FROM THE OFFICE OF PUBLIC AFFAIRS
February 27, 2004
JS-1204
U.S. Government Releases FY 2003 Financial Report
The Treasury Department and Office of Management and Budget today released the fiscal year 2003 Financial Report of the United States Government, a comprehensive look at the government's finances that complements the Budget of the U.S. Government. The report provides financial information for all aspects of the federal government.
"Just as we demand that public companies accurately report financial information to their shareholders, the federal government has an obligation to present its financial position in a complete and timely manner to America's taxpayers. We will continue to make improvements in reporting processes throughout the federal government to produce and report information that meets the highest standards," said Treasury Secretary Snow.
As part of our efforts to provide timely and accurate reporting, this year's Financial Report is being issued a month earlier than last year, a clear indication that the government is making progress in accelerating its reporting. For FY 2003, three-fourths of the major government agencies had completed their audited financial statements by the end of December. Even more important, eight agencies issued their statements by mid-November, only 45 days after the end of the fiscal year and one year ahead of 2004 reporting requirements. In addition, these eight agencies received unqualified opinions.
This year's report reflects information from the Department of Homeland Security with its transfer of 22 government agencies and offices and some 180,000 employees. The creation of the Department of Homeland Security in 2003 was the most significant transformation of the Federal Government since 1947 when the various branches of the Armed Forces were merged into a new Department of Defense.
An important reporting improvement this year was the adoption of a new accounting standard that requires recording military equipment and its related depreciation as an asset. The estimated total acquisition cost of this equipment was $1.2 trillion.
The 2003 financial results show an accrual-based net operating cost of $665 billion, compared to the reported budget deficit of $374.8 billion. The main difference between the two results is that the Financial Report includes post-employment actuarial costs for veterans' benefits and civilian and military retirees' pensions and health care. The government's largest liability for FY 2003 was debt held by the public, which was $3.9 trillion. The report's Management Discussion and Analysis section addresses the full effects of all significant liabilities, stewardship responsibilities, and other commitments.
While much progress had been made in the Federal Government's financial reporting this past year, some challenges remain. The General Accounting Office issued a disclaimer of opinion on the report and cited some material weaknesses in data and processes. We have been working to eliminate these problems; however, making these improvements will require a concerted effort by all government agencies and auditors, along with continued strong leadership from Treasury and OMB.
The full report can be found at http://www.fms.treas.gov/fr/
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