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 the Office of Management and Budget's (OMB) Bulletin 01-09, Form
and Content of Agency Financial Statements. The responsibility for the
integrity of the financial information included in these statements rests
with management of the U.S. Department of Labor (DOL). The audit of DOL's
principal financial statements for FY 2004 and 2003 was performed by R.
Navarro & Associates, Inc., Certified Public Accountants. The auditors'
report accompanies the principal statements.
The Department's principal financial statements for fiscal years (FY)
2004 and 2003 consisted of the following:
- The Consolidated Balance Sheets, which
present as of September 30, 2004 and 2003 those resources owned or managed
by DOL which 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 present the net cost of DOL operations for the years ended September
30, 2004 and 2003. DOL's net cost of operations includes the gross costs
incurred by DOL less any exchange revenue earned from DOL activities.
Due to the complexity of DOL's operations, the classification of gross
cost and exchange revenues by major program and suborganization is presented
in Note 14 to the consolidated financial statements.
- The Consolidated Statements of Changes in Net Position,
which present the change in DOL's net position resulting from the net
cost of DOL operations, budgetary financing sources other than exchange
revenues and other financing sources for the years ended September 30,
2004 and 2003.
- The Combined Statements of Budgetary Resources,
which present the budgetary resources available to DOL during FY 2004
and 2003, the status of these resources at September 30, 2004 and 2003,
and the outlay of budgetary resources for the years ended September
30, 2004 and 2003.
- The Consolidated Statements of Financing,
which reconcile the net cost of operations with the obligation of budgetary
resources for the years ended September 30, 2004 and 2003.
- The Consolidated Statements of Custodial Activity,
which present the sources and disposition of non-exchange revenues collected
or accrued by DOL on behalf of other recipient entities for the years
ended September 30, 2004 and 2003.
|
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
|
|
|
|
|
Funds with U.S. Treasury
(Notes 1-C and 2) |
|
|
$9,700,757 |
|
$9,615,513 |
|
|
Investments (Notes 1-D
and 3) |
|
|
|
|
45,446,510 |
|
48,408,153 |
|
|
Interest receivable from investments |
|
|
|
580,180 |
|
726,160 |
|
|
Accounts receivable (Notes
1-E and 4) |
|
|
3,916,674 |
|
3,789,999 |
|
Total intra-governmental |
|
|
|
|
|
59,644,121 |
|
62,539,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net of allowance (Notes 1-E
and 4) |
|
|
1,127,034 |
|
939,688 |
|
Advances (Notes 1-F and 5) |
|
|
|
|
777,032 |
|
481,078 |
|
Property, plant and equipment, net of depreciation
(Notes 1-G and 6) |
|
|
|
876,269 |
|
830,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
$62,424,456 |
|
$64,791,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND NET POSITION |
|
|
|
|
|
|
Liabilities (Note 1-I) |
|
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
$22,207 |
|
$37,948 |
|
|
Advances from U.S. Treasury (Notes 1-J and 8) |
|
|
8,740,557 |
|
8,243,557 |
|
|
Other liabilities (Note 11) |
|
|
|
|
194,427 |
|
170,184 |
|
Total intra-governmental |
|
|
|
|
|
8,957,191 |
|
8,451,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
1,008,450 |
|
669,873 |
|
Accrued leave (Note 1-K) |
|
|
|
|
|
99,676 |
|
97,913 |
|
Accrued benefits (Notes 1-L and 9) |
|
|
|
1,344,009 |
|
1,638,594 |
|
Future workers' compensation benefits (Notes 1-M
and 10) |
|
|
528,068 |
|
592,125 |
|
Energy employees occupational illness compensation benefits (Note 1-N) |
|
|
|
2,793,823 |
|
2,222,574 |
|
Other liabilities (Note 11) |
|
|
|
|
|
239,333 |
|
270,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
14,970,550 |
|
13,942,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net position (Note 1-R) |
|
|
|
|
|
|
|
|
|
|
Unexpended appropriations |
|
|
|
|
8,299,897 |
|
8,587,666 |
|
Cumulative results of operations |
|
|
|
|
39,154,009 |
|
42,260,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net position |
|
|
|
|
|
|
47,453,906 |
|
50,848,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and net position |
|
|
|
|
$62,424,456 |
|
$64,791,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2003 |
NET COST OF OPERATIONS (Notes 1-S
and 14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CROSSCUTTING PROGRAMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income maintenance |
|
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
$972,951 |
|
$852,394 |
|
With the public |
|
|
|
|
|
|
50,464,699 |
|
60,808,540 |
Total cost |
|
|
|
|
|
|
51,437,650 |
|
61,660,934 |
|
Less earned revenue |
|
|
|
|
|
|
(3,274,386) |
|
(3,015,750) |
|
|
Net program cost |
|
|
|
|
|
|
48,163,264 |
|
58,645,184 |
Employment and training |
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
44,642 |
|
43,709 |
|
With the public |
|
|
|
|
|
|
6,389,375 |
|
7,198,735 |
Total cost |
|
|
|
|
|
|
6,434,017 |
|
7,242,444 |
|
Less earned revenue |
|
|
|
|
|
|
(17,140) |
|
(17,630) |
|
|
Net program cost |
|
|
|
|
|
|
6,416,877 |
|
7,224,814 |
Labor, employment and pension standards |
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
137,019 |
|
138,110 |
|
With the public |
|
|
|
|
|
|
563,409 |
|
459,858 |
Total cost |
|
|
|
|
|
|
700,428 |
|
597,968 |
|
Less earned revenue |
|
|
|
|
|
|
(11,475) |
|
(10,644) |
|
|
Net program cost |
|
|
|
|
|
|
688,953 |
|
587,324 |
Worker safety and health |
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
163,696 |
|
158,339 |
|
With the public |
|
|
|
|
|
|
638,194 |
|
642,819 |
Total cost |
|
|
|
|
|
|
801,890 |
|
801,158 |
|
Less earned revenue |
|
|
|
|
|
|
(5,207) |
|
(5,351) |
|
|
Net program cost |
|
|
|
|
|
|
796,683 |
|
795,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER PROGRAMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statistics |
|
|
|
|
|
|
|
|
|
|
Intra-governmental |
|
|
|
|
|
|
165,549 |
|
168,252 |
|
With the public |
|
|
|
|
|
|
372,556 |
|
359,768 |
Total cost |
|
|
|
|
|
|
538,105 |
|
528,020 |
|
Less earned revenue |
|
|
|
|
|
|
(5,504) |
|
(4,438) |
|
|
Net program cost |
|
|
|
|
|
|
532,601 |
|
523,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs not assigned to programs |
|
|
|
|
98,721 |
|
126,139 |
|
Less earned revenue not attributed to programs |
|
|
(20,643) |
|
(29,669) |
|
|
Net cost not assigned to programs |
|
|
|
78,078 |
|
96,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cost of operations |
|
|
|
|
|
|
$56,676,456 |
|
$67,873,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Budgetary financing |
|
|
|
|
|
|
|
|
|
|
sources (Note 1-T) |
|
|
|
|
|
|
|
|
|
|
|
Appropriations received |
|
|
|
|
|
|
|
|
|
|
Appropriations transferred |
|
|
|
|
|
|
|
|
|
Appropriations not available |
|
|
|
|
|
|
|
|
|
Appropriations used |
|
|
|
|
|
|
|
|
|
|
|
Nonexchange revenue (Note 15) |
|
|
|
|
|
|
|
|
|
|
Employer taxes |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assessments |
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursement of |
|
|
|
|
|
|
|
|
|
|
|
|
unemployment benefits |
|
|
|
|
|
|
|
|
|
Total nonexchange revenue |
|
|
|
|
|
|
|
|
|
Transfers without reimbursement (Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financing sources
(Note 1-U) |
|
|
|
|
|
|
|
|
Imputed financing from costs absorbed by others |
|
|
|
|
|
|
|
|
|
|
|
Transfers without reimbursement (Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financing
Sources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cost of operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balances |
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUDGETARY RESOURCES |
|
|
|
|
|
|
|
|
|
Budget authority |
|
|
|
|
|
|
|
|
|
|
|
Appropriations received |
|
|
|
|
|
$58,039,574 |
|
$68,937,478 |
|
|
Net transfers |
|
|
|
|
|
|
(19,879) |
|
(80,878) |
|
Unobligated balance |
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
|
|
|
|
3,173,996 |
|
2,971,602 |
|
|
Net transfers |
|
|
|
|
|
|
(37,592) |
|
(732) |
|
Spending authority from offsetting collections |
|
|
|
|
|
|
|
Earned |
|
|
|
|
|
|
|
|
|
|
|
|
Collected |
|
|
|
|
|
|
2,645,532 |
|
2,633,039 |
|
|
|
Receivable from Federal sources |
|
|
|
(24,109) |
|
(45,828) |
|
|
Change in unfilled customer orders |
|
|
|
|
|
|
|
|
|
Advance received |
|
|
|
|
|
(5,534) |
|
17,650 |
|
|
|
Without advance from Federal sources |
|
|
- |
|
(2,396) |
|
|
Transfers from trust funds |
|
|
|
|
3,884,725 |
|
4,012,226 |
|
Total spending authority from offsetting collections |
|
|
6,500,614 |
|
6,614,691 |
|
Recoveries of prior year obligations |
|
|
|
463,631 |
|
308,966 |
|
Temporarily not available pursuant to public law |
|
|
(22,661) |
|
- |
|
Permanently not available |
|
|
|
|
|
(207,353) |
|
(250,856) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total budgetary resources |
|
|
|
|
|
$67,890,330 |
|
$78,500,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATUS OF BUDGETARY RESOURCES |
|
|
|
|
|
|
Obligations incurred (Note 17) |
|
|
|
|
|
|
|
|
|
Direct |
|
|
|
|
|
|
$61,566,245 |
|
$72,731,481 |
|
|
Reimbursable |
|
|
|
|
|
|
2,746,299 |
|
2,595,002 |
|
Total obligations incurred |
|
|
|
|
|
64,312,544 |
|
75,326,483 |
|
Unobligated balances available |
|
|
|
|
|
|
|
|
|
Apportioned |
|
|
|
|
|
|
2,344,404 |
|
2,423,022 |
|
|
Exempt from apportionment |
|
|
|
|
(5) |
|
(208) |
|
|
Other available |
|
|
|
|
|
|
212,708 |
|
207,400 |
|
Unobligated balances not available |
|
|
|
1,020,679 |
|
543,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total status of budgetary resources |
|
|
|
|
$67,890,330 |
|
$78,500,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RELATIONSHIP OF OBLIGATIONS TO OUTLAYS |
|
|
|
|
|
|
Obligated balance, net, beginning |
|
|
|
|
$9,364,834 |
|
$10,538,670 |
|
Obligated balance transferred, net |
|
|
|
|
- |
|
1,304,116 |
|
Obligated balance, net, ending |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
(1,344,626) |
|
(1,336,589) |
|
|
Undelivered orders |
|
|
|
|
|
|
6,227,548 |
|
7,112,519 |
|
|
Accounts payable |
|
|
|
|
|
|
3,628,904 |
|
3,588,904 |
|
Outlays |
|
|
|
|
|
|
|
|
|
|
|
Disbursements |
|
|
|
|
|
|
64,693,879 |
|
76,534,321 |
|
|
Collections |
|
|
|
|
|
|
(6,492,578) |
|
(6,960,265) |
|
Total outlays |
|
|
|
|
|
|
58,201,301 |
|
69,574,056 |
|
Offsetting receipts |
|
|
|
|
|
|
(1,549,472) |
|
(1,277,239) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net outlays |
|
|
|
|
|
|
$56,651,829 |
|
$68,296,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESOURCES USED TO FINANCE ACTIVITIES
|
|
|
|
|
Budgetary resources obligated |
|
|
|
|
|
|
|
|
Obligations incurred |
|
|
|
|
|
|
$64,312,544 |
|
$75,326,483 |
|
Recoveries of prior year obligations |
|
|
|
(463,631) |
|
(308,966) |
|
Less spending authority from offsetting collections |
|
|
(6,500,614) |
|
(6,614,691) |
|
Obligations, net of offsetting collections and recoveries |
|
|
57,348,299 |
|
68,402,826 |
Other resources |
|
|
|
|
|
|
|
|
|
|
Imputed financing from costs absorbed by others |
|
|
110,344 |
|
106,003 |
|
Transfers, net |
|
|
|
|
|
|
3,012 |
|
2,314 |
|
Exchange revenue not in budget
|
|
|
(71,873) |
|
(78,398) |
|
Trust fund exchange revenue |
|
|
|
|
(823,315) |
|
(613,147) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total resources used to finance activities |
|
|
56,566,467 |
|
67,819,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
583,394 |
|
931,663 |
|
Resources that finance the acquisition of assets
|
|
(102,862) |
|
(101,221) |
|
Allocation transfers to other agencies
|
|
(77,215) |
|
(225,950) |
|
Other resources that do not affect net cost of operations
|
|
(800,760) |
|
(191) |
|
|
|
|
|
|
Total resources used to finance items not
part of the net cost of operations
|
|
(397,443) |
|
604,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total resources used to finance the net cost of
operations
|
|
56,169,024 |
|
68,423,899 |
|
|
|
|
|
|
COMPONENTS OF THE NET COST OF OPERATIONS THAT
WILL NOT REQUIRE OR GENERATE RESOURCES IN THE CURRENT PERIOD |
|
|
|
|
|
Components requiring or generating resources in future
periods |
|
|
|
|
|
|
Increase in annual leave liability |
|
|
|
1,763 |
|
3,979 |
|
|
Increase (decrease) in employee benefits and retirement
liabilities
|
|
495,628 |
|
(572,516) |
|
|
Other |
|
|
|
|
|
|
(28,273) |
|
27,875 |
|
Total |
|
|
|
|
|
|
|
469,118 |
|
(540,662) |
|
Components not requiring or generating resources |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
50,106 |
|
43,275 |
|
|
Revaluation of assets and liabilities |
|
|
|
678,954 |
|
472,304 |
|
|
Benefit overpayments |
|
|
|
|
|
(690,746) |
|
(525,635) |
|
Total |
|
|
|
|
|
|
|
38,314 |
|
(10,056) |
|
|
|
|
|
|
Total components of the net cost of operations
that will not require or generate resources in the current period
|
|
507,432 |
|
(550,718) |
Net cost of operations |
|
|
|
|
|
|
$56,676,456 |
|
$67,873,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCES OF CUSTODIAL REVENUE |
|
|
|
|
|
(Notes 1-V and 18) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash collection of fines, penalties, assessments
and related interest
|
|
$131,639 |
|
$119,911 |
|
Less refunds |
|
|
|
|
|
|
(2,206) |
|
(102) |
|
Net cash collections |
|
|
|
|
|
|
129,433 |
|
119,809 |
|
Increase (decrease) in amounts to be collected
|
|
(1,964) |
|
2,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sources of custodial revenue |
|
|
|
|
127,469 |
|
122,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISPOSITION OF CUSTODIAL REVENUE |
|
|
|
|
|
(Note 1-V) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net transfers to U.S. Treasury general fund
|
|
129,433 |
|
119,809 |
|
Increase (decrease) in amounts to be transferred |
|
|
(1,964) |
|
2,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total disposition of custodial revenue |
|
|
|
127,469 |
|
122,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net custodial activity |
|
|
|
|
|
|
- |
|
- |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The U.S. Department of Labor (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 and promote the welfare of the job
seekers, wage earners and retirees of the United States by improving their
working conditions, advancing their opportunities for profitable employment,
protecting their retirement and health care benefits, helping employers
find workers, strengthening free collective bargaining, and tracking changes
in employment, prices, and other economic measurements.
DOL is organized into major program agencies, which administer the
various statutes and programs for which the Department is responsible.
Through the execution of its congressionally approved budget, DOL conducts
operations in five major Federal program areas, under three major budget
functions: education,
training, employment and social services, health (occupational health
and safety), and income security. DOL's major program
agencies, and the major programs in which they operate, are shown below.
1. Major program agencies
-
Employment and Training Administration (ETA)
- Employment Standards Administration (ESA)
- Occupational Safety and Health Administration (OSHA)
- Bureau of Labor Statistics (BLS)
- Mine Safety and Health Administration (MSHA)
- Employee Benefits Security Administration (EBSA)
(Formerly Pension and Welfare Benefits Administration)
- Veterans' Employment and Training (VETS)
- Other Departmental Programs
- Office of the Assistant Secretary for Administration
and Management
- Office of the Solicitor
- Office of the Chief Financial Officer
- Office of the Inspector General
- Bureau of International Labor Affairs
- Women's Bureau
- Office of Disability Employment Policy
2. Major programs
- Income maintenance
- Employment and training
- Labor, employment, and pension standards
- Worker safety and health
- Statistics
The Pension Benefit Guaranty Corporation (PBGC), a wholly owned Federal
government corporation under the chairmanship of the Secretary of Labor,
has been designated by the Office of Management and Budget (OMB) as
a separate reporting entity for financial statement purposes and has been
excluded from the DOL reporting entity.
3. Fund accounting structure
DOL's financial activities are accounted for by Federal account symbol,
utilizing individual funds and fund accounts within distinct fund types,
as discussed below.
The Unemployment Trust Fund 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, 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 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 in certain maritime and related employment.
The District of Columbia Workmens' Compensation Act Trust Fund,
established under the authority District of Columbia Workmens' Compensation
Act provides compensation and medical payments to District of Columbia
employees for work related injuries or death which occurred prior to July
26, 1982.
The Black Lung Disability Trust Fund, established under the Black
Lung Benefit Act, provides compensation and medical benefits to coal miners
who suffer disability due to pneumoconiosis, and compensation benefits
to their dependent survivors.
Gifts and Bequests uses miscellaneous funds received by gift or bequest
to support various activities of the Secretary of Labor.
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 programs of training and other services for
the economically disadvantaged designed to lead to permanent gains in
employment, through grants to states and Federal programs such as Job
Corps, authorized by the Workforce Investment Act and the Job Training
Partnership Act.
Welfare to Work Jobs provides funding for the activities of the
Welfare-to-Work Grants program established by the Balanced Budget Act
of 1997. The program provides formula grants to States and Federally administered
competitive grants to other eligible entities to assist welfare recipients
in securing lasting unsubsidized employment.
State Unemployment Insurance and Employment Service Operations includes
grants to states for administering the Unemployment Compensation and Employment
Service programs. Unemployment Compensation provides administrative grants
to state agencies which pay unemployment benefits to eligible workers
and collect state unemployment taxes from employers. The Employment Service
is a nationwide system providing no-fee employment services to individuals
seeking employment and to employers seeking workers. Employment Service
activities are financed by allotments to states distributed under 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 Unemployment Trust Fund to pay
emergency unemployment benefits and associated administrative costs. The
fund is currently used to provide general fund financing for emergency
benefits as provided by the Temporary Extended Unemployment Compensation
Act.
Advances to the Unemployment Trust Fund and Other Funds provides
advances to other accounts within the Unemployment Trust Fund to pay unemployment
compensation 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 provides repayable advances to the Black
Lung Disability Trust Fund, to make disability payments whenever the fund
balance proves insufficient.
Federal Unemployment Benefits and Allowances provides for payment
of benefits, training, job search, and relocation allowances as authorized
by the Trade Act of 1974.
Community Service Employment for Older Americans provides part
time work experience in community service activities to unemployed, low
income persons aged 55 and over.
The 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, employees who have incurred
a work related occupational disease and beneficiaries of employees whose
death is attributable to a job related injury. The Fund also provides
for rehabilitation of injured employees to facilitate their return to
work.
The 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 of 2000. The Act
authorizes lump sum 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.
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.
Part B claims processing and payment operations were transferred to the
Department of Labor effective October 1, 2003.
The Working Capital Fund 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 return the full cost of operations.
The Panama Canal Commission Compensation Fund was established
to pay workers compensation obligations of the Panama Canal Commission
under the Federal Employees' Compensation Act from funding provided by
the Commission.
H-1b Funded provides demonstration grants to regional and local
entities to provide technical skills training to unemployed and incumbent
workers. The fund is 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.
Deposit funds account for monies held temporarily by DOL until
ownership is determined, or monies held by DOL as an agent for others.
- Miscellaneous receipt and clearing accounts
Miscellaneous receipt accounts hold non-entity receipts and accounts
receivable from DOL activities which by law, cannot be deposited into
funds under DOL control. The U.S. Department of the Treasury automatically
transfers all cash balances in these receipt accounts to the general fund
of the Treasury at the end of each fiscal year.
Clearing accounts hold monies which belong to DOL, but for which
a specific receipt account has not been determined.
4. Inter-departmental relationships
DOL and the Department of the Treasury (Treasury) are jointly responsible
for the operations of the Unemployment Trust Fund and the Black Lung Disability
Trust Fund. 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 Unemployment Trust
Fund and the Black Lung Disability Trust Fund into these financial statements.
B. Basis of Accounting and Presentation
These consolidated financial statements present the financial position,
net cost of operations, changes in net position, budgetary resources,
financing, and custodial activities of the U.S. Department of Labor, in
accordance with accounting principles generally accepted in the United
States of America and the form and content requirements of OMB Bulletin
01-09. They 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 interfund balances and transactions have been eliminated,
except in the Statement of Budgetary Resources. OMB Bulletin 01-09 requires
that the Statement of Budgetary Resources be presented on a combined basis.
OMB 01-09 requires budget authority and other resources allocated to
another agency to be reported by the transferor of the appropriation in
its financial statements unless the allocation transfer is material to
the recipient's financial statements. The activity relating to the allocation
should be reported in all of the recipient's financial statements, except
the Statement of Budgetary Resources, when the allocation transfer is
material to the recipient's financial statements. The transferor should
continue to report the appropriation and the related budgetary activity
in its Statement of Budgetary Resources.
DOL has allocated appropriations to the Department of Agriculture and
the Department of Interior in fiscal years 2004 and 2003. These Departments
consider this activity material to their respective financial statements,
and therefore, DOL reports this activity only in the Combined Statement
of Budgetary resources. Appropriations have been allocated to DOL from
the Environmental Protection Agency, the General Service Administration,
and the Agency for International Development, which DOL considers to be
immaterial. These amounts are not included in the DOL financial statements.
Accounting principles generally accepted in the United States of America
encompass both accrual and budgetary transactions. Under accrual accounting,
revenues are recognized when earned, and expenses are recognized when
a liability is incurred. Budgetary accounting facilitates compliance with
legal constraints on, and controls over, the use of federal funds. These
consolidated 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.
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
DOL trust fund balances not required to meet current expenditures are
invested by Treasury in interest bearing securities of the U.S. government.
Balances held in the Unemployment Trust Fund are invested in non-marketable,
special issue Treasury securities, 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.
Balances held in the Longshore and Harbor Workers' Trust Fund and the
District of Columbia Trust Fund, as well as balances held in the Panama
Canal Commission Compensation Fund, the Energy Employees Occupational
Illness Compensation Fund and the Backwage Restitution Fund are invested
in marketable Treasury securities. These investments are stated at amortized
cost, which is equivalent to 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.
1. Intra-governmental accounts receivable
The Federal
Employees Compensation (FEC) account within the Unemployment Trust Fund
provides unemployment insurance to eligible Federal workers (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 Federal Employees' Compensation Act Special Benefit Fund provides
workers' compensation (FECA) 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. 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, ESA, and EBSA;
for amounts due for backwages assessed against employers by ESA; and for
amounts due from grantees and contractors for grant and contract costs
disallowed by ETA.
3. Allowance for doubtful accounts
Accounts receivable are stated net of an allowance for uncollectible
accounts. The allowance is estimated based on an aging of account balances,
past collection experience, and an analysis of outstanding accounts at
year-end. (See Note 4.)
F. Advances
DOL advances consist primarily of payments made to State employment security
agencies (SESAs), 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
unreported expenditures are recorded by DOL. (See Note 5.)
G. Property, Plant and Equipment, Net of 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. DOL maintains the Capital Asset Tracking and
Reporting System (CATARS) to account for Job Corp's PP&E, as well
as other general purpose PP&E used by the Department. Internal use
software is considered general purpose PP&E.
Real property purchases or improvements and leasehold improvements with
a cost greater than $500,000 and a useful life of 2 or more years, internal
use software with a cost greater than $300,000 and a useful life of 2
or more years, and equipment with a cost of $50,000 or more and a useful
life of 2 or more years are capitalized. PP&E acquisitions not meeting
these criteria are charged to expense at the time of purchase. In 2001,
PP&E (excluding internal use software) with a cost greater than $25,000
($5,000 for the Working Capital Fund) and a useful life of 2 or more years
and internal use software with a cost greater than $300,000 and a useful
life of 2 or more years were capitalized. Prior to 2001, internally developed
software in the Working Capital Fund with a cost greater than $5,000 was
capitalized, when the cost was intended to be recovered through charges
to other DOL users. Prior to 1996, PP&E with a cost greater than $5,000
and a useful life of 2 or more years were capitalized. PP&E acquisitions
not meeting these criteria were charged to expense at the time of purchase.
Property, plant and equipment purchases and additions are stated at cost.
Normal repairs and maintenance are charged to expense as incurred. Plant
and equipment are depreciated over their estimated useful lives using
the straight-line method of depreciation.
Job Corps center construction costs are capitalized as construction-in-progress
until completed. Upon completion they are reclassified as structures or
facilities and depreciated over their estimated useful life. Leasehold
improvements made at Job Corps centers and DOL facilities leased from
the General Services Administration are recorded at cost and amortized
over their useful lives, using the straight-line method of amortization.
(DOL has no operating leases which extend for a period of more than one
year.)
Internal use software development costs are capitalized as software development
in progress until the development stage has been completed and successfully
tested. Upon completion and testing, software development-in-progress
costs are reclassified as internal use software and amortized over their
estimated useful life.
The table below shows the major classes of DOL's depreciable plant and
equipment, and the depreciation periods used for each major classification.
(See Note 6.)
|
|
Structures, facilities and improvements |
|
Furniture and equipment |
|
ADP software |
|
DOL grantees have acquired real and tangible property with Federal grant
funds in which DOL has a reversionary interest when the property is disposed
of or no longer used for its authorized purpose. DOL is entitled to a
pro rata share of the proceeds from sale of the property or a pro rata
share of the property's fair market value, if the property is retained
by the grantee but no longer used for DOL purposes.
The value of DOL's reversionary interest in real and tangible property
acquired with Federal grant funds can not be determined until the grantee's
intention to sell or convert the property is known.
H. Non-entity Assets
Assets held by DOL which are not available to DOL for obligation are
considered non-entity assets. DOL holds non-entity 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 for consumption,
regardless of whether the available resources have been obligated. Liabilities
are classified as not covered by budgetary resources if budgetary resources
are not available for consumption. 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. (See Notes 11 and 12.)
J. Advances from U.S. Treasury
The Benefits Revenue Act provides for repayable advances to DOL's Black
Lung Disability Trust Fund, in the event fund resources are not adequate
to meet fund obligations. Spending authority is derived from the Black
Lung Disability Trust Fund's indefinite authority to borrow. Repayable
advances are provided through transfers from the Advances to the Unemployment
Trust Fund and Other Funds appropriation, to the extent of borrowings
under the authority. Advances are repayable with interest at a rate determined
by the Secretary of the Treasury to be equal to the current average market
yield on outstanding marketable obligations of the United States with
remaining periods to maturity comparable to the anticipated period during
which the advance will be outstanding. Advances made prior to 1982 carried
rates of interest equal to the average rate borne by all marketable interest-bearing
obligations of the United States then forming a part of the public debt.
Outstanding advances bear interest rates ranging from 5.250% to 13.875%
at September 30, 2004 and 2003. Amounts in the trust fund shall be available,
as provided by appropriation acts, for the payment of interest on, and
the repayment of these repayable advances. Interest and principal are
paid to the general fund of the Treasury when the Secretary of the Treasury
determines that funds are available in the trust fund for such purposes.
(See Note 8.)
K. 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 non-vested leave are expensed as taken.
L. Accrued Benefits
The financial statements include a liability for unemployment, workers'
compensation and disability benefits payable from various DOL funds, as
discussed below. (See Note 9.)
1. Unemployment benefits payable
The Unemployment Trust Fund provides benefits to unemployed workers who
meet State and Federal eligibility requirements. Regular and extended
unemployment benefits are paid from State accounts within the Unemployment
Trust Fund, 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 Unemployment Trust Fund, financed by a Federal unemployment tax on
employer payrolls. Temporary extended unemployment benefits, which began
in 2002, are paid from the EUCA and are financed by Federal unemployment
tax and general fund appropriations. New claims for this program ended
in January 2004. Unemployment benefits to unemployed Federal workers are
paid from the Federal Employment Compensation Account within the Unemployment
Trust Fund. These benefit costs are reimbursed by the responsible Federal
agency. 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'
unemployment benefits to the extent of unpaid benefits for existing claims
filed during the current period, payable in the subsequent period.
2. Federal employees disability and 10(h) benefits payable
The Federal Employees' Compensation Act 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 other Federal agencies and for 10(h) benefits is accrued
to the extent of unpaid benefits applicable to the current period.
3. Black lung disability benefits payable
The Black Lung Disability Trust Fund and Special Benefits for Disabled
Coal Miners provide compensation and medical benefits for eligible coal
miners who are 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 Department of
Energy (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. DOL recognizes a liability
for disability benefits to the extent of unpaid benefits applicable to
the current period.
5. Longshore and harbor workers' and District of Columbia disability
benefits payable
The Longshore and Harbor Workers' Compensation Trust Fund and the District
of Columbia Workmens' Compensation Trust Fund provide compensation and
medical benefits for work related injuries to workers in certain maritime
employment and to employees of the District of Columbia, respectively.
DOL recognizes a liability for disability benefits payable by these funds
to the extent of unpaid benefits applicable to the current period.
M. Future Workers' Compensation Benefits
The financial statements include a 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 Federal
Employees' Compensation Act 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 a specific incurred period to predict
the ultimate payments related to that period.
The methodology provides for the effects of inflation and adjusts historical
payments to current year constant dollars by applying wage inflation factors
(cost of living adjustments or COLAs) and medical inflation factors (consumer
price index medical or CPIMs) to the calculation of projected benefits.
The compensation COLAs and CPIMs used in the projections for 2004 and
2003 were as follows:
|
2004 |
2003 |
2004 |
2003 |
FY |
COLA |
COLA |
CPIM |
CPIM |
2003 |
2.70% |
2.70% |
4.49% |
4.49% |
2004 |
2.13% |
2.30% |
4.10% |
3.21% |
2005 |
2.03% |
2.00% |
4.14% |
3.54% |
2006 |
2.73% |
1.83% |
3.96% |
3.64% |
2007 |
2.40% |
1.97% |
3.98% |
3.80% |
2008 |
2.40% |
2.17% |
3.99% |
3.92% |
2009+ |
2.40% |
2.17% |
4.02% |
3.92% |
Projected annual payments were discounted to present value based on OMB's
interest rate assumptions for ten year Treasury notes. For 2004, interest
rate assumptions were 4.9% in year one and 5.2% in year two and thereafter.
For 2003, interest rate assumptions were 3.8% in year one and 4.4% in
year two and thereafter. (See Note 10.)
N. Energy Employees Occupational Illness Compensation Benefits
The Energy Employees Occupational Illness Compensation Fund, established
under the authority of the Energy Employees Occupational Illness Compensation
Program Act of 2000 (EEOICPA), provides benefits to eligible current or
former employees of the Department of Energy (DOE) and its contractors,
or to certain survivors of those employees and contractors, as well as
benefits to certain beneficiaries of the Radiation Exposure Compensation
Act. 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. Compensation of $50,000 and payment of
medical expenses from the date a claim is filed are available to individuals
eligible for compensation under of the Radiation Exposure Compensation
Act.
DOL has recognized a $2.8 billion and $2.2 billion liability for estimated
future benefits payable by DOL at September 30, 2004 and 2003, respectively,
to eligible individuals under the EEOICPA. For fiscal year 2004, the undiscounted
liability is $4.4 billion discounted to a present value liability of $2.8
billion based on an interest rate of 5.24% projected over a sixteen year
period. For fiscal year 2003, the undiscounted liability is $3.0 billion
discounted to a present value liability of $2.2 billion based on an interest
rate 4.29% projected over a sixteen year period. The estimated liability
includes the expected lump sum 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 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.
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 2004, DOL's contributions
to the FEHBP and FEGLIP were $70.4 and $1.9 million, respectively. During
2003, DOL's contributions to the FEHBP and FEGLIP were $63.4 and $1.9
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 OPM, and is offset by DOL through recognition of an imputed
financing source. Using cost factors supplied by OPM, DOL recorded ORB
expense and imputed financing sources of $60.8 million in 2004 and $53.2
million in 2003.
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 CSRS Retirement
and Disability Fund. For employees participating in FERS, DOL withholds
0.8% of gross earnings, and matches the withholding with a 10.7% employer
contribution. This total is transferred to the Federal Employees' Retirement
Fund. The CSRS and FERS retirement funds are administered by the 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 FICA withholdings. DOL makes
matching contributions to FICA, recognized as operating expenses. DOL's
matching FICA contributions were $58.7 million in 2004 and $54.4 million
in 2003.
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 9% of their gross pay to the TSP, but
there is no departmental matching contribution. FERS participants may
contribute up to 14% of their gross pay to the TSP. For employees covered
under FERS, DOL contributes 1% of the employees' gross pay to the TSP.
DOL also matches 100% of the first 3% contributed and 50% of the next
2% contributed. DOL contributions to the TSP are recognized as current
operating expenses. The maximum amount that either FERS or CSRS employees
may contribute to the TSP in a calendar year is $13,000. Employee and
employer contributions to the TSP are transferred to the Federal Retirement
Thrift Investment Board.
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.
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 as non-exchange
revenue 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 13.)
R. Net Position
DOL's net position consists of the following:
1. 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 that appropriation
is closed, five years after the appropriations expire. Multi-year appropriations
remain available to DOL for obligation in future periods.
2. Cumulative results of operations
Cumulative results of operations includes 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.
S. Net Cost of Operations
1. Operating costs
Full operating costs are comprised of all direct costs consumed by the
program and those indirect costs which can be reasonably assigned or allocated
to the program. Full costs are reduced by exchange (earned) revenues to
arrive at the program's net operating 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 suborganization in Note 14 to the
financial statements. Note 14 also presents DOL's net operating costs
by the outcome goals adopted in the Department's Annual Performance Plan
for FY 2004 and DOL's net operating costs by budget function.
2. Earned revenue
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
due to the Federal Employees' Compensation Act 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
due to the Unemployment Trust Fund from Federal agencies for the cost
of unemployment benefits provided to or accrued on behalf of their employees.
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
Statement 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 transferred and appropriations
not available
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 not available through
rescission or cancellation.
2. Non-exchange revenue
Non-exchange revenues arise from the Federal government's power to demand
payments from and receive donations from the public. Non-exchange revenues
are recognized by DOL on the Consolidated Statement of Changes in Net
Position for the transfer of employer and excise taxes from the entities
collecting these taxes and for interest from investments, as discussed
below: (See Note 15.)
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 the receiving
entity.
- Employer taxes - continued
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 Unemployment Trust Fund.
State unemployment taxes are collected by each State and deposited in
separate State accounts within the Unemployment Trust Fund. 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 unemployment insurance program. State unemployment
taxes are restricted in their use to the payment of unemployment benefits.
The Unemployment Trust Fund, Longshore and Harbor Workers' Trust Fund,
District of Columbia Trust Fund, the Panama Canal Commission Compensation
Fund and the Energy Employees Occupational Illness Compensation Fund receive
interest on fund investments. The Unemployment Trust Fund receives interest
from states that had accounts with loans payable to the Federal unemployment
account 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.
The Longshore and Harbor Workers' Trust Fund and District of Columbia
Trust Fund receive non-exchange revenues from assessments levied on insurance
companies and self-insured employers. Assessments are recognized as non-exchange
revenues when due.
- Reimbursement of unemployment benefits
The Unemployment Trust Fund receives reimbursements from state and local
government entities and non-profit organizations for the cost of unemployment
benefits provided to their employees. These reimbursements are recognized
as other non-exchange revenue when due.
3. Transfers without reimbursement
Other transfers recognized as financing sources by DOL include the
transfer from various DOL general fund unexpended appropriation accounts
to the Working Capital Fund's cumulative results of operations. (See
Note 16.)
U. Other Financing Sources
Other financing sources include nonexchange revenue and other items that
do not represent budgetary resources.
1. Imputed financing
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 and Q.)
2. Transfers without reimbursement
Other transfers recognized as financing sources by DOL include the
transfer of property from the General Services Administration to the
Employment and Training Administration (ETA) to be used in ETA job training
programs. (See Note 16.)
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, ESA, and EBSA for regulatory violations, for ETA disallowed grant
costs assessed against canceled appropriations and for FECA administrative
costs assessed against government corporations in excess of amounts reserved
to finance capital improvements in the Federal Employees' Compensation
Act Special Benefit Fund. These collections are not available to the agencies
for obligation or expenditure. Penalties and other assessments are recognized
as custodial revenues when collected or subject to collection. The source
and disposition of these revenues are reported on the Consolidated Statements
of Custodial Activity. (See Note 18.)
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