FINANCIAL REPORT
NOTES TO PRINCIPAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY
The Department of Transportation (DOT or Department) serves as the focal point in the Federal Government’s coordinated national transportation policy. It is responsible for helping cities and States meet their local transportation needs through financial and technical assistance, ensuring the safety of all forms of transportation; protecting the interests of consumers; promoting international transportation agreements; and conducting planning and research for the future.
The Department is comprised of the Office of the Secretary and the DOT Operating Administrations, each having its own management and organizational structure, and collectively provides the necessary services and oversight to ensure the best transportation system possible. The Department’s consolidated financial statements present the financial data, including various trust funds, revolving funds, appropriations and special funds, of the following organizations:
- Office of The Secretary (OST) [includes OST Working Capital Fund]
- Federal Aviation Administration (FAA)
- Federal Highway Administration (FHWA)
- Federal Motor Carrier Safety Administration (FMCSA)
- Federal Railroad Administration (FRA)
- National Highway Traffic Safety Administration (NHTSA)
- Maritime Administration (MARAD)
- Federal Transit Administration (FTA)
- Surface Transportation Board (STB)
- Office of Inspector General (OIG)
- Pipeline and Hazardous Materials Safety Administration (PHMSA)
- Research and Innovative Technology Administration (RITA) [includes Volpe National Transportation System Center]
The Saint Lawrence Seaway Development Corporation (SLSDC) is also a DOT entity. However, since it is subject to separate reporting under the Government Corporation Control Act and the dollar value of its activities is not material to that of the Department’s, SLSDC’s financial data is not included in the DOT consolidated financial statements. However, condensed information about SLSDC’s financial position is presented in Note 24.
B. BASIS OF PRESENTATION
The Department’s consolidated financial statements have been prepared to report the financial position and results from operations of DOT, as required by the Chief Financial Officers Act of 1990 (CFO Act) and Title IV of the Government Management Reform Act of 1994 (GMRA). The statements have been prepared from the DOT books and records in accordance with Office of Management and Budget (OMB) form and content requirements for entity financial statements and DOT’s accounting policies and procedures. Unless otherwise noted, all dollar amounts are presented in thousands.
The Consolidated Balance Sheets present agency assets and liabilities, and the resulting agency net position (which is the difference between the two amounts). Agency assets substantially include entity assets (those which are available for use by the agency). Non-entity assets (those which are managed by the agency but not available for use in its operations) are immaterial. Agency liabilities include both those covered by budgetary resources (funded) and those not covered by budgetary resources (unfunded).
The Consolidated Statements of Net Cost present the gross costs of programs less earned revenue to arrive at the net cost of operations for both the programs and the agency as a whole.
The Consolidated Statements of Changes in Net Position report beginning balances, budgetary and other financing sources, and net cost of operations, to arrive at ending balances.
The Combined Statements of Budgetary Resources provide information about how budgetary resources were made available as well as their status at the end of the period. Recognition and measurement of budgetary information reported on this statement is based on budget terminology, definitions, and guidance in OMB Circular No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2008.
Since DOT custodial activity is incidental to Departmental operations and is not considered material to the consolidated financial statements taken as a whole, a Statement of Custodial Activity has not been prepared. However, sources and dispositions of collections have been disclosed in Note 22 to the consolidated financial statements.
The Department is required to be in substantial compliance with all applicable accounting principles and standards established, issued, and implemented by the Federal Accounting Standards Advisory Board (FASAB), which is recognized by the American Institute of Certified Public Accountants (AICPA) as the entity to establish Generally Accepted Accounting Principles (GAAP) for the Federal Government. The Federal Financial Management Improvement Act (FFMIA) of 1996 requires the Department to comply substantially with (1) Federal financial management systems requirements, (2) applicable Federal accounting standards, and (3) the U.S. Government Standard General Ledger requirements at the transaction level.
C. BUDGETS AND BUDGETARY ACCOUNTING
DOT follows standard Federal budgetary accounting policies and practices in accordance with OMB Circular No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2008. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds. Each year, Congress provides each Operating Administration within DOT appropriations to incur obligations in support of agency programs. For FY 2008 and FY 2007, the Department was accountable for trust fund appropriations, general fund appropriations, revolving fund activity and borrowing authority. DOT recognizes budgetary resources as assets when cash (funds held by Treasury) is made available through warrants and trust fund transfers.
Programs are financed from authorizations enacted in authorizing legislation and codified in Title 23 of the United States Code (U.S.C.). The DOT receives its budget authority in the form of contract authority and direct appropriations. Contract authority permits programs to incur obligations in advance of an appropriation, offsetting collections, or receipts. Subsequently, Congress provides an appropriation for the liquidation of the contract authority to allow payments to be made for the obligations incurred. Funds apportioned by state under Titles 23 and 49 of the U.S.C., Subtitle III by the Secretary of Transportation for activities in advance of the liquidation of appropriations are available for a specific time period.
D. BASIS OF ACCOUNTING
Transactions are generally recorded on both an accrual accounting basis and a budgetary basis. Under the accrual method, revenues are recognized when earned, and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds. All material intra-departmental transactions and balances have been eliminated for presentation on a consolidated basis. However, the Statement of Budgetary Resources is presented on a combined basis, in accordance with OMB Circular A-136.
Intragovernmental transactions and balances result from exchange transactions made between DOT and another Federal government reporting entity, while those classified as “with the public” result from exchange transactions between DOT and non-federal entities. For example, if DOT purchases goods or services from the public and sells them to another Federal entity, the costs would be classified as “with the public,” but the related revenues would be classified as “intragovernmental.” This could occur, for example, when DOT provides goods or services to another Federal government entity on a reimbursable basis. The purpose of this classification is to enable the Federal government to prepare consolidated financial statements, and not to match public and intragovernmental revenue with costs that are incurred to produce public and intragovernmental revenue.
DOT accounts for earmarked funds separately from other funds.
E. FUNDS WITH THE U.S. TREASURY AND CASH
DOT does not generally maintain cash in commercial bank accounts. Cash receipts and disbursements are processed by the U.S. Treasury. The funds with the U.S. Treasury are appropriated, revolving, and trust funds that are available to pay current liabilities and finance authorized purchases. Lockboxes have been established with financial institutions to collect certain payments, and these funds are transferred directly to Treasury on a daily (business day) basis. DOT does not maintain any balances of foreign currencies.
F. INVESTMENTS IN U.S. GOVERNMENT SECURITIES
Investments that consist of U.S. Government Securities are reported at cost and adjusted for amortized cost net of premiums or discounts. Premiums or discounts are amortized into interest income over the term of the investment using the interest or straight-line method. The Department’s intent is to hold investments to maturity. Investments, redemptions, and reinvestments are controlled and processed by the Department of the Treasury. The market value is calculated by multiplying the total number of shares by the market price on the last day of the fiscal year.
Securities with the Public include marketable Treasury securities that were purchased using deposit fund monies (Maritime Escrow Fund) and are required to be classified as securities with the public and are not considered intragovernmental investments. The funds can be utilized to cover the construction costs of vessels and serve as additional security in the event of a default on the guaranteed loan.
G. RECEIVABLES
Accounts receivable consist of amounts owed to the Department by other Federal agencies and the public. Federal accounts receivable are generally the result of the provision of goods and services to other Federal agencies and, with the exception of occasional billing disputes, are considered to be fully collectible. Public accounts receivable are generally the result of the provision of goods and services or the levy of fines and penalties from the Department’s regulatory activities. Amounts due from the public are presented net of an allowance for loss on uncollectible accounts, which is based on historical collection experience and/or an analysis of the individual receivables.
Loans are accounted for as receivables after funds have been disbursed. For loans obligated prior to October 1, 1991, loan principal, interest, and penalties receivable are reduced by an allowance for estimated uncollectible amounts. The allowance is estimated based on past experience, present market conditions, and an analysis of outstanding balances. Loans obligated after September 30, 1991, are reduced by an allowance equal to the present value of the subsidy costs (resulting from the interest rate differential between the loans and Treasury borrowing, the estimated delinquencies and defaults net of recoveries, the offset from fees, and other estimated cash flows) associated with these loans.
H. INVENTORY AND RELATED OPERATING MATERIALS AND SUPLIES
Inventory primarily consists of supplies that are for sale or used in the production of goods for sale. Operating materials and supplies primarily consist of unissued supplies that will be consumed in future operations. Valuation methods for supplies on hand at year-end include historical cost, last acquisition price, standard price/specific identification, standard repair cost, weighted average, and moving weighted average. Expenditures or expenses are recorded when the materials and supplies are consumed or sold. Adjustments for the proper valuation of reparable, excess, obsolete, and unserviceable items are made to appropriate allowance accounts.
I. PROPERTY AND EQUIPMENT
DOT agencies have varying methods of determining the value of general purpose property and equipment and how it is depreciated. DOT currently has a capitalization threshold of $200,000 for structures and facilities and for internal use software, and $25,000 for other property, plant and equipment. Capitalization at lesser amounts is permitted. Construction in progress is valued at direct (actual) costs plus applied overhead and other indirect costs as accumulated by the regional project material system. The system accumulates costs by project number assigned to the equipment or facility being constructed. The straight line method is generally used to depreciate capitalized assets.
DOT’s heritage assets, consisting of Union Station in Washington, DC, the Nuclear Ship Savannah and collections of maritime artifacts, are considered priceless and are not capitalized in the Consolidated Balance Sheets. (See Note 9 and the Required Supplementary Information section for additional information related to DOT’s heritage assets).
J. PREPAID AND DEFERRED CHARGES
Payments in advance of the receipt of goods and services are recorded as prepaid charges at the time of prepayment and recognized as expenses or capitalized, as appropriate, when the related goods and services are received.
K. LIABILITIES
Liabilities represent amounts expected to be paid as the result of a transaction or event that has already occurred. Liabilities covered by budgetary resources are liabilities incurred which are covered by realized budgetary resources as of the balance sheet date. Available budgetary resources include new budget authority, spending authority from offsetting collections, recoveries of unexpired budget authority through downward adjustments of prior year obligations, unobligated balances of budgetary resources at the beginning of the year or net transfers of prior year balances during the year, and permanent indefinite appropriations or borrowing authority. Unfunded liabilities are not considered to be covered by such budgetary resources. An example of an unfunded liability is actuarial liabilities for future Federal Employees’ Compensation Act payments. The Government, acting in its sovereign capacity, can abrogate liabilities arising from other than contracts.
L. CONTINGENCIES
The criteria for recognizing contingencies for claims are (1) a past event or exchange transaction has occurred as of the date of the statements; (2) a future outflow or other sacrifice of resources is probable; and (3) the future outflow or sacrifice of resources is measurable (reasonably estimatable). DOT recognizes material contingent liabilities in the form of claims, legal actions, administrative proceedings and environmental suits that have been brought to the attention of legal counsel, some of which will be paid by the Treasury Judgment Fund. It is the opinion of management and legal counsel that the ultimate resolution of these proceedings, actions and claims, will not materially affect the financial position or results of operations.
M. ANNUAL, SICK, AND OTHER LEAVE
Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. For each bi-weekly pay period, the balance in the accrued annual leave account is adjusted to reflect the latest pay rates and unused hours of leave. Liabilities associated with other types of vested leave, including compensatory, credit hours, restored leave, and sick leave in certain circumstances, are accrued based on latest pay rates and unused hours of leave. Sick leave is generally nonvested, except for sick leave balances at retirement under the terms of certain union agreements, including the National Air Traffic Controllers Association (NATCA) agreement, Article 25, Section 13. Funding will be obtained from future financing sources to the extent that current or prior year appropriations are not available to fund annual and other types of vested leave earned and not taken. Nonvested leave is expensed when used.
N. RETIREMENT PLAN
For DOT employees who participate in the Civil Service Retirement System (CSRS), DOT contributes a matching contribution equal to 7 percent of pay. On January 1, 1987, FERS went into effect pursuant to Public Law (P.L.) 99-335. Most employees hired after December 31, 1983, are automatically covered by FERS and Social Security. Employees hired prior to January 1, 1984, could elect to either join FERS and Social Security or remain in CSRS. A primary feature of FERS is that it offers a savings plan to which DOT automatically contributes 1 percent of pay and matches any employee contribution up to an additional 4 percent of pay. For most employees hired since December 31, 1983, DOT also contributes the employer’s matching share for Social Security.
Employing agencies are required to recognize pensions and other post retirement benefits during the employees’ active years of service. Reporting the assets and liabilities associated with such benefit plans is the responsibility of the administering agency, the Office of Personnel Management (OPM). Therefore, DOT does not report CSRS or FERS assets, accumulated plan benefits, or unfunded liabilities, if any, applicable to employees.
O. FEDERAL EMPLOYEES HEALTH BENEFIT (FEHB) PROGRAM
Most Department employees are enrolled in the FEHB Program, which provides post-retirement health benefits. OPM administers this program and is responsible for the reporting of liabilities. Employer agencies and covered employees are not required to make any contributions for post-retirement health benefits. OPM calculates the U.S. Government’s service cost for covered employees each fiscal year. The Department has recognized the entire service cost of these post-retirement benefits for covered employees as an imputed cost and an imputed financing source.
P. FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) PROGRAM
Most Department employees are entitled to participate in the FEGLI Program. Participating employees can obtain basic term life insurance where the employee pays two-thirds of the cost and the Department pays one-third of the cost. OPM administers this program and is responsible for the reporting of liabilities. OPM calculates the U.S. Government’s service cost for the post-retirement portion of the basic life coverage each fiscal year. Because OPM fully allocates the Department’s contributions for basic life coverage to the pre-retirement portion of coverage, the Department has recognized the entire service cost of the post-retirement portion of basic life coverage as an imputed cost and an imputed financing source.
Q. FEDERAL EMPLOYEE COMPENSATION BENEFITS (FECA)
A liability is recorded for actual and estimated future payments to be made for workers’ compensation pursuant to the Federal Employees’ Compensation Act (FECA). The actual costs incurred are reflected as a liability because DOT will reimburse the Department of Labor (DOL) two years after the actual payment of expenses. Future revenues will be used to reimburse DOL. The liability consists of (1) the net present value of estimated future payments calculated by the DOL, and (2) the unreimbursed cost paid by DOL for compensation to recipients under FECA.
R. ENVIRONMENTAL AND DISPOSAL LIABILITIES
DOT recognizes two types of environmental liabilities: unfunded environmental remediation and unfunded asset disposal liability. The liability for environmental remediation is an estimate of costs necessary to bring a known contaminated site into compliance with applicable environmental standards. The asset disposal liability includes both the cost to remove and dismantle an asset when that asset is no longer in service and the estimated cost that will be incurred to remove, contain, and/or dispose of hazardous materials. DOT estimates the environmental remediation and asset disposal costs at the time a DOT-owned asset is placed in service.
Estimating the Department’s environmental remediation liability requires making assumptions about future activities and is inherently uncertain. Costs for estimates of environmental and disposal liabilities are not adjusted for inflation and are subject to revision as a result of changes in technology and environmental laws and regulations.
S. USE OF ESTIMATES
Management has made certain estimates and assumptions when reporting assets, liabilities, revenue, and expenses. Actual results could differ from these estimates. Significant estimates underlying the accompanying financial statements include the allocation of trust fund receipts by Treasury’s Office of Tax Analysis (OTA), accruals of accounts and grants payable, accrued workers’ compensation, the allowance for doubtful accounts receivable, and accrued legal, contingent, environmental and disposal liabilities.
T. ALLOCATION TRANSFERS
DOT is a party to allocation transfers with other federal agencies as a transferring (parent) entity. Allocation transfers are legal delegations by one department of its authority to obligate budget authority and outlay funds to another department. A separate fund account (allocation account) is created in the U.S. Treasury as a subset of the parent fund account for tracking and reporting purposes. All allocation transfers of balances are credited to this account and subsequent obligations and outlays incurred by the receiving entity (child) are charged to this allocation account as the delegated activity is executed on the parent entity’s behalf. Generally, all financial activity related to these allocation transfers (e.g. budget authority, obligations, outlays) is reported in the financial statements of the parent entity, from which the underlying legislative authority, appropriations and budget apportionments are derived.
DOT allocates funds, as the parent, to the following non-DOT Federal agencies in accordance with applicable public laws and statutes: Bureau of Indian Affairs, Bureau of Reclamation, U.S. Forest Service, National Park Service, Bureau of Land Management, Fish and Wildlife Service, Department of the Army, Appalachian Regional Commission, Tennessee Valley Authority, U.S. Army Corps of Engineers, Internal Revenue Service, Department of Housing and Urban Development, Denali Commission, Department of Navy, and Department of Energy.
U. REVENUES AND OTHER FINANCING SOURCES
DOT receives the majority of the funding needed to support its programs through non-exchange earmarked excise tax revenues related to the Highway Trust Fund (HTF) and the Airport and Airway Trust Fund (AATF). DOT also receives annual, multi-year and no-year appropriations. Appropriations are recognized as revenues when related program and administrative expenses are incurred. Additional amounts are obtained from offsetting collections and user fees (e.g., landing and registry fees) and through reimbursable agreements for services performed for domestic and foreign governmental entities. Additional revenue is received from gifts of donors, sales of goods and services to other agencies and the public, the collection of fees and fines, interest/dividends on invested funds, loans and cash disbursements to banks. Interest income is recognized as revenue on the accrual basis rather than when received.
Excise taxes collected are initially deposited to the General Fund of the U.S. Treasury. The IRS does not receive sufficient information at the time the taxes are collected to determine how these payments should be distributed to specific earmarked funds. Therefore, the U.S. Treasury makes initial semi-monthly distributions to earmarked funds based on estimates prepared by OTA. These estimates are based on historical excise tax data applied to current excise tax receipts. When actual amounts are certified by the IRS, generally four months after each quarter-end, adjustments are made to the estimated amounts and the difference is adjusted as a transfer of resources to the HTF and AATF accounts.
The DOT September 30, 2008 financial statements reflect excise taxes certified by the IRS through June 30, 2008 and excise taxes estimated by OTA for the period July 1, 2008 to September 30, 2008 as specified by SFFAS Number 7, Accounting for Revenue and Other Financing Sources. Actual tax collections data for the quarter ended September 30, 2008 will not be available from the IRS until January 2009. Management does not believe that the actual tax collections for the quarter ended September 30, 2008 will be materially different than the OTA estimate.
V. RECLASSIFICATIONS
Certain reclassifications were made to the FY 2007 consolidated financial statement presentation to conform to that used in FY 2008.
NOTE 2. FUND BALLANCE WITH TREASURY
| FY 2008 | FY 2007 | |
|---|---|---|
| Fund Balances | ||
| Trust Funds | $6,283,435 | $5,593,882 |
| Revolving Funds | 636,287 | 643,114 |
| General Funds | 14,831,421 | 16,871,467 |
| Other Fund Types | 323,611 | 284,007 |
| Total | $22,074,754 | $23,392,470 |
| Status of Fund Balance with Treasury | ||
| Unobligated Balance | ||
| Available | $7,453,124 | $5,055,441 |
| Unavailable | 2,380,690 | 1,537,890 |
| Obligated Balance Not Yet Disbursed | 12,021,987 | 16,465,645 |
| Non-Budgetary Fund Balance with Treasury | 218,953 | 333,494 |
| Total | $22,074,754 | $23,392,470 |
Fund Balances with Treasury are the aggregate amounts of the entity’s accounts with Treasury for which the entity is authorized to make expenditures and pay liabilities. Other Fund Types include uncleared suspense accounts, which temporarily hold collections pending clearance to the applicable account, and deposit funds, which are established to record amounts held temporarily until ownership is determined.
The U.S. Treasury processes cash receipts and disbursements. DOT receives appropriations as budget authority, which permits it to incur obligations and make outlays (payments). In addition, DOT also receives contract authority to permit the incurrence of obligations in advance of an appropriation. The contract authority is subsequently replaced with the appropriation or the spending authority from offsetting collections to first cover and then liquidate the obligations. As a result, DOT does not have typical Fund Balance with Treasury amounts as funds remain invested in securities until needed to make payments.
NOTE 3. INVESTMENTS
| As of September 30, 2008 | Cost | Amortized (Premium) Discount |
Investments (Net) |
Market Value Disclosure |
|---|---|---|---|---|
| Intragovernmental Securities | ||||
| Marketable | $41,403 | $650 | $42,053 | $42,594 |
| Non-Marketable, Par Value | 20,484,837 | – | 20,484,837 | 20,484,837 |
| Non-Marketable, Market-Based | 1,087,268 | (533) | 1,086,735 | 1,120,012 |
| Subtotal | 21,613,508 | 117 | 21,613,625 | 21,647,443 |
| Accrued Interest | 85,906 | – | 85,906 | |
| Total Intragovernmental Securities | $21,699,414 | $117 | $21,699,531 | $21,647,443 |
| Securities with the Public | ||||
| Marketable | 28,535 | (250) | 28,285 | 28,355 |
| Subtotal | 28,535 | (250) | 28,285 | 28,355 |
| Accrued Interest | 422 | – | 422 | |
| Total Securites with the Public | 28,957 | (250) | 28,707 | 28,355 |
| As of September 30, 2007 | ||||
| Intragovernmental Securities | ||||
| Marketable | $35,300 | $(371) | $34,929 | $35,665 |
| Non-Marketable, Par Value | 20,135,487 | – | 20,135,487 | 20,135,487 |
| Non-Marketable, Market-Based | 886,403 | – | 886,403 | 895,914 |
| Subtotal | 21,057,190 | (371) | 21,056,819 | 21,067,066 |
| Accrued Interest | 87,264 | – | 87,264 | |
| Total Intragovernmental Securities | $21,144,454 | $(371) | $21,144,083 | $21,067,066 |
| Securities with the Public | ||||
| Marketable | $75,252 | $(1,167) | $74,085 | $74,205 |
Investments include non-marketable par value and market-based Treasury securities and marketable securities issued by the Treasury and other Federal entities. Non-marketable par value Treasury securities are issued by the Bureau of Public Debt to Federal accounts and are purchased and redeemed at par exclusively through Treasury’s Federal Investment Branch. Non-marketable market-based Treasury securities are also issued by the Bureau of Public Debt to Federal accounts. They are not traded on any securities exchange, but mirror the prices of particular Treasury securities trading in the Government securities market. Marketable Federal securities can be bought and sold on the open market.
The Federal Government does not set aside assets to pay future benefits or other expenditures associated with earmarked funds. The cash receipts collected from the public for an earmarked fund are deposited in the U.S. Treasury, which uses the cash for Government purposes. Non-Marketable par value Treasury securities are issued to DOT as evidence of these receipts. These securities provide DOT with authority to draw upon the U.S. Treasury to make future expenditures. When DOT requires redemption of these securities to make expenditures, the Government finances those expenditures out of accumulated cash balances by raising taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures. This is the same way that the Government finances all other expenditures.
Treasury securities are an asset of DOT and a liability of the U.S. Treasury. Because the DOT and the U.S. Treasury are both a part of the Government, these assets and liabilities offset each other from the standpoint of the Government as a whole. For this reason, they do not represent an asset or liability in the U.S. Government-wide financial statements.
NOTE 4. ACCOUNTS RECEIVABLE
| As of September 30, 2008 | Gross Amount Due |
Allowance for Uncollectible Amounts |
Net Amount Due |
|---|---|---|---|
| Intragovernmental | |||
| Accounts Receivable | $235,620 | $– | $235,620 |
| Accrued Interest | 18 | – | 18 |
| Total Intragovernmental | 235,638 | – | 235,638 |
| Public | |||
| Accounts Receivable | 85,141 | (17,722) | 67,419 |
| Accrued Interest | 896 | (463) | 433 |
| Total Public | 86,037 | (18,185) | 67,852 |
| Total Receivables | $321,675 | $(18,185) | $303,490 |
| As of September 30, 2007 | |||
| Intragovernmental | |||
| Accounts Receivable | $509,692 | $– | $509,692 |
| Public | |||
| Accounts Receivable | 123,422 | (9,345) | 114,077 |
| Accrued Interest | 41 | – | 41 |
| Total Public | 123,463 | (9,345) | 114,118 |
| Total Receivables | $633,155 | $(9,345) | $623,810 |
NOTE 5. OTHER ASSETS
| FY 2008 | FY 2007 | |
|---|---|---|
| Intragovernmental | ||
| Advances and Prepayments | $38,915 | $1,739 |
| Other | – | 714 |
| Total Intragovernmental | $38,915 | $2,453 |
| Public | ||
| Advances to the States for the Right of Way | $91,529 | $98,861 |
| Other Advances and Prepayments | 90,646 | 112,029 |
| Other | 317 | 154 |
| Total Public | $182,492 | $211,044 |
Intragovernmental Other Assets are comprised of advance payments to other Federal Government entities for agency expenses not yet incurred and for goods and services not yet received and undistributed assets and payments for which DOT is awaiting documentation. Public Other Assets are comprised of advances to States and advances to Amtrak, employees and contractors.
NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS
The Federal Credit Reform Act of 1990 divides direct loans and loan guarantees into two groups:
- Pre-1992 the direct loan obligations or loan guarantee commitments made prior to FY 1992 and the resulting direct loans obligations or loan guarantees, and
- Post-1991 the direct loan obligations or loan guarantee commitments made after FY 1991 and the resulting direct loans or loan guarantees.
The Act provides that, for direct loan obligations or loan guarantee commitments made after FY 1991, the present value of subsequent subsidy costs (which arises from interest rate differentials, interest subsidies, delinquencies and defaults, fee offsets, and other cash flows) be recognized in the year the direct or guaranteed loan is disbursed. Direct loans are reported net of an allowance for subsidy at present value, and loan guarantee liabilities are reported at present value. Foreclosed property is valued at the net realizable value. Loans receivable, net, or their value of assets related to direct loans, is not the same as the proceeds that would be expected to be received from selling the loans. DOT has calculated the allowance for pre-1992 loans using the allowance for loss method.
DOT administers the following direct loan and/or loan guarantee programs:
- The Railroad Rehabilitation Improvement Program is used to acquire, improve, or rehabilitate intermodal or rail equipment or facilities, including track, components of tract, bridges, yards, buildings, and shops; refinance outstanding debt incurred; and develop or establish new intermodal or railroad facilities.
- The Transportation Infrastructure Finance Innovation Act (TIFIA) Loan Program provides Federal credit assistance to major transportation investments of critical national importance such as highway, transit, passenger rail, certain freight facilities, and certain port projects with regional and national benefits. The TIFIA credit program is designed to fill market gaps and leverages substantial private co-investment by providing supplemental and subordinate capital.
- The Federal Ship Financing Fund (Title XI) offers loan guarantees to qualified shipowners and shipyards. The guarantee provides the benefit of long term financing at stable interest rates to the approved applicants.
- The OST Minority Business Resource Center Guaranteed Loan Program helps small businesses gain access to the financing needed to participate in transportation-related contracts.
An analysis of loans receivable, allowance for subsidy costs, liability for loan guarantees, foreclosed property, modifications and reestimates associated with direct loans and loan guarantees is provided in the following sections:
| FY 2008 Loans Receivable, Gross |
Interest Receivable |
Allowance for Loan Losses |
Value of Assets Related to Direct Loans, Net |
|
|---|---|---|---|---|
| Direct Loan Programs | ||||
| 1. Railroad Rehabilitation Improvement Program | $13,757 | $154 | $– | $13,911 |
| Direct Loan Programs | FY 2008 Loans Receivable, Gross |
Interest Receivable |
Allowance for Subsidy Cost(Present Value) |
Value of Assets Related to Direct Loans, Net |
|---|---|---|---|---|
| Obligated After FY 1991 | ||||
| 1. Railroad Rehabilitation Improvement Program | $289,862 | $552 | $(2,408) | $288,006 |
| 2. TIFIA Loans | 1,488,123 | – | (158,716) | 1,329,407 |
| Total | $1,777,985 | $552 | $(161,124) | $1,617,413 |
| FY 2007 Loans Receivable, Gross |
Interest Receivable |
Allowance for Loan Losses |
Value of Assets Related to Direct Loans, Net |
|
|---|---|---|---|---|
| Direct Loan Programs | ||||
| 1. Railroad Rehabilitation Improvement Program | $17,479 | $90 | $– | $17,569 |
| Obligated After FY 1991 | ||||
| 1. Railroad Rehabilitation Improvement Program | $497,166 | $– | $9,889 | $507,055 |
| 2. TIFIA Loans | 377,058 | – | (39,998) | 337,060 |
| Total | $874,224 | $– | $(30,109) | $844,115 |
| FY 2008 | FY 2007 | |
|---|---|---|
| Direct Loan Programs | ||
| 1. Railroad Rehabilitation Improvement Program | $70,027 | $99,832 |
| 2. TIFIA Loans | 1,079,316 | 246,033 |
| Total | $1,149,343 | $345,865 |
TIFIA loan disbursements increased significantly in FY 2008 over 2007 levels, primarily due to loan disbursements for three large surface transportation system projects totaling $950 million.
Subsidy Expense for Direct Loans by Program and Component
| FY 2008 Interest Differential |
Default | Fees and Other Collections |
Other Subsidy Costs |
Total | |
|---|---|---|---|---|---|
| Direct Loan Programs | |||||
| 1. Railroad Rehabilitation Improvement Program | $– | $– | $1,409 | $– | $1,409 |
| 2. TIFIA Loans | – | 118,763 | – | – | 118,763 |
| Total | $– | $118,763 | $1,409 | $– | $120,172 |
| FY 2007 Interest Differential |
Default | Fees and Other Collections |
Other Subsidy Costs |
Total | |
|---|---|---|---|---|---|
| Direct Loan Programs | |||||
| 1. Railroad Rehabilitation Improvement Program | $– | $– | $1,786 | $– | $1,786 |
| 2. TIFIA Loans | – | 27,576 | – | – | 27,576 |
| Total | $– | $27,576 | $1,786 | $– | $29,362 |
| FY 2008 Total Modifications |
Interest Rate Re-estimates |
Technical Re-estimates |
Total Re-estimates |
|
|---|---|---|---|---|
| Direct Loan Programs | ||||
| 1. Railroad Rehabilitation Improvement Program | $– | $– | $13,801 | $13,801 |
| 2. TIFIA Loans | – | – | 11,944 | 11,944 |
| Total | $– | $– | $25,745 | $25,745 |
| FY 2007 Total Modifications |
Interest Rate Re-estimates |
Technical Re-estimates |
Total Re-estimates |
|
|---|---|---|---|---|
| Direct Loan Programs | ||||
| 1. Railroad Rehabilitation Improvement Program | $(1,745) | $– | $1,567 | $1,567 |
| 2. TIFIA Loans | 2,959 | 1,328 | 7,099 | 8,427 |
| Total | $1,214 | $1,328 | $8,666 | $9,994 |
| FY 2008 | FY 2007 | |
|---|---|---|
| Direct Loan Programs | ||
| 1. Railroad Rehabilitation Improvement Program | $15,210 | $1,608 |
| 2. TIFIA Loans | 130,707 | 2,959 |
| Total | $145,917 | $4,567 |
| FY 2008 Interest Differential |
Default | Fees and Other Collections |
Other | Total | |
|---|---|---|---|---|---|
| Direct Loan Programs | |||||
| 1. Railroad Rehabilitation Improvement Program | -0.95% | 3.85% | -2.90% | 0.00% | 0.00% |
| 2. TIFIA Loans | -0.04% | 5.04% | 0.00% | 0.00% | 5.00% |
| Total | -0.99% | 8.89% | -2.90% | 0.00% | 5.00% |
| Beginning Balance, Changes, and Ending Balance | FY 2008 | FY 2007 |
|---|---|---|
| Beginning Balance of the Subsidy Cost Allowance | $30,109 | $(570) |
| Add: Subsidy Expense for Direct Loans Disbursed during the Reporting Years by Component | ||
| Default Costs (net of recoveries) | 118,763 | – |
| Fees and Other Collections | 1,409 | – |
| Other Subsidy Costs | – | 29,362 |
| Total of the Above Subsidy Expense Components | 120,172 | 29,362 |
| Adjustments | ||
| Loan Modifications | – | 3,207 |
| Fees Received | – | (55) |
| Subsidy Allowance Amortization | (14,902) | (8,518) |
| Ending Balance of the Subsidy Cost Allowance Before Reestimates | 135,379 | 23,426 |
| Add or Subtract Subsidy Reestimates by Component: | ||
| Technical/Default Reestimate | 25,745 | 6,683 |
| Total of the Above Reestimate Components | 25,745 | 6,683 |
| Ending Balance of the Subsidy Cost Allowance | $161,124 | $30,109 |
| Loan Guarantee Programs | FY 2008 Defaulted Guaranteed Loans Receivable, Gross |
Interest Receivable |
Foreclosed Property |
Allowance for Subsidy |
Value of Assets Related to Default Guaranteed Loans Receivable, Net |
|---|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $43,680 | $600 | $– | $(5,320) | $38,960 |
| Loan Guarantee Programs | FY 2007 Defaulted Guaranteed Loans Receivable, Gross |
Interest Receivable |
Foreclosed Property |
Allowance for Subsidy |
Value of Assets Related to Default Guaranteed Loans Receivable, Net |
|---|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $7,501 | $200 | $19,000 | $1,500 | $28,201 |
| Loan Guarantee Programs | Outstanding Principal of Guaranteed Loans, Face Value |
Amount of Outstanding Principal Guaranteed |
|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $2,421,273 | $2,421,273 |
| 4. OST Minority Business Resource Center | 3,350 | 2,513 |
| Total | $2,424,623 | $2,423,786 |
| 2008 Outstanding Principal of Guaranteed Loans, Face Value |
Amount of Outstanding Principal Guaranteed |
|
|---|---|---|
| 4. OST Minority Business Resource Center | $2,600 | $1,950 |
| Loan Guarantee Programs | 2007 Outstanding Principal of Guaranteed Loans, Face Value |
Amount of Outstanding Principal Guaranteed |
|---|---|---|
| 4. OST Minority Business Resource Center | $3,415 | $2,651 |
| Total | $3,415 | $2,651 |
| Loan Guarantee Programs | FY 2008 Liabilities for Post-1991 Guarantees, Present Value |
|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $257,929 |
| 4. OST Minority Business Resource Center | 121 |
| Total | $258,050 |
| Loan Guarantee Programs | 2008 Interest Supplements |
Defaults | Fees and Other Collections |
Other | Total |
|---|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $– | $38,599 | $(23,108) | $– | $15,491 |
| 4. OST Minority Business Resource Center | – | 53 | – | – | 53 |
| Total | $– | $38,652 | $(23,108) | $– | $15,544 |
| Loan Guarantee Programs | 2008 Interest Supplements |
Defaults | Fees and Other Collections |
Other | Total |
|---|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $– | $891 | $744 | $20,499 | $22,164 |
| 4. OST Minority Business Resource Center | 62 | – | – | – | 62 |
| Total | $62 | $891 | $774 | $20,499 | $22,226 |
| Loan Guarantee Programs | FY 2008 Total Modifications |
Interest Rate Re-estimates |
Technical Re-estimates |
Total Re-estimates |
|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $– | $– | $(106,400) | $(106,400) |
| 4. OST Minority Business Resource Center | – | – | (153) | (153) |
| Total | $– | $– | $(106,553) | $(106,553) |
| Loan Guarantee Programs | FY 2007 Total Modifications |
Interest Rate Re-estimates |
Technical Re-estimates |
Total Re-estimates |
|---|---|---|---|---|
| 3. Federal Ship Financing Fund (Title XI) | $(31,096) | $– | $31,096 | $31,096 |
| 4. OST Minority Business Resource Center | – | 12,992 | (15,208) | (2,216) |
| Total | $(31,096) | $12,992 | $15,888 | $28,880 |
| FY 2008 | FY 2007 | |
|---|---|---|
| Loan Guarantee Programs | ||
| 3. Federal Ship Financing Fund (Title XI) | $(90,909) | $22,164 |
| 4. OST Minority Business Resource Center | (100) | (2,154) |
| Total | $(91,009) | $20,010 |
| FY 2008 Interest Supplements |
Default | Fees and Other Collections |
Other | Total | |
|---|---|---|---|---|---|
| Loan Guarantee Programs | |||||
| 3. Federal Ship Financing Fund (Title XI) | 0.00% | 9.23% | -4.88% | 0.00% | 4.35% |
| 4. OST Minority Business Resource Center | 0.00% | 2.03% | 0.00% | 0.00% | 2.03% |
| Total | 0.00% | 11.26% | -4.88% | 0.00% | 6.38% |
| Beginning Balance, Changes, and Ending Balance | FY 2008 | FY 2007 |
|---|---|---|
| Beginning Balance of the Loan Guarantee Liability | $336,626 | $345,864 |
| Add: Subsidy Expense for Guaranteed Loans Disbursed during the Reporting Years by Component | ||
| Default Costs (net of recoveries) | 38,652 | 571 |
| Fees and Other Collections | (23,108) | 774 |
| Other Subsidy Costs | – | 3,299 |
| Total of the Above Subsidy Expense Components | 15,544 | 4,644 |
| Adjustments | ||
| Interest Accumulation on the Liability Balance | 11,910 | 17,216 |
| Other | 523 | – |
| Ending Balance of the Loan Guarantee Liability Before Reestimates | 364,603 | 367,724 |
| Add or Subtract Subsidy Reestimates by Component: | ||
| Technical/Default Reestimate | (106,553) | (31,098) |
| Total of the Above Reestimate Components | (106,553) | (31,098) |
| Ending Balance of the Loan Guarantee Liability | $258,050 | $336,626 |
Interest on the loans is accrued based on the terms of the loan agreement. DOT does not accrue interest on non-performing loans that have filed for bankruptcy protection. DOT management considers administrative costs to be insignificant.
The downward reestimate on the Federal Ship Financing Fund (Title XI) was a result of significant reductions in principal outstanding each year on the loan guarantees as well as the reassessment of risk levels on high risk loans. The economic assumptions of the TIFIA loan program has been revised resulting in an upward reestimate of costs over the life of the loan. The Railroad Rehabilitation Improvement Program’s upward reestimate was a result of an update for change in the discount rate between time of loan obligation and disbursement and an update for actual cash flows and changes in technical assumptions.
The downturn in economy has led to volatility in financial markets which could affect loan repayments under direct and loan guarantee programs. Under the Federal Credit Reform Act, upward reestimates are automatically covered by permanent indefinite budget authority, which ensures DOT will have sufficient resources to cover any losses incurred in its existing portfolio without further action by Congress. DOT continues to evaluate the risks to affected markets in light of evolving economic conditions, but the impact of such risks on DOT’s loan and loan guarantee portfolio reserves, if any, cannot be fully known at this time. The sufficiency of DOT’s portfolio reserves at September 30, 2008 will largely depend on future economic and market conditions and could differ from current estimates.
NOTE 7. INVENTORY AND RELATED PROPERTY
| Cost | Allowance for Loss |
Net | |
|---|---|---|---|
| As of September 30, 2008 | |||
| Inventory: | |||
| Inventory Held for Current Sale | $82,350 | $(96) | $82,254 |
| Excess, Obsolete and Unserviceable Inventory | 19,583 | (19,583) | – |
| Inventory Held for Repair | 487,117 | (96,240) | 390,877 |
| Other | 26,299 | (10,591) | 15,708 |
| Total Inventory | $615,349 | $(126,510) | $488,839 |
| Operating Materials and Supplies: | |||
| Items Held for Use | $229,430 | $(4,856) | $224,574 |
| Items Held in Reserve for Future Use | 65,903 | – | 65,903 |
| Excess, Obsolete and Unserviceable Items | 526 | (526) | – |
| Items Held for Repair | 41,024 | (17,972) | 23,052 |
| Total Operating Materials & Supplies | $336,883 | $(23,354) | $313,529 |
| Total Inventory and Related Property | $802,368 | ||
| As of September 30, 2007 | |||
| Inventory: | |||
| Inventory Held for Current Sale | $82,975 | $(6,631) | $76,344 |
| Inventory Held for Repair | 466,346 | (95,600) | 370,746 |
| Other | 35,992 | (17,996) | 17,996 |
| Total Inventory | $585,313 | $(120,227) | $465,086 |
| Operating Materials and Supplies: | |||
| Items Held for Use | $233,470 | $(3,923) | $229,547 |
| Items Held in Reserve for Future Use | 69,998 | – | 69,998 |
| Excess, Obsolete and Unserviceable Items | 480 | (480) | – |
| Items Held for Repair | 38,385 | (17,256) | 21,129 |
| Total Operating Materials & Supplies | $342,333 | $(21,659) | $320,674 |
| Total Inventory and Related Property | $785,760 | ||
NOTE 8. GENERAL PROPERTY, PLANT AND EQUIPMENT
| Major Classes | Service Life |
Acquisition Value |
Accumulated Depreciation |
Book Value |
|---|---|---|---|---|
| As of September 30, 2008 | ||||
| Land and Improvements | 30 | $103,056 | $(1,084) | $101,972 |
| Buildings and Structures | 15-40 | 5,054,765 | (2,665,384) | 2,389,381 |
| Furniture and Fixtures | 15-20 | 67,509 | (65,050) | 2,459 |
| Equipment | 15-20 | 18,797,474 | (9,843,868) | 8,953,606 |
| ADP Software | 15-20 | 252,778 | (208,227) | 44,551 |
| Assets Under Capital Lease | 6-10 | 166,387 | (125,137) | 41,250 |
| Leasehold Improvements | 40 | 90,392 | (43,519) | 46,873 |
| Aircraft | 40 | 401,614 | (314,282) | 87,332 |
| Ships and Vessels | 11-20 | 1,656,764 | (1,241,137) | 415,627 |
| Small Boats | 20 | 17,724 | (15,180) | 2,544 |
| Construction in Progress | 2,409,108 | – | 2,409,108 | |
| Property Not in Use | 95,013 | (77,148) | 17,865 | |
| Total | $29,112,584 | $(14,600,016) | $14,512,568 | |
| As of September 30, 2007 | ||||
| Land and Improvements | 30 | $208,742 | $(89,679) | $119,063 |
| Buildings and Structures | 15-40 | 4,823,882 | (2,485,100) | 2,338,782 |
| Equipment | 15-20 | 17,666,943 | (9,054,817) | 8,612,126 |
| ADP Software | 15-20 | 208,130 | (180,104) | 28,026 |
| Assets Under Capital Lease | 6-10 | 166,387 | (111,373) | 55,014 |
| Leasehold Improvements | 40 | 67,494 | (35,541) | 31,953 |
| Aircraft | 40 | 401,614 | (297,508) | 104,106 |
| Ships and Vessels | 11-20 | 1,656,764 | (1,176,540) | 480,224 |
| Small Boats | 20 | 17,564 | (14,712) | 2,852 |
| Construction in Progress | 2,892,154 | – | 2,892,154 | |
| Property Not in Use | 93,593 | (74,003) | 19,590 | |
| Total | $28,203,267 | $(13,519,377) | $14,683,890 | |
NOTE 9. STEWARDSHIP PROPERTY, PLANT AND EQUIPMENT
PERSONAL PROPERTY HERITAGE ASSETS
Implied within the Maritime Administration’s mission is the promotion of the nation’s rich maritime heritage. One aspect of this entails the collection, maintenance and distribution of maritime artifacts removed from agency-owned ships prior to their disposal. As ships are assigned to a non-retention status, artifact items are collected, inventoried, photographed and relocated to secure shore-side storage facilities. This resulting inventory is made available on a long-term loan basis to qualified organizations for public display purposes.
MARAD artifacts and other collections are generally on loan to single purpose memorialization and remembrance groups, such as AMVets and preservation societies. MARAD maintains a web-based inventory system that manages the artifact loan process. The program also supports required National Historical Preservation Act processing prior to vessel disposal. Funding for the maintenance of heritage items is typically the responsibility of the organization requesting the loan. The artifacts and other collections are composed of ships’ operating equipment obtained from obsolete ships. The ships are inoperative and in need of preservation and restoration. As all items are durable and restorable, disposal is not a consideration. A total of 604 units of artifacts and other collections were collected as of September 30, 2008 and 598 units were collected as of September 30, 2007.
REAL PROPERTY HERITAGE ASSETS
Washington’s Union Station support’s DOT’s mobility mission, facilitating the movement of intercity and commuter rail passengers through the Washington DC metropolitan area. The Federal Railroad Administration (FRA) has an oversight role in the management of Washington’s Union Station. FRA received title through legislation, and sublets the property to Union Station Venture Limited which manages the property.
Washington’s Union Station is an elegant and unique turn-of-the-century rail station in which a wide variety of elaborate, artistic workmanship characteristic of the period is found. Union Station is listed on the National Register of Historic Places. The station consists of the renovated original building and a parking garage, which was added by the National Park Service.
The Nuclear Ship Savannah is the world’s first nuclear-powered merchant ship. It was constructed as a joint project of the Maritime Administration and the Atomic Energy Commission (AEC) as a signature element of President Eisenhower’s “Atoms for Peace” program. In 1965 the AEC issued a commercial operating license and ended its participation in the joint program. The ship remains licensed and regulated by the U.S. Nuclear Regulatory Commission (successor to the AEC). The Nuclear Ship Savannah is listed on the National Register of Historic Places. The ship is a boldly-styled passenger/cargo vessel powered by a nuclear reactor.
Actions taken by the Maritime Administration since 2006 have stabilized the ship and rehabilitated portions of its interior for work-day occupancy by staff and crew. The ship is currently located in Baltimore, MD, where it is being prepared for continued “SAFSTOR” retention under the provisions of its NRC license.
NOTE 10. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES
| Intragovernmental | FY 2008 | FY 2007 |
|---|---|---|
| Debt | $– | $1,726 |
| Other Liabilities (Note 15) | 364,516 | 440,686 |
| Total Intragovernmental | 364,516 | 442,412 |
| Federal Employee Benefits Payable | 984,710 | 946,408 |
| Environmental and Disposal Liabilities (Note 13) | 828,757 | 852,366 |
| Other Liabilities | 864,520 | 782,120 |
| Total Liabilities Not Covered by Budgetary Resources | 3,042,503 | 3,023,306 |
| Total Liabilities Covered by Budgetary Resources | 11,774,151 | 11,051,917 |
| Total Liabilities | $14,816,654 | $14,075,223 |
NOTE 11. DEBT
| FY 2007 Beginning Balance |
FY 2007 Net Borrowing |
FY 2007 Ending Balance |
FY 2008 Net Borrowing |
FY 2008 Ending Balance |
|
|---|---|---|---|---|---|
| Intragovernmental Debt | |||||
| Debt to the Treasury | $836,680 | $201,623 | $1,038,303 | $722,458 | $1,760,761 |
| Debt to the Fed Financing Bank | 2,677 | (219) | 2,458 | (234) | 2,224 |
| Total Intragovernmental Debt | $839,357 | $201,404 | $1,040,761 | $722,224 | $1,762,985 |
NOTE 12. FEDERAL EMPLOYEE BENEFITS PAYABLE
| 2008 | 2007 | |
|---|---|---|
| Intragovernmental Liability for FECA (Note 15) | $221,586 | $214,787 |
| Expected Future Liability for FECA | 984,710 | 946,408 |
| Total Federal Employee Benefits Payable | $1,206,296 | $1,161,195 |
The Department of Labor calculates the FECA liability for DOT as a whole. FECA liabilities include the expected liability for death, disability, medical and miscellaneous costs for approved compensation cases, plus a component for incurred but not reported claims. The estimated liability is not covered by budgetary resources and thus will require future appropriated funding.
The intragovernmental FECA liability represents amounts billed to DOT by the DOL for FECA payments made on DOT’s behalf. Funding for the liability will be made provided by future appropriations. The intragovernmental amount is not an actuarial liability.
NOTE 13. ENVIRONMENTAL AND DISPOSAL LIABILITIES
| September 30, 2008 | September 30, 2007 | |
|---|---|---|
| Public | ||
| Environmental Remediation | $464,081 | $316,748 |
| Asset Disposal | 364,676 | 535,618 |
| Total Public | $828,757 | $852,366 |
Environmental remediation generally occurs under the Resource Conservation and Recovery Act of 1976 (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or Superfund), or the Toxic Substances Control Act (TSCA). Environmental remediation includes the fuel storage tank program, fuels, solvents, industrial, and chemicals, and other environmental cleanup activities associated with normal operations or the result of an accident. The increase or decrease in the annual liability is charged to the current year expense.
As of September 30, 2008 and 2007, DOT’s environmental remediation liability primarily includes the removal of contaminants on the Nuclear Ship Savannah, containment of exfoliating ship paint for the non-retention ships in the National Defense Reserve Fleet (Fleet), and remediation at various sites managed by the FAA and MARAD.
DOT has not recorded a liability for potential contamination at a MARAD site in Portland, Oregon. Because the remedial investigation/feasibility study has not been completed and because MARAD is listed as one of hundreds of potentially responsible parties, it is not yet possible to reasonably estimate MARAD’s portion, if any, of the remediation costs.
The National Maritime Heritage Act requires that MARAD dispose of certain merchant vessels owned by the U.S. government, including non-retention ships in the Fleet. The asset disposal liability at September 30, 2008 includes the estimated cost of disposing 187 ships. In addition, FAA records an asset disposal liability upon the decommissioning of an asset to cover preparatory costs required to meet regulatory standards allowing for the safe disposition of the asset.
NOTE 14. GRANT ACCRUAL
The grant accrual consists of an estimate of grantee expenses incurred but not yet paid by DOT. Grantees primarily include state and local governments and transit authorities.
Grant accruals by Operating Administration at September 30, 2008 and 2007 are summarized as follows:
| FY 2008 | FY 2007 | |
|---|---|---|
| Federal Highway Administration | $3,730,005 | $4,144,949 |
| Federal Transit Administration | 1,373,270 | 707,996 |
| Federal Aviation Administration | 642,041 | 653,790 |
| Other | 64,831 | 19,553 |
| Total Grant Accrual | $5,810,147 | $5,526,288 |
NOTE 15. OTHER LIABILITIES
| As of September 30, 2008 | Non-Current | Current | Total |
|---|---|---|---|
| Intragovernmental | |||
| Advances and Prepayments | $– | $2,786,860 | $2,786,860 |
| Accrued Pay and Benefits | – | 79,188 | 79,188 |
| FECA Billings (Note 12) | 126,117 | 95,469 | 221,586 |
| Deferred Credits | – | 458 | 458 |
| Other Accrued Liabilities | 92,427 | 82,604 | 175,031 |
| Total Intragovernmental | $218,544 | $3,044,579 | $3,263,123 |
| Public | |||
| Other Accrued Unbilled Payments | $– | $50,177 | $50,177 |
| Advances and Prepayments | – | 60,101 | 60,101 |
| Accrued Pay and Benefits | 48,386 | 698,169 | 746,555 |
| Deferred Credits | – | 93,676 | 93,676 |
| Legal Claims | 2,901 | 109,787 | 112,688 |
| Capital Leases | 49,271 | 12,400 | 61,671 |
| Other Custodial Liability | – | 17,956 | 17,956 |
| Other Accrued Liabilities | 197,131 | 25,302 | 222,433 |
| Total Public | $297,689 | $1,067,568 | $1,365,257 |
| As of September 30, 2007 | Non-Current | Current | Total |
|---|---|---|---|
| Intragovernmental | |||
| Advances and Prepayments | $(79,321) | $2,911,830 | $2,832,509 |
| Accrued Pay and Benefits | 2,533 | 83,810 | 86,343 |
| FECA Billings (Note 12) | 126,127 | 88,660 | 214,787 |
| Deferred Credits | 34,972 | – | 34,972 |
| Other Accrued Liabilities | 227,405 | 22,062 | 249,467 |
| Total Intragovernmental | $311,716 | $3,106,362 | $3,418,078 |
| Public | |||
| Other Accrued Unbilled Payments | $11 | $1,752 | $1,763 |
| Advances and Prepayments | 31,420 | 142,852 | 174,272 |
| Accrued Pay and Benefits | 160,135 | 568,817 | 728,952 |
| Deferred Credits | 129,891 | – | 129,891 |
| Legal Claims | 2,431 | 14,205 | 16,636 |
| Capital Leases | 57,612 | 14,499 | 72,111 |
| Other Custodial Liability | (2) | 26,796 | 26,794 |
| Other Accrued Liabilities | 93,421 | 65,571 | 158,992 |
| Total Public | $474,919 | $834,492 | $1,309,411 |
NOTE 16. CAPITAL LEASES
| 2008 | 2007 | |
|---|---|---|
| Summary of Assets Under Capital Lease by Category | ||
| Land, Buildings & Machinery | $166,387 | $166,387 |
| Accumulated Amortization | (125,137) | (111,373) |
| Net Assets Under Capital Lease | $41,250 | $55,014 |
| Fiscal Year | |
|---|---|
| Year 1 (2009) | $13,502 |
| Year 2 (2010) | 12,833 |
| Year 3 (2011) | 11,816 |
| Year 4 (2012) | 8,637 |
| Year 5 (2013) | 5,709 |
| After 5 Years (2014+) | 54,240 |
| Total Future Lease Payments | $106,737 |
| Less: Imputed Interest | 45,066 |
| Net Capital Lease Liability | $61,671 |
The capital lease payments disclosed above relate to FAA and are authorized to be funded annually as codified in the United States Code - Title 49 - Section 40110(c)(1) which addresses general procurement authority. The remaining principal payments are recorded as unfunded lease liabilities. The imputed interest is funded and expensed annually.
| Fiscal Year | Land, Buildings, Machinery & Other |
|---|---|
| Year 1 (2009) | $208,288 |
| Year 2 (2010) | 200,604 |
| Year 3 (2011) | 177,565 |
| Year 4 (2012) | 161,468 |
| Year 5 (2013) | 108,545 |
| After 5 Years (2014+) | 670,297 |
| Total Future Lease Payments | $1,526,767 |
Operating lease expense incurred during the years ended September 30, 2008 and 2007 was $251 million and $236 million, respectively, including General Services Administration (GSA) leases that have a short termination privilege; however, DOT intends to remain in the leases. The FY 2008 lease expense and related future payments disclosed above include amounts related to DOT’s new Southeast Federal Center Building located in the District’s Anacostia Watershed and do not include immaterial lease amounts of DOT field offices. The operating lease amounts due after five years does not include estimated payments for leases with annual renewal options. Estimates of the lease termination dates are subjective, and any projection of future lease payments would be arbitrary.
NOTE 17. COMMITMENTS AND CONTINGENCIES
LEGAL CLAIMS
As of September 30, 2008 and 2007, DOT’s contingent liabilities, in excess of amounts accrued, for asserted and pending legal claims reasonably possible of loss were estimated at $88.2 million and $33.1 million, respectively. DOT does not have material amounts of known unasserted claims.
GRANT PROGRAMS
FHWA pre-authorizes states to establish construction budgets without having received appropriations from Congress for such projects. FHWA does not guarantee the ultimate funding to the states for these “Advance Construction” projects and, accordingly, does not obligate any funds for these projects. When funding becomes available to FHWA, the states can then apply for reimbursement of costs that they have incurred on such projects, at which time FHWA can accept or reject such requests. For the fiscal year ended September 30, 2008 and 2007, FHWA has pre-authorized $46.2 billion and $46.2 billion, respectively, under these arrangements. These commitments have not been recognized in the DOT consolidated financial statements at September 30, 2008 and 2007.
FTA executes Full Funding Grant Agreements (FFGAs) under its Capital Investment program (New Starts) authorizing transit authorities to establish project budgets and incur costs with their own funds in advance of Congress appropriating New Starts funds to the project. As of September 30, 2008 and September 30, 2007, FTA had approximately $1.7 billion and $3.9 billion respectively, in funding commitments under FFGAs, which Congress had not yet appropriated. Congress must first provide the budget authority (appropriations) to allow FTA to incur obligations for these programs. Until Congress appropriates funds, FTA is not liable to grantees for any costs incurred. There is no liability related to these commitments reflected in the DOT consolidated financial statements at September 30, 2008 and 2007.
FAA’s Airport Improvement Program provides grants for the planning and development of public-use airports that are included in the National Plan of Integrated Airport Systems. Eligible projects generally include improvements related to enhancing airport safety, capacity, security and environmental concerns. FAA’s share is 75 percent of the eligible costs for large and medium primary hub airports with the exception of noise program implementation, which is 80 percent of the eligible costs. For remaining airports (small primary, reliever, and general aviation airports), FAA’s share is 95 percent of the eligible costs.
FAA has authority under 49 U.S.C. 47110(e) to issue letters of intent to enter into Airport Improvement Program grant agreements. FAA records an obligation when a grant is awarded. Through September 30, 2008, FAA issued letters of intent covering FY 1988 through FY 2020 totaling $5.7 billion. As of September 30, 2008, FAA had obligated $4.6 billion of this total amount leaving $1.1 billion unobligated. Through September 30, 2007, FAA issued letters of intent covering FY 1988 through FY 2020 totaling $5.6 billion. As of September 30, 2007, FAA had obligated $4.3 billion of this total amount, leaving $1.3 billion unobligated.
CONTRACT OPTIONS AND NEGOTIATIONS
As of September 30, 2008 and 2007, FAA had contract options of $3.7 billion and $3.5 billion, respectively. These contract options give FAA the unilateral right to purchase additional equipment or services or to extend the contract terms. Exercising this right would require the obligation of funds in future years.
AVIATION INSURANCE PROGRAM
FAA is authorized to issue hull and liability insurance under the Aviation Insurance Program for air carrier operations for which commercial insurance is not available on reasonable terms and when continuation of U.S. flag commercial air service is necessary in the interest of air commerce, national security, and U.S. foreign policy. FAA may issue (1) non-premium insurance, and (2) premium insurance for which a risk-based premium is charged to the air carrier, to the extent practical.
During FY 2008, FAA provided premium war-risk insurance to 77 airlines. For these airlines, combined hull and liability per occurrence coverage limits range from $100 million to $4 billion. FAA also provided non-premium war-risk insurance to 38 carriers with 1,667 aircraft for Department of Defense charter operations for Central Command and standby non-premium war-risk insurance policies for 8 carriers for State Department charter operations.
As of September 30, 2008, there are no pending aviation insurance claims. There is approximately $1.1 billion available in the Aviation Insurance Revolving Fund to pay claims to carriers covered by premium insurance. If premium insurance claims should exceed that amount, additional funding could be appropriated from the General Fund. The Department of Defense and State Department have agreed to pay claims to the carriers covered by non-premium insurance.
ENVIRONMENTAL LIAILITIES
MARAD is named as a defendant in a case alleging violations of the Resource Conservation and Recovery Act, the Clean Water Act, and the hazardous waste code for the State of California. Based on the nature of the lawsuit, management is currently unable to quantify its liability in this area.
As of September 30, 2008, FAA has estimated contingent liabilities, categorized as reasonably possible of $114.1 million related to environmental remediation. Contingency costs are defined for environmental liabilities as those costs that may result from incomplete design, unforeseen and unpredictable conditions or uncertainties within a defined project scope.
NOTE 18. EARMARKED FUNDS
DOT administers certain earmarked funds, which are specifically identified revenues, often supplemented by other financing sources, that remain available over time. No new legislation was enacted as of September 30, 2008 that significantly changed the purpose of the earmarked funds or redirected a material portion of the accumulated balance. Descriptions of the significant earmarked funds are as follows:
Highway Trust FundThe Highway Trust Fund (HTF) is comprised of the Highway Corpus Trust Fund and certain accounts of the Federal Highway Administration, Federal Motor Carrier Safety Administration, Federal Transit Administration, Federal Railroad Administration and the National Highway Traffic Safety Administration. The HTF was created in 1956 by the Highway Revenue Act of 1956 with the main objective of funding the construction of the Dwight D. Eisenhower System of Interstate and Defense Highways. Over the years, the use of the fund has been expanded to include mass transit and other surface transportation programs such as highway safety and motor carrier safety programs. Overall, there are 73 separate treasury symbols in the HTF.
HTF’s programs and activities are primarily financed from excise taxes collected on specific motor fuels, truck taxes, and fines and penalties. The Highway Revenue Act of 1982 established two accounts within the HTF, the Highway Account and the Mass Transit Account. In September 2008, Congress appropriated an $8 billion transfer from the Treasury General Fund to the HTF Highway Account to alleviate the cash shortfall created by increases in fuel prices, and corresponding declines in gas tax revenues.
Airport and Airway Trust FundThe Airport and Airway Trust Fund (AATF) was authorized by the Airport and Airway Revenue Act of 1970 to provide funding for the Federal commitment to the nation’s aviation system and typically includes annual funding for four distinct areas within FAA: Operations; Grant in Aid for Airports; Facilities and Equipment; and Research, Engineering and Development.
Funding currently comes from several aviation related excise tax collections from passenger tickets, passenger flight segments, international arrivals/departures, cargo waybills and aviation fuels.
Mass Transit AccountIn FY-2005 and prior, FTA’s formula and bus grant programs were funded 80 percent by certain earmarked excise tax revenues and 20 percent from the Treasury general receipts account. These funds are considered earmarked but not reported as part of the HTF.
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) legislation (PL 109-59) changed the way FTA programs are funded. Beginning in FY-2006, the FTA formula and bus grant programs are funded 100 percent by the HTF.
The following is a list of other earmarked funds for which the DOT has program management responsibility:
Other Earmarked FundsAviation Insurance Revolving Fund
Pipeline Safety
Emergency Preparedness Grant
Aviation User Fees
Essential Air Service and Rural Airport Improvement Fund
University Transportation Centers
Contributions for Highway Research Program
Cooperative Work, Forest Highways
Safety of Cross-Border Trucking Between the United States and Mexico
Payment to Air Carriers
Right of Way Revolving Fund Program Account
Alaska Pipeline Task Force, Oil Spill Liability Trust Fund
Right-of-Way Revolving Fund Trust Fund
Technical Assistance, United States Dollars Advanced from Foreign Governments
Gifts and Bequests, Maritime Administration
Special Studies, Services and Projects
Gifts and Bequests, DOT Office of the Secretary
Equipment, Supplies, etc., for Cooperating Countries
| Highway Trust Fund |
Airport & Airway Trust Fund |
Mass Transit | Other Earmarked Funds |
FY 2008 Total Earmarked |
|
|---|---|---|---|---|---|
| Balance Sheet as of September 30, 2008 | |||||
| Assets | |||||
| Fund Balance with Treasury | $4,005,470 | $848,372 | $2,157,264 | $3,196,326 | $10,207,432 |
| Investments, Net | 12,811,128 | 7,746,547 | – | 1,142,277 | 21,699,952 |
| Accounts Receivable, Net | 27,112,794 | – | – | 3,918,375 | 31,031,169 |
| Inventory and Related Property, Net | – | – | – | – | – |
| Property, Plant & Equipment | 112,119 | – | – | 3,794 | 115,913 |
| Other | 380,932 | – | 777 | 2,579,181 | 2,960,890 |
| Total Assets | $44,422,443 | $8,594,919 | $2,158,041 | $10,839,953 | $66,015,356 |
| Liabilities and Net Position | |||||
| Accounts Payable | $27,125,748 | $3,772,307 | $2,039 | $315,627 | $31,215,721 |
| AATF Amounts due to FAA | – | – | – | – | – |
| FECA Liabilities | 856,966 | – | 181 | 1,120,534 | 1,977,681 |
| Grants Accrual | 3,791,266 | – | 135,443 | 644,311 | 4,571,020 |
| Other Liabilities | 212,999 | – | 3,360 | 1,080,123 | 1,296,482 |
| Unexpended Appropriations | – | – | 41,197 | 969,212 | 1,010,409 |
| Cumulative Results of Operations | 12,435,464 | 4,822,612 | 1,975,821 | 6,710,146 | 25,944,043 |
| Total Liabilities and Net Position | $44,422,443 | $8,594,919 | $2,158,041 | $10,839,953 | $66,015,356 |
| Statement of Net Cost For the Period Ended September 30, 2008 | |||||
| Program Costs | $43,416,975 | $13,466,390 | $1,322,007 | $866,911 | $59,072,283 |
| Less Earned Revenue | 111,467 | – | (15,330) | 558,714 | 654,851 |
| Net Program Costs | 43,305,508 | 13,466,390 | 1,337,337 | 308,197 | 58,417,432 |
| Costs Not Attibutable to Programs | – | – | – | 147,952 | 147,952 |
| Net Cost of Operations | $43,305,508 | $13,466,390 | $1,337,337 | $456,149 | $58,565,384 |
| Statement of Changes in Net Position For the Period Ended September 30, 2008 | |||||
| Beginning Net Position | $11,293,841 | $6,046,786 | $3,357,240 | $7,068,083 | $27,765,950 |
| Budgetary Financing Sources | 44,414,017 | 12,242,216 | (2,885) | 2,449,990 | 59,103,338 |
| Other Financing Sources | 33,114 | – | – | (1,382,566) | (1,349,452) |
| Net Cost of Operations | 43,305,508 | 13,466,390 | 1,337,337 | 456,149 | 58,565,384 |
| Change in Net Position | 1,141,623 | (1,224,174) | (1,340,222) | 611,275 | (811,498) |
| Net Position End of Period | $12,435,464 | $4,822,612 | $2,017,018 | $7,679,358 | $26,954,452 |
| Highway Trust Fund |
Airport & Airway Trust Fund |
Mass Transit | Other Earmarked Funds |
FY 2007 Total Earmarked |
|
|---|---|---|---|---|---|
| Balance Sheet as of September 30, 2007 | |||||
| Assets | |||||
| Fund Balance with Treasury | $3,209,239 | $715,578 | $3,542,996 | $3,231,336 | $10,699,149 |
| Investments, Net | 12,204,544 | 8,006,774 | – | 933,401 | 21,144,719 |
| Accounts Receivable, Net | 46,987 | 179,673 | 15,646 | 3,057,058 | 3,299,364 |
| Property, Plant & Equipment | 95,744 | – | – | 2,891,344 | 2,987,088 |
| Other | 192,639 | – | 1,322 | 23,130 | 217,091 |
| Total Assets | $15,749,153 | $8,902,025 | $3,559,964 | $10,136,269 | $38,347,411 |
| Liabilities and Net Position | |||||
| Liabilities | $310,363 | $2,855,239 | $4,564 | $3,060,529 | $6,230,695 |
| Grants Accrual | 4,144,949 | – | 198,160 | 7,657 | 4,350,766 |
| Unexpended Appropriations | – | – | 49,232 | 1,163,957 | 1,213,189 |
| Cumulative Results of Operations | 11,293,841 | 6,046,786 | 3,308,008 | 5,904,126 | 26,552,761 |
| Total Liabilities and Net Position | $15,749,153 | $8,902,025 | $3,559,964 | $10,136,269 | $38,347,411 |
| Statement of Net Cost For the Period Ended September 30, 2007 | |||||
| Program Costs | $39,942,210 | $12,695,908 | $1,779,049 | $1,308,782 | $55,725,949 |
| Less Earned Revenue | 108,695 | – | 56,279 | 508,634 | 673,608 |
| Net Program Costs | 39,833,515 | 12,695,908 | 1,722,770 | 800,148 | 55,052,341 |
| Costs Not Attibutable to Programs | – | – | – | 102,279 | 102,279 |
| Net Cost of Operations | $39,833,515 | $12,695,908 | $1,722,770 | $902,427 | $55,154,620 |
| Statement of Changes in Net Position For the Period Ended September 30, 2007 | |||||
| Beginning Net Position | $11,932,051 | $6,398,812 | $5,290,939 | $7,165,637 | $30,787,439 |
| Budgetary Financing Sources | 39,160,532 | 12,343,882 | (210,929) | 2,776,612 | 54,070,097 |
| Other Financing Sources | 34,773 | – | – | (1,971,739) | (1,936,966) |
| Net Cost of Operations | 39,833,515 | 12,695,908 | 1,722,770 | 902,427 | 55,154,620 |
| Change in Net Position | (638,210) | (352,026) | (1,933,699) | (97,554) | (3,021,489) |
| Net Position End of Period | $11,293,841 | $6,046,786 | $3,357,240 | $7,068,083 | $27,765,950 |
NOTE 19. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUES
| For the Year Ended September 30, 2008 | Intragovernmental | With the Public | Total | |
|---|---|---|---|---|
| Surface Transportation | ||||
| Federal-Aid Highway Program | ||||
| Gross Costs | $261,106 | $35,462,448 | $35,723,554 | |
| Less Earned Revenue | 4,541 | 63,819 | 68,360 | |
| Net Program Costs | 256,565 | 35,398,629 | 35,655,194 | |
| Mass Transit Program | ||||
| Gross Costs | 5,517 | 10,137,413 | 10,142,930 | |
| Less Earned Revenue | 16,215 | 766 | 16,981 | |
| Net Program Costs | (10,698) | 10,136,647 | 10,125,949 | |
| Other Surface Transportation Programs | ||||
| Gross Costs | 307,817 | 4,242,481 | 4,550,298 | |
| Less Earned Revenue | 31,350 | 147,080 | 178,430 | |
| Net Program Costs | 276,467 | 4,095,401 | 4,371,868 | |
| Total Surface Transportation Program Costs | 522,334 | 49,630,677 | 50,153,011 | |
| Air Transportation | ||||
| Air Traffic Organization | ||||
| Gross Costs | 1,993,589 | 8,456,418 | 10,450,007 | |
| Less Earned Revenue | 24,273 | 528 | 24,801 | |
| Net Program Costs | 1,969,316 | 8,455,890 | 10,425,206 | |
| Airports | ||||
| Gross Costs | 18,138 | 3,735,702 | 3,753,840 | |
| Less Earned Revenue | – | 165 | 165 | |
| Net Program Costs | 18,138 | 3,735,537 | 3,753,675 | |
| Aviation Safety | ||||
| Gross Costs | 169,358 | 986,409 | 1,155,767 | |
| Less Earned Revenue | 870 | 25 | 895 | |
| Net Program Costs | 168,488 | 986,384 | 1,154,872 | |
| Commercial Space Transportation | ||||
| Gross Costs | 1,693 | 9,564 | 11,257 | |
| Other Federal Aviation Administration Programs | ||||
| Gross Costs | 68,719 | 474,077 | 542,796 | |
| Less Earned Revenue | 2,520 | 353,165 | 355,685 | |
| Net Program Costs | 66,199 | 120,912 | 187,111 | |
| Total Air Transportation Program Costs | 2,223,834 | 13,308,287 | 15,532,121 | |
| Maritime Transportation | ||||
| Gross Costs | $19,364 | $687,285 | $706,649 | |
| Less Earned Revenue | 282,959 | 208,611 | 491,570 | |
| Net Program Costs | (263,595) | 478,674 | 215,079 | |
| Cross-Cutting Programs | ||||
| Gross Costs | 6,335 | 559,526 | 565,861 | |
| Less Earned Revenue | 539,109 | 3,251 | 542,360 | |
| Net Program Costs | (532,774) | 556,275 | 23,501 | |
| Costs not Assigned to Programs | 129,209 | 256,921 | 386,130 | |
| Less: Earned Revenues not Attributed to Programs | 39,196 | 183 | 39,379 | |
| Net Cost of Operations | $2,039,812 | $64,230,651 | $66,270,463 | |
| For the Year Ended September 30, 2007 | Intragovernmental | With the Public | Total |
|---|---|---|---|
| Surface Transportation | |||
| Federal-Aid Highway Program | |||
| Gross Costs | $243,314 | $34,329,482 | $34,572,796 |
| Less Earned Revenue | 26,824 | 56,822 | 83,646 |
| Net Program Costs | 216,490 | 34,272,660 | 34,489,150 |
| Mass Transit Program | |||
| Gross Costs | 12,037 | 8,892,451 | 8,904,488 |
| Less Earned Revenue | 49,783 | 978 | 50,761 |
| Net Program Costs | (37,746) | 8,891,473 | 8,853,727 |
| Other Surface Transportation Programs | |||
| Gross Costs | 293,537 | 3,878,513 | 4,172,050 |
| Less Earned Revenue | 44,554 | 85,067 | 129,621 |
| Net Program Costs | 248,983 | 3,793,446 | 4,042,429 |
| Total Surface Transportation Program Costs | 427,727 | 46,957,579 | 47,385,306 |
| Air Transportation | |||
| Air Traffic Organization | |||
| Gross Costs | 2,002,801 | 7,703,336 | 9,706,137 |
| Less Earned Revenue | 24,644 | 1,017 | 25,661 |
| Net Program Costs | 1,978,157 | 7,702,319 | 9,680,476 |
| Airports | |||
| Gross Costs | 17,955 | 3,905,764 | 3,923,719 |
| Less Earned Revenue | – | 114 | 114 |
| Net Program Costs | 17,955 | 3,905,650 | 3,923,605 |
| Aviation Safety | |||
| Gross Costs | 158,478 | 859,837 | 1,018,315 |
| Less Earned Revenue | 2,231 | 3,335 | 5,566 |
| Net Program Costs | 156,247 | 856,502 | 1,012,749 |
| Commercial Space Transportation | |||
| Gross Costs | 94,081 | 510,448 | 604,529 |
| Less Earned Revenue | 100,381 | 317,292 | 417,673 |
| Net Program Costs | (6,300) | 193,156 | 186,856 |
| Other Federal Aviation Administration Programs | |||
| Gross Costs | 1,676 | 9,092 | 10,768 |
| Net Program Costs | 1,676 | 9,092 | 10,768 |
| Total Air Transportation Program Costs | 2,147,735 | 12,666,719 | 14,814,454 |
| Maritime Transportation | |||
| Gross Costs | $173,064 | $586,739 | $759,803 |
| Less Earned Revenue | 183,089 | 5,987 | 189,076 |
| Net Program Costs | (10,025) | 580,752 | 570,727 |
| Cross-Cutting Programs | |||
| Gross Costs | 25,177 | 486,347 | 511,524 |
| Less Earned Revenue | 492,603 | 7,473 | 500,076 |
| Net Program Costs | (467,426) | 478,874 | 11,448 |
| Costs not Assigned to Programs | 270,670 | 117,722 | 388,392 |
| Less: Earned Revenues not Attributed to Programs | 14 | 30,281 | 30,295 |
| Net Cost of Operations | $2,368,667 | $60,771,365 | $63,140,032 |
Surface Transportation Program costs includes those operating costs incurred by the Operating Administrations authorized by SAFETEA-LU (FHWA, NHTSA, FMCSA, and FTA), plus the FTA, to promote safety and mobility of the nation’s highways and railroads and among the nation’s drivers and auto manufacturers.
Air Transportation Program costs include those operating costs incurred to promote aviation safety and mobility by building, maintaining, and operating the Nation’s air traffic control system; overseeing commercial and general aviation safety through regulation and inspection; and providing assistance to improve the capacity and safety of our airports.
Maritime Transportation Program Costs include those operating costs incurred to promote the development and maintenance of a U.S. merchant marine that is sufficient to carry the Nation’s domestic waterborne commerce, a substantial portion of which is trade with other nations, and to serve as a naval and military auxiliary in time of war and national emergency.
Cross-cutting Program costs include those operating costs incurred to provide goods and services on a reimbursable basis for those Operating Administrations whose mission is primarily cross modal.
NOTE 20. CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION
NON-EXCHANGE REVENUE
| Highway Trust Fund Excise Taxes and Other Non-Exchange Revenue |
FY 2008 | FY 2007 |
|---|---|---|
| Gasoline | $25,325,646 | $25,418,957 |
| Diesel and Special Motor Fuels | 10,531,919 | 9,916,020 |
| Trucks | 2,870,560 | 5,302,320 |
| Fines and Penalties | 17,989 | 16,869 |
| Total Taxes | 38,746,114 | 40,654,166 |
| Less: Transfers | (1,305,069) | (468,003) |
| Gross Taxes | 37,441,045 | 40,186,163 |
| Less: Refunds of Taxes | (1,056,512) | (1,047,659) |
| Total Excise Taxes | 36,384,533 | 39,138,504 |
| Other Non-Exchange Revenue | 2,628 | 19,980 |
| Net Highway Trust Fund Excise Taxes & Other Non-Exchange Revenue | 36,387,161 | 39,158,484 |
| Federal Aviation Administration Excise Taxes and Other Non-Exchange Revenue: |
||
| Passenger Ticket | 8,260,611 | 8,376,680 |
| International Departure | 2,462,375 | 2,136,257 |
| Fuel (Air) | 624,493 | 850,454 |
| Waybill | 521,040 | 574,404 |
| Investment Income | 429,572 | 502,937 |
| Tax Refunds and Credits | (55,957) | (67,229) |
| Other | 36,626 | 64 |
| Net Federal Aviation Administration Excise Taxes & Other Non-Exchange Revenue | 12,278,760 | 12,373,567 |
| Other Miscellaneous Net Non Exchange Revenue | 18,429 | 1,222 |
| Total Non-Exchange Revenue | $48,684,350 | $51,533,273 |
For the Highway Trust Fund and the Airport and Airway Trust Fund, the consolidated financial statements reflect actual tax collections for the nine months ended June 30, plus an estimate of tax collections expected for the quarter ended September 30. Actual tax collection data for the quarter ended September 30 is not available from the IRS until December of each year.
NOTE 21. COMBINED STATEMENT OF BUDGETARY RESOURCES
The amount of direct and reimbursable obligations incurred against amounts apportioned under Category A, B and Exempt from apportionment, as defined in OMB Circular No. A-11, Part 4, Instructions on Budget Execution, are as follows:
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| Direct | Reimbursable | Total | Direct | Reimbursable | Total | |
| Category A | $9,147,943 | $1,009,893 | $10,157,836 | $8,317,117 | $885,289 | $9,202,406 |
| Category B | 76,467,131 | 727,083 | 77,194,214 | 65,307,451 | 816,961 | 66,124,412 |
| Exempt from apportionment | 87,419 | 230,904 | 318,323 | 261,488 | 220,936 | 482,424 |
| Total | $85,702,493 | $1,967,880 | $87,670,373 | $73,886,056 | $1,923,186 | $75,809,242 |
| 2008 | 2007 | |
|---|---|---|
| Available Contract Authority at year-end | $26,974,765 | $17,995,498 |
| Available Borrowing Authority at year-end | $207,985 | $232,807 |
| Undelivered Orders at year-end | $75,032,596 | $72,184,302 |
The amounts reported for undelivered orders only include balances obligated for goods and services not delivered and does not include prepayments.
TERMS OF BORROWING AUTHORITY USEDUnder the provisions of the Federal Credit Reform Act of 1990, DOT direct loan and loan guarantee programs are authorized to borrow funds from Treasury to support its credit programs. All loan draw downs are dated October 1 of the applicable fiscal year. Interest is payable at the end of each fiscal year based on activity for that fiscal year. Principal can be repaid at any time funds become available. Repayment is effectuated by a combination of loan recoveries and upward re-estimates.
EXISTENCE, PURPOSE AND AVAILABILITY OF PERMANENT INDEFINITE APPROPRIATIONSDOT has permanent indefinite appropriations for the Facilities and Equipment, Grants in Aid and Research, Development and Engineering appropriations to fully fund special projects that were on-going and spanned several years.
ADDITIONAL DISCLOSURESUnobligated balances of budgetary resources for unexpired accounts are available in subsequent years until expiration, upon receipt of an apportionment from OMB. Unobligated balances of expired accounts are not available.
STATEMENT OF BUDGETARY RESOURCES VS BUDGET OF THE UNITED STATES GOVERNMENTThe reconciliation for the year ended September 30, 2007 is presented below. The reconciliation for the fiscal year ended September 30, 2008 is not presented, because the submission of the Budget of the United States (Budget) for FY 2010, which presents the execution of the FY 2008 budget, occurs after publication of these financial statements. The Department of Transportation Budget Appendix can be found on the OMB website (http://www.whitehouse.gov/omb/budget) and will be available in early February 2009.
| Budgetary Resources |
Obligations Incurred |
Distributed Offsetting Receipts |
Net Outlays |
|
|---|---|---|---|---|
| Combined Statement of Budgetary Resources | $122,653 | $75,809 | $(47) | $62,070 |
| Funds not Reported in the Budget | ||||
| Expired Funds | (264) | – | – | – |
| Recoveries of prior year obligations | (11) | – | – | – |
| Expenditure transfers from trust funds | (15) | – | – | – |
| Rescission not reflected on SBR | (7) | – | – | – |
| Distributed Offsetting Receipts | – | – | 47 | 47 |
| Other | (25) | (7) | – | 1 |
| Budget of the United States Government | $122,331 | $75,802 | $– | $62,118 |
Other differences represent financial statement adjustments, timing differences and other immaterial differences between amounts reported in the Department’s Statement of Budgetary Resources and the Budget of the United States.
NOTE 22. INCIDENTIAL CUSTODIAL COLLECTIONS
| FY 2008 | FY 2007 | |
|---|---|---|
| Revenue Activity | ||
| Sources of Cash Collections: | ||
| Miscellaneous Receipts | $32,061 | $28,332 |
| Fines, Penalties and Forfeitures | 17,873 | 4,498 |
| Total Cash Collections | 49,934 | 32,830 |
| Total Custodial Revenue | 49,934 | 32,830 |
| Disposition of Collections | ||
| Transferred to Treasury’s (General Fund) | 49,934 | 32,830 |
| Net Custodial Revenue Activity | $– | $– |
NOTE 23. RECONCILATION OF NET COST OF OPERATIONS TO BUDGET
| FY 2008 | FY 2007 | |
|---|---|---|
| Resources Used to Finance Activities | ||
| Budgetary Resources Obligated | ||
| Obligations Incurred | $87,670,373 | $75,809,242 |
| Less: Spending Authority from Offsetting Collections and Recoveries | 10,075,399 | 9,099,273 |
| Obligations Net of Offsetting Collections and Recoveries | 77,594,974 | 66,709,969 |
| Less: Distributed Offsetting Receipts | (325,679) | (46,779) |
| Net Obligations | 77,269,295 | 66,663,190 |
| Other Resources | ||
| Transfers In/Out Without Reimbursement | 20,847 | 2,812 |
| Imputed Financing From Costs Absorbed by Others | 642,148 | 605,189 |
| Other | (1,873) | – |
| Net Other Resources Used to Finance Activities | 661,122 | 608,001 |
| Total Resources Used to Finance Activities | 77,930,417 | 67,271,191 |
| 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 Provided | 3,137,262 | 4,018,636 |
| Resources That Fund Expenses Recognized in Prior Periods | 259,382 | 283,949 |
| Credit Program Collections That Increase Liabilities for Loan Guarantees or Allowances for Subsidy | (513,984) | (115,714) |
| Other/Change in Unfilled Customer Orders | (126,464) | (461,855) |
| Resources That Finance the Acquisition of Assets | 2,569,811 | 1,395,553 |
| Other Resources or Adjustments to Net Obligated Resources that do not Affect Net Cost of Operations | 7,984,827 | 216,115 |
| Total Resources Used to Finance Items Not Part of the Net Cost Of Operations | 13,310,834 | 5,336,684 |
| Total Resources Used to Finance the Net Cost of Operations | $64,619,583 | $61,934,507 |
| 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 | $45,281 | $10,696 |
| Upward/Downward Reestimates of Credit Subsidy Expense | 98,889 | (1,818) |
| Increase in exchange revenue receivable from the public | (1,600) | (43,314) |
| Change in Other Liabilities | 210,361 | 25,584 |
| Total Components of Net Cost of Operations That Will Require or Generate Resources in Future Periods | 352,931 | (8,852) |
| Components Not Requiring or Generating Resources: | ||
| Depreciation and Amortization | 1,213,539 | 1,279,474 |
| Revaluation of Assets or Liabilities | 21,850 | (17,179) |
| Other Expenses and Adjustments not Otherwise Classified Above | 62,560 | (47,918) |
| Total Components of Net Cost of Operations That Will Not Require or Generate Resources | 1,297,949 | 1,214,377 |
| Total Components of Net Cost of Operations That Will Not Require or Generate Resources in the Current Period | 1,650,880 | 1,205,525 |
| Net Cost of Operations | $66,270,463 | $63,140,032 |
The reconciliation of Net Cost of Operations to Budget is intended to be a bridge between the entity’s budgetary and financial (proprietary) accounting. This reconciliation first identifies total resources used by an entity during the period (budgetary and other) and then makes adjustments to the resources based upon how they were used to finance net obligations or cost. The budgetary information used to calculate net obligations (the first four lines) must be presented on a combined basis to enable a direct tie to the Statement of Budgetary Resources. The Reconciliation of Net Cost of Operations to Budget explains the difference between the budgetary net obligations and the proprietary net cost of operations by setting forth the items that reconcile the two amounts. The budgetary net obligations and the proprietary net cost of operations are different in that (1) the net cost of operations may be financed by non-budgetary resources; (2) the budgetary and non-budgetary resources used by an agency may finance activities which are not components of the net cost of operations; and (3) the net cost of operations may contain components which do not use or generate resources in the period.
NOTE 24. REPORTING ON DOT AFFILIATED ACTIVITIES
Saint Lawrence Seaway Development Corporation
The U.S. Saint Lawrence Seaway Development Corporation (SLSDC), a wholly owned Government corporation and operating administration of the Department, is responsible for the operation and maintenance of the U.S. portion of the St. Lawrence Seaway. This responsibility includes maintaining and operating two U.S. locks, controlling vessel traffic and promoting trade development activities on the seaway.
| FY 2008 | FY 2007 | |
|---|---|---|
| Cash and Short-Term Time Deposits | $16,176 | $15,430 |
| Long-Term Time Deposits | 2,153 | 980 |
| Accounts Receivable | 108 | 115 |
| Inventories | 266 | 253 |
| Other Current Assets | 1 | 6 |
| Property, Plant and Equipment | 73,181 | 74,578 |
| Deferred Charges | 3,705 | 3,478 |
| Other Assets | 605 | 599 |
| TOTAL ASSETS | $96,195 | $95,439 |
| Current Liabilities | 2,790 | $2,577 |
| Actuarial Liabilities | 3,705 | 3,478 |
| TOTAL LIABILITIES | 6,495 | 6,055 |
| Invested Capital | 88,219 | 89,617 |
| Cumulative Results of Operations | 1,481 | (233) |
| TOTAL NET POSITION | $89,700 | $89,384 |
| TOTAL LIABILITIES AND NET POSITION | $96,195 | $95,439 |
| Operating Revenues | 17,993 | 17,092 |
| Operating Expenses | 19,169 | 19,488 |
| Operating Income (loss) | (1,176) | (2,396) |
| Other Financing Sources | 2,890 | 2,973 |
| Operating revenues and other financing sources over (under) operating expenses | 1,714 | 577 |
| Beginning cumulative results of operations (deficit) | (233) | (810) |
| Ending cumulative results of operations (deficit) | $1,481 | $(233) |
MARAD Non-Appropriated Fund Instrumentality (NAFI)
The Non-Appropriated Fund Instrumentality (NAFI) operates as a separate fiscal entity under MARAD to provide or assist the U.S. Merchant Marine Academy in providing programs and services for students, personnel and authorized civilians from sources other than Congressional appropriations. Although considered Governmental, NAFI assets and operations are separate and distinct from those recorded in the books of Federal Government. The dollar value of NAFI activities are immaterial to that of the Department.
