Financial Statements of the United States Government for the Fiscal Years Ended September 30, 2019, and 2018

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 the accrual and budgetary accounting basis share transaction data.

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 details 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, 2019, and 2018

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(In billions of dollars)	2019	Restated 2018
Net operating cost	(1,445.1)	(1,159.0)
*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	183.1	88.4
Veterans compensation and burial benefits	173.5	146.3
Post-retirement health and accrued benefits	55.0	33.0
Other benefits	46.4	14.5
Subtotal - federal employee and veteran benefits payable	458.0	282.2
*Insurance and guarantee program liabilities	24.3	(32.3)
*Environmental and disposal liabilities	18.1	112.8
*Accounts payable	11.3	15.9
*Benefits due and payable	12.5	(7.7)
*Other liabilities	31.4	5.8
Subtotal - excess of accrual-basis expenses over budget outlays	555.6	376.7
Amortized expenses not included in budget outlays
Property, plant, and equipment depreciation expense	88.4	72.7
Other expenses that are not reported as budget outlays
Property, plant, and equipment disposals and revaluations	(38.8)	(4.0)
Excess of accrual-basis revenue over budget receipts
Accounts receivable, net	(4.0)	6.2
Taxes receivable, net	(89.1)	(7.8)
Other losses/(gains) and cost/(revenue) that are not budget receipts
*Investments in government-sponsored enterprises	1.1	(20.6)
Subtotal - components of net operating cost not part of budget deficit	513.2	423.2
*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	45.3	5.0
Budget outlays not included in net operating cost
Acquisition of capital assets	(66.0)	(72.2)
*Debt and equity securities	(6.1)	4.0
*Inventories and related property	(18.2)	(10.8)
*Other assets	1.2	35.9
Subtotal - components of the budget deficit that are not part of net operating cost	(43.8)	(38.1)
Adjustments to beginning net position	13.0	0.1
Other
All other reconciling items	(21.7)	(5.2)
Budget deficit	(984.4)	(779.0)
*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 05/11/21