Section I: Management’s Discussion & Analysis

Agency Financial Report Acknowledgement
The Department of Health and Human Services has chosen to participate in the FY 2007 Performance and Accountability Report pilot, as defined in the Office of Management and Budget’s Circular A-136, Financial Reporting Requirements, to provide more transparent and enhanced financial and performance reporting.  For FY 2007, the Department is producing an alternative to the consolidated Performance and Accountability Report called an Agency Financial Report.  The Department will provide its FY 2007 Annual Performance Report and FY 2009 Performance Plan in its Congressional Budget Justification and supporting reports and a “Highlights” document.  These documents will be available on the Web site www.hhs.gov by February 4, 2008.  We anticipate that this approach will improve the presentation of financial and performance reporting by providing decision-makers and the American public with more meaningful and transparent information.

Mission and Organizational Structure
The U.S. Department of Health and Human Services mission and organizational structure is presented in this section of the report.

Strategic Goals and Highlights
HHS has four  Strategic Goals that support the mission of the agency. The goals are listed and a crosswalk to previous strategic goals is provided. Additionally, a table indicates HHS components and the goals they are participating in implementing. The Strategic Goals Highlights describe the department's progress in reaching the goals.

President's Management Agenda
The President’s Management Agenda articulates the Administration’s strategy "for improving the management and performance of government.”  The President’s Management Agenda established five government-wide and eleven program-specific initiatives. This section provides an analysis of HHS' scorecard results toward achieving the agenda.

Analysis of Financial Statements & Stewardship Information
The analysis of financial statements and stewardship information provides a description of the HHS financial condition, assets, liabilities, net position and cost, and budget resources. Additionally, information is provided concerning social insurance, Medicare Trust Funds, hospital and supplementary medical insurance, and the limitations of the principal Financial Statements.

Systems, Controls, and Legal Compliance
The Department’s overall goals for its financial management systems focus on ensuring effective internal controls, systems integration, and the ability to produce timely and reliable financial and performance information for reporting. This section discusses the systems, controls, and legal compliance goals, strategies and progress. 

Other Management Information, Initiatives, and Issues
Other management information, initiatives, and issues discussed include improvement to grant management and system modernization.

Looking Ahead to Next Year
The Looking Ahead to 2008--Department Management Challenges and High Risk Areas section describes the management challenges and the Department’s commitment to make improvements related to these challenges.

Report Date: November 15, 2007