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Performance and Accountability Report
Fiscal Year 2002

Appendix H - Highlights of HHS Budgetary Outlays

In FY 2002, HHS had net outlays of $466.1 billion, representing 23.2 percent of total net federal outlays. This represents an increase from $426.4 billion (22.9 percent of net federal outlays) in FY 2001. Only the Social Security Administration (which became independent from HHS in 1995) exceeded HHS spending in FY 2002.

The portion of the federal budget allocated to HHS has grown significantly over the last three decades. The nature of the HHS entitlement programs is the reason for the growth in spending. HHS cannot limit the number of enrollees in its entitlement programs; every individual who meets the programs' criteria must be enrolled. Nine out of every ten HHS dollars are now spent on entitlements.

When the Medicare and Medicaid entitlement programs were enacted in 1966, HHS net outlays accounted for only four percent of federal net outlays. As the ranks of the enrollees and beneficiaries of these entitlement programs have swelled along with the increasing costs of health care treatment, the impact on the federal budget has been quite significant. The net outlays for Medicare alone now account for 11.5 percent of the total net federal budget outlays.

HHS dollars are allocated to the HHS OPDIVs across budget functions. The accompanying matrix chart of "HHS FY 2002 Net Outlays by Budget Function and by OPDIV" details this distribution and facilitates the identification of concentrations of outlays. The largest single budget function is Medicare (which has a category all its own), with $230.9 billion in spending. The second largest functional category, at $189.7 billion, is Health where most of the funds were spent by CMS (for Medicaid) and by NIH (for research). ACF has the bulk of responsibility for budget function dollars categorized as Education, Training, Employment and Social Services, and also for Income Security through the Temporary Assistance for Needy Families, Child Support Enforcement, and Foster Care and Adoption Assistance (which was categorized as Education, Training, Employment and Social Services in previous reports) programs.

Measured by program spending, CMS is by far the largest of the HHS OPDIVs, followed by ACF, then NIH, HRSA, CDC, SAMHSA, and other HHS agencies. The relative portion of total HHS net outlays by component is illustrated in the accompanying pie chart.

Outlays by budget function are largely concentrated in the Medicare and Health (which includes Medicaid) budget functions.

Readers will note that the Statement of Net Cost allocates costs by HHS agency and by budget function. Costs reported will be concentrated in a similar fashion as the budget figures, noted above, for net outlays reported in this section of the Accountability Report.

Source: Final Monthly Treasury Statement of Receipts and Outlays
of the United States Government. (Treasury includes interest on debt.)

Note: Prior to FY 2001, ATSDR's expenditures were included in HHS financial statements but excluded from HHS outlay figures because they were included under the Natural Resources budget function in EPA's outlay figures. Direct appropriations were provided to HHS for ATSDR beginning in FY 2001 and these outlays are now included with CDC's Health budget function

HHS FY 2002 Net Outlays by OPDIV
(in millions)
HHS FY 2002 Net Outlays by Budget Function and by OPDIV
(in thousands)

HHS Agency	FY 2002	FY 2002	FY 2001	FY 2000	FY 1999	FY 1998	FY 1997	FY 1996	FY 1995
Food and Drug Administration	$1,125	0.2%	$1,073	$1,022	$950	$837	$873	$865	$858
Health Resources and Services Administration	5,755	1.2%	5,123	4,312	3,860	3,473	3,526	3,960	2,612
Indian Health Service	2,812	0.6%	2,553	2,375	2,193	2,145	2,139	1,997	1,975
Centers for Disease Control and Prevention 3/	3,628	0.8%	3,300	2,530	2,428	2,409	2,248	2,166	1,785
National Institutes of Health	20,435	4.4%	17,239	15,405	13,802	12,486	11,171	10,209	10,875
Substance Abuse and Mental Health Svs Adm.	2,885	0.6%	2,737	2,499	2,214	2,235	1,622	2,084	2,444
Agency for Healthcare Research and Quality 4/	-66	0.0%	33	51	79	77	110	81	133
Centers for Medicare & Medicaid Services 5/	382,442	82.1%	350,382	316,139	299,014	294,016	285,523	266,164	248,920
Administration for Children and Families	44,417	9.5%	42,224	36,505	33,624	31,584	31,023	31,023	31,993
Office of the Secretary	1,305	0.3%	568	768	377	233	206	195	275
Administration on Aging	1,105	0.2%	952	884	879	828	828	818	951
Program Support Center	262	0.1%	260	137	280	247	224	240
HHS SUBTOTAL	$466,105	100.0%	$426,444	$382,627	$359,700	$350,570	$339,493	$319,802	$302,821
"Old" HHS agencies that no longer exist as separate agencies in HHS:
OASH 1/									254
SSA 2/
HHS TOTAL	$466,105		$426,444	$382,627	$359,700	$350,570	$339,493	$319,802	$303,075
1/ OASH accounts were merged into OS and PSC in FY 1996.
2/ SSA separated from HHS at end of FY 1994.
3/ Includes outlays for the Agency for Toxic Substances and Disease Registry (ATSDR) beginning in FY 2001 when direct appropriations were provided to HHS.
4/ Agency name changed from the Agency for Health Care Policy and Research pursuant to Public Law 106-129 enacted on 12/6/99.
5/ Agency name changed from the Health Care Financing Administration (HCFA) in June 2001.
Note: The Outlays (net) table is prepared from the Monthly Treasury Statement and includes proprietary receipts from the public and intrabudgetary transactions. The outlays reflected in the HHS Combined Statement of Budgetary Resources (SBR) does not incorporate all of these deductions for offsetting receipts.
Source: Monthly Treasury Statement of Receipts and Outlays of the United States Government as of 12/10/02.

HHS Agency	Education, Training, Employment, and Social Services	Health	Medicare	Income Security	Administration of Justice	TOTAL
Centers for Medicare & Medicaid Services	$-	$151,588,581	$230,853,604	$-	$-	$382,442,185
Administration for Children and Families	10,175,706			34,228,239	12,655	44,416,600
National Institutes of Health		20,435,281				20,435,281
Health Resources and Services Administration		5,754,818				5,754,818
Centers for Disease Control and Prevention		3,619,912			8,170	3,628,082
Substance Abuse and Mental Health Svs. Adm.		2,884,710				2,884,710
Indian Health Service		2,811,732				2,811,732
Food and Drug Administration		1,125,009				1,125,009
Administration on Aging		1,104,941				1,104,941
Office of the Secretary		1,305,551				1,305,551
Program Support Center *		261,633				261,633
Agency for Healthcare Research and Quality		-66,070				-66,070
HHS SUBTOTAL	$11,280,647	$189,721,157	$230,853,604	$34,228,239	$20,825	$466,104,472
* Though PSC's services are fee-based and self-sustaining, net outlays shown include $253,357 thousand for Retirement Pay and Medical Benefits for Commissioned Officers with the remainder attributable to the HHS Service and Supply Fund and miscellaneous trust funds.
Note: The FY 2002 financial statements' supplemental schedules present data under six budget functions, rather than just the 5 shown here. This is because ATSDR's expenditures are shown under the Natural Resources & Environmental budget function in HHS financial statements.
Source: Combined Statement of Receipts, Outlays, and Balances of the United States Government, Fiscal Year 2002. $118 billion in offsetting receipts (proprietary receipts from the public and interfund transactions) has been distributed to the appropriate HHS components based on detailed amounts in the September Monthly Treasury Statement. While the total HHS outlays reported by Treasury includes all of these receipts, the Combined Statement of Budgetary Resources includes $26 billion of proprietary receipts. It does not include interfund transactions of $92 billion. Therefore, the $92 billion of receipts may be netted against net outlays reported in the Combined Statement of Budgetary Resources to bridge the net outlay figure reported by Treasury.

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