at 125 Job Corps centers. The ETA and OJC job training programs authorized by WIA 

are discussed below.

Adult, Dislocated Worker, Youth and Job Corps Programs

Authorized by the Workforce Investment Act (WIA) of 1998

• Adult employment and training programs – ETA awards grants to states to design and operate training 

and employment assistance programs for disadvantaged adults, including public assistance recipients. ETA’s 

FY 2015 investment in human capital through WIA adult programs was $852 million.

• Dislocated worker employment and training programs – ETA awards grants to states to provide 

reemployment services and retraining assistance to individuals dislocated from their employment. ETA’s 

FY2015 investment in human capital through WIA dislocated worker programs was $1.2 billion.

• Youth programs – ETA awards grants to states to support a wide range of program activities and services 

to prepare low-income youth for academic and employment success, including summer jobs, by linking 

academic and occupational learning with youth development activities. ETA’s FY 2015 investment in human 

capital through WIA youth programs was $878 million.

• Job Corps program – ETA’s Office of Job Corps awards contracts to support a system of primarily 

residential centers offering basic academic education, career technical training, work experience and other 

support, to economically disadvantaged youth. Large and small corporations and non-profit organizations 

manage and operate 97 Job Corps centers under these contractual arrangements. The remaining 28 centers 

are operated through interagency agreements between DOL and the U.S. Department of Agriculture. In 

addition, 24 operators are contracted to provide outreach and admissions and career transition services. 

OJC’s FY 2015 investment in human capital through the Job Corps program was $1.6 billion.

• Reintegration of Ex-Offenders programs – ETA supports programs to help individuals exiting prison make 

a successful transition to community life and long-term employment through the provision of mentoring 

and job training programs to promote the successful return of adult and juvenile ex-offenders into 

mainstream society. ETA’s FY 2015 investment in human capital through ex-offender programs was $69

million.
Annual Financial Statements

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 111 

• National programs – ETA’s National programs provide evaluation resources and program support for WIA 

activities; including nationally administered programs providing employment and training services to 

segments of the population that have special disadvantages in the labor market, including grants to 

federally recognized Indian tribes and other Native American governments or non-profit organizations, and 

to Migrant and Seasonal Farmworker service organizations. ETA’s FY 2015 human capital investment in WIA 

National Programs was $140 million.

Community Service Employment for Older Americans(CSEOA) Program

ETA also invests in human capital through the Community Service Employment for Older Americans program, 

authorized under Title V of the Older Americans Act, as amended in 2006. Known as the Senior Community Service 

Employment Program (SCSEP), the SCSEP is a federally sponsored community service employment and training 

program that provides part-time training through on-the-job work experience in community service activities for 

unemployed, low-income individuals ages 55 and older, so that they can prepare to enter or re-enter the 

workforce. ETA’s FY 2015 investment in human capital through the CSEOA’s SCSEP was $436 million.

Trade Adjustment Assistance for Workers Program

The TAA for Workers program was authorized by the Trade Act of 1974, as amended and reauthorized with 

expanded eligibility to service sector workers by the Trade and Globalization Adjustment Assistance Act of 2009. 

This expanded eligibility was extended through December 31, 2014, by the Trade Adjustment Assistance Extension 

Act of 2011. Further amendments made through the Trade Adjustment Assistance Reauthorization Act of 2015 

(TAARA 2015) reauthorized the TAA program through June 30, 2021, and changed group eligibility requirements, 

and individual benefits and services available under the TAA program. The TAA for Workers program provides cash 

benefits; job search and relocation allowances; employment services; and training to eligible workers displaced by 

international trade. Only TAA training costs are considered investments in human capital these costs were $232

million for FY 2015.

Trade Adjustment Assistance Community College and Career Training (TAACCCT) Grant Fund

Implemented in cooperation with the Department of Education, the TAACCCT program provides grants to eligible 

institutions of higher learning to improve education and employment outcomes for students. Authorized by the 

Trade Act of 1974 and Health Care and Education Reconciliation Act of 2010, the program enables educational 

institutions to prepare students to succeed in growing occupations by acquiring the skills necessary for high-wage, 

in-demand jobs. ETA’s FY 2015 human capital investment in the TAACCCT Grant Fund was $413 million.

National Apprenticeship Program

The National Apprenticeship Act of 1937 established the foundation for development of the nation’s skilled 

workforce through apprenticeship programs, which combine on-the-job learning with related technical instruction 

to teach workers the theoretical aspects of skilled occupations. Funding provides oversight for a national system of 

skilled and technical occupational training, which promotes apprentices, registers apprenticeship programs, 

certifies apprenticeship standards, and safeguards the welfare of apprentices. ETA’s FY 2015 investment in 

apprenticeship programs was $34 million.

Program Costs and Outputs

The cost of ETA and OJC investments in human capital and the participants served are shown in the chart below, for 

the five year period FY 2011 through FY 2015.
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112 United States Department of Labor 

ETA and OJC Investmentsin Human Capital

Program Costs (in Millions) and Participants Served (1) (in Thousands)

For The Five Year Period FY 2011 through FY 2015

2015 2014 2013 2012 2011

Program Costs

Part. 

Served Costs

Part. 

Served Costs

Part. 

Served Costs

Part. 

Served Costs

Part. 

Served

WIA(2)

Adult $852 6,520.8 $846 6,105.3 $883 6,761.5 $861 6,979.1 $960 7,025.2

Dislocated 

Worker (3) 1,165 655.3 1,189 853.8 1,329 1,340.4 1,524 1,358.4 2,039 1,570.6

Youth 878 200.3 905 204.1 942 224.0 944 239.6 1,124 245

Job Corps 1,605 109.5 1,537 109.6 1,525 79.6 1,770 97.5 1,717 99.4

Ex-Offenders 69 11.2 85 11.8 96 22.2 76 49.1 67 39

National 

Programs (4) 140 49.2 149 52.2 170 60.0 180 38.7 150 38.9

CSEOA

SCSEP 436 67.4 428 67.7 445 66.9 492 76.9 707 105.9

TAA for Workers 232 51.1 277 67.9 257 105.1 431 144.7 506 193.1

TAACCCT(5) 413 140.9 416 66.5 266 18.1

Apprenticeship 34 430.4 32 392.1 28 366.0 29 410.0 32 432.2

Other (6) 130 87.3 113 28.8 212 109.3 95 357.7 135 104.9

TOTAL $5,954 8,323.4 $5,977 7,959.8 $6,153 9,153.1 $6,402 9,751.7 $7,437 9,854.2

(1) Participant numbers are from grantee reports submitted for the Program Year (PY) ending on June 30 of the corresponding fiscal year. 

(2) WIA participant numbers are based on PY 2014 Quarter 4 reporting as the annual reports were not available as of the date of this report.

(3) Dislocated Worker programs include Community Based Job Training Grants and National Emergency Grants.

(4) National Programs include the Native American and Migrant and Seasonal Farmworker programs.

(5) TAACCCT participants served data is reported on a fiscal year basis which causes a one year lag in annual reporting. All TAACCCT participant counts are 

finalized January of the current fiscal year for the prior year ended.

(6) Other includes training programs for highly skilled occupations funded through H1-B fees, green jobs initiatives and costs for lapsed programs. (High 

Growth and Emerging industry grants were reclassified from Dislocated Workers to Other in FY 2013)

Program Outcomes

Outcomes for training programs comprising ETA’s investment in human capital are presented in the Department’s 

Annual Performance Report for FY 2015, available on the DOL website at www.dol.gov/_sec/media/reports/ in 

February 2016.

Veterans’ Employment and Training Service

The Veterans' Employment and Training Service (VETS) administers programs that address the employment, 

training, and job security needs of Americans who have served in uniform. VETS prepares America's veterans, 

service members and their spouses for meaningful careers, provides them with employment resources and 

expertise, protects their employment rights, and promotes their employment opportunities. 
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FY 2015 Agency Financial Report 113 

Program Activities

Jobs for Veterans State Grants (JVSG)

The Jobs for Veterans Act (JVA) of 2002, which allocates resources to the states through the JVSG program (38 

U.S.C. 4102A(b)(5)), supports the majority of VETS activities by funding two positions in the public workforce 

system:

• Disabled Veterans’ Outreach Program (DVOP) Specialists – The DVOP specialists (as required by 38 U.S.C. 

4103A), provide intensive services to meet the employment needs of veterans, including counseling, 

assessment, lifelong learning skills and referral to training, particularly to veterans with disabilities or those 

with barriers to employment.

• Local Veterans’ Employment Representatives (LVER) Staff – The LVER staff (as required by 38 U.S.C. 4104) 

conducts employer outreach on behalf of veterans, allowing states to develop marketing strategies and 

outreach activities that promote the hiring of veterans. The staff also educate partners within the American 

Job Center on current employment initiatives and programs for veterans.

Transition Assistance Program (TAP)

TAP (established by 10 U.S.C. 1144) operates as a partnership between the Departments of Labor, Defense, 

Homeland Security, Veterans Affairs, Education and the Small Business Administration. The program provides 

separating service members and their spouses or individuals retiring from military service with career counseling 

and training. TAP workshops are provided throughout the United States and overseas.

Homeless Veterans and Veterans’ Workforce Investment Programs

• Homeless Veterans’ Reintegration Program (HVRP) – The HVRP, codified at 38 U.S.C. 2021, provides 

employment assistance to homeless veterans through competitive grants to States or other entities in both 

urban and rural areas to operate employment programs to reach out to homeless veterans and help them 

become employed.

• Veterans’ Workforce Investment Program (VWIP) – The VWIP, (29 U.S.C. 2913), provides competitive 

grants for training and retraining of veterans to create highly skilled employment opportunities for targeted 

veterans.

Federal Management (VETS)

Federal management activities provide programs and policies to meet the employment and training needs of 

veterans. Resources are devoted to Uniformed Services Employment and Reemployment Rights Act (USERRA) of 

1994, codified at 38 U.S.C. Chapter 43, and Veterans’ Preference Rights (5 U.S.C. 2108, 3309) compliance and 

outreach. Activities, as discussed below:

• Uniformed Services Employment and Reemployment Rights Act and Veterans’ Preference Rights –

USERRA protects civilian job rights and benefits for veterans, members of the National Guard and Reserves. 

Veterans’ Preference for Federal Employment is codified in 5 U.S.C. 2108 and 3309. VETS promotes a 

productive relationship between employer and employee by educating both on the employment rights of 

the individual veterans.

Program Costs and Outputs

The full cost of VETS programs is presented in the Consolidated Statement of Net Cost. The costs of VETS 

investments in human capital, and the participants served by this investment, are presented below, by major 

program.
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114 United States Department of Labor 

VETS Investments in Human Capital

Program Costs and Participants Served (in Thousands)

For the Fiscal Years Ended FY 2011 through FY 2015.

2015 2014 2013 2012 2011

Program Cost Part. Served Cost Part. 

Served Cost Part. Served Cost(2) Part. Served Cost Part. Served

JVSG(1) 173,453 185.6 170,764 332.1 162,999 450.6 210,671 508.8 171,497 631.6

TAP(3) 13,917 177.7 14,103 207.0 13,176 187.0 13,093 153.0 7,089 143.1

USERRA(5) 12,782 7.6 12,487(6) 10.9 11,381 47.5 12,361 74.7 9,874 79.9

HVRP 38,146 17.0 36,885 16.1 40,691 17.4 35,562 19.8 28,385 17.0

VWIP(4) 1,564 1.7 1,894 2.1 2,157 1.9 9,855 4.3 7,863 3.9

TOTAL $239,862 389.6 $236,133 568.2 $230,404 704.4 $281,542 760.6 $224,708 875.5

(1) This category was previously broken into its constituent components of DVOPs and LVERs. However, to ensure consistency of each funding 

mechanism representing a single row, DVOPs and LVERs have been consolidated into a single row entitled JVSG - Jobs for Veterans State Grants.

(2) FY12 and prior cost allocated based on historical program cost.

(3) Department of Defense participant estimates, which are not finalized until the end of the first quarter of the following fiscal year.

(4) Public Law 113-6, Consolidated and Further Continuing Appropriations Act, 2013, did not provide funding for the Veterans’ Workforce 

Investment Program.

(5) USERRA Participants (USERRA Outreach Measure) reflects the number of people VETS connects with each year (service members, 

spouses, and employers) to inform them of their rights and responsibilities under the law.

(6) This reflects a correction to the previous year’s cost, which was inaccurately reported. The previously reported FY 2014 amount for 

USERRA of $37,997 included all costs for the Agency’s federal administration appropriation. However, previous submissions and the FY 2015 

submission record USERRA costs as 30% of federal administration.

Program Outcomes

Outcomes for the programs comprising VETS’ investment in human capital are presented in the Department’s 

Annual Performance Report for FY 2015, available in February 2016 on the DOL website at:

www.dol.gov/_sec/media/reports/.
Required Supplementary Information

(Unaudited)
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116 United States Department of Labor 

DEFERRED MAINTENANCE AND REPAIRS

DOL reports as general purpose property, plant and equipment (PP&E), Structures, facilities and improvements on 

which maintenance and repair activities may be deferred. Over 99.3% of these buildings and other structures 

(based on net book value) are owned by DOL’s ETA-OJC, and located at one hundred twenty-five (125) Job Corps 

centers throughout the United States. The remaining 0.7% is owned by the Department’s MSHA. Periodic 

maintenance is performed to keep these properties in acceptable condition, as determined by DOL management. It 

is DOL policy to evaluate PP&E regardless of recorded values and the asset management system does not make any 

distinction between capitalized and non-capitalized PP&E when it comes to maintenance and repairs. Therefore, 

DM&R estimates reported relate to PP&E, whether capitalized or not or fully depreciated. Management has not 

noted any structures, facilities and improvements which is not included in the DM&R estimates reported below.

Defining and Implementing Maintenance and Repairs (M&R) Policies in Practice

Condition assessment surveys are conducted every three years at each property to determine the current condition 

of buildings and structures (constructed assets) and the estimated maintenance cost to correct deficiencies. The 

method of assessment used has not changed from previous years. Surveys conducted during years one and two of 

the three year cycle are updated to reflect maintenance and repairs performed, and rolled up with current 

assessments to provide a condition assessment for the entire DOL portfolio of constructed assets. Condition 

assessment surveys are based on methods and standards consistently applied, including descriptions of the facility 

condition; standardized condition codes, classifications and categories; estimated costs of maintenance and repair 

actions and recommended maintenance schedules. As a part of these condition assessment surveys, deficiencies 

are identified in terms of architectural, mechanical, electrical, structural, and civil areas. Each deficiency is assigned 

a Facilities Condition Index (FCI) score(1) based on classification and categorization. 

Ranking and Prioritizing M&R Activities

Life Safety and Health deficiencies are funded immediately following the condition assessment surveys for 

correction. The remaining deficiencies are classified, categorized, and assigned an FCI score. In each construction, 

rehabilitation, and acquisition (CRA) budget, funding is allocated to accomplish the highest priority deficiencies 

based upon the FCI score. These deficiencies are funded for correction, while any remaining deficiencies become 

candidates for funding in a future CRA budget. 

Factors Considered in Setting Acceptable Condition

Condition assessment surveys are used to estimate the current plant replacement value and DM&R backlog for each

constructed asset. Plant replacement value and repair backlog are used to calculate an FCI score for each building 

and structure. These FCI scores determine the asset condition and contribute to the overall FCI score for each 

portfolio. Job Corps and MSHA have set the goal of achieving and maintaining an FCI score of 90% or greater for its 

portfolio of constructed assets (the standard used by the National Association of College and University Business 

Offices) as a level of acceptable condition for the periods reported. In 2014, the portfolio’s aggregate FCI score for 

4,231 constructed assets was 93.0%, and DM&R costs to return the portfolio to an acceptable condition were 

estimated at $198.9 million, as adjusted for SFFAS 42, Deferred Maintenance and Repairs: Amending Statements of 

Federal Financial Accounting Standards 6, 14, 29, and 32. In FY 2015, the portfolio’s aggregate FCI score for 4,389 

constructed assets was 93.0%, and DM&R costs to return the portfolio to an acceptable condition are estimated at 

$226.5 million. Factors considered in determining acceptable condition standards include health and life safety 

aspects as well as certain environmental and building code compliance elements. These deficiencies are prioritized 

and corrected first as they lead to unacceptable conditions. 

(1) FCI = 1 – (Repair Backlog / Plant Replacement Value). In general, an FCI score closer to 100% would indicate a more positive asset condition.
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FY 2015 Agency Financial Report 117

Asset Category FY 2015 Ending Balance FY 2015 Beginning Balance

Funded:

Structures, facilities and improvements 

 Active $87,569 $85,177

 Inactive 268 288

Subtotal, funded 87,837 85,465

Unfunded:

Structures, facilities and improvements 

 Active 138,428 112,394

 Inactive 211 1,028

Subtotal, unfunded 138,639 113,422

Total $ 226,476 $ 198,887

Significant Changes from Prior Year

The presentation of DM&R Costs reflects the reporting requirements effective in FY 2015 in accordance with SFFAS 

42; funded deficiencies as well as critical and programmatic deficiencies are included in the reported amounts. Due 

to the change in reporting requirements in accordance with SFFAS 42, the FY 2015 beginning balance was adjusted 

from $115.6 million reported as of September 30, 2014 in the FY 2014 Agency Financial Report to $198.9 million to 

include $5.0 million in critical and programmatic deficiencies and $78.3 million in funded deficiencies.

For reporting purposes, DOL has determined that changes of 10% and $25 million between fiscal year beginning and 

ending balances are significant. The significant increase of $26.0 million in unfunded deficiencies for active 

structures, facilities and improvements as of September 30, 2015 is a net result of new deficiencies identified during 

the annual facility survey process as well as prior deficiencies which may have had cost estimates updated for the 

current fiscal year. These deficiencies are currently undergoing review in order to make the appropriate funding 

determinations.
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118 United States Department of Labor

SOCIAL INSURANCE PROGRAMS

Federal Accounting Standards Advisory Board (FASAB) has classified certain government income transfer programs 

as social insurance programs. Recognizing that these programs have complex characteristics that do not fit 

traditional accounting models, the FASAB has developed accounting standards for social insurance programs which 

require the presentation of supplementary information to facilitate the assessment of the program’s long-term 

sustainability. 

DOL operates two programs classified under Federal accounting standards as social insurance programs, the UI 

Program and the Black Lung Disability Benefits Program. Presented below is the supplementary information for the 

two programs.

Unemployment Insurance Program

The UI Program was created in 1935 to provide income assistance to unemployed workers who lose their jobs 

generally through no fault of their own, and are unemployed due to a lack of suitable work. The program protects 

workers during temporary periods of unemployment through the provision of UC benefits. These benefits replace 

part of the unemployed worker’s lost wages and, in so doing, stabilize the economy during recessionary periods by 

increasing the unemployed worker’s purchasing power. The UI program operates counter cyclically, with benefits 

exceeding tax collections during recessionary periods and UI tax revenues exceeding benefit payments during 

periods of recovery.

Program Administration and Funding

The UI program is administered through a unique system of Federal-state partnerships, established in Federal law 

but executed through conforming state laws by state officials. The Federal government provides broad policy 

guidance and program direction through the oversight of DOL, while program details are established through 

individual state UI statutes, administered through state UI agencies.

Federal and State Unemployment Taxes 

The UI program is financed through the collection of Federal and state unemployment taxes levied on subject 

employers and deposited in the UTF and Federal appropriations. The UTF was established to account for the 

receipt, investment, and disbursement of unemployment taxes. Federal unemployment taxes are used to pay for 

the administrative costs of the UI program, including grants to each state to cover the costs of state UI operations 

and the Federal share of extended UI benefits. Federal unemployment taxes are also used to fund an account 

within the UTF, to make advances to state UI accounts that are unable to make benefit payments because the state 

UI account balance has been exhausted. State UI taxes are used exclusively for the payment of regular UI benefits, 

as well as the state’s share of EB. 

Federal Unemployment Taxes

Under the provisions of the FUTA, a Federal tax is levied on covered employers, at a current rate of 6.0% of 

the first $7,000 in annual wages paid to each employee. This Federal tax rate is reduced by a credit of up to 

5.4%, granted to employers paying state UI taxes under conforming state UI statutes. Accordingly, in 

conforming states, employers pay an effective Federal tax of 0.6%; employers in states with advances from 

the fund may pay a higher effective Federal tax rate because the Federal tax rate credit of 5.4% may be 

decreased in increments of 0.3% if a state has had an outstanding advance for more than two years. 

Additional Federal unemployment taxes collected as a result of the reduced Federal tax rate credit are used 
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FY 2015 Agency Financial Report 119

to pay down the state’s outstanding advance balance. Federal unemployment taxes are collected by the 

Internal Revenue Service. 

State Unemployment Taxes

In addition to the Federal tax, individual states finance their UI programs through state tax contributions 

from subject employers based on the wages of covered employees. (Three states also collect contributions 

from employees.) Within Federal confines, state tax rates are assigned in accordance with an employer’s 

experience with unemployment. Actual tax rates vary greatly among the states and among individual 

employers within a state. At a minimum, these rates must be applied to the Federal tax base of $7,000; 

however, states may adopt a higher wage base than the minimum established by FUTA. State UI agencies 

are responsible for the collection of state unemployment taxes.

 

Unemployment Trust Fund

Federal and state UI taxes are deposited into designated accounts within the UTF. The UTF was established under 

the authority of Title IX, Section 904 of the Social Security Act of 1935, as amended, to receive, hold, invest, loan, 

and disburse Federal and state UI taxes. The U.S. Department of the Treasury acts as custodian over monies 

deposited into the UTF, investing amounts in excess of disbursing requirements in Treasury securities. The UTF is 

comprised of the following accounts:

Federal Accounts

The Employment Security Administration Account (ESAA) was established pursuant to Section 901 of the 

Act. Tax receipts collected under the FUTA are appropriated to the ESAA and used to pay the costs of 

Federal and state administration of the UI program and veterans’ ES and 97% of the costs of the state ES; 

and, amounts collected due to FUTA credit reductions are transferred to the FUA and are used to pay down 

balances of state advances that have been outstanding for more than two years. Excess balances in ESAA, 

as defined under the Act, are transferred to other Federal accounts within the Fund, as described below.

The Federal Unemployment Account was established pursuant to Section 904 of the Act. FUA is funded by 

any excesses from the ESAA as determined in accordance with Section 902 of the Act. Title XII, Section 

1201 of the Act authorizes the FUA to loan Federal monies to state accounts that are unable to make 

benefit payments because the state UI account balance has been exhausted. Title XII loans must be repaid 

with interest. The FUA may borrow from the ESAA or EUCA, without interest, or may also receive 

repayable advances, with interest, from the general fund of the U.S. Treasury, when the FUA has a balance 

insufficient to make advances to the states. 

The Extended Unemployment Compensation Account was established pursuant to Section 905 of the Act. 

EUCA provides for the payment of extended unemployment benefits authorized under the Federal-State 

Extended Unemployment Compensation Act of 1970, as amended. Under the EB program, extended 

unemployment benefits are paid to individuals who have exhausted their regular unemployment benefits. 

These EB are financed one-half by State unemployment taxes and one-half by FUTA taxes from the EUCA. 

The EUCA is funded by a percentage of the FUTA tax transferred from the ESAA in accordance with Section 

905(b)(1) and (2) of the Act. The EUCA may borrow from the ESAA or the FUA, without interest, or may 

also receive repayable advances from the General Fund of the U.S. Treasury when the EUCA has a balance 

insufficient to pay the Federal share of EB. During periods of sustained high unemployment, the EUCA may 
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120 United States Department of Labor

also receive payments and non-repayable advances from the General Fund of the Treasury to finance EUC 

benefits. Emergency unemployment benefits require Congressional authorization.

The Federal Employees Compensation (FEC) Account was established pursuant to Section 909 of the Act. 

The FEC account provides funds to States for unemployment compensation benefits paid to eligible former 

Federal civilian personnel and ex-service members. Generally, benefits paid are reimbursed to the Federal 

Employees Compensation Account by the various Federal agencies. Any additional resources necessary to 

assure that the account can make the required payments to States, due to the timing of the benefit 

payments and subsequent reimbursements, will be provided by non-repayable advances from the General 

Fund of the U.S. Treasury.

State Accounts

Separate state accounts were established for each state and territory depositing monies into the Fund, in 

accordance with Section 904 of the Act. State unemployment taxes are deposited into these individual 

accounts and may be used only to pay state unemployment benefits. States may receive repayable 

advances from the FUA when their balances in the Fund are insufficient to pay benefits. 

Railroad Retirement Accounts

The Railroad UI Account and Railroad UI Administrative Account were established under Section 904 of the 

Act to provide for a separate UI program for railroad employees. This separate UI program is administered 

by the Railroad Retirement Board, an agency independent of DOL. DOL is not responsible for the 

administrative oversight or solvency of the railroad UI system. Receipts from taxes on railroad payrolls are 

deposited in the Railroad UI Account and the Railroad UI Administrative Account to meet benefit payment 

and related administrative expenses. 

UI Program Benefits

The UI program provides regular and extended benefit payments to eligible unemployed workers. Regular UI 

program benefits are established under state law, payable for a period not to exceed a maximum duration. In 

1970, Federal law began to require states to extend this maximum period of benefit duration by 50% during periods 

of high unemployment. These extended benefit payments are paid equally from Federal and state accounts. 

 

Regular UI Benefits

The UI program is a cooperative Federal and state program with the federal government providing 

oversight. Eligibility requirements, as well as benefit amounts and benefit duration are determined under 

state law. Under state laws, worker eligibility for benefits depends on experience in covered employment 

during a past base period, which attempts to measure the workers’ recent attachment to the labor force. 

Three factors are common to state eligibility requirements: (1) a minimum duration of recent employment 

and earnings during a base period prior to unemployment, (2) unemployment not the fault of the 

unemployed, and (3) availability of the unemployed for work. 

Benefit payment amounts under all state laws vary with the worker’s base period wage history. Generally, 

states compute the amount of weekly UI benefits as a percentage of an individual’s average weekly base 

period earnings, within certain minimum and maximum limits. Most states set the duration of UI benefits 

by the amount of earnings an individual has received during the base period. Currently, almost all states 
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FY 2015 Agency Financial Report 121

have established the maximum duration for regular UI benefits at 26 weeks. Regular UI benefits are paid by 

the state UI agencies from monies drawn down from the state account within the UTF.

Extended UI Benefits

The Federal/State Extended Unemployment Compensation Act of 1970 provides for the extension of the 

duration of UI benefits during periods of high unemployment. When the insured unemployment level 

within a state, or in some cases total unemployment, reaches certain specified levels, the state must 

extend benefit duration by 50%, up to a combined maximum of 39 weeks; certain states voluntarily 

extended the benefit duration up to a combined maximum of 46 weeks. Fifty percent of the cost of 

extended unemployment benefits is paid from the EUCA within the UTF, and 50% by the state, from the 

state’s UTF account. The ARRA of 2009 began temporary 100% Federal funding of EB. Subsequent 

legislation, most recently P.L. 112-240, the American Taxpayer Relief Act of 2012, authorized continuing 

100% Federal funding of extended unemployment benefits to December 31, 2013.

Emergency UI Benefits

During prolonged periods of high unemployment, Congress may authorize the payment of emergency 

unemployment benefits to supplement extended UI benefit payments. Emergency benefits began in July 

2008, authorized under the Supplemental Appropriations Act, 2008 (previously authorized in 1991 and 

2002). This emergency program was temporarily extended and additionally funded by the ARRA and has 

been subsequently modified several times, most recently by P.L. 112-240, the American Taxpayer Relief Act 

of 2012, which extended the emergency unemployment insurance program to January 1, 2014. 

Federal UI Benefits

Unemployment benefits to unemployed Federal civilian personnel and ex-service members are paid from 

the Federal Employees Compensation Account within the UTF. These benefit costs are reimbursed by the 

responsible Federal agency and are not considered to be social insurance benefits. Federal UC benefits are 

not included in this discussion of social insurance programs. 

Program Finances and Sustainability

As of September 30, 2015, total assets within the UTF exceeded total liabilities by $32.0 billion. At the present time 

there is a surplus; any surplus of tax revenues and earnings on these revenues over benefit payment expenses is 

available to finance benefit payments in future periods when tax revenues may be insufficient. Treasury invests 

any accumulated surplus in Federal securities. The net value of these securities, including interest receivable, as of 

September 30, 2015 was $44.6 billion. This interest is distributed to eligible state and Federal accounts within the 

UTF. Interest income from these investments and income from Title XII advances to states during FY 2015 was $1.2 

billion. Federal and state UI tax and reimbursable revenues of $51.0 billion and regular, extended and emergency 

benefit payment expense of $31.8 billion were recognized for the year ended September 30, 2015.

As discussed in Note 1-K.1 to the consolidated financial statements, DOL recognized a liability for regular, extended 

and emergency unemployment benefits to the extent of unpaid benefits applicable to the current period and for 

benefits paid by states that have not been reimbursed by the UTF. Accrued unemployment benefits payable as of 

September 30, 2015 were $1.1 billion. 

During FY 2015, the FUA borrowed from the General Fund of the U.S. Treasury in the form of repayable advances

and repaid all its outstanding repayable advances. The EUCA repaid current year and certain prior year (PY)
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122 United States Department of Labor

advances. EUCA had an outstanding repayable advances balance of $12.8 billion bearing interest between 2.375% 

and 3.000% as of September 30, 2015.

Subsequent Events

Management has determined that there are no subsequent events.

Effect of Projected Cash Inflows and Outflows on the Accumulated Net Assets of the UTF, in Constant Dollars 

The ability of the UI program to meet a participant’s future benefit payment needs depends on the availability of 

accumulated taxes and earnings within the UTF. The Department measures the effect of projected benefit 

payments on the accumulated net assets of the UTF, under an open group scenario, which includes current and 

future participants in the UI program. Future estimated cash inflows and outflows of the UTF are tracked by the 

Department for budgetary purposes. These projections allow the Department to monitor the sensitivity of the UI 

program to differing economic conditions, and to predict the program’s sustainability under varying economic 

assumptions.

The significant assumptions used in the projections include total unemployment rates, civilian labor force levels, 

percent of unemployed receiving benefits, total wages, distribution of benefit payments by state, state tax rate 

structures, state taxable wage bases, interest rates on UTF investments, and the Consumer Price Index-Urban 

(CPI-U) for goods and services. The use of CPI-U factors allows the projections to be presented in constant dollars 

with FY 2015 as the base year. The valuation date for the projections is September 30, 2015. Cash projections 

depend on the assumptions used and actual experience may differ materially from the projections.

Presented on the following pages is the effect of projected economic conditions on the net assets of the UTF, in 

constant dollars, excluding the Federal Employees Compensation Account. Amount totals for the expected 

economic conditions analysis and the two sensitivity analyses may differ due to rounding.

Expected Economic Conditions 

Charts I and II graphically depict the effect of expected economic conditions on the UTF, in constant dollars, over 

the next ten years. 

Projected Cash Inflows and Outflows, in Constant Dollars, Under Expected Economic Conditions

Chart I depicts projected cash inflows and outflows of the UTF, in constant dollars, over the next ten years 

under expected economic conditions. Both cash inflows and cash inflows excluding interest earnings are 

displayed. Current estimates by the Department are based on an expected unemployment rate of 4.95% 

during FY 2016 and remaining between 4.60% and 4.9%. Total cash inflows exceed total cash outflows in 

FY 2016 and through the end of the projected period. As presented in table (1) Expected Economic 

Conditions, the net inflow (excluding interest) decreases from $18.3 billion in FY 2016 to $13.9 billion in FY 

2018, and decreases from $9.9 billion to $3.1 billion between FYs 2019 and 2025. The net inflow is 

sustained primarily by the excess of Federal tax collections over Federal expenditures.
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FY 2015 Agency Financial Report 123

Chart I

30

35

40

45

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Unemployment Trust Fund

Cash Inflow and Outflow in Constant Dollars

Total Cash Inflows Cash Inflow Excluding Interest Total Cash Outflow

Effect of Expected Cash Flows on UTF Assets in Constant Dollars

Chart II demonstrates the effect of these expected cash inflows and outflows on the net assets of the UTF, 

in constant dollars, over the ten-year period ending September 30, 2025. Yearly projected total cash 

inflows, including interest earnings, and cash outflows, including interest payments, are depicted as well as 

the net effect of this cash flow on UTF assets. 

As depicted in Chart II, total cash inflows exceed total cash outflows in FY 2016 and all other years in the 

projected period. The excess of total cash inflows over total cash outflows is highest in FY 2016. As 

presented in table (1) Expected Economic Conditions, starting at a nearly $31.2 billion fund balance at the 

beginning of FY 2016, net UTF assets increase by more than $118.8 billion over the next ten years to a 

$150.0 billion fund net assets balance by the end of FY 2025. Chart II depicts the increase in the net assets 

of the fund.
Financial Section

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124 United States Department of Labor

Chart II

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Excludes the Federal Employees Compensation Account

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets in Constant Dollars

Total Cash Inflows Total Cash Outflows Net Assets

Sensitivity Analyses in Constant Dollars

Charts III (Sensitivity Analysis I) and IV (Sensitivity Analysis II) demonstrate the effect on accumulated UTF assets of 

projected total cash inflows and cash outflows of the UTF, in constant dollars, over the ten-year period ending 

September 30, 2025, in two sensitivity analyses. Each sensitivity analysis uses an open group, which includes 

current and future participants in the UI program. Sensitivity Analysis I assumes higher rates of unemployment and 

Sensitivity Analysis II assumes even higher rates of unemployment compared to the expected economic conditions 

as shown in Charts I and II. Table I below summarizes the unemployment rates for expected conditions, Sensitivity 

Analysis I, and Sensitivity Analysis II.

Table I

Conditions 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Expected 4.95% 4.68% 4.60% 4.68% 4.82% 4.90% 4.90% 4.90% 4.90% 4.90%

Sensitivity

 Analysis I 6.30% 7.23% 7.31% 6.54% 5.69% 5.56% 5.20% 4.90% 4.90% 4.90%

Sensitivity

 Analysis II 6.36% 8.48% 10.28% 8.30% 7.32% 7.11% 6.67% 5.76% 5.20% 4.90%

Total Unemployment Rate for the Ten-Year Period Ending September 30, 2025
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 125

Effect on UTF Assets, in Constant Dollars, in Sensitivity Analysis I

In this sensitivity analysis, which utilizes a higher unemployment rate of 6.30% beginning in FY 2016, as presented 

in table (2) Sensitivity Analysis I Higher Unemployment Rate, net cash inflows are negative in FYs 2017 and 2018, 

but become positive in FY 2019 and continue to be positive through 2025. Chart III depicts the cross-over points 

where cash outflows exceed cash inflows before 2017 and cash inflows exceed cash outflows before FY 2019. 

Starting at a $31.2 billion fund balance at the beginning of FY 2016, net UTF assets increase by about $59.4 billion 

over the next ten years to about a $90.6 billion fund net assets balance by the end of FY 2025. Chart III depicts the 

increase in net assets. 

Chart III

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Higher Unemployment Rate in Sensitivity Analysis I

Effect of Net Cash Flow on Net Assets in Constant Dollars

Total Cash Inflows Total Cash Outflows Net Assets

Effect on UTF Assets, in Constant Dollars, in Sensitivity Analysis II

In this sensitivity analysis, as presented in the table (3) Sensitivity Analysis II Higher Unemployment Rate, 

net cash inflows including interest earnings and expenses are projected in FY 2016, but outflows exceed 

inflows in FYs 2017, 2018, and 2019 by $17.7 billion, $26.5 billion, and $8.4 billion, respectively. Net cash 

inflows are reestablished in FY 2020 and peak in FY 2025 with a drop in the unemployment rate to 7.32% in 

FY 2020 and then steadily downward for FYs 2021 through 2025. Chart IV depicts the cross-over points 

where outflows exceed inflows before FY 2017 and inflows exceed outflows before FY 2020. The net assets 

increase more than $16.2 billion from a $31.2 billion fund balance at the beginning of FY 2016 to a $47.4

billion fund balance in FY 2025. Chart IV depicts the low point in the fund’s financial position at a fund 

deficit of $17.7 billion in FY 2019 and then the increase in net assets around FY 2020. At the end of the 

projection period of Sensitivity Analysis II, net assets are $102.6 billion less than under expected economic 

conditions.
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126 United States Department of Labor

Chart IV

(40)

(20)

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Higher Unemployment Rate in Sensitivity Analysis II

Effect of Net Cash Flow on Net Assets in Constant Dollars

Total Cash Inflows Total Cash Outflows Net Assets

The example of expected economic conditions and two sensitivity analyses, in constant dollars, 

demonstrate the counter cyclical nature of the UI program, which experiences net cash inflows during 

periods of low unemployment that are depleted by net cash outflows during periods of increased 

unemployment. During the expected conditions and two sensitivity analyses, state accounts without 

sufficient reserve balances to absorb negative cash flows are forced to obtain advances from the FUA and to 

meet benefit payment requirements. Advances to states also deplete the FUA, which borrows from the 

ESAA and the EUCA until they are depleted. The FUA then requires advances from the General Fund of the 

U.S. Treasury to provide borrowings to states. (See following discussion of solvency measures for state UI 

programs.)
FY 2011

FY 2015 Agency Financial Report 127

Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

(Dollars in millions) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Balance, start of year $ 31,170 $ 50,735 $ 67,797 $ 83,392 $ 95,310 $ 106,007 $ 115,518 $ 124,555 $ 133,363 $ 141,933

Cash inflow

State unemployment taxes 45,236 42,674 40,887 39,991 39,312 38,433 37,901 37,545 37,337 37,012

Federal unemployment taxes 8,263 7,537 7,828 5,473 5,429 5,385 5,343 5,306 5,270 5,176

General revenue appropriation - - - - - - - - - -

Interest on loans 114 39 4 1 1 1 1 1 1 1

Deposits by the Railroad Retirement Board 105 115 95 88 111 118 102 91 100 111

Total cash inflow excluding interest 53,718 50,365 48,814 45,553 44,853 43,937 43,347 42,943 42,708 42,300

Interest on Federal securities 1,216 1,479 1,689 2,068 2,528 3,033 3,563 4,076 4,542 4,969

Total cash inflow 54,934 51,844 50,503 47,621 47,381 46,970 46,910 47,019 47,250 47,269

Cash outflow

State unemployment benefits 31,047 30,632 30,839 31,654 32,647 33,427 33,839 34,167 34,630 35,134

State administrative costs 3,837 3,776 3,768 3,770 3,769 3,764 3,769 3,778 3,784 3,793

Federal administrative costs 174 173 172 171 170 170 168 169 168 168

Interest on tax refunds 1 1 1 1 1 1 1 1 1 1

Interest on advances 226 106 28 9 - - - - - -

Railroad Retirement Board withdrawals 84 94 100 98 97 97 96 96 97 96

Total cash outflow 35,369 34,782 34,908 35,703 36,684 37,459 37,873 38,211 38,680 39,192

Excess of total cash inflow excluding

 interest over total cash outflow 18,349 15,583 13,906 9,850 8,169 6,478 5,474 4,732 4,028 3,108

Excess of total cash inflow over

 total cash outflow 19,565 17,062 15,595 11,918 10,697 9,511 9,037 8,808 8,570 8,077

Balance, end of year $ 50,735 $ 67,797 $ 83,392 $ 95,310 $ 106,007 $ 115,518 $ 124,555 $ 133,363 $ 141,933 $ 150,010

Total unemployment rate 4.95% 4.68% 4.60% 4.68% 4.82% 4.90% 4.90% 4.90% 4.90% 4.90% 

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION IN CONSTANT DOLLARS

CASH INFLOW AND OUTFLOW OF THE 

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT

FOR THE TEN-YEAR PERIOD ENDING SEPTEMBER 30, 2025

(1) EXPECTED ECONOMIC CONDITIONS
 

(Dollars in millions) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Balance, start of year $ 31,170 $ 35,394 $ 30,742 $ 27,663 $ 33,222 $ 43,316 $ 54,203 $ 66,724 $ 75,915 $ 83,657

Cash inflow

State unemployment taxes 46,290 46,185 47,536 49,339 49,756 48,114 46,614 44,629 43,148 42,235

Federal unemployment taxes 8,144 7,595 7,792 8,826 8,283 8,810 9,242 5,440 5,475 5,451

General revenue appropriation 5 31 47 34 - - - - - -

Interest on loans 144 162 212 237 221 166 127 98 78 57

Deposits by the Railroad Retirement Board 120 130 110 104 126 133 118 106 115 126

Total cash inflow excluding interest 54,703 54,103 55,697 58,540 58,386 57,223 56,101 50,273 48,816 47,869

Interest on Federal securities 1,005 942 916 1,021 1,269 1,662 2,036 2,383 2,711 3,048

Total cash inflow 55,708 55,045 56,613 59,561 59,655 58,885 58,137 52,656 51,527 50,917

Cash outflow

State unemployment benefits 46,881 55,000 54,950 49,331 45,033 43,616 41,358 39,297 39,645 39,844

State administrative costs 4,079 4,191 4,207 4,117 3,991 3,940 3,901 3,871 3,869 3,871

Federal administrative costs 174 173 172 171 170 170 168 169 168 168

Interest on tax refunds 1 1 1 1 1 1 1 1 1 1

Interest on advances 266 241 265 287 272 177 95 34 8 -

Railroad Retirement Board withdrawals 83 91 97 95 94 94 93 93 94 93

Total cash outflow 51,484 59,697 59,692 54,002 49,561 47,998 45,616 43,465 43,785 43,977

Excess (deficiency) of total cash inflow

 excluding interest over (under)

 total cash outflow 3,219 (5,594) (3,995) 4,538 8,825 9,225 10,485 6,808 5,031 3,892

Excess (deficiency) of total cash inflow

 over (under) total cash outflow 4,224 (4,652) (3,079) 5,559 10,094 10,887 12,521 9,191 7,742 6,940

Balance, end of year $ 35,394 $ 30,742 $ 27,663 $ 33,222 $ 43,316 $ 54,203 $ 66,724 $ 75,915 $ 83,657 $ 90,597

Total unemployment rate 6.30% 7.23% 7.31% 6.54% 5.69% 5.56% 5.20% 4.90% 4.90% 4.90% 

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION IN CONSTANT DOLLARS

CASH INFLOW AND OUTFLOW OF THE 

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT

FOR THE TEN-YEAR PERIOD ENDING SEPTEMBER 30, 2025

(2) SENSITIVITY ANALYSIS I HIGHER UNEMPLOYMENT RATE

128 United States Department of Labor

(Unaudited)REQUIRED SUPPLEMENTARY INFORMATIONFinancial Section
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 129

(Dollars in millions) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Balance, start of year $ 31,170 $ 34,919 $ 17,207 $ (9,319) $ (17,744) $ (13,412) $ (5,286) $ 4,022 $ 17,042 $ 31,940

Cash inflow

State unemployment taxes 46,426 46,913 49,550 53,951 56,153 55,096 52,821 50,593 48,136 46,252

Federal unemployment taxes 8,135 7,513 7,654 8,788 9,826 11,048 10,550 11,112 11,380 11,078

General revenue appropriation 5 27 25 2 - - - - - -

Interest on loans 145 217 463 731 852 887 915 881 752 545

Deposits by the Railroad Retirement Board 105 115 95 88 111 118 102 91 100 111

Total cash inflow excluding interest 54,816 54,785 57,787 63,560 66,942 67,149 64,388 62,677 60,368 57,986

Interest on Federal securities 1,126 999 737 692 845 1,111 1,445 1,836 2,270 2,703

Total cash inflow 55,942 55,784 58,524 64,252 67,787 68,260 65,833 64,513 62,638 60,689

Cash outflow

State unemployment benefits 47,579 68,543 79,647 67,117 57,884 54,595 51,044 46,151 42,631 40,388

State administrative costs 4,089 4,386 4,554 4,365 4,208 4,120 4,056 3,984 3,924 3,887

Federal administrative costs 174 173 172 171 170 170 168 169 168 168

Interest on tax refunds 1 1 1 1 1 1 2 2 2 2

Interest on advances 266 299 576 925 1,095 1,151 1,159 1,091 918 663

Railroad Retirement Board withdrawals 84 94 100 98 97 97 96 96 97 96

Total cash outflow 52,193 73,496 85,050 72,677 63,455 60,134 56,525 51,493 47,740 45,204

Excess (deficiency) of total cash inflow

 excluding interest over (under)

 total cash outflow 2,623 (18,711) (27,263) (9,117) 3,487 7,015 7,863 11,184 12,628 12,782

Excess (deficiency) of total cash inflow

 over (under) total cash outflow 3,749 (17,712) (26,526) (8,425) 4,332 8,126 9,308 13,020 14,898 15,485

Balance, end of year $ 34,919 $ 17,207 $ (9,319) $ (17,744) $ (13,412) $ (5,286) $ 4,022 $ 17,042 $ 31,940 $ 47,425

Total unemployment rate 6.36% 8.48% 10.28% 8.30% 7.32% 7.11% 6.67% 5.76% 5.20% 4.90% 

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION IN CONSTANT DOLLARS

CASH INFLOW AND OUTFLOW OF THE 

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT

FOR THE TEN-YEAR PERIOD ENDING SEPTEMBER 30, 2025

(3) SENSITIVITY ANALYSIS II HIGHER UNEMPLOYMENT RATE
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

130 United States Department of Labor

*States with Minimally Solvent UTF Account Balances

Each state’s accumulated UTF net assets or reserve balance should provide a defined level of benefit payments over 

a defined period. To be minimally solvent, a state’s reserve balance should provide for one year’s projected benefit 

payment needs based on the highest levels of benefit payments experienced by the state over the last twenty 

years. A ratio of 1.00 or greater indicates that the state UTF account balance is minimally solvent. States below this 

level are vulnerable to exhausting their funds in a recession. States exhausting their reserve balance must borrow 

funds from FUA to make benefit payments. During FY 2009, the balances in the FUA were depleted and the FUA 

borrowed from the General Fund of the U.S. Treasury and continued to do so through FY 2015, although in FY 2015

the FUA repaid all its outstanding borrowings. 

Chart V presents the state by state results of this analysis at September 30, 2015 in descending order by ratio. As 

the chart below illustrates, 33 state UTF accounts were below the minimal solvency ratio of 1.00 at September 30, 

2015. Some states borrow from the FUA and then issue bonds to repay their FUA borrowings; the ratios do not 

reflect a state’s debt to bondholders.

Chart V

Minimally Solvent Not Minimally Solvent

State Ratio State Ratio State Ratio

Wyoming 2.33 Florida 0.88 South Carolina 0.35 

Oklahoma 2.06 Tennessee 0.87 Missouri 0.34 

Mississippi 1.80 Maryland 0.80 Delaware 0.33 

Utah 1.76 North Dakota 0.78 West Virginia 0.33 

Nebraska 1.73 Alabama 0.77 New Jersey 0.32 

Oregon 1.73 Kansas 0.76 Massachusetts 0.30 

South Dakota 1.50 Michigan 0.76 Pennsylvania 0.25 

Alaska 1.47 Virginia 0.70 Rhode Island 0.22 

Montana 1.47 Arkansas 0.68 Arizona 0.13 

Idaho 1.33 New Mexico 0.62 New York 0.06 

Louisiana 1.31 Colorado 0.61 Connecticut 0.04 

Washington 1.30 Georgia 0.57 Kentucky 0.03 

Iowa 1.27 Nevada 0.43 Ohio 0.00 

Vermont 1.22 Illinois 0.42 Indiana 0.00 

Hawaii 1.18 North Carolina 0.42 California 0.00 

New Hampshire 1.13 Wisconsin 0.40 Virgin Islands 0.00 

Maine 1.07 Texas 0.38 

Minnesota 1.05 

Puerto Rico 1.01 

District of Columbia 1.00 

*Includes District of Columbia, Puerto Rico, and Virgin Islands.
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2011 FY 2015 Agency Financial Report 131

Black Lung Disability Benefit Program

The Black Lung Disability Benefit Program provides for compensation, medical, and survivor benefits for eligible 

coal miners who are totally disabled due to pneumoconiosis (black lung disease) arising out of their coal mine 

employment and the BLDTF provides benefit payments when no responsible mine operator can be assigned the 

liability. Other information about the BLDTF and social insurance reporting is also presented in Note 1-W of the 

financial statements.

Program Administration and Funding

The Federal Coal Mine Health and Safety Act sets Black Lung benefits at 37.5% of the base salary of a Federal 

employee at level GS-2, Step 1. Black lung disability benefit payments are funded by excise taxes from coal mine

operators based on the domestic sale of coal, as are the program’s administrative costs. These taxes are collected 

by the Internal Revenue Service and transferred to the BLDTF, which was established under the authority of the 

Black Lung Benefits Revenue Act, and administered by the U.S. Department of the Treasury. 

P.L. 110-343, Division B-Energy Improvement and Extension Act of 2008, enacted on October 3, 2008, in section 

113, (1) allowed for the temporary increase in coal excise tax rates to continue an additional five years beyond the 

statutory limit and (2) restructured the BLDTF debt by refinancing the outstanding repayable advances (which had 

higher interest rates) with discounted debt instruments similar in form to zero-coupon bonds (which had lower 

interest rates), plus a one-time appropriation. This Act also allowed that any subsequent debt issued by the BLDTF 

may be used to make benefit payments, other authorized expenditures, or to repay debt and interest from the 

initial refinancing. All debt issued by the BLDTF was effected as borrowing from the Treasury's Bureau of the Fiscal 

Service. (See Notes 1-J and 8)

Program Finances and Sustainability

At September 30, 2015, total liabilities of the BLDTF exceeded assets by $5.6 billion This net position represents 

the accumulated shortfall of excise taxes necessary to meet benefit payments, administrative costs, and interest 

expense incurred prior to and subsequent to the debt refinancing pursuant to P.L. 110-343. Prior to enactment of 

P.L. 110-343, this shortfall was funded by repayable advances to the BLDTF, which were repayable with interest. 

Pursuant to P.L. 110-343, any shortfall will be financed with debt instruments similar in form to zero-coupon bonds, 

with a maturity date of one year and bear interest at the Treasury 1-year rate. Outstanding debt at September 30, 

2015 was $5.7 billion, bearing interest rates ranging from 0.330% to 4.556%. Excise tax revenues of $552.4 million, 

benefit payment expense of $162.3 million, and interest expense of $216.0 million were recognized for the year 

ended September 30, 2015. The interest expense is accrued and capitalized to the principal of the debt until the 

debt reaches its face value at the time of maturity. On September 30, 2015, the BLDTF issued debt in the amount 

of $585.0 million, bearing interest at 0.330% and maturing on September 30, 2016. At September 30, 2015, there 

were 26 debt instruments with staggered maturities of September 30 for years 2016 through 2040, with a total 

carrying value of nearly $5.7 billion and a total face value at maturity of nearly $9.1 billion. Of these 26 debt 

instruments, 25 are from the October 2008 refinancing and one debt instrument was issued on September 30, 

2015.
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REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

132 United States Department of Labor

Projected Cash Inflows and Outflows, in Constant Dollars

The beneficiary population is a nearly closed universe in which attrition by death exceeds new entrants by a ratio of 

more than ten to one. Projections for new participants are included in the overall projections and are considered 

immaterial. Therefore, the difference between the open group measure and the closed group measure due to new 

participants is immaterial and the same measure is presented for both the open group and the closed group.

The significant assumptions used in the projections, in constant dollars, are coal excise tax revenue estimates, the 

tax rate structure, the number of beneficiaries, life expectancy, Federal civilian pay raises, medical cost inflation, the 

interest rate on new debt issued by the BLDTF, and the CPI-U for goods and services. The use of CPI-U factors allows 

the projections to be presented in constant dollars with FY 2015 as the base year. The valuation date for the 

projections is September 30, 2015. Cash projections depend on the assumptions used and actual experience may 

differ materially from the projections.

In FY 2015, the coal excise tax revenue estimates reflect, among other things, regulation pursuant to the Clean 

Power Plan, and future cash inflows from excise taxes have decreased significantly from those reported in prior 

years. The effects of the significant decrease in cash inflows from excise taxes are also reflected in the Statement of 

Social Insurance as of September 30, 2015 and are the largest change reported in the Statement of Changes in 

Social Insurance Amounts for the year ended September 30, 2015. 

These projections, in constant dollars, made over the 25-year period ending September 30, 2040, indicate that cash 

inflows from excise taxes will exceed cash outflows for benefit payments and administrative expenses for most of 

the years in the projection period. Cumulative net cash inflows are projected to reach $1.6 billion by FY 2040. 

However, when payments from the BLDTF’s maturing debt are applied against this surplus cash inflow, the BLDTF’s 

cash flow turns negative in all periods included in the projections. Net cash outflows after payments on maturing 

debt are projected to reach $7.7 billion by the end of FY 2040, resulting in a projected deficit of $10.25 billion at

September 30, 2040. Amount totals in tables may differ slightly due to rounding (See Chart I and Table I).

The net present value of future projected benefit payments and other cash inflow and outflow activities together 

with the fund’s deficit positions as of September 30, 2015, 2014, 2013, 2012, and 2011 are presented in the SOSI.
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2011 FY 2015 Agency Financial Report 133

Chart I

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BLACK LUNG DISABILITY TRUST FUND

CASH INFLOW AND OUTFLOW IN CONSTANT DOLLARS

Total Cash Outflow Total Cash Inflow Cash Outflows Before Repayment of Debt and Interest

Projected Cash Inflows and Outflows with Sensitivity Analysis, in Constant Dollars

For the projected cash inflows and outflows with sensitivity analysis, in constant dollars, the significant assumption 

for cash inflows from estimated taxes was changed to reflect a lower growth rate in FYs 2026 through 2040 of 0.61% 

instead of a growth rate of 1.09%; however, for FYs 2016 through 2025, the growth rate was left unchanged. Both 

growth rates are based on the U.S. Department of Energy, Energy Information Administration, estimates of future 

growth in coal production that reflect, among other things, regulation pursuant to the Clean Power Plan. The higher 

growth rate of 1.09% in FYs 2026 through 2040 reflects regulation pursuant to the Clean Power Plan and the average 

growth in future coal production after decreases in production during FYs 2016 through 2025. The lower growth 

rate of 0.61% reflects a midpoint between the 1.09% average growth rate and a 0.12% average growth rate in FYs 

2026 through 2040 had the regulation been absent. For the sensitivity analysis, the other significant assumptions 

(tax rate structure, number of beneficiaries, life expectancy, Federal civilian pay raises, medical cost inflation, 

interest rate on new debt issued by the BLDTF, and CPI-U for goods and services) were left unchanged. Cash 

projections depend on the assumptions used and actual experience may differ materially from the projections. 

These projections with sensitivity analysis, in constant dollars, made over the 25-year period ending September 30, 

2040, indicate that cash inflows from excise taxes would exceed cash outflows for benefit payments and 

administrative expenses for most of the years in the projection period. Cumulative net cash inflows would be 

projected to reach $1.5 billion by the year 2040. However, when payments from the BLDTF’s maturing debt are 

applied against this surplus cash inflow, the BLDTF’s cash flow would turn negative in all periods included in the 

projections. Net cash outflows after payments on maturing debt would be projected to reach $7.8 billion by the 

end of the year 2040, and would result in a projected deficit of $10.3 billion at September 30, 2040 (See Chart II and 

Table II). Amount totals in tables may differ slightly due to rounding.
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

134 United States Department of Labor

Chart II

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BLACK LUNG DISABILITY TRUST FUND

CASH INFLOW AND OUTFLOW IN CONSTANT DOLLARS

SENSITIVITY ANALYSIS

Total Cash Outflow Total Cash Inflow Cash Outflows Before Repayment of Debt and Interest

Open and Closed Group Measure with Sensitivity Analysis

For the open and closed group measure with sensitivity analysis, we modified the significant assumptions as 

described above (see Projected Cash Inflows and Outflows with Sensitivity Analysis, in Constant Dollars) for the 

growth rate for cash inflows from estimated taxes in FYs 2026 through 2040, but the other significant assumptions 

were left unchanged. 

For the Sensitivity Analysis, the changes that we made in the assumptions as described above (see projected Cash 

Inflows and Outflows with Sensitivity Analysis, in Constant Dollars) did not result in different average durations or in 

different interest rates used to discount the income payments, medical payments, and administrative expenses as 

compared to the average durations and interest rates used in the SOSI. For the coal excise tax collections, the 

average duration decreased from 10.6 years to 10.4 years, but did not result in a change in the interest rate used for 

discounting in the SOSI.

As a result of changing the significant assumption for the growth rate for cash inflows from estimated taxes in FYs 

2026 through 2040 as described above (see projected Cash Inflows and Outflows with Sensitivity Analysis, in 

Constant Dollars), at September 30, 2015 (in thousands of dollars):

In the SOSI,

(a) the actuarial present value of future benefit payments during the projection period to disabled coal miners and 

dependent survivors would remain unchanged;

(b) the present value of estimated future administrative costs during the projection period would remain 

unchanged;
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2011 FY 2015 Agency Financial Report 135

(c) the actuarial present value of future benefit payments and present value of estimated future administrative 

costs during the projection period for current and future participants would remain unchanged;

(d) the present value of estimated future excise tax income during the projection period would decrease ($70,674) 

from $4,738,572 to $4,667,898;

(e) the excess of present value of estimated future excise tax income over actuarial present value of future benefit 

payments and present value of estimated future administrative costs during the projection period for current 

and future participants (open and closed group measure) would decrease ($70,674) from $1,596,713 to 

$1,526,039; and

(f) the trust fund net position deficit at the start of the projection period would remain unchanged.

In the SOSI Summary Section,

(g) the open and close group measure would decrease as described in (e) above;

(h) the Funds with U.S. Treasury and receivables from benefit overpayments at the start of the projection period 

would remain unchanged; and

(i) the Total of open and closed group measure plus fund assets would decrease ($70,674) from $1,651,572 to 

$1,580,898.

Cash projections depend on the assumptions used and actual experience may differ materially from the 

projections.
Table I 

(Dollars in thousands) 2016 2017 2018 2019 2020 2021 - 2040 Total

Balance, start of year $ (5,644,208) $ (5,464,158) $ (5,309,864) $ (5,186,580) $ (5,161,377) $ (5,259,919) $ (5,644,208)

Cash inflow

Excise taxes 516,600 508,555 500,850 302,475 192,765 2,756,942 4,778,187

Total cash inflow 516,600 508,555 500,850 302,475 192,765 2,756,942 4,778,187

Cash outflow

Disabled coal miners benefits 150,144 139,637 130,269 121,834 114,202 1,259,479 1,915,565

Administrative costs 65,147 66,147 66,604 67,060 67,489 921,420 1,253,866

Cash outflows before repayment of

 debt and interest 215,290 205,784 196,873 188,893 181,691 2,180,900 3,169,431

Cash inflow over cash outflow 

 before repayment of debt and interest 301,310 302,771 303,977 113,582 11,074 576,042 1,608,756

Maturity of obligations refinanced October 2008 509,228 521,605 529,812 167,882 177,083 4,543,541 6,449,151

Interest on annual borrowings 1,905 6,239 15,621 29,282 40,133 2,775,931 2,869,111

Total cash outflow 726,423 733,628 742,306 386,057 398,907 9,500,372 12,487,693

Total cash outflow over total cash inflow (209,823) (225,073) (241,456) (83,582) (206,142) (6,743,430) (7,709,506)

Reduction of debt refinanced October 2008 389,874 379,367 364,740 108,786 107,600 1,754,620 3,104,986

Balance, end of year $ (5,464,158) $ (5,309,864) $ (5,186,580) $ (5,161,377) $ (5,259,919) $(10,248,728) $ (10,248,728)

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

U.S. DEPARTMENT OF LABOR

CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY TRUST FUND IN CONSTANT DOLLARS

FOR THE 25-YEAR PERIOD ENDING SEPTEMBER 30, 2040

Financial Section13(Unaudited)REQUIRED SUPPLEMENTARY INFORMATION

6 United States Department of Labor t 
11

Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

Table II 

(Dollars in thousands) 2016 2017 2018 2019 2020 2021 - 2040 Total

Balance, start of year $ (5,644,208) $ (5,464,158) $ (5,309,864) $ (5,186,580) $ (5,161,377) $ (5,259,918) $ (5,644,208)

Cash inflow

Excise taxes 516,600 508,555 500,850 302,475 192,765 2,685,887 4,707,132

Total cash inflow 516,600 508,555 500,850 302,475 192,765 2,685,887 4,707,132

Cash outflow

Disabled coal miners benefits 150,144 139,637 130,269 121,834 114,202 1,259,479 1,915,565

Administrative costs 65,147 66,147 66,604 67,060 67,489 921,420 1,253,866

Cash outflows before repayment of

 debt and interest 215,290 205,784 196,873 188,893 181,691 2,180,900 3,169,431

Cash inflow over cash outflow 

 before repayment of debt and interest 301,310 302,771 303,977 113,582 11,074 504,987 1,537,701

Maturity of obligations refinanced October 2008 509,228 521,605 529,812 167,882 177,083 4,543,541 6,449,151

Interest on annual borrowings 1,905 6,239 15,621 29,282 40,133 2,789,043 2,882,223

Total cash outflow 726,423 733,628 742,306 386,057 398,907 9,513,483 12,500,804

Total cash outflow over total cash inflow (209,823) (225,073) (241,456) (83,582) (206,142) (6,827,596) (7,793,672)

Reduction of debt refinanced October 2008 389,874 379,367 364,740 108,786 107,600 1,754,620 3,104,986

Balance, end of year $ (5,464,158) $ (5,309,864) $ (5,186,580) $ (5,161,377) $ (5,259,918) $(10,332,895) $ (10,332,895)

 U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION SENSITIVITY ANALYSIS

CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY TRUST FUND IN CONSTANT DOLLARS

FOR THE 25-YEAR PERIOD ENDING SEPTEMBER 30, 2040

FY 2015 Agency Financial Report 137 t 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

138 United States Department of Labor

COMBINING STATEMENTS OF BUDGETARY RESOURCES

The principal Combined Statements of Budgetary Resources combine the availability, status, and outlay of DOL’s 

budgetary resources during FY 2015 and FY 2014. Presented on the following pages is the disaggregation of this 

combined information for each of the Department’s major budget agencies. (Dollars in Thousands)
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 13911

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Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

140 United States Department of Labor

COMBINING STATEMENTS OF BUDGETARY RESOURCES

For the Year Ended September 30, 2015

Employment and Office of Workers' Office 

Training Compensation of

Administration Programs Job Corps

BUDGETARY RESOURCES

Unobligated balance brought forward, October 1 $ 1,943,330 $ 1,530,613 $ 937,506

Recoveries of prior year unpaid obligations 446,573 4,843 52,546

Other changes in unobligated balance (1,327,338) (3,235) (11,296)

Unobligated balance from prior year budget authority, net 1,062,565 1,532,221 978,756

Appropriations (discretionary and mandatory) 40,742,419 1,871,811 1,697,065

Spending authority from offsetting collections (discretionary and mandatory) 3,684,774 3,016,760 34,014

Total budgetary resources $ 45,489,758 $ 6,420,792 $ 2,709,835

STATUS OF BUDGETARY RESOURCES

Obligations incurred $ 44,536,146 $ 4,966,004 $ 1,832,515

Unobligated balance, end of year

Apportioned 464,693 1,376,143 834,410

Exempt from apportionment - 41,804 -

Unapportioned 488,919 36,841 42,910

Total unobligated balance, end of year 953,612 1,454,788 877,320

Total budgetary resources $ 45,489,758 $ 6,420,792 $ 2,709,835

CHANGE IN OBLIGATED BALANCE

Unpaid Obligations:

Unpaid obligations, brought forward, October 1 $ 11,961,386 $ 268,292 $ 949,782

Obligations incurred 44,536,146 4,966,004 1,832,515

Less: Outlays (gross) (45,121,908) (4,952,555) (1,665,860)

Less: recoveries of prior year unpaid obligations (446,573) (4,843) (52,546)

Unpaid obligations, end of year 10,929,051 276,898 1,063,891

Uncollected Payments: 

Uncollected payments, Federal sources, brought forward, October 1 (1,984,537) (21,490) -

Change in uncollected payments, Federal sources 294,201 19,430 -

Uncollected payments, Federal sources, end of year (1,690,336) (2,060) -

Obligated balance, start of year $ 9,976,849 $ 246,802 $ 949,782

Obligated balance, end of year $ 9,238,715 $ 274,838 $ 1,063,891

BUDGET AUTHORITY AND OUTLAYS, NET

Budget authority, gross (discretionary and mandatory) $ 44,427,193 $ 4,888,571 $ 1,731,079

Less: actual offsetting collections (discretionary and mandatory) (3,978,975) (3,036,190) (34,014)

Less: change in uncollected customer payments from Federal 

 sources (discretionary and mandatory) 294,201 19,430 -

Budgetary authority, net (discretionary and mandatory) $ 40,742,419 $ 1,871,811 $ 1,697,065

Outlays, gross (discretionary and mandatory) $ 45,121,908 $ 4,952,555 $ 1,665,860

Actual offsetting collections (discretionary and mandatory) (3,978,975) (3,036,190) (34,014)

Outlays, net (discretionary and mandatory) 41,142,933 1,916,365 1,631,846

Distributed offsetting receipts (1,044,765) (1,852) -

Agency outlays, net (discretionary and mandatory) $ 40,098,168 $ 1,914,513 $ 1,631,846
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 14111

Occupational Employee Veterans'

Safety and Bureau of Mine Safety Benefits Employment Wage Other

Health Labor and Health Security and Training and Hour Program

Administration Statistics Administration Administration Service Division Agencies TOTAL

$ 18,731 $ 9,648 $ 4,267 $ 5,007 $ 6,126 $ 42,953 $ 113,559 $ 4,611,740

 7,368 4,666 5,912 5,711 7,582 5,459 23,917 564,577

 (10,416) (2,501) (2,672) (4,245) (5,795) (4,333) (1,235) (1,373,066)

 15,683 11,813 7,507 6,473 7,913 44,079 136,241 3,803,251

 552,788 527,212 375,888 181,000 38,109 274,812 629,714 46,890,818

 (1,122) 87,385 2,063 6,204 232,094 251 380,059 7,442,482

$ 567,349 $ 626,410 $ 385,458 $ 193,677 $ 278,116 $ 319,142 $ 1,146,014 $ 58,136,551

$ 556,916 $ 618,830 $ 378,669 $ 188,194 $ 272,925 $ 284,414 $ 1,054,480 $ 54,689,093

 420 807 597 813 213 26,910 62,113 2,767,119

 - - - - - - - 41,804

 10,013 6,773 6,192 4,670 4,978 7,818 29,421 638,535

 10,433 7,580 6,789 5,483 5,191 34,728 91,534 3,447,458

$ 567,349 $ 626,410 $ 385,458 $ 193,677 $ 278,116 $ 319,142 $ 1,146,014 $ 58,136,551

$ 96,545 $ 107,127 $ 58,298 $ 55,723 $ 110,995 $ 34,057 $ 411,012 $ 14,053,217

 556,916 618,830 378,669 188,194 272,925 284,414 1,054,480 54,689,093

 (558,418) (621,804) (387,289) (190,822) (269,044) (279,235) (929,967) (54,976,902)

 (7,368) (4,666) (5,912) (5,711) (7,582) (5,459) (23,917) (564,577)

 87,675 99,487 43,766 47,384 107,294 33,777 511,608 13,200,831

 (2,979) - - - - - (8,697) (2,017,703)

 2,479 - - (2,690) - - 6,657 320,077

 (500) - - (2,690) - - (2,040) (1,697,626)

$ 93,566 $ 107,127 $ 58,298 $ 55,723 $ 110,995 $ 34,057 $ 402,315 $ 12,035,514

$ 87,175 $ 99,487 $ 43,766 $ 44,694 $ 107,294 $ 33,777 $ 509,568 $ 11,503,205

$ 551,666 $ 614,597 $ 377,951 $ 187,204 $ 270,203 $ 275,063 $ 1,009,773 $ 54,333,300

 (1,357) (87,385) (2,063) (3,514) (232,094) (251) (386,716) (7,762,559)

 2,479 - - (2,690) - - 6,657 320,077

$ 552,788 $ 527,212 $ 375,888 $ 181,000 $ 38,109 $ 274,812 $ 629,714 $ 46,890,818

$ 558,418 $ 621,804 $ 387,289 $ 190,822 $ 269,044 $ 279,235 $ 929,967 $ 54,976,902

 (1,357) (87,385) (2,063) (3,514) (232,094) (251) (386,716) (7,762,559)

 557,061 534,419 385,226 187,308 36,950 278,984 543,251 47,214,343

 - - 5,508 - - - (16,942) (1,058,051)

$ 557,061 $ 534,419 $ 390,734 $ 187,308 $ 36,950 $ 278,984 $ 526,309 $ 46,156,292
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

142 United States Department of Labor

COMBINING STATEMENTS OF BUDGETARY RESOURCES

For the Year Ended September 30, 2014

Employment and Office of Workers' Office 

Training Compensation of

Administration Programs Job Corps

BUDGETARY RESOURCES

Unobligated balance brought forward, October 1 $ 2,015,197 $ 1,209,243 $ 1,227,110

Recoveries of prior year unpaid obligations 284,276 10,180 26,995

Other changes in unobligated balance (261,811) (2,046) (13,756)

Unobligated balance from prior year budget authority, net 2,037,662 1,217,377 1,240,349

Appropriations (discretionary and mandatory) 53,075,632 2,106,108 1,700,979

Borrowing authority (discretionary and mandatory) 2,700,000 - -

Spending authority from offsetting collections (discretionary and mandatory) 3,875,605 3,086,893 1,084

Total budgetary resources $ 61,688,899 $ 6,410,378 $ 2,942,412

STATUS OF BUDGETARY RESOURCES

Obligations incurred $ 59,745,569 $ 4,879,765 $ 2,004,906

Unobligated balance, end of year

Apportioned 546,168 1,442,385 900,991

Exempt from apportionment - 46,795 -

Unapportioned 1,397,162 41,433 36,515

Total unobligated balance, end of year 1,943,330 1,530,613 937,506

Total budgetary resources $ 61,688,899 $ 6,410,378 $ 2,942,412

CHANGE IN OBLIGATED BALANCE

Unpaid Obligations:

Unpaid obligations, brought forward, October 1 $ 13,360,987 $ 227,844 $ 582,162

Obligations incurred 59,745,569 4,879,765 2,004,906

Less: Outlays (gross) (60,860,894) (4,829,137) (1,610,291)

Less: recoveries of prior year unpaid obligations (284,276) (10,180) (26,995)

Unpaid obligations, end of year 11,961,386 268,292 949,782

Uncollected Payments: 

Uncollected payments, Federal sources, brought forward, October 1 (1,935,613) (990) -

Change in uncollected payments, Federal sources (48,924) (20,500) -

Uncollected payments, Federal sources, end of year (1,984,537) (21,490) -

Obligated balance, start of year $ 11,425,374 $ 226,854 $ 582,162

Obligated balance, end of year $ 9,976,849 $ 246,802 $ 949,782

BUDGET AUTHORITY AND OUTLAYS, NET

Budget authority, gross (discretionary and mandatory) $ 59,651,237 $ 5,193,001 $ 1,702,063

Less: actual offsetting collections (discretionary and mandatory) (3,826,681) (3,066,393) (1,084)

Less: change in uncollected customer payments from Federal 

 sources (discretionary and mandatory) (48,924) (20,500) -

Budgetary authority, net (discretionary and mandatory) $ 55,775,632 $ 2,106,108 $ 1,700,979

Outlays, gross (discretionary and mandatory) $ 60,860,894 $ 4,829,137 $ 1,610,291

Actual offsetting collections (discretionary and mandatory) (3,826,681) (3,066,393) (1,084)

Outlays, net (discretionary and mandatory) 57,034,213 1,762,744 1,609,207

Distributed offsetting receipts (6,459,842) (1,891) -

Agency outlays, net (discretionary and mandatory) $ 50,574,371 $ 1,760,853 $ 1,609,207
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 14311

Occupational Employee Veterans'

Safety and Bureau of Mine Safety Benefits Employment Wage Other

Health Labor and Health Security and Training and Hour Program

Administration Statistics Administration Administration Service Division Agencies TOTAL

$ 20,042 $ 6,778 $ 3,155 $ 5,597 $ 6,957 $ 53,117 $ 107,882 $ 4,655,078

 4,685 6,567 2,749 1,011 3,648 8,263 88,442 436,816

 (4,712) (1,696) (1,143) (795) (4,059) (2,741) (6,845) (299,604)

 20,015 11,649 4,761 5,813 6,546 58,639 189,479 4,792,290

 552,249 527,212 375,887 178,500 38,109 268,067 612,970 59,435,713

 - - - - - - - 2,700,000

 2,112 84,264 2,315 6,143 231,465 3,059 311,949 7,604,889

$ 574,376 $ 623,125 $ 382,963 $ 190,456 $ 276,120 $ 329,765 $ 1,114,398 $ 74,532,892

$ 555,645 $ 613,477 $ 378,696 $ 185,449 $ 269,994 $ 286,812 $ 1,000,839 $ 69,921,152

 79 696 256 79 208 26,734 62,159 2,979,755

 - - - - - - - 46,795

 18,652 8,952 4,011 4,928 5,918 16,219 51,400 1,585,190

 18,731 9,648 4,267 5,007 6,126 42,953 113,559 4,611,740

$ 574,376 $ 623,125 $ 382,963 $ 190,456 $ 276,120 $ 329,765 $ 1,114,398 $ 74,532,892

$ 79,162 $ 99,264 $ 40,184 $ 54,660 $ 90,300 $ 26,878 $ 430,680 $ 14,992,121

 555,645 613,477 378,696 185,449 269,994 286,812 1,000,839 69,921,152

 (533,577) (599,047) (357,833) (183,375) (245,651) (271,370) (932,065) (70,423,240)

 (4,685) (6,567) (2,749) (1,011) (3,648) (8,263) (88,442) (436,816)

 96,545 107,127 58,298 55,723 110,995 34,057 411,012 14,053,217

 (2,979) (262) - - - - (6,213) (1,946,057)

 - 262 - - - - (2,484) (71,646)

 (2,979) - - - - - (8,697) (2,017,703)

$ 76,183 $ 99,002 $ 40,184 $ 54,660 $ 90,300 $ 26,878 $ 424,467 $ 13,046,064

$ 93,566 $ 107,127 $ 58,298 $ 55,723 $ 110,995 $ 34,057 $ 402,315 $ 12,035,514

$ 554,361 $ 611,476 $ 378,202 $ 184,643 $ 269,574 $ 271,126 $ 924,919 $ 69,740,602

 (2,112) (84,526) (2,315) (6,143) (231,465) (3,059) (309,465) (7,533,243)

 - 262 - - - - (2,484) (71,646)

$ 552,249 $ 527,212 $ 375,887 $ 178,500 $ 38,109 $ 268,067 $ 612,970 $ 62,135,713

$ 533,577 $ 599,047 $ 357,833 $ 183,375 $ 245,651 $ 271,370 $ 932,065 $ 70,423,240

 (2,112) (84,526) (2,315) (6,143) (231,465) (3,059) (309,465) (7,533,243)

 531,465 514,521 355,518 177,232 14,186 268,311 622,600 62,889,997

 - - (5,508) - - - (14,819) (6,482,060)

$ 531,465 $ 514,521 $ 350,010 $ 177,232 $ 14,186 $ 268,311 $ 607,781 $ 56,407,937

Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

FY 2015 Agency Financial Report 145

Other Information

(Unaudited)

FY 2015 Agency Financial Report 147

Inspector General’s Top Management and Performance Challenges
Other Information

(Unaudited)

148 United States Department of Labor

Top Management and Performance Challenges Facing the Department of Labor

As of November 2015, the OIG considers the following as the most serious management and performance challenges

facing the Department:

• Providing a Safe Learning Environment at Job Corps Centers

• Protecting the Safety and Health of Workers

• Helping Adults, Youth and Veterans Obtain the Education, Training, and Support Services Needed to 

Succeed in the Labor Market

• Protecting Retirement, Health, and Other Benefit Plans for Workers, Retirees, and Their Families

• Securing and Managing Information Systems

• Reducing Improper Payments

CHALLENGE: Providing a Safe Learning Environment at Job Corps Centers

BACKGROUND

The Job Corps program provides residential and nonresidential education, training, and support services to 

approximately 60,000 disadvantaged, at-risk youth, ages 16-24, at 125 Job Corps centers nationwide. The goal of 

this $1.6 billion program is to offer an intensive intervention to this targeted population as a means to help them 

learn a career, earn a high school diploma or pass the General Education Development test, and find and keep a 

good job.

CHALLENGE FOR THE DEPARTMENT

The Job Corps program remains challenged in its efforts to control violence and provide a safe learning 

environment at its centers. Without providing a safe learning environment for students and staff, Job Corps cannot 

meet its core mission of attracting young people who face economic disadvantages or come from debilitating 

environments, teaching them the skills they need to become employable and independent, and placing them in 

meaningful jobs or further education. 

Job Corps centers have been troubled by violence and other criminal behavior for years, as some center operators 

have not been enforcing disciplinary policies. In the past year, a student at the St. Louis Job Corps Center allegedly 

shot and killed another student in their dormitory room, and center operations at the Homestead Job Corps Center 

in South Florida were suspended and students transferred to other centers after a student there was murdered, 

allegedly by several of his fellow students. 

Previous to these serious incidents, OIG audits disclosed that some Job Corps centers failed to report and 

investigate serious misconduct, like drug abuse and assaults, or downgraded incidents of violence to lesser 

infractions to keep students enrolled, creating an unsafe environment for students and staff. 

DEPARTMENT’S PROGRESS 

Job Corps indicated it took steps in 2014 to address safety issues at its centers. Job Corps stated it instructed its 

regional offices to take immediate action to ensure centers are enforcing the program’s zero tolerance policy. In 

addition, Job Corps reported it is developing a comprehensive center safety profile intended to provide 

management staff with current data on significant incident reports and comments and concerns expressed by 

students or the public regarding center safety. Job Corps stated regional office staff has been instructed to conduct 

unannounced monitoring visits to centers with a focus on high-risk or low-performing centers, and it is seeking an 

extra $3.5 million to help coordinate oversight at its regional offices.
Top Management Challenges

(Unaudited)

FY 2015 Agency Financial Report 149

Job Corps also stated it is in the process of developing a risk management assessment tool to help program 

managers identify centers with a higher level of programmatic risk, including factors such as safety and student 

conduct. In response to concerns about the underreporting of data regarding student conduct infractions and 

dispositions, Job Corps reported it has conducted training on entering complete and accurate data in a timely 

manner into its Center Information System. 

WHAT REMAINS TO BE DONE

To provide a safe and healthful center environment for Job Corps students and staff, the Department needs to 

expeditiously implement the various initiatives it has recently begun to protect the safety of its students. After 

these initiatives have been implemented, the Department must be more vigilant in its monitoring to ensure center 

operators and Regional Office personnel fully enforce Job Corps’ zero tolerance policy. The Department also needs 

to examine whether its admissions screening process is adequately vetting the youth who apply for admission to 

the program, and whether it needs to modify the performance clauses in center operators’ contracts to remove 

possible disincentives to enforcing its zero tolerance policy.

CHALLENGE: Protecting the Safety and Health of Workers

BACKGROUND

The Department administers the Occupational Safety and Health Act of 1970 (OSH Act) and the Federal Mine Safety 

and Health Act of 1977 (Mine Act), as amended by the Mine Improvement and New Emergency Response Act of 

2006 (MINER Act). DOL’s effective enforcement of these laws is critical to protecting workers from death, injury, 

and illness.

The two DOL agencies primarily responsible for enforcing these laws are the Occupational Safety and Health 

Administration (OSHA) and the Mine Safety and Health Administration (MSHA). OSHA and its state partners are 

responsible for the safety and health of 130 million workers employed at more than 8 million establishments. 

MSHA is responsible for the safety and health of more than 350,000 miners who work at more than 13,000 mines.

CHALLENGE FOR THE DEPARTMENT

The Department faces challenges in determining how to best use its limited resources to help ensure the safety and 

health of workers, particularly in high risk industries such as construction, forestry, fishing, agriculture, and mining. 

OIG audits have found OSHA lacks outcome-based data needed to determine the effectiveness of its programs. 

OSHA is also challenged to protect workers from retaliation and discrimination when they “blow the whistle” on 

unsafe or unhealthy workplace practices.

MSHA continues to struggle to meet its statutory mine inspection requirements and other enforcement 

responsibilities, such as protecting the rights of miners who report workplace safety and health concerns. At MSHA, 

this challenge is made even more difficult by the demands of maintaining a cadre of experienced, diverse, and 

properly trained enforcement staff and top management. Almost 40% of MSHA’s health and safety personnel are 

eligible to retire by 2017. This is a particularly pressing issue given the nearly 2 years it takes to train new mine 

inspectors. Moreover, 78% of MSHA’s top leadership is eligible to retire by 2017. MSHA is also challenged by the 

underreporting of occupational injuries and illnesses by mine operators. This underreporting hinders MSHA’s ability 

to focus its resources on mines that have elevated accident and injury rates.

MSHA recently implemented the first phase of its new standards for a phased reduction in the amount of allowable 

respirable dust in coal mines by August 2016. While MSHA has reported positive results in the first phase, the 

agency remains challenged to ensure compliance with the more rigorous standard taking effect in 2016, particularly 

in the face of an ongoing court challenge by the industry to the new regulations.

DEPARTMENT’S PROGRESS

OSHA stated it is considering changes to the way it does business to better use its limited resources. In this regard, 

the Department initiated a multi-year study of OSHA’s Site Specific Targeting program to assess the impact of 

program interventions on future employer compliance. The study is scheduled to be completed by the end of 

calendar year 2015. OSHA has introduced 10 new performance measures for monitoring State Plans, one of which 
Other Information

(Unaudited)

150 United States Department of Labor

is intended to help OSHA determine the effectiveness of State Plan inspection targeting. For its whistleblower 

protection program, OSHA has created and updated its dedicated website – www.whistleblowers.gov. The site 

provides workers, employers, and the public with easily accessible information about the 22 federal whistleblower 

protection statutes OSHA currently administers. OSHA has also established whistleblower dedicated Assistant 

Regional Administrator positions in its regions.

MSHA stated it has new and ongoing initiatives and other strategies in FY 2015 to protect the nation’s miners, with 

the goal of continuing the long-term trend toward reduced fatality rates. MSHA stated it stepped up its targeted 

enforcement at metal/nonmetal mines and continued to engage in compliance initiatives including implementation 

of the first phase of the Respirable Dust Rule to end black lung disease among coal miners, promotion of the Rules 

to Live By initiative to prevent common types of mining deaths, and issuance of guidance on ladder safety and 

workplace examinations to improve compliance with the most frequently cited violations of metal/nonmetal 

standards. MSHA issued a final rule on proximity detection systems for continuous mining machines in underground 

coal mines and a proposed rule for proximity detection systems on mobile machines, also in underground coal 

mines. In addition, MSHA stated it implemented technological advancements to make mine rescue safer and more 

efficient and extended its mine rescue reach by establishing regional mine emergency stations. MSHA also stated it 

has developed a succession plan for FYs 2013-2017 and is implementing key strategies for leadership development 

such as training, mentoring and detailing employees to developmental assignments.

WHAT REMAINS TO BE DONE

OSHA’s performance measures have been focused on activities rather than outcomes. While OSHA cites several 

studies that have shown a positive impact from OSHA inspections, the agency needs to continue its efforts to 

develop metrics that reflect the impact of its enforcement efforts on improving workplace safety and health. When 

its study of the Site Specific Targeting Program is completed, OSHA needs to analyze the study results and use them 

to improve its targeting efforts. Similarly, OSHA needs to evaluate its ten new performance measures to identify the 

measures that have been having a positive impact on improving worker safety and health. While OSHA has 

implemented timeliness measures for its Whistleblower Program, it needs to develop performance measures that 

will indicate if the program is working as intended and if complaints are being thoroughly investigated.

MSHA needs to continue taking action to further enhance its knowledge of the underreporting of accidents, injuries 

and illnesses by mine operators and use this knowledge to finalize its strategy to address mine operator programs 

and practices that discourage reporting. MSHA also needs to continue working on the next steps in mine safety, 

including training the mine rescue community on state-of-the-art communications, monitoring and tracking 

systems; developing new mine rescue and command and control guidance; investing in video tools for advancing 

rescue teams; and upgrading seismic and robotics technology. MSHA also needs to continue conducting 

stakeholder outreach so that mine operators have ample time to adjust to the new respirable coal dust 

requirements. MSHA further needs to continue its efforts to ensure key health, safety, and top management 

positions do not experience significant vacancies.

CHALLENGE: Helping Adults, Youth and Veterans Obtain the Education, Training, and 

Support Services Needed to Succeed in the Labor Market

BACKGROUND

In FY 2015, the Department’s Employment and Training Administration (ETA) was appropriated $1.8 billion for 

grants to states for Workforce Innovation and Opportunity Act (Opportunity Act) Adult, Dislocated Worker, and 

Youth programs. On July 1, 2015, most provisions of the Opportunity Act, which replaced the Workforce Investment 

Act of 1998, took effect. The Opportunity Act contains provisions to strategically align workforce development 

programs to develop participants’ skills to meet needs of employers and to improve accountability and 

transparency in reporting. ETA also operates the Job Corps program, spending $1.6 billion dollars annually to 

provide residential and nonresidential education, training, and support services to approximately 60,000 

disadvantaged, at-risk youths (ages 16-24), at 125 Job Corps centers nationwide.
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FY 2015 Agency Financial Report 151

The Veterans’ Employment and Training Service (VETS) assists veterans in obtaining and maintaining civilian 

employment primarily through its Jobs for Veterans State Grants Program. Administered by State Workforce 

Agencies, this program provides employment services to disabled and other eligible veterans, conducts outreach to 

employers, and engages in advocacy efforts to increase employment opportunities for veterans.

CHALLENGE FOR THE DEPARTMENT

The Department remains challenged to ensure its job training programs and related services are helping those with 

barriers to employment to secure the skills and credentials they need to obtain jobs paying a living wage. This 

challenge is made even more difficult by a lack of reliable outcome data that prevents the Department from being 

able to evaluate the effectiveness of its workforce development programs.

Our work in Job Corps has found its graduates have been often placed in jobs unrelated to the occupational skills 

training they received or in jobs that required little or no training. A 2014 GAO report on Workforce Investment Act 

(WIA) training outcome data concluded that data on credential attainment and training-related employment can 

potentially provide more meaningful information on the value of training services. The Department faces challenges 

in assuring credentials that participants obtain from DOL-funded training programs are industry-recognized and 

actually help participants obtain jobs in those industries. The Department continues to be challenged to ensure the 

accuracy of reported outcomes data, as states do not have the technical capabilities needed to track and report this 

data. While provisions in the Opportunity Act are designed to standardize performance metrics and data collection, 

the new act does not include a requirement to report on training-related placements.

The employment situation for veterans has improved, as evidenced by the Bureau of Labor Statistics’ 

announcement in August 2015 that the unemployment rate for veterans had dropped to 4.2%– a 7 year low. As 

military downsizing continues, the Department will continue to be challenged to meet the demand for employment 

services by veterans returning to civilian life, particularly for those with barriers to employment. In particular, 

facilitating veteran attainment of licensing and credentialing for civilian jobs similar to their military jobs is one of 

the Department’s most important and challenging objectives. The Department estimates about 90% of future 

participants served by its Jobs for Veterans State Grants program will require career services, such as career 

planning and assessment and referrals to job training and support services. A lack of reliable data has been 

preventing VETS from determining how well states have been meeting veterans’ needs for services that lead to 

good jobs.

DEPARTMENT’S PROGRESS

In July 2015, provisions in the Opportunity Act took effect to improve accountability by requiring the reporting of 

common performance indicators used by federally funded workforce training programs. For example, the Act 

created a single set of common measures for adults across all core programs authorized under the bill, including 

both occupational training and adult education programs, and a similar set of common measures across all youth 

serving programs authorized under the bill. ETA has begun providing guidance and technical assistance to states to 

assist with the transition to the new Opportunity Act requirements, and has proposed regulations to implement the 

new legislation.

ETA expects to begin to receive the initial results from its WIA Gold Standard Evaluation by the end of 2015 and the 

final impact findings in 2017. ETA stated it plans to use these results to identify those practices and services that are 

having a positive impact on participants’ ability to obtain good jobs.

Job Corps indicated it implemented a standards-based system of teaching and learning and began to identify and 

replicate the practices of high-performing centers. To improve the usefulness of its reported performance data, Job 

Corps stated it has updated its Job Training Match Crosswalk to align with the revised DOL O*NET-Standard 

Occupational Classification database, which characterizes all jobs in the U.S. labor market. Another area of progress 

cited by Job Corps is its system-wide credentialing strategy to align all career technical training offered throughout 

the program with an industry recognized credential, thereby offering every graduate the opportunity to earn at 

least one industry recognized credential upon program completion. Job Corps also stated it has increased its 

oversight of under-performing training programs by improving monitoring and more effectively using performance 

improvement plans, center assessments, and other oversight tools.
Other Information

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152 United States Department of Labor

VETS stated it has provided more emphasis and efforts in three areas: 1) preventing unemployment of recentlyseparated veterans by engaging with them before they leave military service; 2) serving veterans with significant 

barriers to employment; and 3) expanding nationwide outreach. VETS also noted participation in the Department of 

Labor Employment Workshop portion of the military’s Transition Assistance Program has increased almost 30%

since 2013, and it has redesigned the workshop curriculum to be more responsive to the career needs of 

participants. VETS stated it has designated categories of transitioning service members as eligible to receive 

services from its Disabled Veterans Outreach specialists before they leave active duty, and has partnered with the 

Department of Defense to allow eligible transitioning service members to participate in registered apprenticeships 

during their last six months of military service. VETS also partnered with the Department of Veterans Affairs to 

establish a Joint Work Group whose goal is to improve the quality of employment services and outcomes for 

veterans with disabilities. Finally, VETS stated it has expanded its nationwide outreach program by adding staff in 

the national and six regional offices to improve awareness of VETS’ program and cooperation with stakeholders.

WHAT REMAINS TO BE DONE

The Department must reconcile public comments and issue final regulations to implement the provisions of the 

Opportunity Act by January 22, 2016. The performance requirements of the Opportunity Act take effect starting 

July 2016; therefore, ETA needs to establish a new data collection and update technology to collect this new data. 

At a minimum, ETA will need to address data reliability and validity challenges over the initial implementation year. 

ETA also needs to ensure the results of the WIA Gold Standard Evaluation are used to identify those services that 

are having a positive impact on participants’ ability to obtain good jobs.

In Job Corps, the Department needs to complete its plans to issue new guidance on performance improvement 

plans and to revise its procedures for conducting regional office center assessments. The Department also needs to 

evaluate the effectiveness of Job Corps’ system-wide credentialing strategy. The Department should continue to 

pursue statutory access to the National Directory of New Hires. Such access would streamline the process of 

obtaining earnings data needed to assess the impact of services provided by ETA, VETS, and other agencies within 

the Department. The Department should also consider conducting a longitudinal study, similar to the WIA Gold 

Standard Evaluation, of the job counseling, training, and placement services for veterans provided by the 

Department. Such a study could provide a better understanding of the impact of the Department’s services on the 

employment outcomes of veterans.

CHALLENGE: Protecting Retirement, Health, and Other Benefit Plans for Workers, 

Retirees, and Their Families

BACKGROUND

The Employee Benefits Security Administration (EBSA) protects the integrity of pensions, health, and other 

employee benefits for about 143 million people. EBSA’s enforcement authority extends to an estimated 677,000 

private retirement plans, 2.3 million health plans, and a similar number of other employee welfare plans that 

together hold $8.7 trillion in assets. EBSA’s responsibilities include providing oversight of the federal Thrift Savings 

Plan, the largest defined-contribution plan in the United States, with nearly $450 billion in assets and 5 million 

participants.

CHALLENGE FOR THE DEPARTMENT

EBSA’s limited authority and resources present challenges in achieving its mission of administering and enforcing 

Employee Retirement Income Security Act (ERISA) requirements protecting the pensions, health, and other 

employee benefits for approximately 143 million participants and beneficiaries. An important part of EBSA's mission 

is to deter and correct violations of ERISA through a strong enforcement program to ensure workers receive 

promised benefits. Given the number of plans the agency oversees relative to the number of investigators, EBSA 

has to devise ways to focus its available resources on investigations, audits and other reviews that it believes will 

most likely result in the deterrence, detection, and correction of ERISA violations. In order to do so, EBSA must 

determine which of its enforcement initiatives are the most effective.
Top Management Challenges

(Unaudited)

FY 2015 Agency Financial Report 153

For many years, EBSA’s oversight efforts have been challenged by the fact that billions of dollars in pension assets 

held in otherwise regulated entities, such as banks, escaped audit scrutiny. ERISA provides an option for a limitedscope audit under which plan auditors, generally, need not audit investment information certified by certain banks 

or insurance carriers presumably because they are being audited by other entities for other purposes. As a result, 

the independent public accountants that conduct their audits express “no opinion” on the financial statements of 

plans that receive certifications from these institutions holding assets on behalf of the plans. These limited-scope 

audits weaken assurances to stakeholders and may put retirement plan assets at risk because they provide little or 

no confirmation regarding the existence or value of plan assets. These concerns were renewed by recent audit 

findings that as much as $3.3 trillion in pension assets, including an estimated $800 billion in hard-to-value 

alternative investments, received limited-scope audits that provided few assurances to participants as to the 

financial health of their plans.

EBSA is further challenged by the large increase in the types and complexity of investment products available to 

pension plans. EBSA’s proposed conflict of interest rule is intended to ensure workers enrolled in retirement plans 

can be assured the investment advice they receive is delivered with their best interest in mind, but the rule faces 

significant opposition from Congress and industry stakeholders.

EBSA also faces challenges in protecting participants in ERISA-covered, self-funded health plans from improper 

claim denials. EBSA has little or no information about the plans it oversees because it has exempted 98% of health 

plans from the requirement to file Form 5500 informational reports. EBSA should reexamine the filing exemption 

for small plans and capture data on claims for health plans on Form 5500.

DEPARTMENT’S PROGRESS

In FY 2011, EBSA implemented the Sample Investigation Program (SIP) to measure compliance with the civil 

provisions of ERISA. EBSA reported it has processed 1,415 SIP cases through September 15, 2015, and thoroughly 

analyzed the data. EBSA stated the analysis showed that the employee benefit plans, violations and investigations 

studied were too different from each other to draw meaningful statistically-supported inferences regarding overall 

compliance or the impact of EBSA’s investigations. EBSA said it will continue to analyze the data, including 

identifying consequential trends, to make it statistically more useful to the agency, but will only be able to report 

on certain issues in a qualitative way. Going forward, EBSA plans to scale back the SIP program to redirect resources 

to other compliance projects, including one on bonding. Rather than attempt to measure overall compliance with 

all of ERISA’s many provisions, EBSA stated it is focusing on this specific compliance issue of special importance to 

the integrity of plans and plan benefits.

WHAT REMAINS TO BE DONE

EBSA should continue to analyze violation trends as an additional methodology to help guide its resource allocation 

strategies.

EBSA should concentrate on ensuring final regulations on the conflict of interest rule are issued and continue its 

work to obtain legislative changes repealing the limited-scope audit exemption. In the interim, EBSA should 

continue to expand its existing authority to clarify and strengthen limited scope audit regulations and evaluate the 

ERISA Council’s recommendations on the issue.

Regarding health plans, EBSA needs to reexamine the filing exemption for small plans and capture data on claims 

for health plans on Form 5500, increase its enforcement activities, and improve its analysis of the denial of claims 

data at the plan and insurer levels. EBSA should also continue participant complaint reporting, collaborating with 

states on data and enforcement activities, and work with plans and review other ways it could improve the external 

review process for participants and beneficiaries.

CHALLENGE: Securing and Managing Information Systems

BACKGROUND

More than 50 of the Department’s major information systems contain sensitive information that is central to its 

mission and to the effective administration of its programs. Departmental systems are used to analyze and house 
Other Information

(Unaudited)

154 United States Department of Labor

the nation’s leading economic indicators, such as the unemployment rate and the Consumer Price Index. They also 

maintain critical and sensitive data related to the Department’s financial activities, enforcement actions, worker 

safety, health, pension, and welfare benefits, job training services, and other worker benefits.

CHALLENGE FOR THE DEPARTMENT

Safeguarding data and information systems is a continuing challenge for all federal agencies, including the 

Department of Labor. The recent cyber-theft of an estimated 22 million federal personnel records from the Office 

of Personnel Management highlights the risks faced by federal agencies. OIG’s audits and investigations have 

identified deficiencies in configuration management and account management, as well as security and access 

controls weaknesses in the Department’s major information systems, including web applications. These deficiencies 

pose an increased risk to the security of data and information maintained in Departmental systems.

The Department remains challenged to fully implement two-factor authentication for 100% of its users, particularly 

its privileged users. The Department also needs to reduce the number of users with privileged access to systems to 

minimize its exposure to attacks similar in nature to the OPM data breach. The Department continues to be 

challenged to mitigate the significant deficiencies associated with its systems’ access controls and its third party 

oversight and configuration management processes. The Department must address challenges related to mitigating 

the risks associated with the acquisition and management of cloud solutions such as ensuring contracts contain 

provisions that protect the integrity, security and availability of government owned data, and monitoring usage 

rates to ensure charges do not exceed funded amounts. The Department also needs to mitigate the risks posed by 

today’s smartphones. Mobile devices can be easily misplaced or stolen, are susceptible to electronic eavesdropping, 

and their whereabouts can be easily tracked and secretly monitored.

The Department continues to face challenges in managing its financial system, New Core Financial Management 

System (NCFMS), created by sudden legal and bankruptcy issues faced by the private sector firm that was providing 

these services. The Department procured the NCFMS assets and entered into an interagency agreement for a 

federal shared services provider to assume operations and maintenance of NCFMS at a cost of more than $2 million 

per month. The Department has entered into another $24.9 million time and materials interagency agreement with 

the shared services provider to operate and maintain NCFMS over a one-year period that began in April 2015. 

Initially, a time and materials agreement may have been the most appropriate as the shared services provider was 

gaining an understanding of the operations and stabilizing the system; however, the provider has now been 

operating NCFMS for almost a year, but the Department has not been able to define its requirements and move to 

a fixed-price agreement.

DEPARTMENT’S PROGRESS

As of September 15, 2015, the Department reported it had implemented two-factor authentication for about 89%

of its users. The Department plans to achieve full compliance with two-factor authentication by September 30, 

2015. The Department has piloted a mobile device management solution, MaaS360, to secure mobile device usage 

across the Department. In April 2015, the Department issued guidance to provide agencies with a standard 

oversight and monitoring process for its external service providers. The Department stated it has increased the 

frequency of its monitoring reviews and is in the process of deploying additional enterprise monitoring tools to 

address the weaknesses associated with agency account management and baseline configuration procedures.

The Department stated it has taken steps to mitigate NCFMS costs, but contended NCFMS operations continue to 

lack the certainty needed to make a firm-fixed priced agreement a reasonable and prudent choice as we 

recommended. The Department stated it will closely monitor costs under its current agreement and will consider a 

firm-fixed priced agreement if and when it becomes the more cost efficient model.

WHAT REMAINS TO BE DONE

The Department needs to fully implement the use of Personal Identity Verification (PIV) cards to provide greater 

security of its information systems. Departmental agencies need to prioritize available resources to implement 

planned actions to correct deficiencies in web applications, configuration management, access controls (including 

account management), and update its third-party oversight procedures by December 31, 2015. The Department 
Top Management Challenges

(Unaudited)

FY 2015 Agency Financial Report 155

needs to update its policies for managing applications and information in cloud computing environments to include 

best practices. The Department also needs to implement the OMB M-07-16 requirement to log/verify data extracts 

and complete its plans to implement a mobile device management program that can be scaled to cover up to 

30,000 portable devices.

The Department must closely monitor the operation and maintenance services of NCFMS to mitigate financial and 

operational risks. The Department should establish a firm-fixed priced agreement with the federal shared service 

provider for routine operation and maintenance to assist the Department in managing its costs within budgeted 

amounts and reduce the need for agencies to shift funds from program-related requirements.

CHALLENGE: Reducing Improper Payments 

BACKGROUND

In its Fiscal Year (FY) 2014 Agency Financial Report, the Department estimated the Unemployment Insurance (UI) 

benefit program made $5.6 billion in improper payments. According to OMB, the UI program had the fifth highest 

amount of reported improper payments among all federal programs. Claimants who failed to actively seek 

employment and therefore did not meet work search requirements were the leading cause of UI overpayments. 

OIG investigations also continue to uncover fraud committed by individual UI recipients who do not report or 

underreport earnings, as well as fraud related to fictitious employer schemes.

The cluster of Workforce Investment Act Title I grant programs (Adult, Youth, and Dislocated Workers) and the 

FECA benefit program have been classified as at-risk of significant improper payments by OMB former Circular No. 

A-11, Section 57.

CHALLENGE FOR THE DEPARTMENT

OMB has designated the UI program as being particularly at risk for improper payments, and the Department’s 

ability to identify and reduce UI improper payments continues to be a challenge. OIG’s investigative casework 

clearly shows the UI program remains vulnerable to fraud and abuse. As detailed in OIG’s July 2015 investigative 

advisory report on UI fraud, identity thieves and organized criminal groups have found ways to exploit program 

weaknesses, and the OIG views this fraud as a significant threat to the integrity of the UI program.

The Department also remains challenged in identifying the full extent of improper payments in the FECA and WIA 

programs. The FY 2014 improper payment estimate for FECA was likely understated because the estimate excluded 

initial payments made in the first 90 days of a compensation claim, as well as payments made on claims initiated on 

older claims. While some amount of improper payments may be unavoidable due to the need to make initial 

payments as quickly as possible to alleviate hardships to injured federal workers, the Department should track the 

extent of such improper payments and whether they get adjusted to the correct amount. Also, the estimate of 

fraudulent FECA payments was based on actual restitution amounts and therefore did not reflect an estimate of 

undetected fraud. For the WIA programs, data are not readily available to allow the Department to directly sample 

grant payments and develop a statistically valid estimate of improper payments.

DEPARTMENT’S PROGRESS

The Department continues to work with states to implement a number of strategies to improve the prevention, 

detection and recovery of UI improper payments, and cited positive impacts such as an 83% reduction in the 

Employment Services registration error rate in the 2014 reporting period compared with the 2011 baseline. The 

Department also pursued the “Improper Payment High Priority States” initiative to reduce the UI improper 

payment rate in those states with unacceptably high levels over a prolonged period. According to the Department, 

each of the six states designated in FY 2012 and two states designated in FY 2013 achieved an improper payment 

rate below 10%, resulting in their removal from this designation in FY 2015 (although five new states were 

identified as subject to enhanced monitoring and technical assistance). In September 2015, the Department’s UI 

Integrity Center of Excellence hosted a UI Technology Symposium for states to exchange information with each 

other about technology and tools for the prevention and detection of improper payments. In addition, the 

Department stated it is working to improve collaboration with federal benefit programs, such as Earned Income Tax 
Other Information

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156 United States Department of Labor

Credit and Medicaid, which were recently targeted by fraud schemes involving the use of stolen, personallyidentifying information to fraudulently claim benefits.

With respect to improper payments in the FECA program, in FY 2014 the Department implemented a new, OMBapproved methodology for estimating the FECA improper payment rate and will report the FECA improper payment 

rate on an annual basis. In addition, OWCP stated it is developing a Program Integrity Unit with auditors and data 

analysts to provide greater oversight and analysis of payment accuracy. OWCP has also contracted with a data 

analytics firm to assist in developing technology and analytic tools to detect and monitor inherent risk in claims, 

payments, and providers. The resultant technology should enable OWCP to refine its policy, procedures, and 

oversight interventions. In the WIA programs, the Department stated it has attempted to identify the full extent of 

improper payments by including estimates from other sources.

WHAT REMAINS TO BE DONE

The Department needs to employ cost benefit and return on investment analyses to evaluate the impact of its 

improper payment reduction strategies for UI. The Department can further improve oversight of the states’ 

detection and prevention of UI overpayments by increasing the frequency of on-site reviews at State Workforce 

Agencies (SWAs). In addition, the Department needs to continue pursuing legislation to allow states to use a 

percentage of recovered UI overpayments to detect and deter benefit overpayments.

OIG’s July 2015 investigative advisory report included several recommendations on actions the Department should 

take to address systemic weaknesses that make the UI program more susceptible to fraudulent activity. For 

example, SWAs should pay all UI claims by physical check, direct deposit, or a debit card issued by state-approved 

vendors. Such cards provide for account holder verification and make it easier to identify individuals who are 

submitting fraudulent claims. ETA also needs to work with SWAs to develop a plan to identify multiple claims that 

originate from the same IP addresses, provide all identified fraudulent claimant information to a shared database 

that can be queried to identify the filing of fraudulent claims against multiple states, discontinue auto-populating 

any data in their systems, and require UI claimants to fill out all employer contact information correctly and 

completely. Additionally, ETA needs to work with states to strengthen existing systematic audit controls to track 

access to personally identifiable information, and to identify and implement best practices and strategies for 

communication between tax operations and benefit operations.

The Department needs to continue developing the technology and analytic tools (e.g., models) to enhance its FECA 

improper payment estimation methodology.

Finally, the Department needs to continue working with OMB to properly classify the individual grant programs 

authorized under the newly enacted Workforce Innovation and Opportunity Act. Since data are not readily available 

to allow the Department to develop a statistically valid improper payments estimate by directly sampling grant 

payments, the Department needs to consider other sampling methods. Further, the Department needs to provide 

full disclosure in the Agency Financial Report regarding the limitations of the data used to estimate overpayments.
(Unaudited)

FY 2015 Agency Financial Report 157

Summary of Financial Statement Audit and Management Assurances

The following tables provide a summary of the Department’s FY 2015 financial statement audit and its management 

assurances.

Summary of Financial Statement Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

Lack of Sufficient IT Controls over Key Financial Support Systems 0 1 0 0 1

Total Material Weaknesses 0 1 0 0 1

Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Reassessed Ending 

Balance

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Reassessed Ending 

Balance

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Systems conform to financial management system requirements

Non-Conformances Beginning 

Balance

New Resolved Consolidated Reassessed Ending 

Balance

Total Non-Conformances 0 0 0 0 0 0

Compliance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

1. System Requirements No lack of substantial compliance noted No lack of substantial compliance noted

2. Accounting Standards No lack of substantial compliance noted No lack of substantial compliance noted

3. USSGL at Transaction Level No lack of substantial compliance noted No lack of substantial compliance noted
(Unaudited)

158 United States Department of Labor

Improper Payments Reporting Details

The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments Elimination and 

Recovery Act of 2010 (IPERA) and the Improper Payment Elimination and Recovery Improvement Act of 2012 

(IPERIA),1 requires federal agencies to identify and reduce improper payments and report annually on their efforts 

according to guidance promulgated by the Office of Management and Budget in OMB Circular A-123, Appendix C, 

Requirements for Effective Measurement and Remediation of Improper Payments.

Details for each program are provided in the following sections based on the format prescribed by OMB Circular A136 Section II.5.8.

I. Risk Assessments

All agencies must assess the IP risk level for each program that is not already reporting an IP estimate at 

least once every three years (See OMB Circular A-123, Appendix C for additional guidance related to risk 

assessments). All programs that are assessed for risk in a given year should be listed in this section. In 

addition, clearly identify the risk-susceptible programs (i.e., programs that are susceptible to significant IPs 

based on statutory thresholds listed in OMB Circular A-123, Appendix C, Part 1.A.9.Step 1) identified by the 

agency risk assessments performed in the fiscal year or required by OMB to be included (OMB may 

determine, on a case-by-case basis, that certain programs that do not meet the statutory threshold 

requirements may still be subject to the annual reporting requirements). For the newly identified risksusceptible programs indicate the fiscal year in which a rate and amount will be reported (per OMB Circular 

A-123, Appendix C, Part I.A.9.Step 2 footnote 8 this should be the fiscal year following the year in which the 

risk assessment was conducted). Agencies should briefly describe all of the risk assessment(s) performed in 

the fiscal year (the risk factors examined should be included in the description).Highlight any changes to the 

risk assessment methodology or results that occurred since the last AFR or PAR.

IPIA Section 2(a) requires agency heads to review all programs to identify risk susceptibility for improper payments 

(IP) every three years. The last Department-wide risk assessment was performed in FY 2014. Results for risk 

assessments of programs authorized by the Workforce Innovation and Opportunity Act (WIOA) of 2014 (see 

explanation below) are incomplete at the time of publication of this report but are anticipated to be available for FY 

2016 reporting. No other programs were found to have experienced material changes requiring a review of 

previous risk assessments.

Susceptible to Significant Improper Payments: Based on DOL’s FY 2014 department-wide risk assessment, two DOL 

Programs, the Unemployment Insurance (UI) and the Federal Employees’ Compensation Act (FECA) benefit 

programs, are required to provide estimates based on the susceptibility threshold in statute2:

• Either potential estimated IP greater than 1.5% of outlays and greater than $10 million, or

• Potential estimated IP of more than $100 million, regardless of percentage.

Payment integrity information/plans for UI and FECA can be found at:

• UI – http://www.oui.doleta.gov/unemploy/improp_pay.asp

• FECA – http://www.dol.gov/ocfo/media/reports/20141104IPMETHODOLOGY.pdf

Other Programs Required to Report Improper Payments: One DOL program area, the Workforce Investment Act 

(WIA) of 1998 Title I programs (WIA Programs), provides estimates based on inclusion in Exhibit 57B, Section 57, of

OMB Circular A-11 (2002)3

. Although Section 57 was rescinded in 2003, these programs have continued to provide 

IP information beyond that which is required by IPIA.

 1 IPIA, Public Law (P.L.) 107-300 (2002); IPERA, P.L. 111-204 (2010); and IPERIA, P.L. 112-248 (2013) are codified at 31 U.S.C. 3321 note. 2 IPERA §2(a)(3)(A)(II)(ii) 3 In July 2001, OMB issued Section 57, Information on Erroneous Payments, as part of the 2002 revision to Circular A-11, Preparation, 

Submission, and Execution of the Budget. Exhibit 57B of Section 57 listed programs required “. . . to provide improper payment data, 

assessments, and action plans with initial budget submission beginning in 2003.” All “benefit programs” exceeding obligations of $2 billion 

were included on Exhibit 57B.
Other Information

(Unaudited)

FY 2015 Agency Financial Report 159

On July 22, 2014, the President signed the Workforce Innovation and Opportunity Act (WIOA) into law. WIOA 

rescinded the Workforce Investment Act of 1998. Funding for programs under WIA ended on June 30, 2015. The 

new law strengthened internal controls and performance standards for all newly authorized programs. The 

Department remains strongly committed to finding new ways to combat IP for all new DOL programs authorized 

under WIOA. The Department is in the process of conducting risk assessments to determine if these new programs 

exceed the statutory thresholds for IP reporting.

DOL is also required to report an IP estimate for funds provided in response to Hurricane Sandy through the 

Disaster Relief Appropriations Act (Public Law 113-2), signed on January 29, 2013. Section 904(b) of the Act 

provides that all programs and activities receiving funds under this Act shall be deemed to be “susceptible to 

significant IP” for the purposes of IPIA, notwithstanding IPIA section 2(a).

Program Integrity Overviews: The following provides an overview of payment integrity environments for all 

programs reporting.

Unemployment Insurance Program:

The Federal-state unemployment insurance (UI) program, established by the Social Security Act of 1935, is a unique 

Federal-state partnership, based on Federal law but administered by state employees under state law. The program 

is designed to provide benefits to most individuals who are out of work, generally through no fault of their own, for 

periods between jobs. In order to be eligible for benefits, jobless workers must demonstrate workforce attachment, 

usually measured by amount of wages and/or weeks of work, and must be able and available for work and actively 

searching for work.

States also administer two federal unemployment compensation programs – Unemployment Compensation for 

Federal Employees (UCFE) and Unemployment Compensation for Ex-service members (UCX). The states also 

administer an Extended Benefits (EB) program in times of significant unemployment when the unemployment rate 

triggers for EB are met. In addition, Congress periodically enacts temporary episodic programs in times of recession, 

such as the Emergency Unemployment Compensation (EUC) program during the most recent recession and its 

aftermath.

Section 303(a)(1), Social Security Act, requires, as a condition for a state to receive administrative grants for its UI 

program, that the law of the state provide for "such methods of administration ... as are found by the Secretary of 

Labor to be reasonably calculated to insure full payment of unemployment compensation when due." Section 

303(a)(1) has also been interpreted to mean that states must have "methods of administration" to ensure that 

eligible claimants are paid UI benefits promptly when determined eligible and to ensure claimants who are not 

eligible are not paid. In addition, states must have methods of administration to protect against improper payments 

and fraud. This federal-state partnership structure makes UI unique among the nation’s social insurance programs, 

and program integrity depends almost entirely on actions by the states.

The combination of the requirement to pay “when due” and the complexity of managing a large program with 

eligibility rules and administrative resources that vary by state create a complex environment for states to ensure 

program integrity. As such, the Department uses targeted strategies to work with states across many fronts 

including integrity performance measures, monitoring and oversight, facilitating the development of information 

technology systems, employer and claimant communication tool-kits, legislation, a platform to share best practices, 

targeted technical assistance and supplemental funding for state program integrity related activities.

The UI program’s program integrity efforts pre-date the IPIA. The Department’s comprehensive strategic plan 

focuses on state strategies that address specific root causes of improper payments. The plan is continuously 

evolving as new strategies are identified and the progress with each strategy in this plan is regularly monitored. 

These strategies target the three largest root causes of UI improper payments:

• Payments to individuals who continue to claim benefits after they have returned to work (Benefit Year 

Earnings);

• Failure of claimants to comply with the state’s work search requirements (Work Search).
Other Information

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160 United States Department of Labor

• Failure of employers or their third party administrators to provide timely and adequate information on the 

reason for an individual’s separation from employment (Separation); and

Under the Department’s guidance, each state’s Benefit Payment Control (BPC) unit is responsible for ensuring UI 

program integrity through prevention, detection, investigation, establishment, and recovery of improper payments. 

Every state conducts post-award reviews for the prevention and detection of UI improper payments to determine 

whether error or willful misrepresentation has occurred. An additional tool, the Benefit Accuracy Measurement 

(BAM), is a statistical survey created in the 1980s as a quality control and improper payment estimation tool. For 

details on the BAM program, please see the section II. Statistical Sampling: UI.

The UI program uses both the BPC and BAM program results to support the state’s efforts to continuously monitor 

and improve prevention, detection and recovery of improper payments. The results from both BPC and BAM help 

the Department to assess the progress made by the states and provide targeted technical assistance and support.

Benefit outlays for all UI programs decreased in FY 2015 to $32.9 billion from the $48.41 billion paid in FY 2014. This 

decrease reflects the decline in the number of new claims, the discontinuance of the Federally-funded Emergency 

Unemployment Compensation (EUC) program, and the absence of states meeting the trigger thresholds required to 

pay Extended Benefits (EB).

Federal Employees’ Compensation Act Program:

The Federal Employees' Compensation Act provides workers' compensation coverage to approximately three 

million federal and postal workers around the world for employment-related injuries and occupational diseases. 

The Office of Workers’ Compensation Programs and its Division of Federal Employees' Compensation (DFEC) have 

responsibility for administering the Act through twelve district offices and national office staff. DFEC adjudicates 

new claims for benefits and manages ongoing cases; pays medical expenses and compensation benefits to injured 

workers and survivors; and helps injured employees return to work when they are medically able to do so.

The FECA program operates on a Chargeback year that runs from July 1st through June 30th. Approximately 8.79 

million FECA payments totaling $2,987,192,145 were attributable to Chargeback Year 2015 (CBY 2015). These totals 

reflect two basic types of FECA benefit payments: “compensation” and “medical” payments.

• Compensation payments are those made to replace lost wages for a work related injury, benefits for a 

permanent physical impairment due to those injuries, as well as benefits to beneficiaries of federal 

employees that die as a result of a work-related injury.

• Medical payments are made to cover the expenses of medical services, equipment and supplies incurred 

from treatment for illness and/or injury sustained while an employee was engaged in job-related activities.

In CBY 2015, medical payments accounted for 90.7% of all FECA payments; the remaining 9.3% were compensation 

payments. By contrast, the total amount of compensation payments was about $1.92 billion (about 64%), whereas 

the total amount of medical payments was $1.07 billion (about 36%).

Workforce Investment Act Programs:

The stated intent of the Workforce Investment Act (WIA) of 1998 and the objective of its multiple programs is “to 

consolidate, coordinate, and improve employment, training, literacy, and vocational rehabilitation programs in the 

United States” through grants to state agencies. It is important to note that WIA was composed of multiple 

programs which are not entitlement programs – government programs that “provide individuals with personal

financial benefits to which an indefinite number of potential beneficiaries have a legal right...whenever they meet 

eligibility conditions specified by the standing law that authorizes the program."1 WIA funds are awarded to states 

based on a complex statutory formula, driven by unemployment rates and other economic factors—not by the 

number of “participants.” Governors then allocate those limited funds through the nation’s workforce development 

system, which was established by WIA.

 1 "A Glossary of Political Economic Terms," Paul M. Johnson, Ph.D., Auburn University 1994-2005.
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FY 2015 Agency Financial Report 161

The “core” of WIA is Title I – Workforce Investment Systems, which authorized funding to be provided through 

three separate programs: Adult, Dislocated Worker and Youth Programs. These programs primarily provide grant 

funds to states, which, in turn, award the majority of funds to state and local Workforce Investment Boards (WIBs), 

which award sub-grants or contracts to American Job Centers (previously known as One-Stop Centers) and eligible 

non-profit service providers, such as Community Colleges, local school districts, or charities.

On July 22, 2014 President Obama signed the Workforce Innovation and Opportunity Act (WIOA) into law. WIOA 

supersedes the Workforce Investment Act of 1998 and amends the Adult Education and Family Literacy Act, the 

Wagner-Peyser Act, and the Rehabilitation Act of 1973. Funding under WIA ended on June 30, 2015. FY 2015 will be 

the last year for improper payments reporting for rescinded WIA-authorized programs.

The complex funding stream and governance structure for WIA grant dollars when assessing the risk of improper 

payments is an important consideration for effective risk analysis. While WIA is often referred to as one program, in 

actuality, the former law authorized nearly a dozen different programs. The “core” WIA programs correspond to 

three distinct funding streams: Adult, Dislocated Workers, and Youth, each of which has different objectives and 

eligibility requirements.

In FY 2015, the estimated rate of improper payments of WIA programs was approximately 0.88%. Applied to FY 

2015 outlays of $2.53 billion, the estimated dollar amount is approximately $22.26 million.

The Department’s FY 2014 AFR provides a detailed description of all WIA-related programs and risk assessment 

methodology. However, DOL believes this rate is significantly overestimated, as explained in section II. Statistical 

Sampling: WIA.

Factors Contributing to a Low Risk Environment: Several conditions inherent to the structure of the WIA Programs 

create a scenario where improper payments are highly unlikely.

• Individuals do not receive cash payments – they receive services delivered through government agencies 

and/or selected training providers.

• Training providers are screened, approved, and subject to strict performance measures.

ETA has a well-established control environment to communicate requirements and monitor grantees as described 

further in section II. Statistical Sampling: WIA.

Hurricane Sandy Funds Provided by the Disaster Relief Appropriations Act of 2013:

On January 29, 2013, the President signed into law the Disaster Relief Appropriations Act, Public Law 113-2 (127 

Stat. 4), which provided $50.5 billion in aid for Hurricane Sandy disaster victims and their communities. The Act 

requires Federal agencies supporting Sandy recovery and other disaster-related activities to implement additional 

internal controls to prevent waste, fraud, and abuse of these funds. DOL submitted its internal control plan on 

March 31, 2013, to OMB, GAO and the Department’s OIG in accordance with OMB Memorandum M-13-07 

“Accountability for Funds Provided by the Disaster Relief Appropriations Act,” issued March 12, 2013.

Similar to The Recovery Act, the Department collaborated with OIG to minimize risk of waste, fraud and abuse of 

Hurricane Sandy recovery funds. These programs and the risk assessment process are reported in detail in the 

Department’s FY 2014 AFR.

Certain factors contribute to a low-risk environment for Sandy recovery funds:

• “Recipients” are actually providing clean-up and recovery services. They do not receive “benefits”, rather 

they receive a salary (typically minimum wage) for their services.

• Municipalities oversee grants and contracts and must comply with additional compliance mandates for 

Hurricane Sandy accountability.

There were no Hurricane Sandy related funds outlayed by the Department in FY 2015. Therefor this is anticipated to 

be the final IPIA reporting on these programs.
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162 United States Department of Labor

ETA National Emergency Grants: ETA provided $70.3 million in National Emergency Grants (NEGs) to New York, 

New Jersey, Connecticut, West Virginia, and Rhode Island for continuing cleanup and recovery efforts. This included 

$20.5 million provided by the Disaster Relief Appropriation Act of 2013 and $49.8 million provided by ETA’s WIA 

Dislocated Worker National Reserve (DWNR), which funds NEGs.

ETA grantees expended the last NEG funding in September 2014. Hence, there is no reporting for FY 2015.

OSHA: Most of OSHA’s funding was used to conduct inspections. In addition, OSHA provided $1.25 million in Susan 

Harwood Training Grants (CFDA 17.502) to five grantees for training in mitigating workplace hazards in a disaster 

area. The complete list of grantees with amounts and grant requirements can be found at this link:

https://www.osha.gov/dte/sharwood/2013_Disaster_Relief_Grant_Abstracts.html

DOL used the same methodology to analyze those grantees. OSHA expended its final Hurricane Sandy related funds 

in FY 2014. Hence, there is no reporting for FY 2015.

WHD: WHD expended its final Hurricane Sandy relief funds in February 2014. Hence, there is no reporting for FY 

2015.
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FY 2015 Agency Financial Report 163

II. Statistical Sampling

Any agency that has programs or activities that are susceptible to significant IPs based on statutory 

thresholds listed in OMB Circular A-123, Appendix C, Part 1.A.9.Step 1 and are reporting an IP rate under 

section III below, shall briefly describe the statistical sampling process conducted to estimate the IP rate for 

each program identified as being susceptible to significant IPs. Agencies that were granted OMB approval to 

use an alternative sampling and estimation methodology must also include the justification for using the 

alternative methodology (i.e. explain why the agency was not able to follow the requirements in OMB 

Circular A-123, Appendix C Part 1.A.9.Step 2). In addition, briefly highlight any changes to any sampling and 

estimation plans that have occurred since the last AFR or PAR.

In consultation with OMB and the DOL OIG, the Department developed statistical sampling processes conducted to 

estimate the IP rate for each program identified as being susceptible to significant IPs: UI and FECA. WIA-authorized 

and Hurricane Sandy related program methodologies are also included for reporting in this section. These 

methodologies vary by program and are described in detail in the program-specific narratives below.

Unemployment Insurance Program:

UI Improper payment estimates are based on results of the BAM survey, described in detail below, which examines 

a nationally statistically valid sample of payments from the State UI, UCFE, and UCX programs (the three largest 

permanently authorized unemployment compensation (UC) programs), but does not include EUC and EB payments. 

For purposes of reporting payment accuracy data, the estimated improper payment rates are assumed be 

generalizable to the EUC and EB programs, although those programs are not directly measured by the BAM survey.

BAM investigators in each state conduct comprehensive audits for randomly-selected weekly samples of paid and 

denied claims. The population includes paid and denied claims under the State UI, UCFE, and UCX programs.

UI overpayment and underpayment rates for FY 2015 are shown in Table 1 below, and are for the period July 1, 

2014 to June 30, 2015. Data are reported for this period rather than the fiscal year due to the 120 day period 

provided to state BAM investigators to complete claim audits following the end of the quarter. For the period July 

1, 2014 to June 30, 2015, state agencies completed audits for 23,590 paid claims cases, a completion rate of 

99.996%. For the FY 2015 reporting, the estimated UI Improper Payment rate consisted of all overpayments plus 

underpayments.

Federal Employees’ Compensation Act Program:

DOL’s Office of Workers’ Compensation Programs (OWCP) consulted with Office of the Chief Financial Officer 

(OCFO) to develop a sampling methodology and approach to improper payment calculation for the FECA program. 

OWCP also consulted with the DOL OIG to determine a methodology for estimating fraud that could be added to 

the improper payment rate estimate. Ultimately this two part approach was approved by OMB in FY 2014.

The improper payment rate component for non-fraudulent FECA payments was derived by random sampling with 

replacement. The sample sizes used (504 compensation payments and 504 medical payments, for a total of 1,008 

payments) were selected and validated by the OWCP statistician to assure a 90% confidence interval with a 

precision of 2.5%. Each sampled payment was closely examined in accordance with the law and program standards 

to determine whether or not it was proper. The absolute value of any IP found in the sample were totaled and 

projected to a dollar amount that represents the improper payment rate for the entire population.

The FECA improper payments estimation methodology excluded initial payments made in the first 90 days of a 

compensation claim and payments made on claims initiated prior to November 2000 that had not been imaged and 

stored electronically in OWCP’s Integrated Federal Employees Compensation System (iFECS) system. The 

Department is dedicated to ensuring beneficiaries receive the benefits they are entitled to in a timely manner, 

including these payments in a review would hinder timely payment to injured workers and would not be cost 

effective. Additionally, OWCP has concluded that pursuing information on non-imaged (pre-November 2000) cases 
Other Information

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164 United States Department of Labor

would not be cost effective, nor would it provide a significant benefit to sample this steadily diminishing 

population.

The estimate of fraudulent payments is based on actual restitution amounts and therefore did not reflect an 

estimate of undetected fraud. In the Congressional Budget Office's (CBO) report entitled "How Initiatives to Reduce 

Fraud in Federal Health Care Programs Affect the Budget" (10/2014), CBO found “...although fraud that has been 

successfully prosecuted can be quantified, there is no reliable method to estimate the amount of fraud that goes 

undetected...". Given the unreliability of such an estimate, OWCP has concluded that the most appropriate use of 

limited resources is to focus on using data analytics to understand the types of IP, and to look for correlations and 

anomalies in order to understand causes and potential remedies.

The Department’s methodology for estimating IP in the FECA program may be found at: 

http://www.dol.gov/ocfo/media/reports/20141104IPMETHODOLOGY.pdf.

Workforce Investment Act Programs:

The WIA grant program’s funding stream and structure make it extremely difficult to directly sample grant 

payments and develop an all-encompassing statistically valid estimate of improper payments for several reasons:

• The majority of funding is disbursed to states through formula grants (amounts set by statutory formulae 

based on economic conditions), which are then passed through to thousands of recipients, including local 

Workforce Investment Boards, non-profit entities, local governments or educational institutions located 

across the country.

• With the multitude of different types of service providers, the differences in state and local administration 

and the many different eligibility requirements for each program authorized by WIA, developing a 

statistically valid, generalizable measurement is next to impossible.

• Financial records and other documentation supporting WIA outlays at the state level and lower tiers are 

located at the grantee and sub-grantee locations rather than at the DOL National Office.

• Since no direct cash payments go to individuals, and participants are not legally entitled to a specific 

amount of financial “benefit,” it is unclear what scenario or scenarios would constitute an “improper 

payment.”

DOL determined that it would not be cost effective to evaluate a completely statistically valid nationwide sample of 

WIA grantees and sub-grantees each year and perform detailed reviews focused on measuring the nationwide WIA 

improper payment rate. However, the Department continues to consider methods for improving its methodology 

for estimating the rate. The detailed Methodology for estimating WIA-related program IP rates is reported in the 

Department’s FY 2014 AFR.

The most effective means to gathering integrity data for grant programs is the use of reports required by the Single 

Audit Act of 1984, as amended in 1996. The Act and its implementing guidance, OMB Circular A-133, established 

uniform audit requirements for states, local governments, Indian Tribes, and non-profit organizations. All 

non-Federal entities that are subject to a Single Audit Act audit are required to submit summary level results from 

their audits and a copy of the audit report to the Federal Audit Clearinghouse (FAC), which is administered by the 

Census Bureau and operates on behalf of the OMB. The FAC is a central repository of information on all Single 

Audits conducted each fiscal year. While the use of Single Audits has limitations due to the nature of Single Audits, 

it is still a good representation of a statistical analytically prepared estimate for these programs.

Estimated Improper Payment Rate Calculation: The FY 2015 estimated improper payment rate for WIA Title I 

programs was calculated based on the probability of eligibility findings in Single Audit Reports. However, due to 

cyberattack, the FAC website was non-operational during the FY 2015 reporting period. Using backup CFDA data, 

DOL was able to complete the OMB accepted estimation Methodology, with the exception of manually reviewing 

audit reports to remove duplicate eligibility findings. Without this data it is impossible to cull duplicate eligibility 

findings. Therefore, the Department has estimated the rate reported in Table 1 significanlty overstates the actual 

rate.
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FY 2015 Agency Financial Report 165

Hurricane Sandy Funds Provided by the Disaster Relief Appropriations Act of 2013:

The Department uses an alternative sampling methodology for Hurricane Sandy that is a methodology that was 

previously approved for DOL’s WIA-related programs. The Sandy methodology was submitted to OMB for approval.

A detailed explanation of this methodology was reported in the Department’s FY 2014 AFR.

The Department recorded final outlays on all Hurricane Sandy related funds in FY 2014. Hence, there is no reporting 

for FY 2015.
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166 United States Department of Labor

III. Improper Payments Reporting

The table that follows (Table 1) is required for each agency that has programs and activities reporting under 

OMB Circular A-123 Appendix C Part I.A.9.Step 2 or Part I.A.14 or for programs that OMB has automatically 

deemed susceptible to significant IPs (please see footnote 8 under Part I.A.9.Step 2 for reporting timing 

expectations) regardless of whether the program or activity has IPs exceeding the statutory thresholds listed 

in OMB Circular A-123 Appendix C Part I.A.9.Step 1.v.

Table 1 below provides a breakdown of estimated IP and an outlook for IP reductions for each DOL program or 

activity reporting under OMB Circular A-123, Appendix C, Part I.A.9.Step 2 or Part I.A.14 or for programs that OMB 

automatically deemed susceptible to significant IPs.

Table 1: Improper Payments Reduction Outlook ($ in millions)

Program or Activity

FY14 OutlaysFY14 IP %FY14 IP $FY15 OutlaysFY15 IP %FY15 IP $FY15 Overpayments $FY15 Underpayments $FY16 Estimated OutlaysFY16 Estimated IP %FY16 Estimated IP $FY17 Estimated OutlaysFY17 Estimated IP %FY17 Estimated IP $FY18 Estimated OutlaysFY18 Estimated IP %FY18 Estimated IP $

Unemployment 

Insurance (UI) 1

$48,411.88

11.57%

$5,604.16

$32,895.31

10.73%

$3,530.16$3,384.10

$146.06

$35,701.00

10.63%

$3,795.07

$36,010.00

10.53%

$3,791.00

$37,057.00

10.43%

$3,865.00

Federal Employees’ 

Compensation Act 

(FECA)

2

$2,894.37

2.50%

$72.36

$2,987.19

2.87%

$85.73$81.22

$4.51

$3,061.87

2.50%

$76.55

$3,138.42

2.25%

$70.61

$3,216.88

2.00%

$64.34

Workforce 

Investment Act 

(WIA) Title I 

Programs 3

$2,478.00

0.37%

$9.20

$2,530.00

0.88%

$22.26$22.26

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

Hurricane Sandy 

Funds Provided by 

the Disaster Relief

Appropriations Act 

of 2013 4

$21.04

0.11%

$0.02

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

TOTAL 5

$53,805.29

10.57%

$5,685.

7

4

$38,412.50

9.47%

$3,638.15$3,487.58

$150.57

$38,762.87

9.99

%

$3,871.5

7

$

3

8,716.6

2

9.97

%

$3,861.61

$40,273.88

9.76%

$3,929.34

Note: 1 Current UI data is for 12-month ending June 30, 2015. 2 The FECA program operates on a Chargeback year (CBY) that runs from July 

1st through June 30th.

3 WIA funding ended as of FY 2015. 4 DOL recorded final Hurricane Sandy related outlays in FY 2014. 5 Totals do not 

represent a true statistical estimate.
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FY 2015 Agency Financial Report 167

High Priority Program Supplemental Measure Info – Unemployment Insurance Program:

In addition to the Improper Payment rate required by IPERA, the Department has also implemented supplemental 

measures as required by Executive Order 13520. These supplemental measures, developed in consultation with 

OMB for the FY 2014 reporting period, are important metrics that provide additional insight into root causes and 

possible corrective actions. The current supplemental measures are:

• The IP rate excluding recoveries (previously known as “net improper payment” rate), which subtracts 

recoveries from the IP rate; and

• The IP rate excluding work search, which subtracts IP due to work search errors.

These supplemental measures are tracked and reported on www.PaymentAccuracy.gov within 120 days after 

completion of a quarter. Both supplemental measures use the estimated overpayment and underpayment rate 

from BAM survey data. Monitoring and reporting on the “net improper payment” rate is a positive incentive for 

states to improve IP recoveries. States making progress on both reducing overpayments and increasing recoveries 

will realize significant reductions in the “net improper payment” rate and will have achieved considerable 

improvement in efficient use of UI trust fund dollars.

• The IP rate excluding recoveries is defined as total overpayments plus total underpayments minus the 

amount of overpayments recovered by state workforce agencies. This supplemental measure includes both 

the overpayment and underpayment rates for all causes, but excludes payments determined to be 

technically proper under state UI law. The net improper payment rate includes two components – “IP”, 

which will continue to be estimated from BAM, and “overpayments recoveries”, which are based on actual 

amounts reported by the state workforce agencies on the ETA 227 Overpayment Detection and Recovery 

report.

• The improper payment rate excluding work search as a supplemental measure allows for the review of 

improper payment rates without the influence of work search errors. During the recent quarters, work 

search errors are driving much of the increase in the improper payment rate as states have implemented 

stricter work search requirements. There are no effective strategies that states can employ other than 

messaging to prevent work search errors. Generally, they can only be detected after the fact, which does 

not help bring down the improper payment rate. In addition, states have limited resources to conduct work 

search audits outside of BAM. Since there are a multitude of challenges identifying realistic strategies to 

bring down the work search component of the overall improper payment rate, tracking the improper 

payment rate excluding the work search rate recognizes the inability of states to actively prevent these 

improper payments and help assess progress made on the other root causes.

The supplemental improper payment rate excluding work search consists of all overpayments minus work search 

overpayments plus total underpayments. This supplemental measure includes the overpayment and underpayment 

rates for all causes except work search related errors. Both the overpayment and underpayment rates exclude

payments determined to be technically proper under state UI law.
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Table 1.1 -UI: UI Improper Payment Reduction Outlook FY 2014 – FY 2018 ($ in millions)

FY 2014 FY 2015 FY 2016 (Targets) FY 2017 (Targets) FY 2018 (Targets)

Est. IP% Est. IP$ Est. IP% Est. IP$ Est. IP% Est. IP$ Est. IP% Est. IP$ Est. IP% Est. IP$

Improper Payment 

Rate minus 

Recoveries

8.65%$4,188.00 7.28% $2,393.00 7.18% $2,563.00 7.08% $2,550.00 6.98% $2,587.00

Improper Payment 

Rate minus Work 

Search Errors

7.85%$3,798.00 7.95% $2,616.00 7.85% $2,803.00 7.75% $2,791.00 7.65% $2,835.00

The Department reports these supplemental measures quarterly for publication on the Department of the Treasury 

Payment Accuracy Web site at: http://www.paymentaccuracy.gov/.
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FY 2015 Agency Financial Report 169

IV. Improper Payment Root Cause Categories

The table that follows (Table 2) is required for each agency that has programs and activities reporting under 

OMB Circular A 123 Appendix C Part I.A.9.Step 2 or Part I.A.14 regardless of whether the program or activity 

has IPs exceeding the statutory thresholds listed in OMB Circular A-123 Appendix C Part I.A.9.Step 1.

Table 2: Improper Payment Root Cause Category Matrix ($ in millions)

Reason for 

Improper Payment

UI FECA WIA

Overpayments Underpayments Overpayments Underpayments Overpayments Underpayments

Program Design or 

Structural Issue TBD 1 TBD 1

Inability to 

Authenticate 

Eligibility

$2,772.83 $113.54 $11.94 $0.00

Failure to Verify

Excluded 

Party

Death Data

Financial 

Data

Prisoner 

Data

Other 

Eligibility 

Data

$223.45 $10.36 $59.27 $0.00

Administrative 

or Process Error 

Made by:

Federal 

Agency $6.69 $3.85

State or 

Local 

Agency

$211.00 $17.99 N/A N/A $22.26

Other 

Party2 $0.48 $0.66

Medical Necessity

Insufficient 

Documentation to 

Determine

Other: 3 $176.82 $4.17

Other: 4 $2.84

Total $3,384.10 $146.06 $81.22 $4.51 $22.26

Notes: 1 UI is conducting a study to examine, quantify, and better understand program and legal requirements which may 

create IP that states are unable to control. 2 “Other Party” for DFEC refers to administrative error by other Federal employing 

agencies. 3 Improper payment had been identified and the state agency was in the process of taking corrective action at the 

time of the BAM sample selection. 4 Indicates OIG fraud restitution average as explained in section VII. Accountability below.

Unemployment Insurance Program:

The Improper Payment Root Cause Category Matrix identified in Table 2 does not align precisely with the way the 

UI program classifies root causes. Additionally, the categories presented in Table 2 overlap between the root causes 

and responsibilities for the payment errors which make it difficult to describe corrective actions for each improper 
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170 United States Department of Labor

payment category as presented in Table 2. The discussion below attempts to clarify for the reader the intricacies of 

the UI program.

Program Design or Structural Issue: ETA believes that a significant portion of the program’s IP may be categorized 

under this root cause. Among the errors included in this category are payments made following an initial eligibility 

determination where all the information was unavailable; work search errors which cannot be prevented and can 

only be detected after the fact; and payments that may go undetected due to a lag in data availability - such as the 

National Directory of New Hires (NDNH) data. To enable a reliable estimate of the program design and structural 

impacts, UI is conducting a study to examine, quantify, and better understand program and legal requirements 

which may create IP that states are unable to control.

Inability to Authenticate Eligibility: In order to receive a weekly benefit payment, a claimant must retroactively 

certify that they have met a myriad of eligibility conditions for the benefit week for which they request payment. 

Much of this information can only be authenticated with an employer or other third parties who do not participate 

in the weekly certification process.

Similar to the structural issues discussed above, this section includes errors where the state agency followed official 

procedures and necessary forms were fully completed but a payment issue was not detectable by normal 

procedures at the time of payment. These errors may be due to the claimant providing inadequate or inaccurate 

information and/or no income verification sources to authenticate the claimant’s eligibility to prevent the improper 

payment. Examples include: inadequate time to verify the work search activities provided by the claimant with the 

employer listed as a contact, income data such as the NDNH information to verify whether or not that the claimant 

has returned to employment, and/or the employer failing to respond to the agency’s request for separation 

information.

Failure to Verify: This section includes errors where the state agency had sufficient documentation to identify that 

there was a payment issue but did not resolve the issue. Examples include: failure by the state agency to verify or 

follow-up to determine whether the claimant returned to work after receiving a NDNH cross-match hit, follow-up 

adequately with the employer regarding an incomplete response to a separation request, and/or not verifying work 

search activities/contacts provided by the claimant.

Administrative or Process Errors: State procedures/forms had not been properly followed/completed thereby 

precluding ability to detect the payment issue; or state agency provided incorrect information or instructions. 

Examples include: failure by the state agency to verify whether the claimant returned to work using a NDNH crossmatch or other income verification sources, not requesting separation information from an employer, and/or not 

requesting work search activities/contacts from a claimant or requesting work search verification from an 

employer.

Other Reason: Improper payment had been identified and the state agency was in the process of taking corrective 

action at the time of the BAM sample selection.
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FY 2015 Agency Financial Report 171

V. Corrective Actions

For all programs and activities as determined under OMB Circular A-123 Appendix C Part I.A.9.Step 2 with 

IPs exceeding the statutory thresholds listed in OMB Circular A-123 Appendix C Part I.A.9.Step 1, agencies 

shall identify the reasons their programs and activities are susceptible to significant IPs and put in place a 

corrective action plan to reduce them.

DOL has identified the root causes for IPs in all programs and activities listed in Table 2 above and has developed 

comprehensive corrective action plans to reduce them. These corrective action plans vary by program and a highlevel review of these plans is described in the program-specific narratives below.

Unemployment Insurance Program:

In response to the level of IP in the UI program, the Department has developed a comprehensive and continuously 

evolving Strategic Plan to address several root causes of IP. A high level summary of the Strategic Plan is available 

at: http://www.dol.gov/dol/maps/Strategies.htm. The Strategic Plan was designed to specifically target UI program 

root causes prior to the generalized Federal root cause categories addressed in Table 2 above. The UI program 

specific root cause corrective actions detailed below overlap multiple generalized Federal categories. 

Table 2.1 - UI reflects supplemental information on how the Department classifies the root causes of UI 

overpayments.

Table 2.1 - UI: Root Causes of UI Overpayments ($ in millions)

% of Overpayments 

(2015 IPIA Rate)

Benefit Year Earnings (continuing to claim benefits after returning to work) 33.27%

Work Search (failure to actively seek employment) 29.41%

Separation (ineligible due to voluntarily quitting or discharge for cause) 18.52%

Able and Available (Ineligible due to not being able to work or available for work) 5.95%

Base Period Wages (Error in calculating claimant’s benefit based on wages 

earned prior to period of unemployment) 4.42%

Employer Service Registration (failing to register for referral to work or 

reemployment services) 1.61%

Other Eligibility Issues (refusal of work, self-employment, failure to report for 

agency review or report requested information, citizenship status, and claiming 

benefits using a false identity)

2.35% 

All Other Issues (adjustments to dependents’ allowance, adjustments to benefits 

due to claimant receipt of income from severance pay, vacation pay, Social 

Security, or employer pension, back pay awards, payment during a period of 

disqualification, or agency redetermination of eligibility)

4.47% 
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172 United States Department of Labor

The Department actively works with the states1 to reduce IP. All states have been called to action to ensure that UI 

integrity is a top priority and to develop state-specific strategies to bring down the overpayment rate. Specific 

attention and assistance has been given to those states with a high IP rate.

DOL has provided states with supplemental funding to implement strategies and technology-based infrastructure 

investments that will help the states prevent, detect, and recover UI overpayments. These grants demonstrate 

DOL’s commitment to the development of integrity-related systems focused on the proper payment of UI benefits. 

These improvements can result in significant savings of staff costs for integrity-related activities, increased dollar 

amounts of overpayments recovered, and prevention of future overpayments.

Between FY 2005 and FY 2014, DOL provided approximately $330 million to states in supplemental funding for 

integrity-related projects. Additionally, between FY 2009 and FY 2014, approximately $360.4 million in 

supplemental funding was provided to state consortia to address outdated IT system infrastructure, which is 

necessary to improve UI integrity. Please see section VIII. Agency Information Systems and Other Infrastructure: 

UI for information on the state consortia.

In June 2015, DOL provided $80 million to 47 state workforce agencies to provide UI claimants with improved 

reemployment services and reemployment eligibility assessments. Additionally, in September 2015, DOL awarded 

$39.3 million in supplemental funding to 44 state workforce agencies for the prevention, detection, and recovery of 

improper UI benefit payments; to improve state performance; to address outdated IT system infrastructures 

necessary to improve UI program integrity; and implement projects to reduce worker misclassification.

Reducing Improper Payments in the UI Programs: Each state Benefit Payment Control (BPC) unit conducts postaward audits for the prevention and detection of UI improper payments on benefit payments and to determine 

whether error or willful misrepresentation has occurred.

These activities are conducted through the use of automated tools and procedures that confirm the identity and 

legal status of the claimants, search for unreported earnings, and detect other forms of fraud or errors contributing 

to IP in the UI program.

State agencies also maintain the integrity of UI and reduce IP by ensuring that employers contribute their fair share 

of taxes and facilitate the return to work of UI claimants.

As noted above, the Improper Payment Root Cause Category Matrix identified in Table 2 does not align precisely 

with the way the UI program classifies root causes. Below are descriptions of national strategies underway to 

address the top root causes of UI IP:

Benefit Year Earnings (BYE) Strategies: In order to address this root cause, it is critical to ensure that claimants 

understand their responsibility to report when they return to work and for states to identify as quickly as possible 

that the claimant has returned to work. The strategies to accomplish these purposes include:

• Improved cross-matching against the NDNH and the immediate notification of claimants that the state 

agency is aware they may have returned to work while still claiming benefits. As of December 2012, all 

states except California are using NDNH for their BPC operations.

• Targeted technical assistance and monitoring for states with high BYE error rates, including review of the 

state’s implementation of NDNH cross-matching and providing assistance to identify and implement 

strategies to address this root cause in the Integrity Action Plan submitted as part of the FY 2016 State 

Quality Service Plan (SQSP) submission. This technical assistance is complete as of September 2015, with 

monitoring planned to continue through the 4th quarter of FY 2016.

• Promotion of messaging tools that are designed to improve claimant and employer understanding of, and 

compliance with, the established rules and procedures related to UI claims. In March 2012, DOL published a 

UI Program Letter announcing the availability of Claimant and Employer Messaging Toolkit containing 

products and tools designed to support these state messaging campaigns. As of March 2013, all states have 

 1 For the purposes of UI program reporting, “states” refer to the 50 states and the territories of District of Columbia, Puerto Rico, and the 

Virgin Islands.
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implemented their own state-specific claimant and employer messaging campaigns using at least one tool 

from the Toolkit. Additional information on the toolkit is available at: 

http://www.dol.gov/dol/maps/tools.htm

• Supporting state implementation of the Treasury Offset Program (TOP) that permits states to recover 

certain unemployment compensation debts due to fraud and certain non-fraud overpayments through 

Federal income tax refund offsets. As of September 2015, a total of 44 states have implemented TOP, with 

five additional states in various stages of implementation. Two other states received TOP implementation 

funding in FY 2015 and are beginning the implementation process. These two funded states are working 

toward implementation by the 4th quarter of FY 2016.

• ETA continues to pursue new data sources to determine when claimants have returned to work, including 

the use of the use of financial institutions’ payroll deposit information as well as employer payroll data. This 

effort is ongoing and is due for completion in the 4th quarter of FY 2017.

Separation Strategies: The goal of these strategies is to improve timeliness and accuracy of information received 

from employers to make eligibility determinations specifically on the reason for a UI claimant’s separation from 

employment.

• Expand state and employer adoption and usage of the State Information Data Exchange System (SIDES), a 

system that enables the electronic communication of separation and other UI information between 

employers and State Workforce Agencies (SWAs). DOL provided funding for SIDES implementation to 51 

state workforce agencies. As of September 2015, 47 states have implemented SIDES, and three additional 

states are in various stages of SIDES programming and testing. One other state received SIDES 

implementation funding in FY 2015 and is beginning implementation. The funded states are working toward 

implementation by the 2nd quarter of FY 2017.

Work Search Strategies: Work search requirements vary significantly among states and are among the most 

difficult to control and costly for states to monitor. The strategies to address these issues include:

• DOL provided supplemental grant funding for New York State to build a new technology tool that 

incorporates the necessary system linkages between the workforce and UI systems to effectively capture, 

organize, and share individual UI claimant work search activity information. In December 2013, DOL 

announced the availability of the tool for states to replicate and that New York is available to provide 

technical assistance to support its replication.

• DOL is convening a federal/state workgroup of program experts in UI, and employment and training, to reenvision work search requirements in the 21st Century labor market. The workgroup is focused on ensuring 

that work search activities help claimants get good jobs, meet state eligibility requirements for UI, are 

verifiable, connect claimants to services provided by the public workforce system, and reflect the way 

individuals search for work in the current labor market. Actionable strategies developed by the workgroup 

will be shared across the UI system during FY 2016.

Employment Service (ES) Registration Strategies: These IP are most often the result of information technology 

system errors that exit a claimant from their required registration with the state employment service or job bank 

after a period of inactivity. Customized technical assistance was provided to states with the highest error rates for 

this cause. DOL targeted a 75% reduction of IP due to ES Registration errors from the 2011 baseline rate. As of the 

2014 reporting period, the ES Registration error rate was 0.18%, an 83% reduction in the ES Registration error rate. 

This milestone was completed as of June 2014.

State and Other Engagement Strategies: States administer the UI program and are responsible for its integrity and 

controlling improper payments. SWAs have been engaged in strategies to address bringing both the individual state 

and the national improper payment rates into compliance with the 10% threshold established by IPERA. These 

strategies include:

• Encourage SWAs to convene cross-functional task forces to support the maintenance/enhancement of 

integrity action plans as part of each SWA’s SQSP, which becomes the foundation of states’ grant 
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174 United States Department of Labor

agreement with DOL. As of the 1st quarter of FY 2012, all states had established task forces and DOL 

continues to encourage states to convene them regularly.

• Continue technical assistance and monitoring to states with persistently high IP rates. Eight “High Priority” 

states designated in FY 2012 and FY 2013 have achieved an IP rate below 10% and were removed from this 

designation. In FY 2014 and 2015, the Department identified five new states to receive technical assistance 

through this strategy.

• In FY 2014, select state UI programs worked with Treasury and Do Not Pay staff to test the use of Do Not 

Pay services, including a pilot of “The Work Number” directly through Equifax. Due to issues with DNP 

statutory/legal authority to provide its services to states that administer federally-funded programs, UI 

access to Do Not Pay was suspended in January 2015.

• Continue development of the successful state-driven UI Integrity Center of Excellence with the goal of 

promoting the development and implementation of innovative integrity strategies to support all states, 

including the prevention and detection of fraud, in the UI program. The Center is focused on the following 

activities:

o Developing a secure portal to enable rapid exchange of information among states about UI fraud 

schemes. The initial phase of this portal was launched in May 2014 with information on successful 

state integrity practices, information about the Center and its deliverables, and ways for states to 

share integrity practices with the UI community. Enhancements to the portal are expected to 

launch in the 2nd quarter of FY 2016.

o Working with its vendor and two states to develop and pilot a data analytics and predictive 

modeling tool. Following the completion of the pilot, the Center will disseminate information and 

training on the tool, which will be available to all states across the UI system. This tool is expected 

to be complete in the 4th quarter of FY 2016.

o Developing locally adaptable program integrity training for use by the states. Following the 

completion of the training deliverables, the Center will make the products available to all states 

across the UI system. This training is expected to be available in the 2nd quarter of FY 2016.

o Working to establish a data hub for use by SWAs for cross-matching claimant information against 

relevant data sources to help prevent and detect improper payments. This activity is scheduled for 

completion in the 3rd quarter of FY 2017.

o Engaging states to conduct an assessment of current UI integrity efforts, to support implementation 

of an outreach strategy to solicit information on integrity issues, and create a model BPC operation 

plan. The information will also be used to highlight integrity practices that should be part of state UI 

IT Modernization efforts, including best practices, return on investment information, and “how-tos” 

in areas such as collections, fraud identification, cross matching, and identifying fictitious 

employers. This activity is due for completion in the 2nd quarter of FY 2016.

o In September 2015, the Center hosted a conference to showcase products and tools that individual 

states are using to improve UI program integrity and prevent fraud. This technical informationsharing event brought together vendors and state staff responsible for program integrity to focus 

on the prevention, detection, and recovery of UI improper payments. The event also highlighted 

the Center’s efforts directed at reducing IP for the entire UI system.

DOL is working to establish a deeper collaboration with Federal benefit programs that were recently targeted by 

fraud schemes involving the theft of personally identifying information and the use of that information for willful 

misrepresentation in claiming benefits. DOL will continue in FY 2016 to engage representatives from the Earned 

Income Tax Credit (EITC), Medicaid, Supplemental Nutrition Assistance Program (SNAP), Social Security Disability 

Insurance (SSDI), and the Temporary Assistance for Needy Families (TANF) programs with the goals of increasing 

information sharing and developing solutions to combat fraud schemes across multiple programs.
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Federal Employees’ Compensation Act Program:

“Failure to Verify” Error: Many IPs in the FECA program were “technically proper” when they were initiated, but 

due to current payment cycles, the payments could not be adjusted when additional information was received. 

These payments are considered part of the “Failure to Verify” error in Table 2 above. In order to reduce this aspect 

of the FECA improper payment rate, OWCP has worked with Treasury to shorten the current payment cycles to 

significantly reduce the number of technically proper payments. This change was implemented in late March 2015, 

meaning it only affected the 4th quarter of CBY 2015 covered by this report. 

“Administrative or Process Errors” Error: The program is also planning to engage in greater outreach efforts to 

employing Federal agencies, stressing the importance of timely and accurate reporting of payment information to 

FECA. The “Administrative or Process Errors” error category in Table 2 above reflects pay rate errors and other 

errors that result from the lack of timely and accurate documentation from employing agencies. 

“Inability to Authenticate Eligibility” and “Other” Error: In addition, OWCP is developing a Program Integrity Unit 

with auditors and data analysts to provide greater oversight and analysis of payment accuracy. As of October 1, 

2014, OWCP has contracted with a data analytics firm to assist in developing technology and analytic tools to detect 

and monitor inherent risk in claims, payments, and providers. The resultant technology and analyses will enable 

OWCP to refine its policy, procedures and oversight interventions. The “Other” error category in Table 2 above 

reflects OIG fraud restitution issues which are detailed in section VII. Accountability below.
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VI. Internal Control over Payments

The table that follows (Table 3) is required for each agency that has programs and activities as determined 

under OMB Circular A-123 Appendix C Part I.A.9.Step 2 with IPs exceeding the statutory thresholds listed 

in OMB Circular A-123 Appendix C Part I.A.9.Step 1. Agencies shall briefly summarize the status of internal 

control over payments using: (1) a single narrative explaining efforts undertaken to provide reasonable 

assurance that internal controls over payments are in place and operating effectively; and (2) Table 3 

illustrated below. The primary purpose of the summary is to provide a thoughtful analysis linking agency 

efforts in establishing internal controls and reducing IP rates. Agencies do not need to create a separate 

narrative for each program they are addressing in this section, rather, the agency may report using one 

narrative that encompasses the information for all of the programs reporting under the requirements of this 

section. Agencies should leverage existing internal control plans and at a minimum should address the 

internal control standards provided in OMB Circular A-123, Appendix C, Part II.C.2.

Effective internal controls are necessary for timely and reliable financial management information and fundamental 

to management accountability. DOL’s internal controls review provides reasonable assurance to the President and 

Congress that the Department’s internal controls are in place and operating effectively to prevent and detect 

improper payments. DOL applies the five standards included in Table 3: Status of Internal Controls below: Control 

Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring. DOL management 

is able to reasonably assess the design and operating effectiveness of control activities and to ultimately support an 

unqualified Assurance Statement published in the MD&A of this report. The UI program and the FECA program 

internal control activities over payments are discussed below.

Table 3: Status of Internal Controls

Internal Controls Standards UI FECA

Control Environment 4 4

Risk Assessment 4 3

Control Activities 4 3

Information & Communication 4 3

Monitoring 4 3

Legend:

4 = Sufficient controls are in place to prevent IPs.

3 = Controls are in place to prevent IPs but there is room for improvement.

2 = Minimal controls are in place to prevent IPs.

1 = Controls are not in place to prevent IPs.

Unemployment Insurance Program:

As mentioned in Section I. Risk Assessments, the UI program is a unique Federal-state partnership, based on 

Federal law but administered by state employees under state law. Section 303(a)(1) has been interpreted to mean 

that states must have "methods of administration" to ensure that eligible claimants are paid UI benefits promptly 

when determined eligible and to ensure claimants who are not eligible are not paid. In addition, states must have 

methods of administration to protect against improper payments and fraud. This federal-state partnership 

structure makes UI unique among the nation’s social insurance programs and program integrity depends almost 

entirely on actions by the states. DOL provides oversight and monitoring for state workforce agencies to support 

their efforts to reduce UI improper payments.

Control Environment: DOL ensures that states are actively engaged in implementing strategies and activities to 

effectively reduce improper payments and promoting a culture of integrity throughout the entire UI system. All 

states are required to have an Integrity Strategic Plan embedded in their biennial State Quality Service Plan (SQSP). 

State integrity performance measures are actively tracked and states failing to meet measures are required to 
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FY 2015 Agency Financial Report 177

include corrective action plans in the SQSP to support performance improvement. In addition, states may be 

identified as “high priority” for sustained poor performance related to program integrity and those so designated 

receive intensive technical assistance and increased monitoring and oversight. To accomplish that goal, an 

immediate call to action was issued to all state UI Administrators to ensure that all staff responsible for the 

operation of the program are engaged in a coordinated effort to address improper payments at all levels of the 

program. Essentially, everyone owns program integrity and it is expected that all agency staff be aware of the 

causes of improper payments and what their role is regarding overpayment prevention. Integrity programs must be 

designed to discourage fraud and uncover potential issues of fraud at the earliest possible time.

Accountability mechanisms have been established for DOL’s OCFO to monitor the implementation of its integrity 

strategies and to share information on the improper payment rate in the Federal-state UI system with the 

Department’s leadership and the public.

Risk Assessment: States are responsible for day-to-day operations to ensure integrity for the UI program, across all 

program functions, and through all levels of staff. BAM units within the states conduct in-depth investigations of a 

random sample group of claims made each week to measure the accuracy of UI benefit payments. Data from the 

BAM investigations provide the basis for the estimated improper payment rates at the state and national level. 

Refer to section II. Statistical Sampling for a more detailed discussion on BAM.

For claims that were improperly made, BAM determines the root cause of and the party responsible for the error, 

the point in the UI claims process at which the error was detected, and actions taken by the claimant, employer, 

and agency prior to sample selection. The root causes of improper payments derived from the BAM data is 

analyzed, prioritized, and used to develop strategies and corrective actions.

DOL validates and reports the BAM data on its public website.

Control Activities: All states have implemented pre-payment review processes for verifying and validating benefit 

eligibility requirements required under state UI law, although they may vary from state to state. Additionally, each 

state’s BPC unit is responsible for promoting and maintaining program integrity through prevention, detection, 

investigation, establishment, and recovery of improper payments. In addition, ETA collaborates with National 

Association of State Workforce Agencies (NASWA) and state representatives on the UI Integrity Center of 

Excellence which will assist with states’ internal control efforts by developing a data analytics and predictive 

modeling tool available for replication, as well as a UI data hub for states to compare information from different 

sources.

Every state conducts post-award reviews for the prevention and detection of UI improper payments to determine 

whether error or willful misrepresentation has occurred. These post-award reviews include use of data sources and 

other analytical tools to help ensure that payments made to claimants were appropriate.

Cost-benefit analysis has been performed to the extent feasible on strategies and other corrective actions to 

address root causes of improper payments prior to implementation.

Information and Communication: DOL issues advisories and handbooks to provide guidance and technical 

assistance to states. Additionally, training sessions (in-person and remote), and conferences have been scheduled 

to provide technical assistance share best practices between states.

DOL has established a robust set of performance measures used to evaluate the states’ overall operational 

performance including program integrity. States not meeting the criteria set for these measures are expected to 

submit corrective action plans as part of their annual SQSP submission. Additionally, the SQSP also includes a statespecific Integrity Action Plan that must discuss the root causes of improper payments and present the state’s 

strategies to address these causes.

DOL established an integrity strategic plan to improve the prevention, detection, and recovery of UI improper 

payments by targeting the largest root causes of overpayments. The plan is continuously evolving as new strategies 

to address the root causes are identified. Additionally, program performance information and data is published in 

the Department’s AFR. DOL also publishes UI improper payment targets and data on websites operated and 
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178 United States Department of Labor

maintained by OMB, the Department, and ETA. The Department’s site clearly identifies each state’s improper 

payment rate over a three-year sample period and the status of each state’s progress in implementing the integrity 

strategies identified in the Department’s strategic plan, noting if a plan is in place to implement the strategy and 

rating the strategy implementation as complete, on track, or not on track.

DOL’s oversight process includes quarterly reviews on corrective action plans submitted as part of the SQSP, peer 

reviews and training for specific program areas such as BAM, Appeals and Benefit Timeliness and Quality, and 

enhanced monitoring and technical assistance provided to states with high improper payment rates or chronic poor

performance. Currently, DOL is engaged in the reengineering of its accountability and review processes that will 

include addressing the operational aspects of the program through a state self-assessment process.

Finally, the UI Integrity Center of Excellence will assist with states’ internal control efforts by developing a model 

Benefit Payment Control operation plan. Activities of the Center will include engaging states to conduct an 

assessment of current UI integrity efforts, supporting implementation of an outreach strategy to solicit information 

on integrity issues, and creating a model BPC Operation plan. The information will also be used to highlight integrity 

practices that should be part of state UI IT Modernization efforts, including state successful practices, return on 

investment information, and “how-tos” in areas such as collections, fraud identification, cross matching, and 

identifying fictitious employers.

Monitoring: DOL has implemented the BAM survey methodology to estimate the level of improper payments at the 

state and national level. Additionally, targets have been developed and progress tracked against these targets. The 

survey methodology and targets adhere to existing laws and OMB guidance. Additionally, DOL is understands 

statutory barriers for the UI program that limit the agency’s corrective actions in reducing improper payments.

Federal Employees’ Compensation Act Program:

In addition to the robust operational internal controls already in place, OWCP has initiated an annual audit process 

to estimate the improper payment rate and enhance internal controls to mitigate identified weaknesses. Longer 

term, OWCP is in the process of developing a Program Integrity Unit with auditors and data analysts to provide 

greater oversight and analysis of payment accuracy. OWCP has also contracted with a data analytics firm to assist in 

developing technology and analytic tools to detect and monitor inherent risk in claims, payments, and providers. 

The resultant technology and analyses will enable OWCP to refine its policy, procedures and oversight 

interventions.
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FY 2015 Agency Financial Report 179

VII. Accountability

For all programs and activities as determined under OMB Circular A-123 Appendix C Part I.A.9.Step 2 with 

IPs exceeding the statutory thresholds listed in OMB Circular A-123 Appendix C Part I.A.9.Step 1, agencies 

shall describe the steps the agency has taken and plans to take (including timeline) to ensure that agency 

managers, accountable officers (including the agency head), programs, and States and localities (where 

appropriate) are held accountable for reducing and recapturing IPs. Specifically, they should be held 

accountable for meeting applicable IPs reduction targets and establishing and maintaining sufficient 

internal controls (including an appropriate control environment) that effectively prevents IPs from being 

made and promptly detects and recaptures any IPs that are made.

The Department has taken extensive measures to ensure that managers, accountable officers (including agency 

heads), programs, and states and localities are held accountable for reducing and recapturing IPs. These measures 

are designed to hold the appropriate personnel accountable for meeting applicable IP reduction targets and 

establishing and maintaining sufficient internal controls to effectively manage IP risk and promptly detect and 

recapture any IPs that are made. They vary by program and are described in detail in the program-specific 

narratives below.

Unemployment Insurance Program:

DOL’s Employment and Training Administration (ETA) is responsible for Federal oversight of state UI programs, 

including oversight of state activities to reduce and recover improper UI benefit payments. ETA has taken and 

continues to take the steps discussed below to hold Federal managers accountable for reduction and recovery of 

improper UI payments by states. State workforce agencies administer the UI program and set operational priorities 

within the resources available. ETA has established a robust set of performance measures used to evaluate the 

states’ overall operational performance. States not meeting the criteria set for these measures are expected to 

submit corrective action plans as part of their annual State Quality Service Plan submission.

In response to the level of improper payments in the UI program, ETA developed a Strategic Plan to address several 

root causes of IP which were described in detail above in section V. Corrective Actions: UI. ETA continues to focus 

on the following integrity related activities and ensure the annual performance standards for managers include the 

completion of significant milestones for the projects listed below.

• As part of their SQSP, states are required to prepare an Integrity Action Plan. The plan must identify the 

state officer(s) accountable for reducing IP, summarize the state’s assessment of whether it has the internal 

controls, human capital, and information systems and other infrastructure needed to reduce IP to minimal 

cost-effective levels, and identify any statutory or regulatory barriers which may limit the agency’s 

corrective actions in reducing IP. Additionally, the plan must discuss the root causes of IP and present the 

state’s strategies to address these causes.

• ETA requires states to operate the BAM survey to measure and report the percentage, dollar amount, and 

reasons for IP. Data are derived from investigations of a statistically valid sample of payments using 

federally prescribed procedures. ETA reviews this data for validity, analyzes the data for each state, and 

makes the data available publicly on ETA’s Office of Unemployment Insurance (OUI) website. Data review, 

analysis and publication are included in the performance plan of the Administrator of ETA’s OUI and in the 

elements and standards of numerous staff in that office.

• ETA has implemented a core performance measure for detection of overpayments by state UI programs. 

States that fail to meet the performance criterion submit corrective action plans. Analysis of state 

performance and monitoring of states’ corrective actions continue to be evaluation factors in OUI 

managers’ performance plans.

• ETA has developed additional performance measures that require states to:

o Reduce by 30% after the first year of implementation and by 50% after the second year of 

implementation those overpayments attributable to individuals who continue to claim UI benefits 

after they return to work;
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o Meet the less than 10% improper payment rate criterion included in IPERA; and

o Meet a minimum UI overpayment recovery rate target.

• ETA has promoted and continues to promote cost effective methods for states to prevent, detect, and 

recover improper UI benefit payments. Development, delivery, and/or successful implementation of these 

initiatives by states have been and continue to be factors on which the OUI administrator and managers are 

evaluated. These initiatives were described in detail earlier in this document in section V. Corrective 

Actions: UI.

As discussed in section VI. Internal Control over Payments: UI, as part of its monitoring and oversight 

responsibilities of each state's UI operations, DOL takes an active role in facilitating and promoting strategies to 

reduce IP and meet the payment accuracy and recovery targets required by IPERA. However, it should be noted 

that these strategies require the cooperation and implementation by individual states, including in some cases 

changes to state laws and regulations. DOL has no explicit authority over how states establish priorities in 

administering their UI programs and, therefore, can only make recommendations and provide technical assistance 

in the use of these strategies.

Federal Employees’ Compensation Act Program:

The FECA improper payment rate estimate includes a fraud component. For the purposes of rate calculation, OWCP 

considers fraudulent payments to be those payments for which fraud has been admitted or proven in the judicial 

system. A fraudulent payment rate was determined by averaging the court-ordered restitution awarded to FECA as 

the result of fraud across a three year period. Using this process, the average for the CBY2015 fraud estimation was 

$2.84 million1 per year, which translated to 0.095%. The overall improper payment rate, less fraud, was 2.78%. This 

represents a 0.28% increase from last year’s IP rate. OWCP attributes this to a change in claims processing 

requirements. In FY 2015, FECA dropped a performance standard relating to review of incoming case 

documentation in an attempt to find process efficiencies due to limited resources. However, as a result, not all 

claims actions were completed in time to prevent being designated as an improper payment under the current 

methodology. After the FY15 IP review identified the issue the standard has been reinstated in FECA Operational 

Plan goals for FY 2016. OWCP anticipates that FECA will return to prior levels of performance in FY 2016. While this 

rate is above the IPERA threshold for risk susceptibility, issues identified during OWCP’s improper payments review 

should lead to substantial improvements in the FECA rate in the coming years.

As noted in section II. Statistical Sampling: FECA, the FECA estimate of fraudulent payments are based on actual 

restitution amounts and therefore did not reflect an estimate of undetected fraud. In the Congressional Budget 

Office's (CBO) report entitled "How Initiatives to Reduce Fraud in Federal Health Care Programs Affect the Budget" 

(10/2014), CBO found “...although fraud that has been successfully prosecuted can be quantified, there is no reliable 

method to estimate the amount of fraud that goes undetected...". Given the unreliability of such an estimate, OWCP 

has concluded that the most appropriate use of limited resources is to focus on using data analytics to understand 

the types of improper payments, and to look for correlations and anomalies in order to understand causes and 

potential remedies.

With the goal of reducing IP in the program, OWCP implemented an IP review process and is committed to 

addressing issues identified during the review. This review process should lead to substantial improvements in the 

estimated FECA IP rate in the coming years. Longer term, OWCP is developing plans to improve the program 

integrity function in its programs with auditors and data analysts to provide greater oversight and analysis of 

payment accuracy.

 1 As noted in Table 2, under the “Other” root cause category above.
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FY 2015 Agency Financial Report 181

VIII. Agency Information Systems and Other Infrastructure

a. For all programs and activities as determined under OMB Circular A-123 Appendix C Part I.A.9.Step 2 

with IPs exceeding the statutory thresholds listed in OMB Circular A-123 Appendix C Part I.A.9.Step 1, 

agencies shall describe whether the agency has the internal controls, human capital, and information 

systems and other infrastructure it needs to reduce IPs to the levels the agency has targeted.

b. If the agency does not have such internal controls, human capital, and information systems and other 

infrastructure, describe the resources the agency requested in its most recent budget submission to 

Congress to establish and maintain the necessary internal controls, human capital, and information 

systems and other infrastructure.

Unemployment Insurance Program:

States have internal controls, processes, programs, and staff in place throughout all operations of the UI program 

dedicated to protection from internal threats and vulnerabilities. These threats and vulnerabilities include physical 

damage and harm to staff and property, misuse of administrative funds and assets by agency staff, and misuse of UI 

funds by agency staff. It is incumbent upon the state agencies to have a series of protections in place addressing 

controls such as the granting of systems access, developing and upholding security policies and procedures, the 

proper configuration of hardware and software, basic physical safeguards, backup tests and disaster recovery 

provisions, regular audits, ongoing employee training, etc.

While state internal security programs are intended to identify and eliminate system vulnerabilities, the risk 

remains of losses from the issuance of improper UI benefit payments and misuse of administrative funds due to 

fraud, waste, and abuse. States are expected to review these controls and update them regularly to eliminate new 

threats and vulnerabilities as technology and business practices in the administration of the UI program evolve.

Although integrity is the responsibility of all agency staff, the states have dedicated staff conducting BPC activities 

to prevent, detect, and recover improper payments. These staffs work closely with agency management to assure 

that sufficient controls are in place to prevent improper payments, conduct complex fraud investigations, and 

operate the activities required to recover improper payments if they have been made.

DOL is also engaged with the states to monitor activity and provide technical assistance to ensure that states are 

able to utilize available integrity tools. For example, as a result of DOL monitoring, states modified computer 

matching procedures to improve the productivity of NDNH as a resource to detect improper payments. 

Additionally, DOL has worked closely with state agencies to develop the information systems and infrastructure to 

support SIDES and to access TOP for UI overpayment recovery.

State UI benefit and tax IT systems vary in terms of performance capacities, capabilities, and adaptability to new UI 

programs and integrity strategies. Many states continue to struggle with antiquated IT infrastructure, making it 

difficult to implement many integrity solutions. During the past decade, DOL has provided states with over $800 

million supplemental funding to implement strategies and technology-based infrastructure investments that will 

help the states prevent, detect, and recover UI overpayments. These investments result in staff cost savings for 

integrity-related activities, increased dollar amounts of overpayments recovered, and prevention of future 

overpayments. Included in these supplemental funding to states are approximately $369 million provided to state 

consortia to address outdated IT system infrastructures which are necessary to improve UI integrity. Currently, 

there are now five consortia projects under way involving 14 states.

Federal Employees’ Compensation Act Program:

OWCP-DFEC is a claims processing organization adjudicating workers’ compensation claims for all Federal 

employees and certain non-Federal employees specifically covered under FECA. OWCP utilizes the Integrated 

Federal Employees Compensation System (iFECS) to administer the FECA program. iFECS is a major application that 

provides a case management system to support DFEC core business functions in administering FECA. iFECS includes 

the iFECS system and three sub-components, the Agency Query System (AQS), the Claimant Query System (CQS) 
Other Information

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182 United States Department of Labor

and the Employees' Compensation Operations and Management Portal (ECOMP). iFECS is a three-tier application 

that was established to provide FECA with an automated case management system. iFECS provides data processing, 

program management, financial management, and decision support functionalities to authorized users in DFEC. 

iFECS maintains an automated record of all claims filed, the adjudicatory status of those claims and benefits paid 

and denied. Data on entitlement, benefits payment status and attorney fees maintained on iFECS is available in 

accordance with the Privacy Act to authorized claimants, authorized representatives and authorized user 

organizations verbally via telephone and in paper/electronic formats.

Initial payments made in the first 90 days of a compensation claim and payments made on claims initiated prior to 

November 2000 that have not been imaged and stored electronically in OWCP’s iFECS system are not included in 

the FECA improper payment estimation methodology. The Department is dedicated to ensuring beneficiaries 

receive the benefits they are entitled to in a timely manner and has concluded that pursuing information on nonimaged (pre-November 2000) cases would not be cost effective and would not provide a statistically significant 

benefit to sample a steadily diminishing population.
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FY 2015 Agency Financial Report 183

IX. Barriers

For all programs and activities as determined under OMB Circular A-123 Appendix C Part I.A.9.Step 2 with 

IPs exceeding the statutory thresholds listed in OMB Circular A-123 Appendix C Part I.A.9.Step 1, agencies 

shall describe any statutory or regulatory barriers, which may limit the agency’s corrective actions in 

reducing IPs and actions taken by the agency to mitigate the barriers’ effects.

Unemployment Insurance Program:

The UI program complies with several statutory provisions establishing requirements that impose challenges to 

reducing improper payments.

Federal-State Partnership: Each state administers the UI program according to its own laws and policies, which 

must conform to broad federal requirements. Improper payment rates often reflect differences in state law. For 

example, states with strict active work search requirements will have perennially higher overpayment rates than 

those states with minimal active work search requirements. It is extremely resource intensive for states to verify 

and enforce claimant work search contacts with employers given the more pervasive role employment search 

engines, large employment application databases, and online social networks play in the modern job search 

process.

Additionally, States have bottom-line authority to set operational priorities. The Department has limited authority 

to ensure states use their funding to pursue improper payment reduction activities.

Delays in Receiving Separation Information: As discussed in section I. Risk Assessments: Program Integrity 

Overview - UI above, Section 303(a)(1) of the Social Security Act requires payment “when due”, prohibiting states 

from suspending UI benefit payments until an official determination has been made that payments are no longer 

due. In addition, there are strong policy reasons for ensuring prompt payment of benefits when due - UI is a critical 

safety net program providing individuals funds to pay for necessities while searching for the next job, and UI funds 

circulating in the economy during times of increased unemployment has a stabilizing impact on the economy. In 

compliance with the “when due” provisions of the law, states make the determination of whether or not to pay 

benefits based on the best available information. A major challenge to addressing IP is created when claimants, 

employers, and third party administrators working for employers fail to report information timely and/or 

accurately.

State Resource Priorities: In recent years state staffing resources have been negatively impacted in two ways. First, 

during the recent recession, many state agencies diverted integrity staff to claims taking functions to process 

overwhelming workloads. In addition, the per-staff cost factors have only been increased for inflation once since 

1995, and that was by 1% in 2010. From 1995 through 2014 inflation, as measured by the consumer price index 

(CPI), has increased by 55.3%, causing prevailing wages to increase beyond states’ ability to compete for staff in the 

labor market. Also, state furloughs and hiring freezes have reduced the UI administrative staff overall. Due to these 

personnel dislocations and staffing mismatches, UI claims adjudication was often conducted by less experienced or 

inadequately trained staff, resulting in an increased number of claims processing errors.

Second, state agencies’ employees who leave through normal attrition or early retirements are often replaced by 

less experienced staff. Pressures on state budgets have reduced training, further contributing to the decrease in 

skilled staff who can accurately administer the relatively complex UI program.

Work Search as a Root Cause: Developing strategies to address work search errors, which is the highest root cause 

of UI improper payments nationally, is very challenging. State eligibility requirements with respect to active work 

search vary significantly among states and in some cases use vague language making it difficult to interpret 

consistently. More states are implementing stricter work search requirements resulting in significantly increased 

work search errors. It is very difficult for state UI agencies to verify claimant work search contacts with employers, 

given the methods of employment application vary widely in the current labor market, such as the posting of 

resumes on employment search engines and large databases. In addition, employers do not maintain records on all 

applicants or individuals submitting resumes, also adding to the challenge of validating work search. Strategies to 
Other Information

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184 United States Department of Labor

address these challenges are few. The most effective strategy is random work search audits, which is workload and 

resource intensive and states have not been specifically required or funded to do random work search audits. As a 

result of all these factors, work search IP are increasing and driving up the overall UI improper payment rate.

Information Technology (IT) Capacity: State IT capacity has been strained by the need to reprogram for the several 

extensions of temporary unemployment compensation programs. IT resources are not available for integrity 

functions, such as cross-matching claimant information with the new hire and other databases. Many state systems 

are several decades old and cannot be easily adapted to new improper payment detection methods, such as 

generating follow-up communications with claimants and employers to verify new hire matches.

Federal Employees’ Compensation Act Program:

The largest category of discrepancies identified is payments that were technically proper but were issued 

improperly due to payment cycle limitations with the Treasury. Specifically, the improper payment was due to the 

fact that FECA was notified of a claimant’s ineligibility after the payment cycle had closed, but before the payment 

was issued, yet was still unable to stop the payment. Had these technically proper payments been stopped before 

issuance, the FY 2015 FECA improper payment rate would have been estimated at only 2.11%.

The other major category highlighted an ongoing difficulty that FECA has with its payment process, namely reliance 

on reporting by other Federal agencies. The FECA program has to rely on the information supplied by the injured 

worker’s employing agency in order to determine their benefit payments and has no mechanism to determine if the 

agency reporting is accurate. Untimely or inaccurate pay rate information provided by the employing agency leads 

to improper payments attributed to the FECA program, even if a DFEC employee keyed the payment accurately 

according to the information available. In essence, this increases FECA’s improper payment rate through no fault of 

the program.

Lastly, the urgency of FECA payments must be considered when reviewing payment performance. FECA wage-loss 

payments are issued to injured federal employees who are likely without any other source of income, so it is 

imperative that the program issues the payments in a very timely manner. This restricts the program’s ability to put 

additional controls in place to ensure payment accuracy, such as a more detailed post-payment review process, in

the interest of avoiding hardship to the claimants it serves.
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FY 2015 Agency Financial Report 185

X. Recapture of Improper Payments Reporting

a. Payment Recapture Audits Narrative. See OMB Circular A-123, Appendix C Part I.D for more information 

about payment recapture audits. All programs and activities that expend $1 million or more annually –

including grant, benefit, loan, and contract programs – shall be considered for payment recapture audits. An 

agency shall discuss payment recapture audit (or recovery auditing) efforts, if applicable.

b. Programs Excluded from the Payment Recapture Audit Program. If the agency has excluded any programs 

or activities from review under its payment recapture audit program (including any programs or activities 

where the agency has determined a payment recapture audit program is not cost-effective), the agency 

must:

1. List all of the programs and activities where it has been determined conducting a payment recapture 

audit program would not be cost effective (whether determination occurred in the current year or in a 

prior year),

2. Indicate when OMB was notified (month and year) that it was not cost effective to conduct a payment 

recapture audit and the program would be excluded from a payment recapture audit program, and

3. Provide the justification and a summary of the analysis that is used to determine that conducting a 

payment recapture audit program for the program or activity was not cost effective (i.e., a discussion of 

the analysis conducted to determine that a payment recapture audit program would not be costeffective).

c. Payment Recapture Audit Reporting. Complete the table (Table 4) below and include each program or 

activity that expends $1 million or more annually and either conducts a payment recapture audit or 

recaptures payments outside of a payment recapture audit (if any of this information is not available 

indicate by either note or by “n/a” in the relevant column or cell). Agencies may include a footnote to list the 

programs or activities that do not have a recovery audit program in place. Programs or activities where the 

agency has determined a payment recapture audit program is not cost effective should still be listed in the 

table below if they have overpayments recaptured outside of a payment recapture audit (see the 

Overpayments Recaptured Outside of Payment Recapture Audits section below for more information). 

Dollars shall be displayed in millions and shall be carried out by at least two decimal points or be carried out 

to as many decimal points as the agency deems necessary to convey accurate information beyond two 

decimal points. For 157 ease of presentation, if a column in Table 4 does not apply to any of the programs or 

activities listed in Table 4 for a particular agency, the column does not need to be displayed. Note that these 

will be payments that were identified and/or recaptured in the current reporting year; however, the actual 

payment itself may have been made in a prior reporting year or in the current reporting year.

d. Overpayments Recaptured Outside of Payment Recapture Audits. As applicable, agencies should also report 

on IPs identified and recovered through sources other than payment recapture audits. For example, 

agencies could report on IPs identified through: statistical samples conducted under IPIA; agency post 

payment reviews or audits; Office of Inspector General reviews; Single Audit reports; self-reported 

overpayments; or reports from the public. Agencies should use the “Overpayments Recaptured Outside of 

Payment Recapture Audits” section of Table 4 to report this information. Note that these will be payments 

that were identified and/or recaptured in the current reporting year; however, the actual payment itself 

may have been made in a prior reporting year or in the current reporting year.

e. Payment Recapture Audit Program Targets. If an agency has a payment recapture audit program in place, 

then the agency is required to establish annual targets to drive their annual performance. The targets shall 

be based on the rate of recovery. Agencies are expected to report CY amounts and rates, as well as 

recapture rate targets for two years (CY+1 and CY+2). Agencies are encouraged to set targets that show an 

increase in recapture rate over time.

As reported to OMB in November 2014 in the FY 2014 AFR and FY 2014 Recapture Audit Report, and in previous 

such reports, DOL risk assessments have found that recapture audit programs are cost effective for only the UI 

program. As part of the Department’s regular cycle of Department-wide risk assessments, these determinations will 

be revaluated for all programs in fiscal years 2016 and 2017.
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186 United States Department of Labor

Table 4.0: Overpayments Recaptured through Payment Recapture Audits ($ in millions)

Benefits Total

Program 

or Activity

Amount 

Identified

Amount 

Recaptured

FY 2015 

Recapture %

FY 2016 

Recapture % 

(Target)

FY 2017 

Recapture % 

(Target)

Amount 

Identified

Amount 

Recaptured

UI $1,600.71 $1,143.12 71.41% 68.00% 71.00% $1,600.71 $1,143.12

Total $1,600.71 $1,143.12 71.41% 68.00% 71.00% $1,600.71 $1,143.12

Notes: UI payments are reviewed by each state, not by the DOL, in accordance with the provisions of the Single Audit Act and state 

UI law. Each state follows review procedures, such as matching paid claims against the NDNH and other databases to detect 

benefits which are improperly paid and use a variety of tools to recover benefits overpaid, such as leveraging the U.S. Treasury 

Offset Program. Overpayments detected and recovered are reported to DOL on the Quarterly Overpayment Report, ETA 227.

Includes total overpayments reported as outstanding on the ETA 227 and EUC 227 reports (line 313) as of the report date.

Excludes amounts waived for recovery.

Amounts based on data for the period July 1, 2014 through June 30, 2015, the most recent period for which data are available.

Table 4.1: Overpayments Recaptured Outside of Payment Recapture Audits ($ in millions)

No program which expended over $1 million or greater reported overpayments recovered outside of payment 

recapture audits.

Table 5: Disposition of Funds Recaptured Through Payment Recapture Audits ($ in millions)

Program 

or Activity

Amount 

Recovered

Type of 

Payment

Agency 

Expenses to 

Administer 

the Program

Payment 

Recapture 

Auditor Fees

Financial 

Management 

Improvement 

Activities

Original 

Purpose

Returned 

to 

Treasury

Other

UI $1,143.12 UI Benefits NA NA NA $1,143.12 NA NA

Total $1,143.12

Notes: Federal law prohibits the use of UI funds recaptured for any purpose other than the original purpose.

Table 6: Aging of Outstanding Overpayments Identified in the Payment Recapture Audits ($ in millions)

Program 

or Activity

Type of 

Payment

Amount 

Outstanding

(0 – 6 months)

Amount Outstanding

(6 months to 1 year)

Amount 

Outstanding

(over 1 year)

Amount determined 

to not be collectable 1

UI UI Benefits $595.52 $603.28 $2,088.27 $888.01

Total $595.52 $603.28 $2,088.27 $888.01

Notes: Includes that portion of overpayments reported as outstanding on the ETA 227 and EUC 227 Reports (line 313) that were 

360 days old or less as of the report date. Overpayment aging data are not available for EUC overpayments and have been imputed 

from UI, UCFE, UCX, and EB overpayment aging data. See explanation in narrative below. 1

Includes overpayments written off (ETA 227 and EUC 227 Reports, line 309) and receivables removed after two years unless 

recovery is in progress (ETA 227 and EUC 227 Reports, line 312).
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FY 2015 Agency Financial Report 187

Unemployment Insurance Program:

The UI program was deemed cost effective for payment recapture audits. Performing UI payment recapture 

activities and providing states with tools to aid recovery are top priorities at DOL. DOL’s recapture activities have 

focused on areas that offer the greatest opportunity for improvement.

The Department coordinates with states to recover UI overpayments. Each state’s BPC unit is responsible for 

promoting and maintaining UI program integrity through prevention, detection, investigation, establishment, and 

recovery of IP. BPC operations identify UI overpayments for recovery through such methods as cross-matching 

claimant Social Security Numbers with State and National Directories of New Hires, wage record files submitted 

each quarter by employers, matches with other databases, such as Workers Compensation and State Corrections, 

and other sources such as appeals, reversals and tips and leads. States collect overpaid claims through offsets of UI 

benefits, Federal income tax refunds under the Treasury Offset Program (TOP), state income tax offsets, and direct 

cash reimbursement from the claimant. From FY 2008 through FY 2015, approximately $9.42 billion was recovered 

for the UI program (including the State UI, UCFE, UCX, EB, and EUC programs).

In February 2011, Treasury enacted a regulation to permit states to offset UI overpayments through TOP. As of 

September 2015, 44 states have implemented TOP and 5 other states are in various stages of implementation. An 

estimated $221.6 million in UI overpayments were recovered through TOP in FY 2015. Additionally, on December 

26, 2013, the President signed into law the Bipartisan Budget Act. This Act amended section 303 of the Social 

Security Act to require states, as a condition for receipt of grants to administer their UI programs, to use the TOP to 

recover covered UI debt that remains uncollected as of the date that is one year after the debt was finally 

determined to be due and collected.

The states must hold the claimants liable to repay benefits that were received improperly and take an active role to 

recover IP (payment recapture audits). States may waive repayments for non-fraud overpayments when it would be 

against equity and good conscience pursuant to their state’s law. Some of the recovery activities and tools used by 

states include:

• Offsets from benefits;

• Offsets from state and Federal income tax refunds;

• Offsets from lottery winnings, homestead exemptions, and other benefits, including the Alaska Mineral 

Refund;

• Interstate recovery agreements;

• Repayment plans;

• Civil Actions, including wage garnishments and property liens;

• Skip tracing, collection agencies, and credit bureaus;

• Probate and bankruptcy;

• Referral to OIG and other law enforcement agencies;

• State and Federal prosecution; and

• Establishment of interest and penalties on overpayments, which adds an incentive to repay quickly.

Table 4.0, above, provides a summary of UI overpayments established and recovered as a result of the activities 

described above.

Recovered overpayments for state UI claims are returned to the UI account from which the benefits were originally 

paid.
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188 United States Department of Labor

Table 4.2.UI: UI Overpayments Established and Recovered by Fiscal Year (Excluding Waivers) ($ in millions)

Fiscal 

Year

Overpayments 

Established 

UI/UCFE/UCX/EB

Overpayments 

Recovered 

UI/UCFE/UCX/EB

Recovered 

%

Overpayments 

Established 

UI/UCFE/UCX/EB + 

EUC

Overpayments 

Recovered 

UI/UCFE/UCX/EB + 

EUC

Recovered 

%

2008 $1,002.13 $571.16 56.99% $1,010.17 $572.97 56.72%

2009 $1,456.40 $850.99 58.43% $1,736.29 $914.63 52.68%

2010 $1,906.31 $966.02 50.67% $2,834.45 $1,179.89 41.63%

2011 $1,887.18 $997.97 52.88% $2,995.72 $1,298.98 43.36%

2012 $1,740.39 $1,015.23 58.34% $3,021.71 $1,400.13 46.34%

2013 $1,575.51 $1,077.02 68.36% $2,452.12 $1,512.82 61.69%

2014 $1,467.51 $1,036.88 70.66% $2,089.80 $1,400.71 67.03%

2015 $1,357.50 $926.27 68.23% $1,600.71 $1,143.12 71.41%

The states are required to report quarterly on overpayment detection and recovery activities on the ETA 227 

Report. The amounts established and recovered are based on reports submitted during the indicated fiscal year. 

However, the actual payment of benefits may have occurred in a prior fiscal year.

The information reported on the ETA 227 Report is based on actual counts of UI overpayments identified and 

recovered by the state agencies. This is in contrast to the estimates of UI overpayment rates and amounts that are 

reported for the IPIA, which are based on the results of BAM. BAM is a statistical survey of paid and denied UI

claims. The results of the BAM audits are projected to the population of benefit payments for all unemployment 

compensation programs: State UI, UCFE, UCX, EB, and EUC. These BAM estimates may be significantly higher than 

actual overpayments identified for recovery because:

1. BAM audits detect eligibility issues that usual BPC detection methods will not identify, because it is very 

workload intensive and/or not cost effective to detect (for example, verification of all claimant work search 

activity or that all claimants were able and available for work); or

2. The overpayment is not recoverable because the responsibility for the improper payment is the agency’s 

and/or the employer’s, rather than the claimant’s, or due to state finality rules.

“Overpayment Establishments” have been adjusted to subtract waivers, which are overpayments that the state 

agency has determined are not recoverable. The Unemployment Insurance Report Handbook (ET Handbook 401, 

4th edition, Section IV, Chapter 3, p. 10) defines a waiver as “a non-fraud overpayment for which the state agency, 

in accordance with state law, officially relinquishes the obligation of the claimant to repay. Usually, this is 

authorized when the overpayment was not the fault of the claimant and requiring repayment would be against 

equity and good conscience or would otherwise defeat the purpose of the UI law.”

All state laws provide for recovery of benefit overpayments. States must follow their individual state laws and 

policies in executing such recovery efforts. In addition to direct repayment by claimants, overpayment collection 

efforts include benefit payment offsets, state income tax refund offsets, federal income tax refund offsets via the 

Treasury Offset Program, wage garnishments, interception of lottery winnings, and pursuing both civil and criminal 

action in state courts as well as some other means available to states. The expense of recovery efforts can vary 

greatly by state depending on the actions that are pursued. Also, the capacity of the state to pursue such actions is 

a factor that influences the level of recovery.
Other Information

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FY 2015 Agency Financial Report 189

DOL believes that this definition is consistent with the criteria established by OMB for evaluating the cost 

effectiveness of a payment recapture program in the revised OMB Circular A-123, Appendix C, Part I.D, Section 5, 

p.31.

The ETA 227 Report captures data on the causes of overpayments, the method of detection, recovery and 

reconciliation, criminal and civil actions, and the aging of benefit accounts. After eight quarters, the overpayments 

are removed from the total outstanding balance on this report. This does not affect the state’s accounting 

practices. When overpayments are recovered that have been removed from the reported outstanding balance, the 

amount will be added back to report the recovery in the quarterly report, regardless of when the overpayment 

originally occurred. States are now able to attempt recovery of these older unemployment compensation debts 

through TOP by offsetting the claimant’s Federal income tax returns. When IP are recovered, they are returned to 

the states’ UI trust fund account from which they were paid.

No UI benefit overpayments were recovered outside of payment recapture audits.
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XI. Additional Comments

Discuss any additional comments, if any, on overall agency efforts, specific programs, best practices, or 

common challenges identified, as a result of IPIA, IPERA, and or IPERIA implementation.

Unemployment Insurance Program:

Other Barriers and Department Response: The Department of Treasury requires states to use merit-based state 

government staff to access TOP data. However, several states use contract staff to perform program activities that 

require accessing TOP data. Some states have reported difficulties in implementing the TOP program due to 

Treasury’s mandate to use merit staff. Treasury is working with the Department to provide customized technical 

assistance to resolve this issue.

ETA is developing Integrity legislation. The package is completing the departmental approval process, and ETA is 

drafting legislative specifications and language for clearance by OMB. Legislative language is expected to be 

transmitted to Congress, pending OMB approval.

Federal Employees’ Compensation Act Program:

The FECA program believes that the enhanced Treasury payment cycle changes put in towards the end of the prior 

review period will show even larger gains in FY 2016, resulting in reductions to the IP rate. Though only in place for 

one quarter, the changes showed positive results so FECA believes that there will be even greater gains in the 

coming year. The Program is also analyzing the results of an Improper Payments audit conducted in FY 2015 to 

determine further corrective actions to be applied in FY 2016.

FECA continues to work towards reducing improper payments, and towards that end plans enhanced Program 

Integrity efforts in FY 2016. This includes the hiring of additional staff dedicated to process improvement and 

improper payment reduction. In addition, the Program continues to work with other federal partners such as the 

Social Security Administration (SSA), Internal Revenue Service (IRS), and Office of Personnel Management (OPM) to 

facilitate data matches aimed at improper payment reduction. These matches will benefit both partner agencies, 

resulting in government-wide improper payment reductions.
Other Information

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FY 2015 Agency Financial Report 191

XII. Reduction of Improper Payments with the Do Not Pay Initiative

IPERIA requires pre-payment and pre-award reviews by each agency to determine program or award 

eligibility and to prevent improper payments before the release of any Federal funds. The procedures must 

ensure that a thorough review on eligibility occurs with relevant information of available databases.

IPERIA also requires OMB to submit to the Congress an annual report, “which may be included as part of 

another report submitted to Congress by the Director, regarding the operation of the Do Not Pay Initiative, 

which shall:

A. include an evaluation of whether the Do Not Pay Initiative has reduced improper payments or 

improper awards; and

B. provide the frequency of corrections or identification of incorrect information.”

To support this requirement, all agencies shall provide a brief narrative discussing the agency's actions 

attributable to the Do Not Pay Initiative and respective databases on an annual basis, regardless of the 

agency’s susceptibility to improper payments. This narrative shall include an evaluation of whether the Do 

Not Pay Initiative has reduced improper payments or improper awards; identify the frequency of corrections 

or identification of incorrect information; and include completion of the table that follows (Table 7).

Do Not Pay (DNP) Initiative is a government-wide initiative mandated by OMB Memorandum M-12-11 dated April 

12, 2012, Reducing Improper Payments through the “Do Not Pay List,”, and the Improper Payments Elimination and 

Recovery Improvement Act (IPERIA) of 2012 (Pub. L. 112-248) to screen payment recipients before a grant, contract 

award or payment is made. DOL has implemented the screening of payments through the Treasury Do Not Pay 

Portal and, as appropriate, screens payments via the DNP databases directly.

IPERIA Specified Databases: In FY 2015, the following databases were specified by IPERIA:

• Death Master File of the Social Security Administration (DMF),

• General Services Administration’s Excluded Parties List System (EPLS), (or the updated System for Award 

Management (SAM))

• Debt Check Database of the Department of the Treasury (Debt Check),

• Credit Alert System or Credit Alert Interactive Voice Response System of the Department of Housing and 

Urban Development (CAIVRS),

• List of Excluded Individuals/Entities of the Office of Inspector General of the Department of Health and 

Human Services (LEIE), and

• Prisoner Update Processing System of the Social Security Administration (PUPS), as added to IPERIA by the 

Bipartisan Budget Act of 2013, Public Law 113–67.

Table 7: Results of the Do Not Pay Initiative in Preventing Improper Payments ($ in millions)

Program or 

Activity

Number (#) of 

payments reviewed 

for possible IP

Dollars ($) of 

payments reviewed 

for possible IP

Number (#) of 

payments 

stopped

Dollars ($)

of payments 

stopped

Number (#) of 

potential IP 

reviewed & 

determined proper

Dollars ($) of 

potential IP 

reviewed & 

determined 

proper

Reviews with 

the IPERIA 

specified 

databases 1 2,260,295 $6,531.35 0 0 1,303 $1.04

Reviews with 

databases not 

listed in 

IPERIA 2 NA NA NA NA NA NA

Notes: 1 Indicates payments reviewed by the DNP Portal. 2Information is not collectable at this time, as detailed in narrative below.
Other Information

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192 United States Department of Labor

Overview of Do Not Pay: IPERIA and OMB directives require agencies to integrate the use of existing Federal 

databases (collectively known as the “Do Not Pay List”) to verify eligibility for Federal payments in order to reduce 

and eliminate payment errors before they occur. The DNP Business Center provides Federal agencies with a webbased single-entry access DNP Portal to these existing databases.

Approach for Implementing DNP Portal: Incorporating the DNP Portal fully into DOL’s business processes is a major 

undertaking involving the active cooperation of not only OMB, Treasury, and DOL component agencies, but also the 

states. OCFO facilitated development of a Plan for enrollment and implementation with affected component 

agencies. Component agencies work with OCFO to implement the DNP Solution in their business processes. 

Component agencies are responsible for implementation of DNP within their business processes and interfacing 

with state stakeholders where appropriate.

DNP Portal Payment Reviews: Beginning in FY 2015, the DNP Portal has been comparing the Department’s PAM file 

against the SAM and DMF databases. The PAM file includes automated payments made by the Department. When 

a payment matches, the payment information is returned to OCFO for adjudication. OCFO reviews matches against 

business rules to cull false-positives. Matches which cannot be culled per business rules are reviewed by subject 

matter experts in the appropriate component agency to determine if the match represents a true positive improper 

payment. Since its inception, none of the matches returned by the DNP Portal have been found to be improper 

payments.

Reviews of IPERIA Specified Databases Outside the DNP Portal: DOL programs review IPERIA specified databases 

as appropriate for their business needs. Procurement and grants programs include internal controls requiring 

review of all vendors against the SAM database. OWCP benefit programs conduct batch matching against the DMF. 

States are currently prohibited by law from participating in the DNP Initiative, however many state programs review 

UI beneficiaries against versions of the DMF independently, as discussed in detail in section V. Corrective Actions: 

UI, above. These reviews are designed to prevent IP and vary significantly by specific programmatic need. Because 

of programmatic variation and the high likelihood of “double matching” a single payment against multiple 

databases, comparable statistics on potential IP prevented by these efforts have not been collected. The 

Department will review if this data can be cost effectively collected during the course of regular risk assessments.

Reviews of non-IPERIA Specified Databases: The Department maintains comprehensive, cost effective internal 

controls to ensure the payment integrity of all programs. Among these controls DOL programs review payment files 

against certain databases not specified by IPERIA. These reviews are designed to prevent IP and vary significantly by 

specific programmatic need. Many state programs review UI beneficiaries against a variety of databases, (e.g. the 

National and/or State Directory of New Hires, etc) independently. These efforts are discussed in detail in section V. 

Corrective Actions: UI, above. Because of programmatic variation and the high likelihood of “double matching” a 

single payment against multiple databases, comparable statistics on potential IP prevented by these efforts have 

not been collected. The Department will review if this data can be cost effectively collected during the course of 

regular risk assessments.
Other Information

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FY 2015 Agency Financial Report 193

Freeze the Footprint

Consistent with Section 3 of the OMB Memorandum M-12-12, Promoting Efficient Spending to Support Agency 

Operations and OMB Management Procedures Memorandum M-13-02, the “Freeze the Footprint” (FTF) policy 

implementing guidance, all Chief Financial Officer Act departments and agencies shall not increase the total square 

footage of their domestic office and warehouse inventory compared to the FY 2012 baseline. There are significant 

opportunities for reductions in square footage and cost savings through agency co-locations, consolidations, and 

disposals of unneeded space within the Federal Government’s vast portfolio of real property assets. As a result, 

OMB is working in partnership with General Service Administration (GSA) and other Federal agencies to better align 

the size of the Federal real property inventory.

Agencies are required to report cost data along with the most recent square footage information submitted to the 

Federal Real Property Profile (FRPP) in their annual Performance and Accountability Report or AFR. This section is 

presented in accordance with Section 11.5.10 of OMB Circular A-136, issued September 2014.

Actions to Freeze the Footprint

Overall, the space utilization for DOL personnel in GSA provided office space is 258.6 square feet per person 

(SF/per), and represents an opportunity for DOL to achieve both rent savings and a reduction of the total office 

footprint nation-wide. As GSA leases commercial space on a competitive basis and sets the rent for federal 

buildings, DOL has little control of the rent and maintenance cost per square foot for each office location.

Using the initial President’s Management Agenda Real Property Benchmarking Metrics, DOL has identified potential 

space consolidations and co-locations that can result in significant reductions to the DOL office footprint and 

achieve rent savings for the agencies.

Table FTF 1 reflects the total square footage associated with DOL’s assets subject to “Freeze the Footprint” policy, 

as identified by Data Element #3 from Federal Real Property Council’s “Guidance for Real Property Inventory 

Reporting from the latest available reporting year FY 2014, and compares it to the FY 2012 “Freeze the Footprint” 

baseline (as assigned by GSA). The square footage totals reported align with agency totals confirmed by GSA. As 

noted in DOL’s submissions to OMB, DOL had expected increased in the FY 2013 and FY 2014 footprints due to 

projects approved prior to the end of FY 2012.

Table FTF 1: Freeze the Footprint Baseline Comparison

FY 2012 

Baseline 2014 (CY) Change(2014 CY - FY 2012 Baseline)

Square Footage (SF in millions) 6,942,509 6,976,171 33,662

Table FTF 2 reflects the annual operating costs as reported in the most recent Federal Real Property Profile 

submittal for owned and direct lease facilities (direct lease facilities does not include GSA occupancy agreements) 

that are subject to the “Freeze the Footprint” policy, as identified by Data Element #3 from Federal Real Property 

Council’s “Guidance for Real Property Inventory Reporting” as reported in the most recent Federal Real Property 

Profile submittal1

. The cost data reported by DOL is based directly on data reported into the latest available Federal 

Real Property Profile database.

 1 See GSA, Office of Government-wide Policy, Federal Real Property Council, 2014 Guidance for Real Property Inventory Reporting (May 27, 

2014) p.6.
Other Information

(Unaudited)

194 United States Department of Labor

Table FTF 2: Operation and Maintenance Costs – Owned and Direct Lease Buildings ($ in millions)

FY 2012 

Reported Cost 2014 (CY) Change(2014 CY - FY 2012 Baseline)

Operation and Maintenance Costs $6.9 $8.7 $1.8

DOL will utilize several strategies to reduce its footprint and increase the efficient use of real property to manage 

space. These strategies include: implementing the renegotiated collective bargaining agreements to reduce per 

person square footage, increasing telework, and introducing hoteling. DOL is also participating with GSA in 

Consolidated Portfolio Reviews (CPP) for the Chicago and National Capital Regions and will work closely with GSA in 

reviewing office space utilization nationwide to identify opportunities to reduce space and co-locate offices. It is 

through a combination of these strategies that we plan to achieve success across all of DOL to reduce our footprint 

nationwide.
Other Information

(Unaudited)

FY 2015 Agency Financial Report 195

Civil Monetary Penalty Inflation Adjustment Reporting

Table CMP 1: Civil Monetary Penalty Inflation Adjustment

Table CMP 1 below describes the Department’s civil monetary penalties, their authorities, dates of inflation adjustment, if applicable, and amounts.

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

EBSA

Section 209(b): Failure to furnish 

information or maintain records for 

any plan year. 

29 USC §1059(b) 1974 July 29, 1997

$11 for each employee 

for whom such failure 

occurs

EBSA

502 (l) - Penalty 1) against a fiduciary 

who breaches a fiduciary 

responsibility under, or commits a 

violation of, part 4 of Title I of ERISA 

or 2) against any other person who 

knowingly participates in such breach 

or violation.

29 USC §1132(l)

N/A (not subject to 

adjustment under 

Federal Civil Monetary 

Penalties Adjustment 

Act of 1990)

N/A(not subject to 

adjustment under 

Federal Civil 

Monetary Penalties 

Adjustment Act of 

1990)

20% of applicable 

recovery amount

EBSA

502 (i) - Penalty against a party in 

interest who engages in a transaction 

prohibited by section 406 of ERISA 

with respect to either an employee 

welfare benefit plan or a nonqualified pension plan.

29 USC §1132(i)

N/A (not subject to 

adjustment under 

Federal Civil Monetary 

Penalties Adjustment 

Act of 1990)

N/A(not subject to 

adjustment under 

Federal Civil 

Monetary Penalties 

Adjustment Act of 

1990)

5% of applicable recovery 

amount

EBSA

502 (c)(1) - Penalty for failure to 

provide plan participants requested 

information; penalty for failure to 

furnish participants notice of pension 

surplus transfer to health account 

under ERISA § 101(e), COBRA notice, 

annual funding notice and pension 

benefit statements.

29 USC §1132(c)(1) 1974 July 29, 1997 Up to 

$110/day/participant

EBSA 502 (c)(2) - Penalty for failure/refusal 

to properly file plan annual report. 29 USC 1132 (c)(2) 1987 July 29, 1997 Up to 

$1,100/day/violation
Other Information

(Unaudited)

196 United States Department of Labor

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

EBSA

502 (c)(3) - Penalty for failure to 

provide notice for failing to meet 

minimum funding standards; failure 

to notify certain person pension 

surplus transfers.

29 USC §1132(c)(3) 1989 July 29, 1997 Up to $110/day/violation

EBSA

502 (c)(4) - Failure to disclose certain 

documents to participants, 

beneficiaries and others as required 

by Pension Protection Act (PPA) 

disclosures (i.e., violations of ERISA 

§101(j), (k), and (l) and 514(e)(3).

29 USC §1132(c)(4)

1993 or 2006 (under 

review; prior to PPA 

penalty applied to 

certain repealed 

notice requirements)

N/A Up to 

$1,000/day/violation

EBSA

502 (c)(5) - Failure to file annual 

report for Multiple Employer Welfare 

Arrangements (MEWAs).

29 USC §1132(c)(5) 1996 March 24, 2003 Up to 

$1,100/day/violation

EBSA

502 (c)(6) - Failure to provide 

Secretary of Labor requested 

documentation.

29 USC §1132(c)(6) 1997 March 24, 2003

Up to $110 

/day/violation not to 

exceed $1,100 per 

request

EBSA

502 (c)(7) - Failure to provide plan 

participants notices of blackout 

periods and of right to divest 

employer securities.

29 USC §1132 (c)(7) 2002 N/A

Up to 

$100/day/participant or 

beneficiary

EBSA

502 (c)(8) - Failure to adopt a 

multiemployer Defined Benefit (DB), 

funding improvement, rehabilitation 

plan or meet benchmarks.

29 USC §1132(c)(8) 2006 N/A Up to 

$1,100/day/violation

EBSA

Section 502(c)(9)(A) – Failure by an 

employer to inform employees of 

CHIP coverage opportunities under 

Section 701(f)(3)(B)(i)(l) – each 

employee a separate violation.

29 USC §1132 (c)(9)(A) 2009 N/A

Assessed against 

employer:

Up to $100 /day/ 

employee

EBSA

Section 502(c)(9)(B) - Failure by a 

plan to timely provide to any State 

information required to be disclosed.

29 USC §1132 (c)(9)(B) 2009 N/A

Assessed against Plan 

Administrator:

Up to $100 /day/ 
Other Information

(Unaudited)

FY 2015 Agency Financial Report 197

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

under Section 701(f)(3)(B)(ii), as 

added by CHIP regarding coverage 

coordination – each 

participant/beneficiary a separate 

violation.

participant and 

beneficiary

EBSA

Section 502(c)(10) Failure by any plan 

sponsor of group health plan, or any 

health insurance issuer offering 

health insurance coverage in 

connection with the plan, to meet 

the requirements of Sections 

702(a)(1)(F), (b)(3), or (3); or Section 

701; or Section 702(B)(1) with 

respect to genetic information.

29 USC §1132 (c)(10) 2008 N/A

$100/day/participant and 

beneficiary for each noncompliance period

Uncorrected de minimis 

violations - minimum 

penalty: $2,500

Uncorrected violations 

that are not de minimis –

minimum penalty: 

$15,000

Unintentional failure 

maximum: $500,000

EBSA

502(c)(12) – Failure of a CSEC plan in 

restoration status to adopt a 

restoration plan.

29 USC §1132 (c)(12) 2014 N/A Up to $100 per day

EBSA

502 (m) - Penalty against fiduciary 

for failure to make proper 

distribution for a defined benefit plan 

under §206(e).

29 USC §1132 (m) 1994 N/A

Penalty is equal to value 

of improper distribution, 

not to exceed $10,000 

for each improper 

distribution

EBSA

Failure to provide SBC under PHS Act 

section 2715(f), as incorporated in 

ERISA section 715 and 29 CFR 

2590.715-2715(f).

29 USC 1185d and 42 

USC 300gg-15 2010 N/A $1,000 per failure, per 

participant/beneficiary

MSHA Maximum daily penalty amount. 30 CFR, Part 100 January 28, 2013 N/A $7,500
Other Information

(Unaudited)

198 United States Department of Labor

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

MSHA Minimum/maximum immediate 

notification penalty amount. 30 CFR, Part 100 January 28, 2013 N/A $5,000 – $65,000

MSHA Minimum/maximum regular penalty 

amount. 30 CFR, Part 100 January 28, 2013 N/A $112 – $70,000

MSHA Maximum flagrant penalty amount. 30 CFR, Part 100 January 28, 2013 N/A $242,000

OSHA Serious. Occupational Safety and 

Health Act of 1970. N/A N/A Up to $7,000 for each 

violation

OSHA Other-Than-Serious. Occupational Safety and 

Health Act of 1970. N/A N/A Up to $7,000 for each 

violation

OSHA Willful or repeated. Occupational Safety and 

Health Act of 1970. N/A N/A 

Not more than $70,000 

for each violation, but 

not less than $5,000 for 

each willful violation

OSHA Failure to abate. Occupational Safety and 

Health Act of 1970. N/A N/A

Not more than $7,000 

per day during which 

such failure or violation 

continues

OSHA Posting requirements. Occupational Safety and 

Health Act of 1970. N/A N/A Up to $7,000 for each violation

OWCP Failure to report termination of 

payments. 

Black Lung Benefits Act, 

30 U.S.C. § 932(a), 

incorporating 33 U.S.C. 

§ 914(g); 20 C.F.R. §

725.621 (b), (d)

None January 19, 2001 Maximum of $550 per 

instance

OWCP Failure to secure payment of 

benefits. 

Black Lung Benefits Act, 

30 U.S.C. § 933(d)(1); 20 

C.F.R. § 726.302(c)(5)

None January 19, 2001 Maximum of $1,100 per 

day

OWCP Failure to file required reports. 

Black Lung Benefits Act, 

30 U.S.C. § 942; 20 

C.F.R. § 725.621(d)

None January 19, 2001 Maximum of $550 per 

instance
Other Information

(Unaudited)

FY 2015 Agency Financial Report 199

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

OWCP Failure to report termination of 

payments.

Longshore and Harbor 

Workers’ Compensation 

Act, 33 U.S.C. § 914(g); 

20 C.F.R. § 702.236

None November 17, 1997 $110

OWCP

Failure to file first report of injury or 

filing a false statement or 

misrepresentation in first report.

Longshore and Harbor 

Workers’ Compensation 

Act, 33 U.S.C. § 930(e); 

20 C.F.R. § 702.204

None November 17, 1997 $11,000

OWCP

Discrimination against employees 

who claim compensation or testify in 

a LHWCA proceeding.

Longshore and Harbor 

Workers’ Compensation 

Act, 33 U.S.C. § 949; 20 

C.F.R. § 702.271(a)(2)

None November 17, 1997 Not less than $1,100, but 

not more than $5,500

WHD

Civil Monetary Penalty (CMP) for 

willful or repeated FLSA minimum 

wage or overtime violations.

29 USC § 216(e)(2); 29 

CFR 578.3(a). November 17, 1989 December 7, 2001 $1,100

WHD CMP for FLSA child labor violations. 29 USC § 216(e)(1)(A)(i); 

29 CFR 579.1(a)(1)(i)(A). November 5, 1990 May 21, 2008 $11,000

WHD CMP for FLSA child labor violations 

resulting in serious injury or death.

29 USC § 

216(e)(1)(A)(ii); 29 CFR 

579.1(a)(1)(i)(B).

N/A May 21, 2008 $50,000

WHD

CMP for willful or repeated FLSA child 

labor violations resulting in a serious 

injury or death.

29 USC § 

216(e)(1)(A)(ii); 29 CFR 

579.1(a)(1)(i)(B).

N/A May 21, 2008 $100,000

WHD CMP for violations related to 

homework under the FLSA.

29 USC § 211(d); 29 CFR 

530.302 N/A November 10, 1988 $500

WHD CMP for willful violations of the 

FMLA’s notice requirement.

29 USC § 2619(b); 29 

CFR 825.300(a). February 5, 1993 November 17, 2008 $110

WHD CMP for violations under the H-1B 

program.

8 USC § 1182(n)(2)(C)(i); 

20 CFR 655.810(b)(1). N/A November 29, 1990 $1,000

WHD

CMP for willful violations or 

discrimination under the H-1B 

program.

8 USC § 

1182(n)(2)(C)(ii); 20 CFR 

655.810(b) (2). 

N/A October 21, 1998 $5,000
Other Information

(Unaudited)

200 United States Department of Labor

Bureau 

Name Penalty (Name of Penalty) Authority (Statute) Date of Previous Adjustment

Date of Current 

Adjustment

Current Penalty Level

($ Amount)

WHD

CMP for willful violations resulting in 

the displacement of a U.S worker 

under the H-1B program.

8 USC § 

1182(n)(2)(C)(iii); 20 CFR 

655.810(b) (3).

N/A October 21, 1998 $35,000

WHD CMP for violations under the H-2A 

program.

8 USC § 1188(g)(2); 29 

CFR 501.19(c). June 1, 1987 February 12, 2010 $1,500

WHD

CMP for willful violations or 

discrimination under the H-2A 

program.

8 USC § 1188(g)(2); 29 

CFR 501.19(c) (1). N/A December 18, 2008 $5,000

WHD

CMP for a safety or health violation 

resulting in a serious injury or death 

under the H-2A program.

8 USC § 1188(g)(2); 29 

CFR 501.19(c)(2). December 18, 2008 February 12, 2010 $50,000

WHD

CMP for a willful or repeated safety 

or health violation resulting in a 

serious injury or death under the H2A program.

8 USC § 1188(g)(2); 29 

CFR 501.19(c)(4). December 18, 2008 February 12, 2010 $100,000

WHD

CMP for failing to cooperate with an 

investigation under the H-2A 

program.

8 USC § 1188(g)(2); 29 

CFR 501.19(d). N/A December 18, 2008 $5,000

WHD CMP for unlawfully displacing a U.S 

worker under the H-2A program.

8 USC § 1188(g)(2); 29 

CFR 501.19(e). December 18, 2008 February 12, 2010 $15,000

WHD

CMP for improperly rejecting a U.S 

worker under the H-2A program 

under the H-2A program.

8 USC § 1188(g)(2); 29 

CFR 501.19(f). N/A February 12, 2010 $15,000

WHD CMP for violations under the H-2B 

program.

8 USC § 1184(c)(14); 29 

CFR 503.23. N/A May 11, 2005 $10,000

WHD CMP for violations under the MSPA 

program.

29 USC § 1853(a)(1); 29 

CFR 500.1(e). N/A January 14, 1983 $1,000

WHD CMP for violations of the Employee 

Polygraph Protection Act (EPPA).

29 USC § 2005(a); 29 

CFR 801.42(a) N/A June 27, 1988 $10,000
SCHEDULES OF SPENDING

For the Years Ended September 30, 2014 and 2013

(Unaudited)

FY 2015 Agency Financial Report 201

The Schedule of Spending presents an overview of how and where the Department is spending its money. It is 

presented on a budgetary basis, the same as the Combined Statements of Budgetary Resources (SBR). Amounts 

shown below as “Total amounts agreed to be spent” equal amounts shown as “Obligations incurred” on the SBR.

To improve public transparency and the quality of data reported on USASpending.gov, DOL has begun reconciliation 

efforts between obligations reported on the financial statements and spending reported on USASpending.gov.

Obligations included on the financial statements that are not included on USASpending.gov generally include: 

financial assistance direct payments, personnel compensation and benefits, leases, interagency agreements, travel, 

and training. Differences may also exist due to timing differences between obligations reported in DOL's financial 

reporting system and data transmitted to USASpending.gov through the Federal Procurement Data System.

(Dollars in Millions) 2015 2014

Section I – What money is available to spend?

This section presents resources that were available to spend by the Department.

Total resources $ 58,137 $ 74,533

Less amount available but not agreed to be spent (2,809) (3,027)

Less amount not available to be spent (639) (1,585)

Total amounts agreed to be spent $ 54,689 $ 69,921

Section II – How was the money spent?

This section presents services or items purchased and grouped for the Department’s major programs .

Income maintenance

 Insurance claims and indemnities $ 36,005 $ 44,661

 Net internal transfers between DOL funds 4,248 9,064

 Personnel compensation and benefits 314 308

 Contractual services and supplies 414 466

 Grants, subsidies, and contributions 3,721 4,394

 Interest 649 774

 Other 122 480

Employment and training

 Personnel compensation and benefits 263 256

 Contractual services and supplies 1,723 2,002

 Grants, subsidies, and contributions 4,230 4,655

 Other 125 24

Labor, employment and pension standards; worker safety and health; 

 statistics; other

 Personnel compensation and benefits 1,473 1,451

 Contractual services and supplies 1,040 1,009

 Grants, subsidies, and contributions 301 330

 Other 62 47

Total amounts agreed to be spent $ 54,689 $ 69,921

Section III – Who did the money go to?

This section identifies with whom the Department is spending money based on obligations incurred.

Individuals $ 36,052 $ 44,746

Net internal transfers between DOL funds 4,248 9,143

States and local governments 7,120 7,367

Other federal agencies 453 2,063

Vendors and other 3,809 2,826

Employees 795 1,787

Higher Education 1,595 1,121

Non-for-profits 617 868

Total amounts agreed to be spent $ 54,689 $ 69,921

Schedule of Spending
202 United States Department of Labor

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FY 2015 Agency Financial Report 203

Acronyms

AFR Agency Financial Report

ARRA American Reinvestment and 

Recovery Act

BAM Benefit Accuracy Measurement

BLDTF Black Lung Disability Trust Fund

BLS Bureau of Labor Statistics

BPC Benefit Payment Control

COLA Cost of Living 

Allowance/Adjustment

CPIM Consumer Price Index-Medical

CPI-U Consumer Price Index-Urban

CSEOA 

Community Service 

Employment for Older 

Americans

CSRS Civil Service Retirement System

CY Current Year

DFEC Division of Federal Employees’

Compensation

DNP Do Not Pay

DOE Department of Energy

DOL Department of Labor

EB Extended Benefits

EBSA Employee Benefits Security 

Administration

EEOICPA

Energy Employees 

Occupational Illness 

Compensation Program Act

ERISA Employee Retirement Income 

Security Act

ES Employment Service

ESAA Employment Security 

Administration Account

ETA Employment and Training 

Administration

EUC Emergency Unemployment 

Compensation

EUCA Extended Unemployment 

Compensation Account

FAC Federal Audit Clearinghouse

FAUC Federal Additional 

Unemployment Compensation

FASAB Federal Accounting Standards 

Advisory Board

FCI Facilities Condition Index

FEC Federal Employees 

Compensation

FECA Federal Employees’ 

Compensation Act

FERS Federal Employees Retirement 

System

FFMIA Federal Financial Management 

Improvement Act

FLSA Fair Labor Standards Act

FMFIA Federal Managers’ Financial 

Integrity Act

FUA Federal Unemployment 

Account

FUTA Federal Unemployment Tax Act

FY Fiscal Year

GAAP Generally Accepted Accounting 

Principles

GAO Government Accountability 

Office

GSA General Services 

Administration

HVRP Homeless Veterans’ 

Reintegration Program

ILAB Bureau of International Labor 

Affairs

IPERA Improper Payments Elimination 

and Recovery Act

IPERIA Improper Payments Elimination 

and Recovery Improvement Act

IPIA Improper Payments 

Information Act

IT Information Technology

JVSG Jobs for Veterans State Grants

LPD Lost Production Day

MSHA Mine Safety and Health 

Administration

NCFMS New Core Financial 

Management System

NDNH National Directory of New 

Hires

NIOSH National Institute for 

Occupational Safety and Health

OCFO Office of the Chief Financial 

Officer

ODEP Office of Disability Employment 

Policy

OFCCP Office of Federal Contract 

Compliance Programs

OIG Office of Inspector General

OJC Office of Job Corps

OLMS Office of Labor-Management 

Standards

OMB Office of Management and 

Budget

OPM Office of Personnel 

Management

OSHA Occupational Safety and Health 

Administration

OUI Office of Unemployment 

Insurance

OWCP Office of Workers’ 

Compensation Programs

PIV Personal Identification 

Verification

PY Prior Year/Program Year

RECA Radiation Exposure 

Compensation Act

SAM System for Award Management

SBR Statement of Budgetary 

Resources

SCSEP Senior Community Service 

Employment Program

SCSIA Statement of Changes in Social 

Insurance Amounts

SIDES State Information Data 

Exchange System

SOSI Statement of Social Insurance

SSA Social Security Administration

TAA Trade Adjustment Assistance

TAACCCT

Trade Adjustment Assistance 

Community College and Career 

Training

TOP Treasury Offset Program

UC Unemployment Compensation

UCFE Unemployment Compensation 

for Federal Employees

UCX Unemployment Compensation 

for Ex-Service Members

UI Unemployment Insurance

USC United States Code

USERRA

Uniformed Services 

Employment and 

Reemployment Rights Act

UTF Unemployment Trust Fund

VETS Veterans’ Employment and 

Training Service

WB Women’s Bureau

WHD Wage and Hour Division

WIA Workforce Investment Act