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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, 2023, and 2022

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, 2023, and 2022

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(In billions of dollars) 2023 2022*
Net operating cost (3,417.2) (4,171.0)
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 303.7 774.1
Veterans compensation and burial benefits 1,130.7 1,662.8
Post-retirement health and accrued benefits 49.5 176.3
Other benefits 31.6 15.8
Subtotal - federal employee and veteran benefits payable 1,515.5 2,629.0
** Insurance and guarantee program liabilities (5.2) (25.3)
** Environmental and disposal liabilities 19.0 13.0
** Accounts payable 9.6 (8.5)
** Benefits due and payable 37.6 14.4
** Advances from others and deferred revenue 108.1 45.2
** Other liabilities 178.1 (182.0)
Subtotal - excess of accrual-basis expenses over budget outlays 1,862.7 2,485.8
Amortized expenses not included in budget outlays:
Property, plant, and equipment depreciation expense 77.9 78.3
Other expenses that are not reported as budget outlays:
Property, plant, and equipment disposals and revaluations 9.1 15.5
Excess of accrual-basis revenue over budget receipts:
Accounts receivable, net (18.6) (20.8)
Taxes receivable, net 55.0 65.5
Other losses/(gains) and cost/(revenue) that are not budget receipts:
** Investments in government-sponsored enterprises (16.7) (2.8)
Subtotal - components of net operating cost not part of budget deficit 1,969.4 2,621.5
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 24.5 (58.5)
Budget outlays not included in net operating cost:
Acquisition of capital assets (124.5) (114.4)
** Investments (0.5) 31.3
** Inventory and related property, net (16.1) (7.7)
** Advances and prepayments 45.4 71.3
** Other assets (157.7) 1.0
Subtotal - components of the budget deficit that are not part of net operating cost (228.9) (77.0)
Adjustments to beginning net position (0.8) (4.3)
Other:
Allocations of special drawing rights (4.0) 14.8
Effect of uninvested principal from the TSP's G Fund - 156.7
All other reconciling items (13.7) 83.8
Total other (17.7) 255.3
Budget deficit (1,695.2) (1,375.5)
* Certain amounts differ from prior year reported amounts due to a change in presentation (see Financial Statement Note 1.W).
** 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 03/20/24