Introduction to Principal Financial Statements
The Principal Financial Statements have been prepared to report the financial position and results of operations of the U.S. Agency for International Development (USAID). The Statements have been prepared from the books and records of the Agency in accordance with formats prescribed by the Office of Management and Budget (OMB) in OMB Circular A-136, Financial Reporting Requirements. The Statements are in addition to financial reports prepared by the Agency in accordance with OMB and U.S. Department of the Treasury directives to monitor and control the status and use of budgetary resources, which are prepared from the same books and records. The Statements should be read with the understanding that they are for a component of the U.S. government, a sovereign entity. The Agency has no authority to pay liabilities not covered by budgetary resources. Liquidation of such liabilities requires enactment of an appropriation.
USAID’s Principal Financial Statements and additional information for FY 2007 and FY 2006 consist of the following:
The Consolidated Balance Sheet provides information on amounts available for use by USAID (assets); the amounts owed (liabilities); and amounts that comprise the difference between assets and liabilities, which is the Agency’s net financial position or equity, similar to the balance sheets reported in the private sector. Comparative data for FY 2006 are included and intra-Agency balances have been eliminated from the amounts presented.
The Consolidated Statement of Net Cost reports the components of the net costs of the Agency’s operations for the period. The net cost operations consist of the gross cost incurred by the Agency less any exchange (i.e. earned) revenue from its activities. Comparative data for FY 2006 are included and intra-Agency balances have been eliminated from the amounts presented.
The Consolidated Statement of Changes in Net Position reports the beginning net position, the transactions that affect net position for the period, and the ending net position. The components of net position are separately displayed in two columns, Cumulative Results of Operations and Unexpended Appropriations, to more clearly identify the components of and changes to net position. Comparative data for FY 2006 are included and intra-Agency balances have been eliminated from the amounts presented.
The Combined Statement of Budgetary Resources provides information on how budgetary resources were made available for the year and what the status of budgetary resources was at year-end. Information in this statement is reported on the budgetary basis of accounting. Comparative data for FY 2006 are included and intra-Agency balances have been eliminated from the amounts presented.
The Notes to Principal Financial Statements are an integral part of the financial statements. They provide explanatory information to help financial statement users to understand, interpret, and use the data presented. Comparative FY 2006 Note data may have been restated or recast to enable comparability with the FY 2007 presentation.
Required Supplementary Information provides details on USAID’s budgetary resources at year-end.
History of USAID’s Financial Statements
In accordance with the Government Management Reform Act of 1994 (GMRA), USAID has prepared consolidated fiscal year-end financial statements since FY 1996. The USAID Office of Inspector General (OIG) is required to audit these statements, related internal controls, and Agency compliance with applicable laws and regulations. From FY 1996 through FY 2000, the OIG was unable to express an opinion on USAID’s financial statements because the Agency’s financial management systems could not produce complete, reliable, timely, and consistent financial information.
For FY 2001, the OIG was able to express qualified opinions on three of the five principal financial statements of the Agency, while continuing to issue a disclaimer of opinion on the remaining two. For FY 2002, the OIG expressed unqualified opinions on four of the five principal financial statements and a qualified opinion on the fifth. This marked the first time since enactment of the GMRA that USAID received an opinion on all of its financial statements. We are extremely pleased that the efforts of both Agency and OIG staff have resulted in an unqualified opinion on all of the financial statements since FY 2003.
Effective for FY 2007, the Consolidated Statement of Financing is presented in Note 21, per OMB’s authority under Statements of Federal Financial Accounting Standard (SFFAS) #7, and is no longer considered a basic statement.
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