2011   Financial Report of the United States Government

Financial Statements

Statements of Operations and Changes in Net Position

These statements report the results of Government operations, which include the results of operations for earmarked funds. They include non-exchange revenues that are generated principally by the Government’s sovereign power to tax, levy duties, and assess fines and penalties. These statements also present the cost of Government operations, net of revenue earned from the sale of goods and services to the public (exchange revenue). They further include certain adjustments and unreconciled transactions that affect the net position.

Revenue

Individual income tax and tax withholdings include Federal Insurance Contributions Act (FICA)/Self-Employment Contributions Act (SECA) taxes and other taxes. These taxes are characterized as non-exchange revenue.

Excise taxes consist of taxes collected for various items, such as airline tickets, gasoline products, distilled spirits and imported liquor, tobacco, firearms, and others. These also are characterized as non-exchange revenue.

Other taxes and receipts include Federal Reserve banks (FRBs) earnings, tax related fines, penalties and interest, and railroad retirement taxes.

Miscellaneous earned revenues consist of earned revenues received from the public with virtually no associated cost. These revenues include rents and royalties on the Outer Continental Shelf Lands resulting from the leasing and development of mineral resources on public lands.

Earmarked revenues are required by statute to be used for designated activities, benefits or purposes and must be accounted for separately from the rest of the Government’s non-earmarked revenues. See Note 24—Earmarked Funds for detailed information.

Intragovernmental interest represents interest earned from the investment of surplus earmarked revenues, which finance the deficit spending of non-earmarked operations. These investments are recorded as intragovernmental debt holdings and are included in Note 14—Federal Debt Securities Held by the Public and Accrued Interest, in the table titled Intragovernmental Debt Holdings: Federal Debt Securities Held as Investments by Government Accounts. These interest payments and the associated investments are eliminated in the consolidation process.

Net Cost of Government Operations

The net cost of Government operations (gross cost [including (gains)/losses from changes in assumptions] less earned revenue) flows through from the Statements of Net Cost. The net cost associated with earmarked activities is separately reported.

Intragovernmental Transfers

Intragovernmental transfers reflect amounts required by statute to be transferred from the General Fund of the Treasury to earmarked funds (an example is the annual transfer to the Department of Health and Human Services’ (HHS) Supplementary Medical Insurance Trust Fund (Medicare Parts B and D) which receives approximately 76 percent and 80 percent, respectively, of its funding from the General Fund.

Unmatched Transactions and Balances

Unmatched transactions and balances are adjustments needed to bring the change in net position into balance due to unreconciled intragovernmental differences, agency reporting errors, timing differences, and General Fund transactions in the consolidated financial statements. See Note 1.T—Summary of Significant Accounting Policies and the Supplemental Information—Unmatched Transactions and Balances for detailed information.

Net Position, Beginning of Period

The net position, beginning of period, reflects the net position reported on the prior year’s balance sheet as of the end of that fiscal year. The net position for earmarked funds is shown separately.

Prior-period adjustments are revisions to adjust the beginning net position and balances presented on the prior year financial statements due to corrections of errors or changes in accounting principles. See Note 1.B—Basis of Accounting and Revenue Recognition and Note 21—Prior Period Adjustments for detailed information.

Net Position, End of Period

The net position, end of period, amount reflects the net position as of the end of the fiscal year. The net position for earmarked funds is separately shown.

United States Government
Statements of Operations and Changes in Net Position
for the Years Ended September 30, 2011, and 2010
Non-Earmarked Funds
Ear-
marked
Funds
Con-
solidated
Non-Earmarked Funds
Ear-
marked
Funds
Con-
solidated
(In billions of dollars)
2011
2010
Revenue:
Individual income tax and tax withholdings 1,092.9 772.9 1,865.8 902.6 830.3 1,732.9
  Corporation income taxes 175.1 175.1 179.6 179.6
  Unemployment taxes 56.1 56.1 45.2 45.2
  Excise taxes 21.3 52.2 73.5 22.6 49.0 71.6
  Estate and gift taxes 7.3 7.3 18.8 18.8
  Customs duties 28.5 28.5 25.1 25.1
  Other taxes and receipts 120.4 20.9 141.3 96.9 30.6 127.5
  Miscellaneous earned revenues 11.3 4.9 16.2 11.3 4.5 15.8
  Intragovernmental interest 202.0 202.0 195.0 195.0
  Total revenue 1,456.8 1,109.0 2,565.8 1,256.9 1,154.6 2,411.5
  Eliminations (202.0) (195.0)
  Consolidated revenue 2,363.8 2,216.5
Net Cost:
  Net cost 2,110.6 1,550.2 3,660.8 2,553.5 1,742.5 4,296.0
  Intragovernmental interest 202.0 202.0 195.0 195.0
  Total net cost 2,312.6 1,550.2 3,862.8 2,748.5 1,742.5 4,491.0
  Eliminations (202.0) (195.0)
  Consolidated net cost 3,660.8 4,296.0
Intragovernmental transfers (540.5) 540.5 (482.1) 482.1
  Unmatched transactions and   balances (Note 1) (15.6) (15.6) (0.8) (0.8)
  Net operating (cost)/revenue (1,411.9) 99.3 (1,312.6) (1,974.5) (105.8) (2,080.3)
  Net position, beginning of
  period
(14,119.7) 646.9 (13,472.8) (12,208.6) 752.7 (11,455.9)
  Prior period adjustments-
  changes in accounting principles
  (Note 21)
           
(2.0) 2.0 - 63.4 - 63.4
  Net operating (cost)/revenue (1,411.9) 99.3 (1,312.6) (1,974.5) (105.8) (2,080.3)
  Net position, end of period (15,533.6) 748.2 (14,785.4) (14,119.7) 646.9 (13,472.8)

The accompanying notes are an integral part of these financial statements.


Last Updated: February 16, 2012