APPENDIX 5
A link to the electronic version of this Appendix can be found on AGA website ñ
www.agacgfm.org/cgfm/studyguideappendices2016
Online version, for personal use only

Online version, for personal use only

A Citizen's Guide to the 2015 Financial Report of the U.S. Government
Citizenís Guide to the Fiscal Year 2015
Financial Report of the United States Government
The Citizenís Guide to the Fiscal Year 2015 Financial Report of the U.S. Government (Financial
Report) summarizes the U.S. Governmentís current financial position and condition and discusses key
financial topics, including fiscal sustainability. This Guide and the Financial Report are produced by the
U.S. Department of the Treasury in coordination with the Office of Management and Budget (OMB) of
the Executive Office of the President. The Secretary of the Treasury, Director of OMB, and Comptroller
General of the United States at the Government Accountability Office believe that the information
discussed in this Guide is important to all Americans.
Where We Are Now
Comparing the Budget and the Financial Report
Together, the Budget of the United States Government (Budget) and the Financial Report of the
U.S. Government (Financial Report) present complementary perspectives on the Governmentís financial
position and condition.
x
The Budget is the Governmentís primary financial planning and control tool. It accounts for past
Government receipts and spending, and presents the Presidentís proposed receipt and spending plan.
The Budget focuses on receipts, or cash received by the U.S. Government (Government) and outlays,
or payments made by the Government to the public. An excess of receipts over outlays is called a
budget surplus; an excess of outlays over receipts is called a budget deficit.
x
The Financial Report focuses on the Governmentís costs and revenues (what went out and what came
in), assets and liabilities (what it owns and owes), and other important financial information. The
Financial Report compares the Governmentís revenues (amounts earned, but not necessarily
collected), with its costs (amounts incurred, but not necessarily paid) to derive net operating cost.
Chart 1 compares the Governmentís budget deficit (receipts vs. outlays) and net operating cost
(revenues vs. costs) for Fiscal Years
(FY) 2011-2015. During FY 2015:
x
A $227.9 billion increase in
receipts more than offset a $183.4
billion increase in outlays to
reduce the budget deficit by $44.5
billion (about 9 percent) to $438.9
billion.
x
Net operating cost decreased
$271.6 billion or 34.3 percent to
$519.7 billion, due largely to a
$267.9 billion increase in tax and
other revenues, which more than
offset a slight $21.8 billion
increase in net cost.
The $80.8 billion difference between the budget deficit and net operating cost is primarily due to
accrued costs (incurred but not necessarily paid) associated with increases in estimated federal
employee and veteran benefits liabilities and certain other liabilities that are included in net operating
cost, but not the budget deficit.
Online version, for personal use only

A Citizen's Guide to the 2015 Financial Report of the U.S. Government
3
What Went Out and What Came In
The Governmentís ìbottom lineî net operating cost (revenue less net cost of Government operations
with some adjustments) of $519.7 billion in FY 2015 is calculated as follows:
x
Starting with total gross costs
of $4.3 trillion, the government
subtracts earned program
revenues (e.g., Medicare
premiums, national park entry
fees, and postal service fees)
and adjusts the balance for
gains or losses from changes in
actuarial assumptions used to
estimate future liabilities for
federal employee and veterans
benefits to derive its net cost of
$3.9 trillion, a slight increase
of $21.8 billion or 0.6 percent
from FY 2014. This net
increase is the combined effect
of many offsetting increases and decreases across the Government. For example:
o
The Department of Health and Human Services (HHS) and the Social Security Administration
(SSA) experienced net cost increases of $78.0 billion and $38.3 billion, respectively, largely due
to increases in benefit expenses from the social insurance programs administered by those
agencies (e.g., Medicare, Social Security). Net costs at the Department of Defense (DOD)
decreased by $88.7 billion due largely to decreases in costs for future military retirement and
health care benefits. Chart 2 shows that the largest shares of the Governmentís total FY 2015 net
cost came from HHS, SSA, and DOD.
o
The Department of Energyís net costs increased $19.9 billion due mostly to changes in
environmental and other liability estimates, while the Department of Educationís net costs
decreased $11.4 billion due
largely to decreases in loan
program costs and increases
in interest earned on loans.
x
The Government deducts tax
and other revenues from its net
cost (with some adjustments) to
derive its ìbottom lineî net
operating cost of $519.7 billion,
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