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2016 Financial Report of the United States Government


Management's Discussion & Analysis

Introduction

The Fiscal Year (FY) 2016 Financial Report of the United States Government (Financial Report) provides the President, Congress, and the American people with a comprehensive view of the federal government's finances, i.e., its financial position and condition, its revenues and costs, assets and liabilities, and other obligations and commitments.  The Financial Report also discusses important financial issues and significant conditions that may affect future operations, including the need to achieve fiscal sustainability over the medium and long term.

Pursuant to 31 U.S.C. § 331(e)(1), the Department of the Treasury (Treasury), in cooperation with the Office of Management and Budget (OMB), must submit an audited (by the Government Accountability Office or GAO) financial statement for the preceding fiscal year, covering all accounts and associated activities of the executive branch of the United States Government1 -the central component of the Financial Report – to the President and Congress no later than six months after the September 30 fiscal year end.  To encourage timely and relevant reporting, OMB accelerated both individual agency and governmentwide reporting deadlines. 

The Financial Report is prepared from the audited financial statements of specifically designated federal agencies, including the Cabinet departments and many smaller, independent agencies (see organizational chart on the next page).  As it has for the past nineteen years, GAO issued a “disclaimer” of opinion on the accrual-based, consolidated financial statements for the fiscal years ended September 30, 2016 and 2015. GAO also issued disclaimers of opinion on the 2016 and 2015 Statement of Long-Term Fiscal Projections (SLTFP); the 2016, 2015, 2014, 2013 and 2012 Statements of Social Insurance (SOSI); and the 2016 and 2015 Statement of Changes in Social Insurance Amounts (SCSIA). A disclaimer of opinion indicates that sufficient information was not available for the auditors to determine whether the reported financial statements were fairly presented in accordance with Generally Accepted Accounting Principles (GAAP). In FY 2016, 322 of the 39 most significant agencies earned unmodified opinions on their financial statement audits.

The FY 2016 Financial Report consists of:

In addition, a Citizen’s Guide is included to provide the American taxpayer with a quick reference to the key issues in the Financial Report and an overview of the Government's financial position and condition.

Mission & Organization

The Government's fundamental mission is derived from the Constitution: "…to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity."  Congress authorizes and agencies implement programs as missions and initiatives evolve over time in pursuit of key public services and objectives, such as providing for national defense, promoting affordable health care, fostering income security, boosting agricultural productivity, providing veterans benefits and services, facilitating commerce, supporting housing and the transportation systems, protecting the environment, contributing to the security of energy resources, and helping States provide education. Exhibit 1 provides an overview of how the U.S. Government (Government) is organized.

Exhibit 1 - Overview of how the United States Government is organized

Notes

1 The Government Management Reform Act of 1994 has required such reporting, covering the executive branch of the Government, beginning with financial statements prepared for FY 1997. Treasury and OMB have elected to include certain financial information on the legislative and judicial branches in consolidated financial statements as well. (Back to Content)
2 The 32 agencies include the Department of Health and Human Services, which received disclaimers of opinion on its 2015, 2014, 2013, 2012, and 2011 SOSI and on its 2016 and 2015 SCSIA and the Department of Labor, which received disclaimers of opinion on its 2016 SOSI and SCSIA.(Back to Content)

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