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Financial Report of the United States Government

Financial Statements of the United States Government for the Fiscal Years Ended September 30, 2021, and 2020

Reconciliations of Net Operating Cost and Budget Deficit

These statements reconcile the results of operations (net operating cost) on the Statements of Operations and Changes in Net Position to the budget deficit (result of outlays exceeding receipts during a particular fiscal year). The premise of the reconciliation is that accrual accounting and budgetary accounting often share much of the same transactional data. However, some transactions differ between the two bases of accounting and are presented as reconciling items from the net operating cost to the budget deficit.

Receipts and outlays in the budget are measured primarily on a cash basis and differ from the accrual basis of accounting used in the Financial Report. Refer to Note 1.B—Basis of Accounting and Revenue Recognition for additional information on the accrual basis of accounting. These statements begin with the net results of operations (net operating cost) and report activities where the basis of accounting for the components of net operating cost and the budget deficit differ.

Some presentations of the budget deficit make the distinction between on-budget and off-budget totals. On-budget totals reflect the transactions of all government entities, except those excluded from the budget by law. Off-budget totals reflect the transactions of government entities that are excluded from the on-budget totals by law. Under current law, the off-budget totals include the Social Security trust funds and USPS. The budget deficit, as presented in the Financial Report, combines the on-budget and off-budget totals to derive consolidated totals for federal activity.

Components of Net Operating Cost Not Part of the Budget Deficit

This information includes the operating components, such as the changes in benefits payable for veterans, military and civilian employees, environmental and disposal liabilities, and depreciation expense, not included in the budget results.

Components of the Budget Deficit Not Part of Net Operating Cost

This information includes the budget components, such as the acquisition of capital assets (that are recorded as outlays in the budget when cash is disbursed and reflected in net operating cost through depreciation expense over the useful life of the asset) and increases in other assets that are not included in the operating results.

United States Government
Reconciliations of Net Operating Cost and Budget Deficit
for the Years Ended September 30, 2021, and 2020

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(In billions of dollars)
2021
Restated
2020
Net operating cost (3,094.9) (3,841.4)
Components of net operating cost not part of the budget deficit
Excess of accrual-basis expenses over budget outlays
*Federal employee and veteran benefits payable
Pension and accrued benefits 282.0 160.1
Veterans compensation and burial benefits 439.2 733.3
Post-retirement health and accrued benefits 28.7 22.0
Other benefits 17.6 59.8
Subtotal - federal employee and veteran benefits payable 767.5 975.2
*Insurance and guarantee program liabilities (69.5) 4.8
*Environmental and disposal liabilities 10.6 7.3
*Accounts payable 24.1 1.0
*Benefits due and payable 17.6 32.7
*Advances from others and deferred revenue 27.8 (0.8)
*Other liabilities 283.1 58.7
Subtotal - excess of accrual-basis expenses over budget outlays 1,061.2 1,078.9
Amortized expenses not included in budget outlays
Property, plant, and equipment depreciation expense 91.2 77.2
Other expenses that are not reported as budget outlays
Property, plant, and equipment disposals and revaluations (9.8) (50.2)
Excess of accrual-basis revenue over budget receipts
Accounts receivable, net (11.8) 7.9
Taxes receivable, net (68.0) (91.1)
Other losses/(gains) and cost/(revenue) that are not budget receipts
*Investments in government-sponsored enterprises (112.0) 3.2
Subtotal - components of net operating cost not part of budget deficit 950.8 1,025.9
Components of the budget deficit that are not part of net operating cost
Budget receipts not included in net operating cost
Credit reform and other loan activities (75.1) 44.9
Budget outlays not included in net operating cost
Acquisition of capital assets (118.4) (60.0)
* Investments (5.4) (11.5)
* Inventory and related property, net (17.3) (26.2)
* Advances and prepayments (150.7) (150.6)
*Other assets 4.0 (0.1)
Subtotal - components of the budget deficit that are not part of net operating cost (362.9) (203.5)
Adjustments to beginning net position 0.7 6.0
Other
Allocations of special drawing rights (112.1) (1.5)
Effect of uninvested principal from the Thrift Savings Plan's G Fund (156.7)  - 
All other reconciling items (0.5) (117.4)
Total other (269.3) (118.9)
Budget deficit 1 (2,775.6) (3,131.9)
1The FY 2021 budget deficit differs from the FY 2021 budget deficit reported in the MTS because of approximately $3.4 billion of outlays that were not recorded in the MTS until FY 2022.
*The amounts represent the year over year net change in the Balance Sheet line items.
The accompanying notes are an integral part of these financial statements.
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Last modified 03/18/22