U.S. Merit Systems Protection Board 

Agency 

Financial 

Report 

 Fiscal Year 2021 

November 2021 
ii 

Table of Contents 

Message from the Chief Executive and Administrative Officer ............................................... 1 

How to Use This Report ........................................................................................................... 2 

Management Discussion and Analysis ..................................................................................... 3 

About the Merit Systems Protection Board (MSPB) .................................................................................. 3 

 The MSPB Mission ........................................................................................................................................... 3 

Board Organization ......................................................................................................................................... 3 

MSPB Program Offices and Their Functions ............................................................................................. 3 

Organization Chart .......................................................................................................................................... 5 

 Interim Summary of MPSB’s FY 2021 Program Performance ................................................................. 6 

 Systems, Controls, and Legal Compliances .................................................................................................. 8 

Financial Section ..................................................................................................................... 10 

Message from the Chief Financial Officer .................................................................................................. 10 

Notes on the Financial Statements .............................................................................................................. 11 

Other Information ................................................................................................................... 12 

Summary of Financial Statement Audit and Management Assurances .................................................. 12 

Civil Monetary Penalties’ Adjustments for Inflation ................................................................................. 13 

Independent Auditor’s Report on the Financial Statements 

 Financial Statements 

 

 

 

 

2 

How to Use This Report 

The Agency Financial Report (AFR) presents financial information, as well as relevant performance 

information, on the U.S. Merit Systems Protection Board’s operations. The report was prepared in 

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

and covers activities from October 1, 2020 through September 30, 2021. 

MSPB has chosen to produce an AFR and an Annual Performance Report (APR). MSPB will submit its 

FY 2021 APR with its Congressional Budget Justification and post it on the agency’s website at 

http://www.mspb.gov at the time the President’s FY 2023 Budget is submitted to Congress in 2022. 

This report is organized into the following major components: 

Management Discussion and Analysis (MD&A) 

This section provides an overview of the MSPB. It discusses the agency’s mission, board organization, 

program offices and their functions, and organization chart. Additionally, this section contains an overview 

of the performance information contained in the Interim FY 2021 Performance results. It also includes 

relevant performance information related to the MSPB’s strategic and management objectives. 

Systems, Controls, and Legal Compliances 

This section provides an overview of MSPB’s management commitment to excellence and the importance of 

strong financial systems and internal controls to ensure accountability, integrity, and reliability. Management, 

administrative, and financial system controls have been developed to ensure the following: 

 Obligations and costs are in compliance with applicable laws; 

 Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or 

misappropriation; 

 Revenues and expenditures applicable to operations are properly recorded and accounted for to permit 

the preparation of reliable accounting, financial, and statistical reports; and, 

 Accountability over assets is maintained. 

Financial Section

This section contains details of MSPB’s financial position in FY 2021 including a message from the Chief 

Financial Officer (CFO) followed by the notes on the financial statements, independent auditor’s report on 

the financial statements, financial statements, and notes to the financial statements. 

Other Information Section 

This section contains details of MSPB’s financial statement audit and management assurances including 

material weaknesses, compliances, and civil monetary penalties adjustments. 
3 

Management Discussion and Analysis (MD&A)

About MSPB 

MSPB has its origin in the Pendleton Civil Service Reform Act of 1883 (Pendleton Act), which established 

the Civil Service Commission (CSC) and a merit-based employment system for the Federal Government. The 

Pendleton Act was passed after the assassination of President Garfield by a disgruntled Federal job seeker and 

grew out of the 19th century reform movement to curtail the excesses of political patronage in government 

and ensure a stable highly qualified workforce to serve the public. Over time, it became clear that the CSC 

could not properly, adequately, and simultaneously set managerial policy, protect the merit systems, and 

adjudicate appeals. Concern over the inherent conflict of interest in the CSC’s role as both rule-maker and 

judge was a principal motivating factor behind the passage of the Civil Service Reform Act of 1978 (CSRA). 

The CSRA replaced the CSC with three new agencies: MSPB as the successor to the Commission;1 the 

Office of Personnel Management (OPM) to serve as the President’s agent for Federal workforce management 

policy and procedure; and the Federal Labor Relations Authority (FLRA) to oversee Federal labormanagement relations. The CSRA also codified for the first time the values of the merit systems as the Merit 

System Principles (MSPs) and defined the Prohibited Personnel Practices (PPPs).2

The MSPB Mission 

The mission of the MSPB is to protect the Federal merit systems and the rights of individuals within those systems. MSPB 

carries out its statutory responsibilities and authorities primarily by adjudicating individual employee appeals, 

enforcing its decisions, conducting objective, merit systems studies, and reviewing the rules, regulations, and 

significant actions of OPM to assess the degree to which those actions support adherence to the merit 

principles and do not lead to the commission of PPP’s. 

Board Organization 

The agency has three appointed Board members and was authorized 235 Full-time Equivalents (FTE) with 

offices in Washington, D.C. (headquarters) and six regional and two field offices that are located throughout 

the United States. 

MSPB Program Offices and Their Functions 

The three Board Members adjudicate the cases brought to MSPB. The bipartisan Board consists of the 

Chairman, Vice Chairman, and Member, with no more than two of its three members from the same political 

party. Board members are nominated by the President, confirmed by the Senate, and serve overlapping, nonrenewable 7-year terms. The Chairman, by statute, is the chief executive and administrative officer of MSPB. 

The Office Directors report to the Chairman through the Executive Director. 

The Office of the Administrative Law Judge (ALJ) adjudicates and issues initial decisions in corrective and 

disciplinary action complaints (including Hatch Act complaints) brought by the Special Counsel, proposed 

agency actions against ALJs, MSPB employee appeals, and other cases assigned by MSPB. The functions of 

1 Bogdanow, M., and Lanphear, T., History of the Merit Systems Protection Board, Journal of the Federal Circuit Historical Society, Volume 4, 2010.

2 Title 5 U.S.C. § 2301 and Title 5 U.S.C. § 2302, respectively.
4 

this office are currently performed by ALJs at the U. S. Coast Guard and Federal Trade Commission under 

reimbursable interagency agreements. 

The Office of Appeals Counsel conducts legal research and prepares proposed decisions for the Board in 

cases where a party petitions for review (PFR) of an administrative judge’s (AJ) initial decision and in most 

other cases decided by the Board. The office prepares proposed decisions on interlocutory appeals of rulings 

made by judges, makes recommendations on reopening cases on the Board’s own motion, and provides 

research, policy memoranda, and advice to the Board on legal issues. 

The Office of the Clerk of the Board receives and processes cases filed at MSPB headquarters (HQ), rules 

on certain procedural matters, and issues MSPB decisions and orders. The office serves as MSPB’s public 

information center, coordinates media relations, produces public information publications, operates MSPB’s 

library and on-line information services, and administers the Freedom of Information Act and Privacy Act 

programs. The office also certifies official records to the courts and Federal administrative agencies and 

manages MSPB’s records systems, legal research systems, and the Government in the Sunshine Act program. 

The Office of Equal Employment Opportunity plans, implements, and evaluates MSPB’s equal 

employment opportunity programs. It processes complaints of alleged discrimination brought by agency 

employees and provides advice and assistance on affirmative employment initiatives to MSPB’s managers and 

supervisors. 

The Office of Financial and Administrative Management administers the budget, accounting, travel, time 

and attendance, human resources, procurement, property management, physical security, and general services 

functions of MSPB. It develops and coordinates internal management programs, including review of agency 

internal controls. It also administers the agency’s cross-servicing agreements with the U.S. Department of 

Agriculture, National Finance Center (NFC) for payroll services, U.S. Department of the Treasury, Bureau of 

Fiscal Service (BFS) for accounting services, and U.S. Department of Agriculture, Animal and Plant Health 

Inspection Service (APHIS) for human resources management services. 

The Office of the General Counsel, as legal counsel to MSPB, advises the Board and MSPB offices on a 

wide range of legal matters arising from day-to-day operations. The office represents MSPB in litigation; 

prepares proposed decisions for the Board to enforce a final MSPB decision or order, in response to requests 

to review OPM regulations, and for other assigned cases; conducts the agency’s PFR settlement program; and 

coordinates the agency’s legislative policy and congressional relations functions. The office drafts regulations, 

conducts MSPB’s ethics program, and plans and directs audits and investigations. 

The Office of Information Resources Management develops, implements, and maintains MSPB’s 

automated information systems to help the agency manage its caseload efficiently and carry out its 

administrative and research responsibilities. 

The Office of Policy and Evaluation carries out MSPB’s statutory responsibility to conduct special studies 

of the civil service and other Federal merit systems. Reports of these studies are sent to the President and the 

Congress and are distributed to a national audience. The office provides information and advice to Federal 

agencies on issues that have been the subject of MSPB studies. The office reviews and reports on the 

significant actions of OPM. The office also conducts program evaluations for the agency and has 

responsibility for preparing MSPB’s strategic and performance plans and performance reports required by the 

Government Performance and Results Modernization Act of 2010. 
5 

CHAIRMAN MEMBER

General Counsel

Equal

Employment

Opportunity

Clerk of the

Board

Administrative

Law Judge Regional

Operations

Appeals Counsel Policy and

Evaluation

Regional Offices

Atlanta, Chicago,

Dallas,

Philadelphia,

Oakland, and

Washington, DC

VICE CHAIRMAN

Field Offices

Denver and

New York

Financial and

Administrative

Management

Information

Resources

Management

Executive

Director

U.S. Merit Systems Protection Board

Performance

Improvement

Officer

Human Resources Management services are provided by the U.S. Department of Agriculture’s (USDA), Animal and Plant 

Health Inspection Service (APHIS) Business Services. 

Payroll services are provided by USDA, National Finance Center. 

Accounting services are provided by the Department of the Treasury, Bureau of the Fiscal Service (BFS). 

The functions of the Administrative Law Judge (ALJ) are performed by ALJs employed by the Federal Trade Commission 

(FTC) and the U.S. Coast Guard under reimbursable interagency agreements. 

The Office of Regional Operations oversees the agency’s six regional and two field offices, which receive, 

and process appeals and related cases. It also manages MSPB’s Mediation Appeals Program (MAP). AJs in 

the regional and field offices are responsible for adjudicating assigned cases and for issuing fair, well-reasoned, 

and timely initial decisions. 

Organization Chart 
6 

Interim Summary of MSPB’s FY 2021 Program Performance 

This performance summary contains interim FY 2021 performance results and initial judgements related to 

the achievement of our strategic and management objectives. This information is organized to align with the 

Annual Performance Plan for FY 2021. MSPB is continuing to verify and validate FY 2021 performance 

results for FY 2021, and final performance results will be published in the FY 2021 Annual Performance 

Report (APR) released in February 2022. 

Strategic Objective 1A: Provide understandable, high-quality resolution of appeals, supported by fair 

and efficient adjudication and alternative dispute resolution (ADR) processes. Interim results indicate 

that this objective was Partially Met. MSPB exceeded its targets for average processing time for initial 

appeals and achieved the targets for cases left unchanged by the court and for conducting surveys of 

adjudication and ADR customers. MSPB lacked a quorum for all of FY 2021 so did not set targets for nor 

rate the results for quality of initial appeals (which is based on petition for review (PFR) decisions), or for 

average PFR processing time. MSPB continued to process cases at headquarters (HQ) and prepare draft 

decisions in PFR and original jurisdiction cases for review by new Board members when they arrive. As of 

the end of FY 2021, 3,465 cases were pending at HQ. 

Strategic Objective 1B: Enforce timely compliance with MSPB decisions. This objective was Not 

Rated (No Quorum). MSPB lacked a quorum for all of FY 2021, so was unable to set a target for nor 

release decisions in compliance/enforcement cases at HQ. Therefore, this objective and accompanying 

performance goal were not rated. 

Strategic Objective 1C: Conduct objective, timely studies of the Federal merit systems and Federal 

human capital management issues. Interim results indicate this objective was Exceeded. MSPB 

achieved its targets for newsletters and other articles by publishing three Issues of Merit newsletter editions. 

MSPB exceeded its target for studies reports or research briefs publishing 5 research briefs on: the 

importance of job fit for agencies and employees; direct hire authority; determining acceptable level of 

competence; agency leader responsibilities for PPPs, and employee confidence in ability to perform. MSPB 

exceeded its target for conducting surveys by successfully completing the 2021 Merit Principles Survey (MPS) 

that was administered to more agencies and took less than half the time from final content to launch. 

Strategic Objective 1D: Review and act upon the rules, regulations, and significant actions of OPM, 

as appropriate. Interim results indicate that this objective was Partially Met. MSPB lacked a quorum for 

all of FY 2021, so it did not set a target for nor rate the performance goal involving review of OPM 

regulations. MSPB achieved its target for reviewing OPM significant actions by publishing the Annual Report 

for FY 2020, which included a review of OPM significant actions such as the COVID-19 pandemic, 

improving applicant assessment, human capital (HC) reviews, and guidance on the appointment of political 

appointees to the career service during the election period. 

Strategic Objective 2A: MSPB’s work is referenced by a variety of policy-related, educational, 

professional, or media resources. Interim results indicate that this objective was Not Met. MSPB’s 

work was referenced in 92 sources, which was less than 90 percent of the number of sources reported in FY 

2020. Notable references included OPM’s final regulations on Probation, Performance-Based Reduction in 

Grade, and Removal Actions; NAPA’s report on the review of OPM; GAO reports on sexual harassment, 

employee engagement, and gender pay differences; and in a letter from the House Committee of Oversight 

and Reform to President Biden calling for nominations of MSPB board members. 
7 

Strategic Objective 2B: Support and improve the practice of merit, adherence to the Merit System 

Principles (MSP), and prevention of Prohibited Personnel Practices (PPPs) in the workplace through 

successful outreach. Interim results indicate this objective was Exceeded. MSPB conducted over 135 

outreach events which was more than double the target number of 60 events. The COVID-19 pandemic 

negatively affected the number of outreach events in FY 2020 resulting in a very conservative target for FY 

2021. The number of events in FY 2021 was similar to the average number of outreach events conducted in 

FY 2015-2019. Notably, MSPB was invited to speak with OMB officials about hiring assessments using subject 

matter experts (SMEs) and structured interviews. 

Strategic Objective 2C: Advance the understanding of the concept of merit, MSPs, and PPPs by 

developing and sharing informational and educational materials and guidance. Interim results 

indicate this objective was Exceeded. MSPB exceeded the target for the number of educational and 

informational materials made available on the website with over 25 documents posted or updated in each of 

12 categories. These documents included: 5 research briefs; 3 IoM editions, 5 agency documents; 2020 

AES/FEVS results; 2 Federal Register notices, 8 press releases, 3 Privacy Impact Assessments, 2 No FEAR 

Act updates, and many updates to pending cases at HQ and MSPB case reports. 

Management Objective M1: Lead, manage and develop employees to ensure a diverse, inclusive, 

and engaged workforce with the competencies to perform MSPB’s mission and support functions 

successfully. Interim results are Exceeded. Results from the 2021 Internal Survey (IS) indicated that the 

target for competencies was met, and the targets for diversity/inclusion and engagement were exceeded. 

Management Objective M2: Develop budgets and manage financial resources to ensure necessary 

resources now and in the future. This objective was Not Rated because it was discontinued in mid-2021 

as not needed. 

Management Objective M3: Improve and maintain information technology (IT) and information 

services programs to support agency mission and administrative functions. Interim results indicate 

that this objective was Exceeded. Results from the 2021 IS indicated that the employee ratings of availability 

and reliability of the IT infrastructure and satisfaction with IRM support exceeded their respective targets. 

The target for cybersecurity was met. 

Management Objective M4: Modernize core business applications to achieve electronic 

adjudication and provide a web-based survey capability. Interim results for this measure indicate this 

objective was Met. Wireframes for new adjudication applications and pilot release 1 were completed; 84 

percent of initial appeals and 94 percent of pleadings were filed electronically, the highest percentages since 

we started measuring them in FY 2012. The MPS was successfully completed in April 2021; an authority to 

operate (ATO) was issued for the survey platform; and a System of Records Notice (SORN) was published 

for MSPB studies. 
8 

Systems, Controls, and Legal Compliances 

Federal Managers’ Financial Integrity Act (FMFIA) of 1982 

In accordance with the FMFIA, MSPB has established an internal management control system to ensure 

that: (1) obligations and costs comply with applicable law; (2) assets are safeguarded against waste, loss, 

unauthorized use, or misappropriation; (3) revenues and expenditures are properly recorded and accounted 

for; and (4) expenditures are being made in accordance with the agency’s mission and they are achieving their 

intended results. 

Federal Financial Management Improvement Act (FFMIA) of 1996 

The purpose of the FFMIA is to advance Federal financial management by ensuring that Federal financial 

management systems provide accurate, reliable, and timely financial management information to the 

government’s managers. The intent and the requirements of this Act go well beyond the directives of the 

CFO Act and the Government Management Reform Act of 1994 (GMRA) to publish audited financial 

reports. 

MSPB’s management review of the system of internal accounting and administrative control was evaluated in 

accordance with the applicable Federal guidance. The objectives of the system are to provide reasonable 

assurance that: 

• Obligations and costs are in compliance with applicable laws; 

• Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or 

misappropriation; 

• Revenues and expenditures applicable to operations are properly recorded and accounted for to 

permit the preparation of reliable accounting, financial, and statistical reports; and, 

• Accountability over assets is maintained. 

The evaluation of management controls extends to every MSPB responsibility and activity and is applicable to 

financial, administrative, and operational controls. Furthermore, the concept of reasonable assurance 

recognizes that: (1) the cost of management controls should not exceed the projected derived benefits; and 

(2) the benefits consist of reductions in the risks of failing to achieve the stated objectives. The expected 

benefits and related costs of control procedures should be addressed using estimates and managerial 

judgment. Moreover, errors and irregularities may occur and not be detected because of inherent limitations 

in any system of internal accounting and administrative control, including those limitations resulting from 

resource constraints, restrictions, and other factors. Finally, projection of any evaluation of the system to 

future periods are subject to risk that the procedures may be inadequate because of changes in conditions or 

that the degree of compliance with the procedures may deteriorate. 

Improper Payments Act 

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

management focus of the Federal government. At MSPB, developing strategies and the means to reduce 

improper payments is a matter of good stewardship. Accurate payments lower program costs. 

OMB originally provided Section 31 of Circular A-11 as guidance for Federal agencies to identify and reduce 

improper payments for selected programs. The Improper Payments Information Act of 2002 (IPIA) 
9 

broadened the original erroneous payment reporting requirements to programs and activities beyond those 

originally listed in Circular A-11. In August 2006, OMB issued Circular A-123, Appendix C - Requirements 

for Effective Measurement and Remediation of Improper Payments. 

The IPIA defines improper payments as those payments made to the wrong recipient, in the wrong amount, 

or used in an improper manner by the recipient. The IPIA requires a Federal agency to identify its programs 

that are of high risk for improper payments. It also requires the agency to implement a corrective action plan 

that includes improper payment reduction and recovery targets and to report annually on the extent of its 

improper payments for high-risk programs and the actions taken to increase the accuracy of payments. 

To coordinate and facilitate MSPB’s efforts under the IPIA, the CFO works with Office Directors to develop 

a coordinated strategy to perform annual reviews for all programs and activities susceptible to improper 

payments. This cooperative effort includes developing actions to reduce improper payments, identifying and 

conducting ongoing monitoring techniques and establishing appropriate corrective action initiatives. MSPB 

has determined that there is no significant risk of improper payments based on the review of its programs in 

FY 2021.
10 

Financial Section 

Message from the Chief Financial Officer 

It is my honor to join Tristan Leavitt, General Counsel and Acting Chief Executive and Administrative 

Officer, in presenting the U.S. Merit Systems Protection Board’s (MSPB) financial statements for Fiscal Year 

(FY) 2021 in our Agency Financial Report (AFR). MSPB is dedicated to financial accountability, responsible 

stewardship of taxpayer dollars, and transparency. The AFR represents MSPB’s statement of accountability 

to the President of the United States, Congress, and to the American people. 

MSPB has attained an unmodified (clean) opinion on its FY 2021 consolidated financial statements. This 

accomplishment marks 15 years of MSPB receiving a clean audit opinion on its financial statements. As in 

previous fiscal years, no material weaknesses were identified in the auditor’s report on internal controls; nor 

were there any material instances of noncompliance with laws and regulations. 

 

Since 1992, MSPB has partnered with the Department of the Treasury, Bureau of the Fiscal Service (BFS) in 

Parkersburg, West Virigina to facilitate the Agency’s compliance with all external reporting requirements. 

Through its financial operations, BFS has provided us with timely and complete reports allowing us to 

operate more efficiently and to identify and resolve potential concerns quickly. I sincerely thank all MSPB 

and BFS financial personnel for their dedication, diligence, and excellence work throughout the fiscal year as 

we continue to act as good stewards of public funds. 

This achievement is a culmination of the dedicated and meticulous efforts of our MSPB employees and BFS 

partners who collaborate to accomplish the mission of MSPB – to protect the Federal merit systems and the 

rights of individuals within those systems. I sincerely thank MSPB and BFS personnel for their dedication to 

excellence and accuracy. 

 Respectfully, 

 

 Kevin J. Nash 

 Chief Financial Officer 

 November 15, 2021 
11 

Notes on the Financial Statements 

Improving financial management continues to be a high priority of MSPB. It is an essential element in 

demonstrating accountability and enhancing services provided to the public. Financial improvements 

initiated by MSPB have been driven by recent legislation and external initiatives; as well as by a strict 

organizational belief that adherence to sound financial policies and procedures will directly enhance the 

efficiency and effectiveness of the agency. This is of particular importance in an era of financial uncertainty 

and tightening budgets. Pivotal to driving better performance results through enhanced financial 

management practices has been MSPB’s ongoing efforts to provide day-to-day decision-makers with reliable 

budgetary and cost information. 

Limitations of the Principal Financial Statements 

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

operations of this entity, pursuant to the requirements of 31 U.S.C. 3515 (b). While the statements have been 

prepared from the books and records of the entity in accordance with 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 MSPB is a component of the U.S. 

Government, a sovereign entity. 

The principal financial statements summarize MSPB’s financial position, net cost of operations, and changes 

in net position, provide information on budgetary resources and financing, and present the sources and 

disposition of custodial revenues for FY 2020 and FY 2021. 

The Balance Sheet summarizes the assets, liabilities, and net position by category as of the reporting date. 

Intragovernmental assets and liabilities resulting from transactions between federal agencies are presented 

separately from assets and liabilities from transactions with the public. 

The Statement of Net Cost shows, by programs, the net cost of operations for the reporting period. Net cost 

of operations consists of full program costs incurred by the agency less exchange revenues earned by those 

programs. 

The Statement of Changes in Net Position presents the agency’s beginning and ending net position by two 

components—Cumulative Results of Operations and Unexpended Appropriations. It summarizes the 

change in net position by major transaction category. The ending balances of both components of the net 

position are also reported on the Consolidated Balance Sheet. 

The Statement of Budgetary Resources presents the budgetary resources available to the agency, the status of 

these resources, and the outlays of budgetary resources. 

The Notes to the Financial Statements provides information to explain the basis of the accounting and 

presentation used to prepare the statements and to explain specific items in the statements. They also provide 

information to support how particular accounts have been valued and computed. 
12 

Other Information 

Summary of Financial Statement Audit and Management Assurances

Presented below is a summary of financial statement audit and management assurances for FY 2021. Table 1 

relates to the Agency’s FY 2021 financial statement audit, which resulted in an unmodified opinion with no 

material weakness. Table 2 presents the number of material weaknesses reported by the Agency under 

Section 2 of the FMFIA—either with regard to internal controls over operations or financial reporting, and 

Section 4, which relates to internal controls over financial management systems; as well as the Agency’s 

compliance with the FFMIA. 

Table 1. Summary of Financial Statement Audit 

 Audit Opinion  Unmodified 

 Restatement  No 

Material Weakness Beginning Balance New Resolved Consolidated Ending Balance 

Total Material Weaknesses 0 0 0 0 0 

Table 2. Summary of Management Assurances 

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2) 

Statement of Assurance: Unmodified 

Material Weakness 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: Unmodified 

Material Weakness Beginning Balance New Resolved Consolidated Reassessed Ending Balance 

Total Material Weaknesses 0 0 0 0 0 0 

 

Compliance with Federal Financial Management System Requirements (FMFIA § 4) 

Statement of Assurance: Systems conform with financial management system requirements 

Material Weakness Beginning Balance New Resolved Consolidated Reassessed Ending Balance 

Total Material Weaknesses 0 0 0 0 0 0 

 

Compliance with Section 803(a) of the Federal Financial Management Improvement Act (FFMIA) 

 Agency Auditor 

1. System Requirements No lack of compliance noted No lack of compliance noted 

2. Accounting Standards No lack of compliance noted No lack of compliance noted 

3. USSGL at Transaction Level No lack of compliance noted No lack of compliance noted 
13 

Civil Monetary Penalties’ Adjustments for Inflation

The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection 

Improvement Act of 1996, required agencies to adjust their civil monetary penalties (CMP) for inflation at 

least every four years to maintain their deterrent effect. A CMP is defined as ‘‘any penalty, fine, or other 

sanction’’ that: (1) ‘‘is for a specific amount’’ or ‘‘has a maximum amount’’ under Federal law; and (2) that a 

Federal agency assesses or enforces ‘‘pursuant to an administrative proceeding or a civil action in the Federal 

courts.’’ MSPB had no CMP in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990. 

On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 

further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 to improve the effectiveness of 

CMPs and to maintain their deterrent effect. This amendment required agencies to adjust the CMP levels in 

effect as of November 2, 2015, with initial catch-up adjustments for inflation through an interim final 

rulemaking published by July 1, 2016, and to take effect no later than August 1, 2016. The maximum amount 

for an initial catch-up adjustment for inflation could not exceed 150 percent of the amount of that CMP on 

the date of enactment of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 

(November 2, 2015). 

The 2015 Amendments also provide for agencies to adjust for inflation to their CMP amounts by January 15, 

2017, and not later than January 15 of each year thereafter. Accordingly, MSPB had adjusted for inflation to 

CMP. MSPB published its latest adjustments for inflation to CMPs (86 FR 7797-7798, Civil Monetary 

Penalty Inflation Adjustment) in the Federal Register on February 2, 2021, pages 7797-7798, and which is also 

available on the agency website at www.mspb.gov. 

The following table provides detailed information on each of the Agency’s CMPs as of February 2, 2021. 

Statutory Authority 

Penalty 

(Name or Description) 

Year 

Enacted 

Latest Year 

of 

Adjustment 

(via Statute 

or 

Regulation) 

Current 

Penalty 

Level 

Location for Penalty 

Update Details 

 

5 U.S.C § 1215(a)(3), 

Civil Service Reform 

Act of 1978 (CSRA) Disciplinary Action 1989 2021 $1,125 

Federal Register 86 

(Feb. 2021): 7797- 

7798 www.mspb.gov 

5 U.S.C § 7326, Hatch 

Act Modernization Act 

of 2012 Penalties 2012 2021 $1,125 

Federal Register 86 

(Feb. 2021): 7797- 

7798 www.mspb.gov 
14 

This page intentionally left blank. 
MERIT SYSTEMS PROTECTION BOARD

INDEPENDENT AUDITOR’S REPORT

AND

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

SEPTEMBER 30, 2021 AND 2020

Prepared By

Brown & Company CPAs and Management Consultants, PLLC

November 12, 2021
MERIT SYSTEMS PROTECTION BOARD

INDEPENDENT AUDITOR’S REPORT

AND

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

SEPTEMBER 30, 2021 AND 2020

TABLE OF CONTENTS

INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS ............. 1

BALANCE SHEET ................................................................................................................ 6

STATEMENT OF NET COST .............................................................................................. 7

STATEMENT OF CHANGES IN NET POSITION.............................................................. 8

STATEMENT OF BUDGETARY RESOURCES................................................................. 9

NOTES TO THE FINANCIAL STATEMENTS................................................................... 10
1

INDEPENDENT AUDITOR’S REPORT 

U.S. Merit Systems Protection Board 

Washington, D.C.

In our audits of the fiscal years 2021 and 2020 financial statements of U.S. Merit Systems Protection 

Board (MSPB), we found

• MSPB’s financial statements as of and for the fiscal years ended September 30, 2021, and

2020, are presented fairly, in all material respects, in accordance with U.S. generally accepted

accounting principles;

• no material weaknesses in internal control over financial reporting based on the limited

procedures we performed; and

• no reportable noncompliance for fiscal year 2021 with provisions of applicable laws,

regulations, contracts, and grant agreements we tested

The following sections discuss in more detail (1) our report on the financial statements, which includes 

requiredsupplementary information(RSI) andotherinformationincluded withthefinancialstatements;

(2) our report on internal control over financial reporting; and (3) our report on compliance with laws,

regulations, contracts, and grant agreements.

Report on the Financial Statements

In accordance with the provisions of Accountability of Tax Dollars Act of 2002 (ATDA) (Pub. L. No. 

107-289), we have audited MSPB’s financial statements. MSPB’s financial statements comprise the

balance sheets as of September 30, 2021, and 2020; the related statements of net cost, changes in net

position, and budgetary resourcesforthe fiscal yearsthen ended; and the related notes to the financial

statements.

We conducted our audits in accordance with U.S. generally accepted government auditing standards and the 

provisions of OMB Bulletin No. 21-04, Audit Requirements for Federal Financial Statements. We believe

that the audit evidence we obtained issufficient and appropriate to provide a basisfor our audit opinions.

Management’sResponsibility

MSPB management isresponsible for (1) the preparation and fair presentation of these financial statements

in accordance with U.S. generally accepted accounting principles; (2) preparing, measuring, and presenting

the RSI in accordance with U.S. generally accepted accounting principles; (3) preparing and presenting

other information included in documents containing the audited financial statements and auditor’s report,

and ensuring the consistency of that information with the audited financial statements and the RSI; and (4)

maintaining effective internal control over financial reporting, including the design, implementation, and

maintenance of internal control relevant to the preparation and fair presentation offinancial statements that

are free from material misstatement, whether due to fraud or error.
2

Auditor’s Responsibility

Our responsibility isto express an opinion on these financial statements based on our audits. U.S. generally

accepted government auditing standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement. We are also

responsible for applying certain limited procedures to RSI and other information includedwith the financial

statements.

An audit offinancial statements involves performing proceduresto obtain audit evidence about the amounts

and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the auditor’s assessment ofthe risks of material misstatement ofthe 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 offinancial

statements also involves evaluating the appropriateness of the accounting policies used and the

reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. Our audits also included performing such other procedures as we

considered necessary in the circumstances.

Opinion on Financial Statements

In our opinion, MSPB’s financial statements present fairly, in all material respects, MSPB’s financial

position as of September 30, 2021, and 2020, and its net cost of operations, changes in net position, and

budgetary resources for the fiscal years then ended in accordance with U.S. generally accepted accounting

principles.

Other Matters

RequiredSupplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards

Advisory Board (FASAB) require that the RSI be presented to supplement the financial

statements. Although the RSI is not a part of the financial statements, FASAB considers this

information to be an essential part of financial reporting for placing the financial statements in

appropriate operational, economic, or historical context. We have applied certain limited

procedures to the RSI in accordance with U.S. generally accepted government auditing

standards, which consisted of inquiries of management about the methods of preparing the RSI

and comparing the information for consistency with management’s responses to the auditor's

inquiries, the financial statements, and other knowledge we obtained during the audit of the

financial statements, in order to report omissions or material departures from FASAB

guidelines, if any, identified by these limited procedures. We did not audit and we do not

express an opinion or provide any assurance on the RSI because the limited procedures we

applied do not provide sufficient evidence to express an opinion or provide any assurance.
3

Other Information

MSPB’s other information contains a wide range of information, some of which is not directly

related to the financial statements. This information is presented for purposes of additional

analysis and is not a required part of the financial statements or the RSI. We read the other 

information included with the financial statements in order to identify material inconsistencies,

if any, with the audited financial statements. Our audit was conducted for the purpose of

forming an opinion on MSPB’s financial statements. We did not audit and do not express an

opinion or provide any assurance on the other information.

Report on Internal Control over Financial Reporting

In connection with our audits of the MSPB’s financial statements, we considered the MSPB’s internal

control over financial reporting, consistent with our auditor's responsibility discussed below. We

performed our procedures related to the MSPB’s internal control over financial reporting in accordance

with U.S. generally accepted government auditing standards.

Management’s Responsibility

MSPB management is responsible for maintaining effective internal control over financial reporting,

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

and fair presentation of financial statements that are free from material misstatement, whether due to

fraud or error.

Auditor’s Responsibility

In planning and performing our audit of MSPB’s financial statements as of and for the year ended

September 30, 2020, in accordance with U.S. generally accepted government auditing standards, we

considered the MSPB’s internal control over financial reporting as a basis for designing 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 the

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

MSPB’s internal control over financial reporting. We are required to report all deficiencies that are

considered to be significant deficiencies or material weaknesses. We did not consider all internal

controls relevant to operating objectives, such as those controls relevant to preparing performance

information and ensuring efficient operations.

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 of 

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.
4

Definition and Inherent Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with

governance, management, and other personnel, the objectives of which are to provide reasonable

assurance that (1) transactions are properly recorded, processed, and summarized to permit the

preparation of financial statements in accordance with U.S. generally accepted accounting principles,

and assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and (2)

transactions are executed in accordance with provisions of applicable laws, including those governing

the use of budget authority, regulations, contracts, and grant agreements, noncompliance with which

could have a material effect on the financial statements.

Because of itsinherent limitations, internal control over financial reporting may not prevent, or detect

and correct, misstatements due to fraud or error.

Results of Our Consideration of Internal Control over Financial Reporting

Our consideration of internal control was for the limited purpose described above, and was not

designed to identify all deficiencies in internal control that might be material weaknesses and

significant deficiencies or to express an opinion on the effectiveness of the MSPB’s internal control 

over financial reporting. Given these limitations, during our audit, we did not identify any deficiencies

in internal control over financial reporting that we consider to be material weaknesses. However,

material weaknesses may exist that have not been identified.

Intended Purpose of Report on Internal Control over Financial Reporting

The purpose of this report issolely to describe the scope of our consideration of the MSPB’s internal

control over financial reporting and the results of our procedures, and not to provide an opinion on the

effectiveness ofthe MSPB’s internal control over financial reporting. This report is an integral part of

an audit performed in accordance with U.S. generally accepted government auditing standards in

considering internal control over financial reporting. Accordingly, this report on internal control over

financial reporting is not suitable for any other purpose.

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

In connection with our audits of MSPB’s financial statements, we tested compliance with selected

provisions of applicable laws, regulations, contracts, and grant agreements consistent with our

auditor’s responsibility discussed below. We caution that noncompliance may occur and not be

detected by these tests. We performed our tests of compliance in accordance with U.S. generally

accepted government auditing standards.

Management’s Responsibility

MSPB management is responsible for complying with laws, regulations, contracts, and grant 

agreements applicable to the MSPB.
5

Auditor’s Responsibility

Our responsibility is to test compliance with selected provisions of applicable laws, regulations,

contracts, and grant agreements applicable to MSPB that have a direct effect on the determination of

material amounts and disclosures in MSPB’s financial statements, and perform certain other limited

procedures. Accordingly, we did not test compliance with all laws, regulations, contracts, and grant

agreements applicable to MSPB.

Results of Our Testsfor Compliance with Laws, Regulations, Contracts, and Grant Agreements

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and grant

agreements disclosed no instances of noncompliance for fiscal year 2020 that would be reportable

under U.S. generally accepted government auditing standards. However, the objective of our tests was

not to provide an opinion on compliance with laws, regulations, contracts, and grant agreements 

applicable to MSPB. Accordingly, we do not express such an opinion.

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

The purpose of this report is solely to describe the scope of our testing of compliance with selected

provisions of applicable laws, regulations, contracts, and grant agreements, and the results of that

testing, and not to provide an opinion on compliance. This report is an integral part of an audit

performed in accordance with U.S. generally accepted government auditing standards in considering

compliance. Accordingly, this report on compliance with laws, regulations, contracts, and grant

agreements is notsuitable for any other purpose.

This report is intended solely for the information and use of the management of the MSPB, OMB, and 

the U.S. Congress, and is not intended to be, and should not be used by anyone other than these 

specific parties.

Greenbelt, Maryland

November 12, 2021
The accompanying notes are an integral part of these financial statements.

6

2021 2020

Assets:

Intragovernmental:

Fund Balance with Treasury (Note 2) $ 16,160,702 $ 15,558,737

Advances and Prepayments 11,772 11,772

Total Intragovernmental 16,172,474 15,570,509

With the Public:

Accounts Receivable, Net (Note 3) 1,416 1,278

General Property, Plant, and Equipment, Net (Note 4) 2,240,629 1,574,263

Total With the Public 2,242,045 1,575,541

Total Assets $ 18,414,519 $ 17,146,050

Liabilities (Note 5):

Intragovernmental:

Accounts Payable $ 286,134 $ 534,421

Other Liabilities (Note 7) 503,779 528,133

Total Intragovernmental 789,913 1,062,554

With the Public:

Accounts Payable 579,355 1,007,785

Federal Employee [and Veteran] Benefits Payable 4,020,785 4,182,446

Other Liabilities (Note 7) 1,500,374 1,368,636

Total With the Public 6,100,514 6,558,867

Total Liabilities $ 6,890,427 $ 7,621,421

Net Position:

Total Unexpended Appropriations $ 8,512,317 $ 9,721,413

Total Cumulative Results of Operations 3,011,775 (196,784)

Total Net Position 11,524,092 9,524,629

Total Liabilities and Net Position $ 18,414,519 $ 17,146,050

MERIT SYSTEMS PROTECTION BOARD

BALANCE SHEET

AS OF SEPTEMBER 30, 2021 AND 2020

(In Dollars)
The accompanying notes are an integral part of these financial statements.

7

2021 2020

Gross Program Costs:

Program Adjudication:

Gross Costs $ 38,716,185 $ 40,103,974

Less: Earned Revenue (75,737) (246,659)

Net Program Costs $ 38,640,448 $ 39,857,315

Program Management Support:

Gross Costs $ 5,087,313 $ 5,483,999

Net Program Costs $ 5,087,313 $ 5,483,999

Program Merit Systems Studies:

Gross Costs $ 2,322,815 $ 2,363,507

Net Program Costs $ 2,322,815 $ 2,363,507

Net Cost of Operations $ 46,050,576 $ 47,704,821

MERIT SYSTEMS PROTECTION BOARD

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)
The accompanying notes are an integral part of these financial statements.

8

2021 2020

Unexpended Appropriations:

Beginning Balances $ 9,721,413 $ 11,759,629

Appropriations Received 44,490,000 44,490,000

Other Adjustments (798,886) (1,065,661)

Appropriations Used (44,900,210) (45,462,555)

Net Change in Unexpended Appropriations (1,209,096) (2,038,216)

Total Unexpended Appropriations - Ending $ 8,512,317 $ 9,721,413

Cumulative Results of Operations:

Beginning Balances $ (196,782) $ (2,220,156)

Appropriations Used 44,900,210 45,462,555

Transfers In/Out Without Reimbursement 2,345,000 2,345,000

Imputed Financing (Note 9) 2,013,923 1,920,638

Net Cost of Operations (46,050,576) (47,704,821)

Net Change in Cumulative Results of Operations 3,208,557 2,023,372

Cumulative Results of Operations - Ending $ 3,011,775 $ (196,784)

Net Position $ 11,524,092 $ 9,524,629

MERIT SYSTEMS PROTECTION BOARD

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)
The accompanying notes are an integral part of these financial statements.

9

2021 2020

Budgetary Resources:

Unobligated balance from prior year budget authority, net (Note 10) $ 7,350,454 $ 6,912,204

Appropriations 44,490,000 44,490,000

Spending authority from offsetting collections 2,420,737 2,591,440

Total Budgetary Resources $ 54,261,191 $ 53,993,644

Status of Budgetary Resources:

New obligations and upward adjustments (total) $ 46,818,543 $ 46,383,252

Unobligated balance, end of year:

 Apportioned, unexpired accounts 6,215,154 6,093,617

Unexpired unobligated balance, end of year 6,215,154 6,093,617

Expired unobligated balance, end of year 1,227,494 1,516,775

Unobligated balance, end of year (total) 7,442,648 7,610,392

Total Budgetary Resources $ 54,261,191 $ 53,993,644

Outlays, Net and Disbursements, Net:

Outlays, net (total) $ 43,089,148 $ 42,393,656

Distributed Offsetting Receipts - (1,200)

Agency outlays, net $ 43,089,148 $ 42,392,456

MERIT SYSTEMS PROTECTION BOARD

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)
MERIT SYSTEMS PROTECTION BOARD

NOTES TO THE FINANCIAL STATEMENTS

10

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The U.S. Merit Systems Protection Board (MSPB) is an independent quasi-judicial agency in the Executive 

branch that serves as the guardian of federal merit systems. The Board was established by the Civil Service 

Reform Act of 1978 (CSRA) with a mission of ensuring that employees are protected against abuses by 

agency management, that Executive branch agencies make employment decisions in accordance with the 

merit systems principles, and that federal merit systems are kept free of prohibited personnel practices. The 

MSPB reporting entity is comprised of General Funds and General Miscellaneous Receipts.

General Funds are accounts used to record financial transactions arising under congressional appropriations 

or other authorizations to spend general revenues. MSPB manages Operations and Facilities, Engineering 

and Development General Fund accounts.

General Fund Miscellaneous Receipts are accounts established for receipts of non-recurring activity, such 

as fines, penalties, fees and other miscellaneous receipts for services and benefits.

The MSPB has rights and ownership of all assets reported in these financial statements. The reporting 

entity is a component of the U.S Government. For this reason, some of the assets and liabilities reported by 

the entity may be eliminated for Government-wide reporting because they are offset by assets and liabilities 

of another U.S. Government entity. These financial statements should be read with the realization that they 

are for a component of the U.S. Government, a sovereign entity. The MSPB does not possess any nonentity assets.

B. Basis of Presentation

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

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

the agency’s operating results; the Statement of Changes in Net Position displays the changes in the 

agency’s equity accounts. The Statement of Budgetary Resources presents the sources, status, and uses of 

the agency’s resources and follows the rules for the Budget of the United States Government.

The statements are a requirement of the Chief Financial Officers Act of 1990, the Government Management 

Reform Act of 1994 and the Accountability of Tax Dollars Act of 2002. They have been prepared from, 

and are fully supported by, the books and records of the MSPB in accordance with the hierarchy of 

accounting principles generally accepted in the United States of America, standards issued by the Federal 

Accounting Standards Advisory Board (FASAB), Office of Management and Budget (OMB) Circular A136, Financial Reporting Requirements, as amended, and the MSPB accounting policies which are 

summarized in this note. These statements, with the exception of the Statement of Budgetary Resources, 

are different from financial management reports, which are also prepared pursuant to OMB directives that 

are used to monitor and control the MSPB’s use of budgetary resources. The financial statements and 
11

associated notes are presented on a comparative basis. Unless specified otherwise, all amounts are 

presented in dollars.

C. Basis of Accounting

Transactions are recorded on both an accrual accounting basis and a budgetary basis. Under the accrual 

method, revenues are recognized when earned, and expenses are recognized when a liability is incurred, 

without regard to receipt or payment of cash. Budgetary accounting facilitates compliance with legal 

requirements on the use of federal funds.

D. Fund Balance with Treasury

FBWT is an asset of a reporting entity and a liability of the General Fund. It is the aggregate amount of the

MSPB’s funds with Treasury in expenditure, receipt, and revolving fund accounts. Appropriated funds 

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

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

cash held outside of Treasury. When the reporting entity seeks to use FBWT or investments in Government 

securities to liquidate budgetary obligations, Treasury will finance the disbursements in the same way it 

finances all other disbursements, which is to borrow from the public if there is a budget deficit (and to use 

current receipts if there is a budget surplus). Funds are disbursed for the agency on demand.

E. Accounts Receivable

Accounts receivable consists of amounts owed to MSPB by other federal agencies and the general public. 

Amounts due from federal agencies are considered fully collectible. Accounts receivable from the public 

include reimbursements from employees. An allowance for uncollectible accounts receivable from the 

public is established when, based upon a review of outstanding accounts and the failure of all collection 

efforts, management determines that collection is unlikely to occur considering the debtor’s ability to pay.

F. Property, Equipment, and Software

Property, equipment and software represent furniture, fixtures, equipment, and information technology 

hardware and software which are recorded at original acquisition cost and are depreciated or amortized 

using the straight-line method over their estimated useful lives. Major alterations and renovations are 

capitalized, while maintenance and repair costs are expensed as incurred. The MSBP’s capitalization 

threshold is $50,000 for individual purchases and $500,000 for bulk purchases. Property, equipment, and 

software acquisitions that do not meet the capitalization criteria are expensed upon receipt. Applicable 

standard governmental guidelines regulate the disposal and convertibility of agency property, equipment, 

and software. The useful life classifications for capitalized assets are as follows:

Description Useful Life (years)

Building 10

Office Equipment 10

Software 5

G. Advances and Prepaid Charges

Advance payments are generally prohibited by law. There are some exceptions, such as reimbursable 

agreements, subscriptions and payments to contractors and employees. Payments made in advance of the 

receipt of goods and services are recorded as advances or prepaid charges at the time of prepayment and 

recognized as expenses when the related goods and services are received.
12

H. Liabilities

Liabilities represent the amount of funds likely to be paid by the MSPB as a result of transactions or events 

that have already occurred.

MSPB reports its liabilities under two categories, Intragovernmental and With the Public. 

Intragovernmental liabilities represent funds owed to another government agency. Liabilities with the 

Public represent funds owed to any entity or person that is not a federal agency, including private sector 

firms and federal employees. Each of these categories may include liabilities that are covered by budgetary 

resources and liabilities not covered by budgetary resources.

Liabilities covered by budgetary resources are liabilities funded by a current appropriation or other funding 

source. These consist of accounts payable and accrued payroll and benefits. Accounts payable represent 

amounts owed to another entity for goods ordered and received and for services rendered except for 

employees. Accrued payroll and benefits represent payroll costs earned by employees during the fiscal 

year which are not paid until the next fiscal year.

Liabilities not covered by budgetary resources are liabilities that are not funded by any current appropriation 

or other funding source. These liabilities consist of accrued annual leave, actuarial FECA, and the amounts 

due to Treasury for collection and accounts receivable of civil penalties and FOIA request fees. 

I. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. The balance in the 

accrued leave account is adjusted to reflect current pay rates. Liabilities associated with other types of 

vested leave, including compensatory, restored leave, and sick leave in certain circumstances, are accrued 

at year-end, based on latest pay rates and unused hours of leave. Funding will be obtained from future 

financing sources to the extent that current or prior year appropriations are not available to fund annual and 

other types of vested leave earned but not taken. Nonvested leave is expensed when used. Any liability 

for sick leave that is accrued but not taken by a Civil Service Retirement System (CSRS)-covered employee 

is transferred to the Office of Personnel Management (OPM) upon the retirement of that individual. Credit 

is given for sick leave balances in the computation of annuities upon the retirement of Federal Employees 

Retirement System (FERS)-covered employees.

J. Accrued and Actuarial Workers’ Compensation

The Federal Employees' Compensation Act (FECA) administered by the U.S. Department of Labor (DOL) 

addresses all claims brought by the MSPB employees for on-the-job injuries. The DOL bills each agency 

annually as its claims are paid, but payment of these bills is deferred for two years to allow for funding 

through the budget process. Similarly, employees that the MSPB terminates without cause may receive 

unemployment compensation benefits under the unemployment insurance program also administered by 

the DOL, which bills each agency quarterly for paid claims. Future appropriations will be used for the 

reimbursement to DOL. The liability consists of (1) the net present value of estimated future payments 

calculated by the DOL and (2) the unreimbursed cost paid by DOL for compensation to recipients under 

the FECA.

K. Retirement Plans

The MSPB employees participate in either the CSRS or the FERS. The employees who participate in CSRS 

are beneficiaries of the MSPB matching contribution, equal to seven percent of pay, distributed to their 

annuity account in the Civil Service Retirement and Disability Fund.
13

Prior to December 31, 1983, all employees were covered under the CSRS program. From January 1, 1984 

through December 31, 1986, employees had the option of remaining under CSRS or joining FERS and 

Social Security. Employees hired as of January 1, 1987 are automatically covered by the FERS program. 

Both CSRS and FERS employees may participate in the federal Thrift Savings Plan (TSP). FERS 

employees receive an automatic agency contribution equal to one percent of pay and the MSPB matches 

any employee contribution up to an additional four percent of pay. For FERS participants, the MSPB also 

contributes the employer’s matching share of Social Security.

FERS employees and certain CSRS reinstatement employees are eligible to participate in the Social 

Security program after retirement. In these instances, the MSPB remits the employer’s share of the required 

contribution.

The MSPB recognizes the imputed cost of pension and other retirement benefits during the employees’ 

active years of service. OPM actuaries determine pension cost factors by calculating the value of pension 

benefits expected to be paid in the future and communicate these factors to the MSPB for current period 

expense reporting. OPM also provides information regarding the full cost of health and life insurance 

benefits. The MSPB recognized the offsetting revenue as imputed financing sources to the extent these 

expenses will be paid by OPM.

The MSPB does not report on its financial statement’s information pertaining to the retirement plans 

covering its employees. Reporting amounts such as plan assets, accumulated plan benefits, and related 

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

L. Other Post-Employment Benefits

The MSPB employees eligible to participate in the Federal Employees' Health Benefits Plan (FEHBP) and 

the Federal Employees' Group Life Insurance Program (FEGLIP) may continue to participate in these 

programs after their retirement. The OPM has provided the MSPB with certain cost factors that estimate 

the true cost of providing the post-retirement benefit to current employees. The MSPB recognizes a current 

cost for these and Other Retirement Benefits (ORB) at the time the employee's services are rendered. The 

ORB expense is financed by OPM and offset by the MSPB through the recognition of an imputed financing 

source. 

M. Use of Estimates

The preparation of the accompanying financial statements in accordance with generally accepted 

accounting principles requires management to make certain estimates and assumptions that affect the 

reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those 

estimates.

N. Reclassification

Certain fiscal year 2020 balances have been reclassified, retitled, or combined with other financial statement 

line items for consistency with the current year presentation. 

N. Classified Activities

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

presentations and disclosures to be modified, if needed, to prevent the disclosure of classified information.
14

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2021 and 2020, were as follows:

No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances in the 

Treasury accounts.

The available unobligated fund balances represent the current period amount available for obligation or 

commitment. At the start of the next fiscal year, this amount will become part of the unavailable balance 

as described in the following paragraph.

The unavailable unobligated fund balances represent the amount of appropriations for which the period of 

availability for obligation has expired. These balances are available for upward adjustments of obligations 

incurred only during the period for which the appropriation was available for obligation or for paying claims 

attributable to the appropriations.

The obligated balance not yet disbursed includes accounts payable, accrued expenses, and undelivered 

orders that have reduced unexpended appropriations but have not yet decreased the fund balance on hand 

(see also Note 11).

NOTE 3. ACCOUNTS RECEIVABLE

Accounts receivable balances as of September 30, 2021 and 2020, were as follows:

The accounts receivable is primarily made up of Employee Receivables.

Historical experience has indicated that the majority of the receivables are collectible. There are no material 

uncollectible accounts as of September 30, 2021 and 2020.

2021 2020

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 6,215,154 $ 6,093,617 

 Unavailable 1,227,494 1,516,775 

Obligated Balance Not Yet Disbursed 8,718,054 7,948,345 

Total $ 16,160,702 $ 15,558,737 

2021 2020

With the Public

Accounts Receivable $ 1,416 $ 1,278

Total Accounts Receivable $ 1,416 $ 1,278
15

NOTE 4. GENERAL PROPERTY, PLANT AND EQUIPMENT, NET

Schedule of General Property, Plant and Equipment, Net as of September 30, 2021:

Schedule of General Property, Plant and Equipment, Net as of September 30, 2020:

NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for the MSPB as of September 30, 2021 and 2020, include liabilities not covered by budgetary 

resources. Congressional action is needed before budgetary resources can be provided. Although future 

appropriations to fund these liabilities are likely and anticipated, it is not certain that appropriations will be 

enacted to fund these liabilities. 

FECA and the Unemployment Insurance liabilities represent the unfunded liability for actual workers 

compensation claims and unemployment benefits paid on the MSPB’s behalf and payable to the DOL. The 

MSPB also records an actuarial liability for future workers compensation claims based on the liability to 

benefits paid (LBP) ratio provided by DOL and multiplied by the average of benefits paid over three years. 

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The balance in 

the accrued annual leave account is reviewed quarterly and adjusted as needed to accurately reflect the 

liability at current pay rates and leave balances. Accrued annual leave is paid from future funding sources 

and, accordingly, is reflected as a liability not covered by budgetary resources. Sick and other leave is 

expensed as taken. 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation Net Book Value

Leasehold Improvements $ 2,083,762 $ 2,007,210 $ 76,552

Furniture & Equipment 1,712,093 736,184 975,909

Software 9,749,616 9,478,640 270,976

Software-in-Development 917,192 - 917,192

Total $ 14,462,663 $ 12,222,034 $ 2,240,629

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation Net Book Value

Leasehold Improvements $ 2,083,762 $ 1,976,578 $ 107,184

Furniture & Equipment 960,763 603,658 357,105

Software 9,606,765 9,413,983 192,782

Software-in-Development 917,192 - 917,192

Total $ 13,568,482 $ 11,994,219 $ 1,574,263

2021 2020

Intragovernmental – FECA $ 43,698 $ 87,261

Unfunded Leave 3,475,862 3,456,201

Actuarial FECA 400,929 573,882

Other Employee Liabilities - 200

Total Liabilities Not Covered by Budgetary Resources $ 3,920,489 $ 4,117,544

Total Liabilities Covered by Budgetary Resources 2,969,938 3,503,877

Total Liabilities $ 6,890,427 $ 7,621,421
16

NOTE 6. ACTUARIAL FECA LIABILITY

FECA provides income and medical cost protection to covered federal civilian employees harmed on the 

job or who have contracted an occupational disease, and beneficiaries of employees whose death is 

attributable to a job-related injury or occupational disease. Claims incurred for benefits under FECA for 

the MSPB’s employees are administered by the DOL and ultimately paid by the MSPB when funding 

becomes available.

The MSPB bases its estimate for FECA actuarial liability on the DOL’s FECA model. The DOL method 

of determining the liability uses historical benefits payment patterns for a specific incurred period to predict 

the ultimate payments for the period. Based on the information provided by the DOL, the MSPB’s liability 

as of September 30, 2021 and 2020, was $400,929 and $573,882, respectively.

NOTE 7. OTHER LIABILITIES

Other liabilities account balances as of September 30, 2021 were as follows:

Other liabilities account balances as of September 30, 2020 were as follows:

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 107,128 $ 107,128

Employer Contributions and Payroll Taxes Payable 351,843 351,843

Other Post Employment Benefits Due and Payable 1,110 1,110

Unfunded FECA Liability 43,698 43,698

Total Intragovernmental Other Liabilities $ 503,779 $ 503,779

With the Public

Accrued Funded Payroll and Leave $ 1,496,502 $ 1,496,502

Other Liabilities w/Related Budgetary Obligations 3,872 3,872

Total Public Other Liabilities $ 1,500,374 $ 1,500,374

Total Other Liabilities $ 2,004,153 $ 2,004,153

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 93,095 $ 93,095

Employer Contributions and Payroll Taxes Payable 298,283 298,283

Other Post Employment Benefits Due and Payable 49,494 49,494

Unfunded FECA Liability 87,261 87,261

Total Intragovernmental Other Liabilities $ 528,133 $ 528,133

With the Public

Accrued Funded Payroll and Leave $ 1,362,178 $ 1,362,178

Other Employee Liabilities w/o Related Budgetary Obligations 200 200

Other Liabilities w/Related Budgetary Obligations 6,258 6,258

Total Public Other Liabilities $ 1,368,636 $ 1,368,636

Total Other Liabilities $ 1,896,769 $ 1,896,769
17

NOTE 8. LEASES

Operating Leases

The MSPB occupies office space at various locations nationwide (Atlanta, Chicago, Dallas, Denver, New 

York, Philadelphia, Oakland, Arlington, VA, and in Washington DC.) The lease agreement is with the 

General Service Administration (GSA) and is accounted for as an operating lease. This lease agreement 

covers all locations that the MSPB occupies. The lease term began on January 1, 2012 and expires on 

August 31, 2031. Lease payments are increased annually based on the adjustments for operating cost and 

real estate tax escalations. The total operating lease expense for fiscal years 2021 and 2020 were $1,638,443 

and $3,155,490, respectively. Below is a schedule of future payments for the term of the lease.

The operating lease amount does not include estimated payments for leases with annual renewal options.

NOTE 9. INTER-ENTITY COSTS

The MSPB recognizes certain inter-entity costs for goods and services that are received from other federal 

entities at no cost or at a cost less than the full cost. Certain costs of the providing entity that are not fully 

reimbursed are recognized as imputed cost and are offset by imputed revenue. Such imputed costs and 

revenues relate to employee benefits and claims to be settled by the Treasury Judgement Fund. The MSPB 

recognizes as inter-entity costs the amount of accrued pension and post-retirement benefit expenses for 

current employees. The assets and liabilities associated with such benefits are the responsibility of the 

administering agency, OPM. For the periods ended September 30, 2021 and 2020, respectively, inter-entity 

costs were as follows:

NOTE 10. NET ADJUSTMENTS TO UNOBLIGATED BALANCE, BROUGHT FORWARD, 

OCTOBER 1

The Unobligated Balance Brought Forward from the prior fiscal year has been adjusted for recoveries of 

prior year paid and unpaid obligations and other changes such as canceled authority. The Adjustments to 

Unobligated Balance Brought Forward, October 1, as of September 30, 2021, and 2020, consisted of the 

following:

Fiscal Year Building Federal

2022 $ 3,738,235 $ 3,738,235 

2023 3,800,486 3,800,486 

2024 3,586,757 3,586,757 

2025 3,661,558 3,661,558 

2026 3,734,789 3,734,789 

Thereafter 25,837,119 25,837,119 

Total Future Lease Payments $ 44,358,944 $ 44,358,944 

Asset Category Totals

2021 2020

Office of Personnel Management $ 2,013,923 $ 1,920,638 

Total Imputed Financing Sources $ 2,013,923 $ 1,920,638 

2021 2020

Unobligated Balance Brought Forward From Prior Year, October 1 $ 7,610,392 $ 6,858,280 

Recoveries of Prior Year Obligations 538,948 1,119,585 

Other Changes in Unobligated Balances (798,886) (1,065,661)

Unobligated Balance From Prior Year Budget Authority, Net (Discretionary and Mandatory) $ 7,350,454 $ 6,912,204 
18

NOTE 11. UNDELIVERED ORDERS AT THE END OF THE PERIOD

As of September 30, 2021, budgetary resources obligated for undelivered orders were as follows:

As of September 30, 2020, budgetary resources obligated for undelivered orders were as follows:

NOTE 12. EXPLANATION OF DIFFERENCES BETWEEN THE SBR AND THE BUDGET OF 

THE U.S. GOVERNMENT

The President’s Budget that will include fiscal year 2021 actual budgetary execution information has not 

yet been published. The President’s Budget is scheduled for publication in February 2022 and can be found 

at the OMB Web site: http://www.whitehouse.gov/omb/. The 2022 Budget of the United States 

Government, with the “Actual” column completed for 2020, has been reconciled to the Statement of 

Budgetary Resources and there were no material differences. 

In Millions

NOTE 13. CUSTODIAL ACTIVITY

The MSPB’s custodial collection primarily consists of penalties and fines collected. While these collections 

are considered custodial, they are neither primary to the mission of the MSPB nor material to the overall 

financial statements. The MSPB’s total custodial collections are $0 and $1,200 for the years ended 

September 30, 2021, and 2020, respectively. 

Federal Non-Federal Total

Paid Undelivered Orders $ 11,772 $ - $ 11,772

Unpaid Undelivered Orders 2,641,743 3,106,374 5,748,117

Total Undelivered Orders $ 2,653,515 $ 3,106,374 $ 5,759,889

Federal Non-Federal Total

Paid Undelivered Orders $ 11,772 $ - $ 11,772

Unpaid Undelivered Orders 1,972,657 2,471,811 4,444,468

Total Undelivered Orders $ 1,984,429 $ 2,471,811 $ 4,456,240

New Obligations

Budgetary & Upward Net

Resources Adjustments (Total) Outlays

Combined Statement of Budgetary Resources $ 54 $ 46 $ 42

Unobligated Balance Not Available (2) - -

Budget of the U.S. Government $ 52 $ 46 $ 42
19

NOTE 14. RECONCILIATION OF NET COST TO NET OUTLAYS 

The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual 

basis, provides an explanation of the relationship between budgetary and financial accounting information. 

Reconciliation of Net Cost to Net Outlays as of September 30, 2021:

Intragovernmental With the Public Total 

$ 13,792,675 $ 32,257,901 $ 46,050,576

Property, Plant, and Equipment Depreciation Expense - (227,816) (227,816)

Increase/(Decrease) in Assets:

Accounts Receivable, Net - 139 139

(Increase)/Decrease in Liabilities:

Accounts Payable 248,286 428,429 676,715

Federal Employee and Veteran Benefits Payable - 161,658 161,658

Other Liabilities 24,354 (131,738) (107,384)

Financing Sources:

Imputed Cost (2,013,923) - (2,013,923)

$ (1,741,283) $ 230,672 $ (1,510,611)

Acquisition of Capital Assets - 894,183 894,183

Financing Sources:

Transfers Out (In) Without Reimbursements (2,345,000) - (2,345,000)

$ (2,345,000) $ 894,183 $ (1,450,817)

$ 9,706,392 $ 33,382,756 $ 43,089,148

$ 43,089,148

RECONCILIATION OF NET COST TO NET OUTLAYS

BUDGET AND ACCRUAL RECONCILIATION

FOR THE YEARS ENDED SEPTEMBER 30, 2021

(In Dollars)

Components of Net Cost Not Part of the Budgetary Outlays

Total Net Outlays (Calculated Total) 

Net Operating Cost (SNC)

Total Components of Net Operating Cost Not Part of the Budgetary Outlays

Components of the Budget Outlays That Are Not Part of Net Operating Cost

Total Components of the Budget Outlays That Are Not Part of Net Operating Cost

Budgetary Agency Outlays, Net (SBR 4210)

Budgetary Agency Outlays, Net
20

Reconciliation of Net Cost to Net Outlays as of September 30, 2020:

Intragovernmental With the Public Total 

Net Operating Cost (SNC) $ 14,838,096 $ 32,866,725 $ 47,704,821

Property, Plant, and Equipment Depreciation Expense - (117,737) (117,737)

Increase/(Decrease) in Assets:

Accounts Receivable, Net - (11,776) (11,776)

Other Assets 6,586 - 6,586

(Increase)/Decrease in Liabilities:

Accounts Payable 272,215 (535,568) (263,353)

Federal Employee and Veteran Benefits Payable - (498,909) (498,909)

Other Liabilities (123,897) (227,630) (351,527)

Financing Sources:

Imputed Cost (1,920,638) - (1,920,638)

$ (1,765,734) $ (1,391,620) $ (3,157,354)

Acquisition of Capital Assets - 191,189 191,189

Financing Sources:

Transfers Out (In) Without Reimbursements (2,345,000) - (2,345,000)

$ (2,345,000) $ 191,189 $ (2,153,811)

Custodial/Non-Exchange Revenue 1,179 (1,179) -

$ 1,179 $ (1,179) $ (1,200)

$ 10,728,541 $ 31,665,115 $ 42,392,456

$ 42,392,456

BUDGET AND ACCRUAL RECONCILIATION

FOR THE YEARS ENDED SEPTEMBER 30, 2020

(In Dollars)

Budgetary Agency Outlays, Net 

Components of Net Cost Not Part of the Budgetary Outlays

Total Components of Net Operating Cost Not Part of the Budgetary Outlays

Components of the Budget Outlays That Are Not Part of Net Operating Cost

Total Components of the Budget Outlays That Are Not Part of Net Operating Cost

Budgetary Agency Outlays, Net (SBR 4210)

Misc Items

Total Other Reconciling Items

Total Net Outlays (Calculated Total) 

RECONCILIATION OF NET COST TO NET OUTLAYS