U.S. Department of Labor -- DOL Annual Report, Fiscal Year 2006 - Principal Financial Statements and Notes

DOL Annual Report, Fiscal Year 2006
Performance and Accountability Report

Principal Financial Statements and Notes

NOTE 2 — FUNDS WITH U.S. TREASURY

Funds with U.S. Treasury at September 30, 2006 consisted of the following:

	Entity Assets
(Dollars in thousands)	Unobligated Balance Available	Unobligated Balance Unavailable	Obligated Balance Not Yet Disbursed	Total Entity Assets	Non-entity Assets	Total

Revolving funds	$3,946	$—	$35,694	$39,640	$—	$39,640
Trust funds	141,122	—	(41,062)	100,060	(159)	99,901
Appropriated funds	2,446,785	1,371,403	5,696,774	9,514,962	—	9,514,962
Other	—	—	—	—	62,646	62,646

	$2,591,853	$1,371,403	$5,691,406	$9,654,662	$62,487	$9,717,149


Funds with U.S. Treasury at September 30, 2005 consisted of the following:

	Entity Assets
(Dollars in thousands)	Unobligated Balance Available	Unobligated Balance Unavailable	Obligated Balance Not Yet Disbursed	Total Entity Assets	Non-entity Assets	Total

Revolving funds	$3,900	$—	$27,682	$31,582	$—	$31,582
Trust funds	107,154	16,921	(338,941)	(214,866)	(707)	(215,573)
Appropriated funds	2,290,830	1,187,214	5,865,841	9,343,885	—	9,343,885
Other	—	—	—	—	59,766	59,766

	$2,401,884	$1,204,135	$5,554,582	$9,160,601	$59,059	$9,219,660

The negative fund balances reported as of September 30, 2006 and 2005 relate to the Unemployment Trust Fund (UTF) and are the result of the timing of processing the investments and redemptions of UTF. The investments and redemptions relating to the last business day of the month are not processed until the first day of the next month. This could result in a negative cash position for the preceding business day if the disbursements are greater than the receipts to the fund.

Unobligated Balance Available includes $339 million of funds apportioned for use in the subsequent year.

NOTE 3 — INVESTMENTS

Investments at September 30, 2006 consisted of the following:

		Face	Premium	Net	Market
(Dollars in thousands)		Value	(Discount)	Value	Value

Unemployment Trust Fund
	Non-marketable
	U.S. Treasury Certificates of Indebtedness
	4.875% maturing June 30, 2007	$8,662,384	$—	$8,662,384	$8,662,384
	5.0% maturing June 30, 2007	343,768	—	343,768	343,768
	Special issue U.S. Treasury Bonds
	4.625% maturing June 30, 2007	17,927,258	—	17,927,258	17,927,258
	4.625% maturing June 30, 2008	19,299,158	—	19,299,158	19,299,158
	4.875% maturing June 30, 2008	10,000,000	—	10,000,000	10,000,000
	4.875% maturing June 30, 2009	9,980,072	—	9,980,072	9,980,072
		66,212,640	—	66,212,640	66,212,640

Panama Canal Commission
Compensation Fund
	Marketable
	U.S. Treasury Bill
	Maturing November 16, 2006	13,608	(85)	13,523	13,016
	U.S. Treasury Notes
	3.625% to 6.625% various maturities	24,460	30	24,490	24,315
	U.S. Treasury Bonds
	10.375% to 11.750% various maturities	39,738	2,597	42,335	42,233
		77,806	2,542	80,348	79,564

Longshore and Harbor Workers' Compensation Act Trust Fund
	Non-marketable
	One Day Deposit
	5.030% maturing October 2, 2006	73,146	—	73,146	73,146

District of Columbia Workmen's Compensation Act Trust Fund
	Non-marketable
	One Day Deposit
	5.030% to maturing October 2, 2006	5,611	—	5,611	5,611

Energy Employees Occupational Illness Compensation Fund
	Non-marketable
	U.S. Treasury Bill
	5.030% maturing October 2, 2006	83,307	—	83,307	83,307

		$66,452,510	$2,542	$66,455,052	$66,454,268


Entity investments		$66,351,966	$2,542	$66,354,508	$66,353,724
Non-entity investments		100,544	—	100,544	100,544

		$66,452,510	$2,542	$66,455,052	$66,454,268

Investments at September 30, 2005 consisted of the following:

		Face	Premium	Net	Market
(Dollars in thousands)		Value	(Discount)	Value	Value
Unemployment Trust Fund
	Non-marketable
	U.S. Treasury Certificates of Indebtedness
	4.625% maturing June 30, 2006	$2,285,274	—	$2,285,274	$2,285,274
	Special issue U.S. Treasury Bonds
	4.625% maturing June 30, 2007	26,000,000	—	26,000,000	26,000,000
	4.625% maturing June 30, 2008	19,299,158	—	19,299,158	19,299,158
	5.500% maturing June 30, 2006	7,221,451	—	7,221,451	7,221,451
		54,805,883	—	54,805,883	54,805,883

Panama Canal Commission
Compensation Fund
	Marketable
	U.S. Treasury Notes
	3.625% to 7.875% various maturities	32,307	711	33,018	32,784
	U.S. Treasury Bonds
	10.375% to 14.000% various maturities	44,232	4,941	49,173	49,798
		76,539	5,652	82,191	82,582

Longshore and Harbor Workers' Compensation Act Trust Fund
	Non-Marketable
	One Day Deposit
	3.460% maturing October 3, 2005	60,000	—	60,000	60,000

District of Columbia Workmen's Compensation Act Trust Fund
	Non-Marketable
	One Day Deposit
	3.460% maturing October 3, 2005	3,000	—	3,000	3,000

Backwage Restitution Fund
	Marketable
	U.S. Treasury Bill
	2.920% to 3.160% maturing October 20, 2005	1,625	(55)	1,570	1,570

		$54,947,047	$5,597	$54,952,644	$54,952,644


Entity investments		$54,850,990	$5,652	$54,856,642	$54,857,033
Non-entity investments		96,057	(55)	96,002	96,002

		$54,947,047	$5,597	$54,952,644	$54,953,035

NOTE 4 — ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

Accounts receivable at September 30, 2006 consisted of the following:

(Dollars in thousands)				Gross Receivables	Allowance	Net Receivables

Entity intra-governmental assets
	Due for UCFE and UCX benefits			$334,738	$—	$334,738
	Due for workers' compensation benefits			3,696,581	—	3,696,581
	Other			14,869	—	14,869
				4,046,188	—	4,046,188

Entity assets
	State unemployment taxes			932,626	(666,082)	266,544
	Due from reimbursable employers			544,016	(32,357)	511,659
	Benefit overpayments			1,949,362	(1,730,343)	219,019
	Other			8,079	(2,443)	5,636
				3,434,083	(2,431,225)	1,002,858

Non-entity assets
	Fines and penalties			81,309	(36,808)	44,501
	Backwages			23,966	(16,169)	7,797
				105,275	(52,977)	52,298
				3,539,358	(2,484,202)	1,055,156

				$7,585,546	$(2,484,202)	$5,101,344


Changes in the allowance for doubtful accounts during 2006 consisted of the following:



(Dollars in thousands)		Balance at September 30, 2005	Write-offs	Contra Revenue	Bad Debt	Balance at September 30, 2006

Entity assets
State unemployment taxes		$(636,367)	$349,681	$(379,396)	$—	$(666,082)
Due from reimbursable employers		(31,513)	19,936	(20,780)	—	(32,357)
Benefit overpayments		(1,737,979)	613,131	—	(605,495)	(1,730,343)
Other		(2,314)	36	—	(165)	(2,443)
		(2,408,173)	982,784	(400,176)	(605,660)	(2,431,225)

Non-entity assets
Fines and penalties		(55,807)	26,410	(7,411)	—	(36,808)
Backwages		(12,661)	—	—	(3,508)	(16,169)
		(68,468)	26,410	(7,411)	(3,508)	(52,977)

		$(2,467,641)	$1,009,194	$(407,587)	$(609,168)	$(2,484,202)


Accounts receivable at September 30, 2005 consisted of the following:


(Dollars in thousands)				Gross Receivables	Allowance	Net Receivables

Entity intra-governmental assets
	Due for UCFE and UCX benefits			$344,073	$—	$344,073
	Due for workers' compensation benefits			3,640,388	—	3,640,388
	Other			6,809	—	6,809
				3,991,270	—	3,991,270

Entity assets
	State unemployment taxes			871,549	(636,367)	235,182
	Due from reimbursable employers			547,623	(31,513)	516,110
	Benefit overpayments			1,949,359	(1,737,979)	211,380
	Other			10,264	(2,314)	7,950
				3,378,795	(2,408,173)	970,622

Non-entity assets
	Fines and penalties			113,075	(55,807)	57,268
	Backwages			27,789	(12,661)	15,128
				140,864	(68,468)	72,396
				3,519,659	(2,476,641)	1,043,018

				$7,510,929	$(2,476,641)	$5,034,288


Changes in the allowance for doubtful accounts during 2005 consisted of the following:



(Dollars in thousands)		Balance at September 30, 2004	Write-offs	Contra Revenue	Bad Debt	Balance at September 30, 2005

Entity assets
State unemployment taxes		$(556,917)	$334,716	$(414,166)	$—	$(636,367)
Due from reimbursable employers		(39,404)	27,088	(19,197)	—	(31,513)
Benefit overpayments		(1,862,710)	524,158	—	(399,427)	(1,737,979)
Other		(2,121)	234	—	(427)	(2,314)
		(2,461,152)	886,196	(433,363)	(399,854)	(2,408,173)

Non-entity assets
Fines and penalties		(56,326)	20,135	(19,616)	—	(55,807)
Backwages		(10,389)	—	—	(2,272)	(12,661)
		(66,715)	20,135	(19,616)	(2,272)	(68,468)

		$(2,527,867)	$906,331	$(452,979)	$(402,126)	$(2,476,641)

NOTE 5 — ADVANCES

Advances at September 30, 2006 and 2005 consisted of the following:

(Dollars in thousands)				2006	2005

Intra-governmental
	Advances to the Department of Justice			$4	$—
	Advances to the Department of Commerce - Bureau of Census			—	10,812
				4	10,812
Advances to states for UI benefit payments				474,153	489,177
Advances to grantees and contractors to finance future DOL program expenditures				78,537	89,520
Other				2,604	5,442
				555,294	584,139
				$555,298	$594,951



NOTE 6 — PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment at September 30, 2006 consisted of the following:

		2006

(Dollars in thousands)		Cost	Accumulated Depreciation/ Amortization	Net Book Value

Structures, facilities and improvements
	Structures and facilities	$862,100	$(378,086)	$484,014
	Improvements to leased facilities	409,521	(222,152)	187,369
		1,271,621	(600,238)	671,383
Furniture and equipment
	Equipment held by contractors	159,771	(154,226)	5,545
	Furniture and equipment	62,740	(39,973)	22,767
		222,511	(194,199)	28,312

ADP software		192,270	(68,640)	123,630
Construction-in-progress		162,486	—	162,486
Land		90,999	—	90,999

		$1,939,887	$(863,077)	$1,076,810

Property, plant and equipment at September 30, 2005 consisted of the following:

		2005

(Dollars in thousands)		Cost	Accumulated Depreciation/ Amortization	Net Book Value

Structures, facilities and improvements
	Structures and facilities	$884,117	$(356,235)	$527,882
	Improvements to leased facilities	385,067	(213,858)	171,209
		1,269,184	(570,093)	699,091
Furniture and equipment
	Equipment held by contractors	162,064	(156,852)	5,212
	Furniture and equipment	63,135	(37,286)	25,849
		225,199	(194,138)	31,061

ADP software		177,463	(69,656)	107,807
Construction-in-progress		94,464	—	94,464
Land		90,999	—	90,999

		$1,857,309	$(833,887)	$1,023,422



NOTE 7 — NON-ENTITY ASSETS

Non-entity assets consisted of the following at September 30, 2006 and 2005:

(Dollars in thousands)				2006	2005

Intra-governmental
	Funds with U.S. Treasury			$62,487	$59,059
	Investments			100,544	96,002
	Interest receivable from investments			1,129	1,095
				164,160	156,156
Accounts receivable, net of allowance				52,298	72,396

				$216,458	$228,552

NOTE 8 — ADVANCES FROM U.S. TREASURY

Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2006 consisted of the following:

(Dollars in thousands)		Balance at September 30, 2005	Net Borrowing	Balance at September 30, 2006

Intra-governmental
	Borrowing from the Treasury	$9,186,557	$445,000	$9,631,557

		$9,186,557	$445,000	$9,631,557


Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2005 consisted of the following:

(Dollars in thousands)		Balance at September 30, 2004	Net Borrowing	Balance at September 30, 2005

Intra-governmental
	Borrowing from the Treasury	$8,740,557	$446,000	$9,186,557

		$8,740,557	$446,000	$9,186,557


Assuming the continuation of current operating conditions, repayment of these and necessary future advances will require a change in the statutory operating structure of the fund. (See note 20.)



NOTE 9 — ACCRUED BENEFITS

Accrued benefits at September 30, 2006 and 2005 consisted of the following:

(Dollars in thousands)			2006	2005

	State regular and extended unemployment benefits payable		$790,745	$646,473
	Federal extended unemployment benefits payable		36,615	36,338
	Federal temporary extended unemployment benefits		24,532	23,620
	Federal emergency unemployment benefits payable		42,649	37,714
	Federal employees' unemployment benefits payable		36,725	41,885
	Federal employees' unemployment benefits for existing claims due in the subsequent year		137,161	145,642
	Total unemployment benefits payable		1,068,427	931,672
	Black lung disability benefits payable		46,329	51,995
	Federal employees' disability and 10(h) benefits payable		59,735	156,570
	Energy employees occupational illness compensation benefits payable		21,492	3,812
	Longshore and harbor workers disability benefits payable		3,382	3,234
	District of Columbia disability benefits payable		283	375

			$1,199,648	$1,147,658

NOTE 10 — FUTURE WORKERS' COMPENSATION BENEFITS

DOL's liability for future workers' compensation benefits at September 30, 2006 and 2005 consisted of the following:

(Dollars in thousands)			2006	2005

	Projected gross liability of the Federal government
	for future FECA benefits		$25,851,505	$26,007,693
	Less liabilities attributed to other agencies:
		U.S. Postal Service	(8,662,714)	(8,663,963)
		Department of Navy	(2,698,683)	(2,725,371)
		Department of Army	(1,973,869)	(1,950,173)
		Department of Veterans Affairs	(1,811,947)	(1,776,459)
		Department of Air Force	(1,369,905)	(1,399,314)
		Department of Transportation	(952,969)	(1,007,910)
		Department of Homeland Security	(1,519,329)	(1,473,295)
		Tennessee Valley Authority	(553,322)	(580,506)
		Department of Treasury	(600,737)	(644,620)
		Department of Agriculture	(807,652)	(834,415)
		Department of Justice	(991,560)	(926,336)
		Department of Interior	(678,923)	(689,306)
		Department of Defense, Other	(813,532)	(844,007)
		Department of Health and Human Services	(273,374)	(270,354)
		Social Security Administration	(274,763)	(284,589)
		General Services Administration	(165,051)	(170,113)
		Department of Commerce	(170,164)	(173,415)
		Department of Energy	(96,386)	(98,479)
		Department of State	(62,669)	(60,288)
		Department of Housing & Urban Development	(79,873)	(81,613)
		Department of Education	(16,952)	(18,082)
		National Aeronautics and Space Administration	(60,217)	(62,430)
		Environmental Protection Agency	(39,408)	(39,380)
		Small Business Administration	(27,045)	(28,967)
		Office of Personnel Management	(20,448)	(25,653)
		National Science Foundation	(1,287)	(1,381)
		Nuclear Regulatory Commission	(7,434)	(8,417)
		Agency for International Development	(23,438)	(23,726)
		Other	(549,540)	(580,826)
			(25,303,191)	(25,443,388)

			$548,314	$564,305

	Projected liability of the Department of Labor for future FECA benefits
		FECA benefits not chargeable to other Federal agencies payable by
		DOL's Federal Employees' Compensation Act Special Benefit Fund	$250,179	$270,255
		FECA benefits due to eligible workers of DOL and Job Corp enrollees	242,525	233,652
		FECA benefits due to eligible workers of the Panama Canal Commission	55,610	60,398

			$548,314	$564,305

NOTE 11 — OTHER LIABILITIES

Other liabilities at September 30, 2006 and 2005 consisted of the following current liabilities:

(Dollars in thousands)		2006	2005

Intra-governmental
	Accrued benefits	$10,070	$9,666
	Unearned FECA assessments	48,285	44,347
	Deposit and clearing accounts	2	—
	Non-entity receipts due to U.S. Treasury	44,501	57,268
	Amounts held for the Railroad Retirement Board	101,514	94,820
	Advances from other Federal agencies	1,013	—
Total intra-governmental		205,385	206,101

Accrued payroll and benefits		44,968	45,261
Due to Backwage recipients		71,235	71,632
Unearned assessment revenue		42,751	48,910
Deposit and clearing accounts		—	5,503
Readjustment allowances and other Job Corps liabilities		58,359	84,427
Other advances		—	7,500
		217,313	263,233

		$422,698	$469,334



NOTE 12 — LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

Liabilities not covered by budgetary resources at September 30, 2006 and 2005 consisted of the following:

(Dollars in thousands)		2006	2005

Intra-governmental
	Advances from U.S. Treasury	$9,631,557	$9,186,557

Accrued benefits		—	13,519
Future workers' compensation benefits		242,525	230,721
Accrued annual leave		92,506	90,222
Readjustment allowances and other Job Corps liabilities		58,359	84,427
		393,390	418,889

		$10,024,947	$9,605,446

NOTE 13 — PENSION EXPENSE

Pension expense in 2006 consisted of the following:

(Dollars in thousands)	Employer Contributions	Accumulated Costs Imputed by OPM	Total Pension Expense

Civil Service Retirement System	$26,506	$42,476	$68,982
Federal Employees' Retirement System	86,876	—	86,876
Thrift Savings Plan	33,003	—	33,003

	$146,385	$42,476	$188,861


Pension expense in 2005 consisted of the following:

(Dollars in thousands)	Employer Contributions	Accumulated Costs Imputed by OPM	Total Pension Expense

Civil Service Retirement System	$27,034	$43,919	$70,953
Federal Employees' Retirement System	81,359	—	81,359
Thrift Savings Plan	30,824	—	30,824

	$139,217	$43,919	$183,136