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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, 2018, and 2017

Statements of Net Cost

These statements present the net cost of the government operations for fiscal years 2018 and 2017, including the operations related to funds from dedicated collections. Costs and earned revenues are categorized on the Statement of Net Cost by significant entity, providing greater accountability by showing the relationship of the entities’ net cost to the governmentwide net cost. Costs and earned revenues are presented in this Financial Report on an accrual basis, while the budget presents outlays and receipts, generally on a cash basis. The focus of the budget of the U.S. is by entity. Budgets are prepared, defended, and monitored by entity. In reporting by entity, we are assisting the external users in assessing the budget integrity, operating performance, stewardship, and systems and controls of the government.

The Statements of Net Cost contain the following four components:

  • Gross cost—is the full cost of all the departments and entities excluding (gain)/loss from changes in assumptions. These costs are assigned on a cause-and-effect basis, or reasonably allocated to the corresponding entities.
  • Earned revenue—is exchange revenue resulting from the government providing goods and services to the public at a price.
  • (Gain)/loss from changes in assumptions—is the gain or loss from changes in long-term assumptions used to measure the liabilities reported for federal civilian and military employee pensions, other post-employment benefits, and other retirement benefits, including veterans’ compensation.
  • Net cost—is computed by subtracting earned revenue from gross cost, adjusted by the (gain)/loss from changes in assumptions.

Individual entity net cost amounts will differ from the entity’s financial statements primarily because of reallocations completed at the governmentwide level which are listed below.

  • Employee benefit costs.
  • Intragovernmental eliminations, as adjusted for buy/sell costs and related revenues.
  • Imputed costs.

Because of its specific function, most of the employee benefit costs originally associated with the OPM have been reallocated to the user entities for governmentwide reporting purposes. The remaining costs for OPM on the Statements of Net Cost are the administrative operating costs, the expenses from prior costs from health and pension plan amendments, and the actuarial gains and losses, if applicable.

GSA is the primary provider of goods and services to federal entities. GSA’s net cost is adjusted for its intragovernmental buy/sell costs and related revenues. The remaining costs for GSA on the Statements of Net Cost are administrative operating costs. With regard to intragovernmental buy/sell costs and related revenues, the amounts recognized by each entity are added to, and subtracted from, respectively, the individual entity non-federal net cost amounts.

In addition, the intragovernmental imputed costs recognized for the receipt of goods and services, financed in whole or part by the providing entities, are added to the individual entity non-federal net cost amounts. The most significant types of imputed costs that are recorded relate to post-retirement and health benefits, FECA, and the Treasury Judgment Fund. The consolidated Statements of Net Cost is intended to show the full cost for each entity, therefore, the amount of these imputed costs are added back to the reporting entities’ gross cost line item and subtracted from the applicable administering entities’ gross cost line item. These imputed costs have a net effect of zero on the Statements of Net Cost in the Financial Report.

The interest on securities issued by the Treasury and held by the public is reported on Treasury’s financial statements, but, because of its importance and the dollar amounts involved, it is reported separately in these statements.

United States Government
Statement of Net Cost
for the Year Ended September 30, 2018

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(In billions of dollars)		 Gross
Cost		 Earned
Revenue		 Subtotal (Gain)/Loss
from
Changes in
Assumptions		 Net
Cost
Department of Health and Human Services  1,252.6 110.5 1,142.1 0.4 1,142.5
Social Security Administration  1,038.50 0.2 1,038.3 - 1,038.3
Department of Defense  719.8 38.2 681.6 16.8 698.4
Interest on Treasury Securities Held by the Public  357.3 - 357.3 - 357.3
Department of Veterans Affairs  272.5 4.8 267.7 79.2 346.9
Department of Energy  147.0 6.1 140.9 - 140.9
Department of Agriculture  137.0 6.6 130.4 - 130.4
Department of the Treasury  150.5 21.9 128.6 - 128.6
Office of Personnel Management  101.3 23.4 77.9 26.2 104.1
Department of Transportation  79.0 1.1 77.9 - 77.9
Department of Homeland Security  78.3 14.8 63.5 1.1 64.6
Department of Education  79.2 31.4 47.8 - 47.8
Department of Housing and Urban Development  43.3 1.8 41.5 - 41.5
Department of Labor  41.1 - 41.1 - 41.1
Security Assistance Accounts  37.9 - 37.9 - 37.9
Department of Justice  35.4 1.9 33.5 - 33.5
Department of State  32.3 4.8 27.5 1.5 29.0
National Aeronautics and Space Administration  20.3 0.2 20.1 - 20.1
Department of the Interior  20.4 2.9 17.5 - 17.5
U.S. Agency for International Development  13.1 - 13.1 - 13.1
Railroad Retirement Board 13.1 - 13.1 - 13.1
Federal Communications Commission  10.8 0.4 10.4 - 10.4
Department of Commerce  11.8 3.6 8.2 - 8.2
Environmental Protection Agency  8.3 0.4 7.9 - 7.9
National Science Foundation  7.3 - 7.3 - 7.3
U.S. Postal Service  71.4 69.7 1.7 - 1.7
Smithsonian Institution  1.5 0.5 1.0 - 1.0
Millennium Challenge Corporation  0.8 - 0.8 - 0.8
Small Business Administration  0.7 0.3 0.4 - 0.4
National Credit Union Administration  0.9 0.6 0.3 - 0.3
U.S. Nuclear Regulatory Commission  0.9 0.7 0.2 - 0.2
Farm Credit System Insurance Corporation  0.2 0.2 - - -
Overseas Private Investment Corporation  - 0.1 (0.1) - (0.1)
Export-Import Bank of the U.S.  - 0.5 (0.5) - (0.5)
Securities and Exchange Commission  1.8 2.3 (0.5) - (0.5)
General Services Administration  - 0.8 (0.8) - (0.8)
Tennessee Valley Authority  9.9 11.2 (1.3) - (1.3)
National Railroad Retirement Investment Trust  0.1 1.9 (1.8) - (1.8)
Federal Deposit Insurance Corporation  1.3 10.8 (9.5) - (9.5)
Pension Benefit Guaranty Corporation  (7.8) 16.7 (24.5) - (24.5)
All other entities  18.7 1.5 17.2 - 17.2
Total 4,808.5 392.8 4,415.7 125.2 4,540.9
The accompanying notes are an integral part of these financial statements.

United States Government
Statement of Net Cost
for the Year Ended September 30, 2017 (Restated)

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(In billions of dollars)		 Gross
Cost		 Earned
Revenue		 Subtotal (Gain)/Loss
from
Changes in
Assumptions		 Net
Cost
Department of Health and Human Services  1,186.8 101.1 1,085.7 0.4 1,086.1
Social Security Administration  999.1 0.3 998.8 - 998.8
Department of Defense  718.7 77.4 641.3 24.1 665.4
Interest on Treasury Securities Held by the Public  296.3 - 296.3 - 296.3
Department of Veterans Affairs  254.8 4.8 250.0 229.7 479.7
Department of Energy  46.9 5.6 41.3 - 41.3
Department of Agriculture  142.9 8.1 134.8 - 134.8
Department of the Treasury  179.5 37.9 141.6 - 141.6
Office of Personnel Management  90.1 22.3 67.8 102.5 170.3
Department of Transportation  79.6 0.9 78.7 - 78.7
Department of Homeland Security  77.3 12.3 65.0 (0.5) 64.5
Department of Education  84.4 30.6 53.8 - 53.8
Department of Housing and Urban Development  69.1 1.7 67.4 - 67.4
Department of Labor  43.5 - 43.5 - 43.5
Security Assistance Accounts  36.7 - 36.7 - 36.7
Department of Justice  34.2 1.6 32.6 - 32.6
Department of State  31.3 4.8 26.5 0.3 26.8
National Aeronautics and Space Administration  19.6 0.2 19.4 - 19.4
Department of the Interior  20.2 2.7 17.5 - 17.5
U.S. Agency for International Development  13.2 - 13.2 - 13.2
*Railroad Retirement Board 13.0 3.8 9.2 - 9.2
Federal Communications Commission  20.7 0.4 20.3 - 20.3
Department of Commerce  12.9 3.3 9.6 - 9.6
Environmental Protection Agency  8.8 0.4 8.4 - 8.4
National Science Foundation  7.1 - 7.1 - 7.1
U.S. Postal Service  71.9 68.7 3.2 - 3.2
Smithsonian Institution  0.9 - 0.9 - 0.9
Millennium Challenge Corporation  0.7 - 0.7 - 0.7
Small Business Administration  0.1 0.3 (0.2) - (0.2)
National Credit Union Administration  (0.1) 0.7 (0.8) - (0.8)
U.S. Nuclear Regulatory Commission  0.9 0.8 0.1 - 0.1
Farm Credit System Insurance Corporation  - 0.4 (0.4) - (0.4)
Overseas Private Investment Corporation  - 0.1 (0.1) - (0.1)
Export-Import Bank of the U.S.  0.4 1.2 (0.8) - (0.8)
Securities and Exchange Commission  1.9 2.1 (0.2) - (0.2)
General Services Administration  0.2 0.6 (0.4) - (0.4)
Tennessee Valley Authority  9.9 10.7 (0.8) - (0.8)
Federal Deposit Insurance Corporation  1.5 10.6 (9.1) - (9.1)
Pension Benefit Guaranty Corporation  9.8 14.1 (4.3) - (4.3)
All other entities  21.4 1.4 20.0 - 20.0
Total 4,606.2 431.9 4,174.3 356.5 4,530.8

*Includes amounts from National Railroad Retirement Investment Trust (NRRIT) in 2017. In 2018, NRRIT amounts are reported separately.

The accompanying notes are an integral part of these financial statements.
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Last modified 04/06/23