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Financial Report of the United States Government

Management's Discussion & Analysis

Introduction

The Fiscal Year (FY) 2018 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 financial position and condition, and 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 to the President and Congress no later than six months after the September 30 fiscal year-end.

The Financial Report is prepared from the financial information provided by 158 federal consolidation entities (see organizational chart on the next page and Appendix A). As it has for the past 21 years, GAO issued a disclaimer of opinion on the accrual-based, consolidated financial statements for the fiscal years ended September 30, 2018 and 2017. GAO also issued a disclaimer of opinion on the sustainability financial statements, which consist of the 2018 and 2017 Statements of Long-Term Fiscal Projections (SLTFP); the 2018, 2017, 2016, 2015, and 2014 Statements of Social Insurance (SOSI); and the 2018 and 2017 Statements 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 2018, 352 of the 40 most significant entities earned unmodified (“clean”) opinions on their financial statements.

The FY 2018 Financial Report consists of:

This Financial Report addresses the government’s financial activity and results as of and for the fiscal years ended September 30, 2018 and 2017. Note 26, Subsequent Events discusses events that occurred after the end of the fiscal year which may affect the Government’s financial position and condition.

In addition, the Results in Brief and Executive Summary to this Financial Report provides 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."  The Government’s functions have evolved over time to include health care, income security, veterans benefits and services, housing and transportation, security, and education. Exhibit 1provides an overview of how the U.S. 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. The consolidated financial statements include the legislative and judicial branches. (Back to Content)

2 The 35 entities include the Department of Health and Human Services, which received disclaimers of opinion on its 2018, 2017, 2016, 2015, and 2014 SOSI and on its 2018 and 2017 SCSIA. (Back to Content)

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Last modified 05/30/19