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Department of Commerce Performance and Accountability Report
Fiscal Year 2007

Financial Section

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Analysis of FY 2007 Financial Conditions and Results

 

Composition of Assets and Assets by Responsibility Segment

The he composition (by percentage) and distribution (by responsibility segment) of the Department’s assets remained consistent from FY 2006 to FY 2007.

Total assets amounted to $14.20 billion at September 30, 2007. Fund Balance with Treasury of $7.60 billion is the aggregate amount of funds available to make authorized expenditures and pay liabilities. General Property, Plant, and Equipment, Net of Accumulated Depreciation (General PP&E) of $5.73 billion includes $3.36 billion of Construction-in-progress, primarily of satellites and weather measuring and monitoring systems; $858 million of satellites and weather systems; $790 million of structures, facilities, and leasehold improvements; and $724 million of other General PP&E. Loans Receivable and Related Foreclosed Property, Net of $520 million primarily relates to NOAA’s direct loan programs. Accounts Receivable, Net of $102 million resulted primarily when the Department performed reimbursable services or sold goods. Other Assets of $252 million primarily includes Inventory, Materials, and Supplies, Net of $107 million, and Advances and Prepayments of $130 million.

Composition of the Department's Assets
Asset Percentage
Fund Balance with Treasury 53%
General Property, Plant, and Equipment, Net 40%
Loans Receivable and Related Foreclosed Property, Net  4%
Other  2%
Accounts Receivable, Net  1%

Assets by Responsibility Segment
Responsibility Segment Percentage
NOAA 65%
USPTO 11%
TA 10%
Others  9%
ESA  4%
Department Management  1%

Trends in Assets

Total Assets increased $840 million or 6 percent, from $13.36 billion at September 30, 2006 to $14.20 billion at September 30, 2007. Fund Balance with Treasury increased $365 million or 5 percent, from $7.23 billion to $7.60 billion, which primarily resulted from an increase in obligated balances not yet disbursed of $368 million. General PP&E, Net increased $431 million or 8 percent, from $5.30 billion to $5.73 billion, mainly due to an increase of $302 million in NOAA’s Satellites/Weather Systems Personal Property, Net. Loans Receivable and Related Foreclosed Property, Net increased $52 million or 11 percent, from $468 million to $520 million, primarily due to NOAA’s Fisheries Finance Traditional Loans, and Bering Sea and Aleutian Islands Non-Pollock Buyback Loans.

Trends in Total Assets
(In Millions)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007
$8,949 $9,399 $10,611 $10,994 $11,436 $11,758 $11,936 $12,730 $13,360 $14,201

Composition of Liabilities and Liabilities by Responsibility Segment

The composition (by percentage) and distribution (by responsibility segment) of the Department’s liabilities also remained consistent from FY 2006 to FY 2007.

Total liabilities amounted to $4.23 billion at September 30, 2007. Unearned Revenue of $1.43 billion represents the portion of monies received from customers for which goods and services have not been provided or rendered by the Department. Federal Employee Benefits of $626 million is composed of the actuarial present value of projected benefits for the NOAA Corps Retirement System ($416 million) and the NOAA Corps Post-retirement Health Benefits ($45 million), and Actuarial Federal Employees Compensation Act (FECA) Liability ($165 million), which represents the liability for future workers’ compensation benefits. Accounts Payable of $432 million consists primarily of amounts owed for goods, services, or capitalized assets received, progress on contract performance by others, and other expenses due. Accrued Grants of $405 million, which relates to a diverse array of financial assistance programs and projects, includes the Economic Development Administration’s (EDA) accrued grants of $260 million for their economic development and assistance funding to state and local governments. Debt to Treasury of $646 million consists of monies borrowed primarily for NOAA’s direct loan programs and the National Telecommunications and Information Administration’s (NTIA) Digital Television Transition and Public Safety Fund. Accrued Payroll and Annual Leave of $396 million includes salaries and wages earned by employees, but not disbursed as of September 30. Other Liabilities of $296 million primarily includes Downward Subsidy Reestimates Payable to Treasury of $37 million, Loan Guarantee Liabilities of $56 million, Environmental and Disposal Liabilities of $67 million, and Resources Payable to Treasury of $30 million.

Composition of the Department's Liabilities
Asset Percentage
Unearned Revenue 34%
Federal Employee Benefits 15%
Debt to Treasury 15%
Accrued Grants 10%
Accounts Payable 10%
Accrued Payroll and Annual Leave  9%
Other  7%

Liabilities by Responsibility Segment
Responsibility Segment Percentage
NOAA 39%
USPTO 27%
Others 16%
TA  8%
ESA  7%
Department Management  3%

Trends in Total Liabilities
(In Millions)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007
$2,259 $2,499 $2,864 $2,997 $3,134 $3,187 $3,250 $3,762 $3,891 $4,228

Trends in Liabilities

Total Liabilities increased $337 million or 9 percent, from $3.89 billion at September 30, 2006 to $4.23 billion at September 30, 2007. Unearned Revenue increased $37 million or 3 percent, from $1.39 billion to $1.43 billion, primarily due to increased unearned revenue from patent and trademark application and user fees that are pending action. Debt to Treasury increased $224 million or 53 percent, from $422 million to $646 million, mainly due to net borrowings in FY 2007 of $164 million for NTIA’s Digital Television Transition and Public Safety Fund and $63 million for NOAA’s direct loan programs. Accounts Payable increased $68 million or 19 percent, from $364 million to $432 million, primarily related to NOAA’s program support activities and transactions with the National Aeronautics and Space Administration (NASA).

Composition of and Trends in Financing Sources

Most of the Department’s Financing Sources, shown on the Consolidated Statements of Changes in Net Position, are obtained from Appropriations Received, net of reductions. Other typical Financing Sources include net transfers to and from other federal agencies without reimbursement, imputed financing sources from costs absorbed by other federal agencies, and Downward Subsidy Reestimates Payable to Treasury (a negative Financing Source).

The composition (by percentage) of the Department’s financing sources remained consistent from FY 2006 to FY 2007.

Total Financing Sources increased $20 million or 0.3 percent, from $6.92 billion for FY 2006 to $6.94 billion for FY 2007. Appropriations Received, net of reductions, decreased by $3 million or 0.1 percent. All other financing sources had a net increase of $23 million, from $263 million at September 30, 2006 to $286 million at September 30, 2007.

Composition of the Department's FY 2007 Financing Sources
Source Percentage
Appropriations Received 96%
Other  4%

FY 2007 Net Cost of Operations by Strategic Goal

FY 2007 Net Cost of Operations
Breakdown of Gross Costs and
Earned Revenue by Strategic Goal
(In Millions)
  Total
Earned Revenue		 Total
Gross Costs 		Totals
Strategic Goal 1 $  299 $(2,134) $(1,835)
Strategic Goal 2 $1,967 $(2,781) $  (814)
Strategic Goal 3 $  277 $(4,063) $(3,786)

In FY 2007, Net Cost of Operations amounted to $6.44 billion, which consists of Gross Costs of $8.98 billion less Earned Revenue of $2.54 billion.

Strategic Goal 1, Provide the Information and Tools to Maximize U.S. Competitiveness and Enable Economic Growth for American Industries, Workers, and Consumers, includes Net Program Costs of $948 million (Gross Costs of $1.20 billion less Earned Revenue of $250 million) for Census Bureau. The Census Bureau carries out the Decennial Census, periodic censuses, and demographic and other surveys, and prepares and releases targeted data products for economic and other programs. The ITA’s programs and activities also support Strategic Goal 1, with Net Program Costs of $422 million (Gross Costs of $436 million less Earned Revenue of $14 million). ITA assists the export growth of small and medium-sized businesses, enforces U.S. trade laws and trade agreements, monitors and maintains trading relationships with established markets, promotes new business in emerging markets, and improves access to overseas markets by identifying and pressing for the removal of trade barriers. Strategic Goal 1 also includes Net Program Costs of $257 million (Gross Costs of $275 million less Earned Revenue of $18 million) for EDA. EDA helps distressed communities address problems associated with long-term economic distress, as well as sudden and severe economic dislocations including recovering from the economic impacts of natural disasters, the closure of military installations and other federal facilities changing trade patterns, and the depletion of natural resources.

Strategic Goal 2, Foster Science and Technological Leadership by Protecting Intellectual Property (IP), Enhancing Technical Standards, and Advancing Measurement Science, includes Net Program Costs of $34 million (Gross Costs of $1.77 billion less Earned Revenue of $1.74 billion) for the U.S. Patent and Trademark Office’s (USPTO) patents and trademark programs, which includes processing patent applications and disseminating patent information. Through issuing patents, USPTO encourages technological advancement by providing incentives to invent, invest in, and disclose new technology. Strategic Goal 2 also includes Net Program Costs of $491 million (Gross Costs of $619 million less Earned Revenue of $128 million) for the National Institute of Standards and Technology’s (NIST) Measurement and Standards Laboratories. These laboratories are the stewards of the Nation’s measurement infrastructure, and provide measurement methods, reference materials, test procedures, instrument calibrations, fundamental data, and standards that comprise essential tools for research, production, and buyer-seller transactions.

Strategic Goal 3, Observe, Protect, and Manage the Earth’s Resources to Promote Environmental Stewardship, includes Net Program Costs of $1.43 billion (Gross Costs of $1.53 billion less Earned Revenue of $101 million) related to NOAA’s stewardship of ecosystems, which reflects NOAA’s mission to conserve, protect, manage, and restore fisheries, coastal, and ocean resources. The Department has a responsibility for stewardship of the marine ecosystem and for setting standards to protect and manage the shared resources and harvests of the oceans. The Department strives to balance sustainable development and healthy functioning marine ecosystems, and to conserve, protect, restore, and better manage resources.
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