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 15 — NON-EXCHANGE REVENUE

Non-exchange revenues reported on the Consolidated Statement of Changes in Net Position in 2006 and 2005 consisted of the following:

(Dollars in thousands)			2006	2005

Employer taxes
	Unemployment Trust Fund
		Federal unemployment taxes	$7,383,523	$6,810,122
		State unemployment taxes	34,023,122	33,151,082
			41,406,645	39,961,204
	Black Lung Disability Trust Fund excise taxes		607,387	610,417
			42,014,032	40,571,621

Interest
	Unemployment Trust Fund		2,780,114	2,586,064
	Longshore and Harbor Workers' Compensation Act Trust Fund		2,016	1,007
	District of Columbia Workmen's Compensation Act Trust Fund		155	63
	Panama Canal Commission Compensation Fund		3,647	3,915
	Energy Employees Occupational Illness Compensation Fund		5,654	1,722
	Black Lung Disability Trust Fund		297	644
			2,791,883	2,593,415
Assessments
	Longshore and Harbor Workers' Compensation Act Trust Fund		138,857	133,566
	District of Columbia Workmen's Compensation Act Trust Fund		10,789	11,216
	Other		183	533
			149,829	145,315

Reimbursement of unemployment benefits from state and local governments and non-profit organizations to the Unemployment Trust Fund			1,855,188	1,857,193

			$46,810,932	$45,167,544

NOTE 16 — TRANSFERS WITHOUT REIMBURSEMENT

Transfers from (to) other Federal agencies in 2006 and 2005 consisted of the following:

(Dollars in thousands)		2006	2005

Budgetary financing sources
	From H-1B Nonimmigrant Petitioner Account, Department of Homeland Security	$390,823	$—
	From DOL general fund unexpended appropriation accounts to the DOL Working Capital Fund	3,000	3,000
		393,823	3,000

Other financing sources
	Liability for EEOICPA, Part D, from the Department of Energy	—	(810,000)
	Liability for RECA, Section 5, from the Department of Justice	—	(316,993)
	From General Services Administration	1,537	3,564
	To General Services Administration	(209)	(3,943)
	From Department of Defense	—	41,760
		1,328	(1,085,612)

		$395,151	$(1,082,612)

NOTE 17 — STATUS OF BUDGETARY RESOURCES

A. Apportionment Categories of Obligations Incurred

Obligations incurred reported on the Combined Statement of Budgetary Resources in 2006 and 2005.

(Dollars in thousands)		2006	2005

Direct Obligations
	Category A	$4,063,611	$4,021,560
	Category B	9,247,270	9,551,655
	Exempt from apportionment	37,033,486	37,760,421
Total direct obligations		50,344,367	51,333,636
Reimbursable Obligations
	Category A	188,504	172,936
	Category B	2,906,630	2,609,991
Total reimbursable obligations		3,095,134	2,782,927
		$53,439,501	$54,116,563

B. Permanent Indefinite Appropriations

The Department of Labor’s permanent indefinite appropriations include all trust funds, the Federal Employees' Compensation Act Special Benefit Fund, the Panama Canal Commission Compensation Fund, the Energy Employees Occupational Illness Compensation Fund, ETA and ESA H-1B funds, and portions of State Unemployment Insurance and Employment Service Operations and Federal Unemployment Benefits and Allowances. These funds are described in Note 1-A.3.

C. Legal Arrangements Affecting Use of Unobligated Balances

Unemployment Trust Fund receipts are reported as budget authority in the Combined Statement of Budgetary Resources. The portion of UTF receipts collected in the current year in excess of amounts needed to pay benefits and other valid obligations are precluded by law from being available for obligation. Therefore, these excess receipts are not classified as budgetary resources in the Combined Statement of Budgetary Resources. Current year excess receipts are reported as temporarily not available pursuant to Public Law. Conversely, when obligations exceed receipts in the current year, amounts are drawn from unavailable collections to meet these obligations. Cumulative excess receipts are not included in unobligated balances in the status of budgetary resources included in that Statement. All excess receipts are reported as assets of the UTF and are included in the Consolidated Balance Sheet. They will become available for obligation as needed in the future.

The cumulative amounts of excess UTF receipts are denoted as unavailable collections in the Budget of the United States Government. The cumulative amount of these excess receipts at September 30, 2006 and 2005 reclassified from unobligated balances to UTF unavailable collections is presented on the following page.

(Dollars in millions)		2006	2005

Unemployment Trust Fund unavailable collections, beginning		$52,213	$42,964
	Budget authority from current year appropriations	46,725	45,184
	Less obligations	(34,943)	(35,935)

Excess of obligations over budget authority		11,782	9,249

Unemployment Trust Fund unavailable collections, ending		$63,995	$52,213

D. Explanation of Differences between the Statement of Budgetary Resources and the Budget of the United States Government

The Budget of the United States Government with actual amounts for the year ended September 30, 2006 has not been published as of the issue date of these financial statements. This document will be available in February 2007. In addition, the reconciliation of the SF133 and the Statement of Budgetary Resources will be performed in Fiscal Year 2007 after the Department receives the final SF133 reports from Trust Funds and allocated accounts.

A reconciliation of budgetary resources, obligations incurred and outlays, as presented in the Combined Statement of Budgetary Resources, to amounts included in the Budget of the United States Government for the year ended September 30, 2005 is shown below.

(Dollars in millions)		Budgetary Resources	Obligations Incurred	Gross Outlays

Combined Statement of Budgetary Resources		$57,989	$54,117	$54,082
	Pension Benefit Guaranty Corporation reported separately	15,936	3,592	3,571
	Accruals not reported in the budget	201	201	-
	Amounts in the budget not included in the Consolidated Statement of Budgetary Resources	5	5	14
	Amounts in the Consolidated Statement of Budgetary Resources not included in the budget	(62)	(37)	(42)
	Expired accounts	(1,177)	(111)	-
	Other	1	3	(6)

Budget of the United States Government		$72,893	$57,770	$57,619

E. Undelivered Orders

Undelivered orders at September 30, 2006 and 2005 were as follows.

(Dollars in thousands)	2006	2005

Undelivered orders	$5,773,816	$5,879,080

F. Appropriations Received

The Combined Statements of Budgetary Resources discloses appropriations received of $58,971 and $57,249 million for FY 2006 and 2005, respectively. Appropriations received on the Consolidated Statements of Changes in Net Position are $10,704 and $11,101 million for FY 2006 and 2005, respectively. The differences of $48,267 and $46,148 million represent certain dedicated and earmarked receipts recognized as exchange revenue or non-exchange revenue reported on the Consolidated Statements of Net Cost or the Consolidated Statements of Changes in Net Position and amounts of new budget authority permanently reduced by enacted legislation.

NOTE 18 — DISCLOSURE RELATED TO THE STATEMENT OF FINANCING

A. Other Resources That Do Not Affect the Net Cost of Operations

Other resources that do not affect net cost of operations for the years ended September 30, 2006 and 2005 consisted of the following:

(Dollars in thousands)	2006	2005

Transfer of liability for EEOICPA, Part D, from the Department of Energy	$—	$810,000
Transfer of liability for RECA, Section 5, from the Department of Justice	—	316,993
Transfer of property to GSA	209	3,943
Transfer of expired funds from Veterans' Employment and Training to the Unemployment Trust Fund	—	150
	$209	$1,131,086

B. Relationship between Liabilities Not Covered by Budgetary Resources and Components Requiring or Generating Resources in Future Periods.

(Dollars in thousands)	2006	2005

Liabilities not covered by budgetary resources, current year (Note 12)	$10,024,947	$9,605,446
Less liabilities not covered by budgetary resources, prior year (Note 12)	(9,605,446)	(9,130,206)
Current year change in liabilities not covered by budgetary resources	419,501	475,240
Proceeds from Advances from U.S. Treasury	(445,000)	(446,000)
Increase in energy employees occupational illness compensation benefits liability funded with permanent and indefinite appropriation	—	3,515,426
Increase in future workers' compensation benefits not covered by budgetary resources	(11,804)	—
Increase in future workers' compensation benefits covered by budgetary resources	—	42,075
Decrease in accrued benefits not covered by budgetary resources	13,519	—
Decrease in accrued benefits covered by budgetary resources	—	(8,899)
Decrease in annual leave not covered by budgetary resources	—	4,624
Increase in annual leave covered by budgetary resources	386	—
Decrease in other liabilities not covered by budgetary resources	26,068	—
Decrease in other liabilities covered by budgetary resources	—	(75)
Components requiring or generating resources in future periods	$2,670	$3,582,391

NOTE 19 — SOURCES OF CUSTODIAL REVENUE

Custodial revenues in 2006 consisted of the following:

(Dollars in thousands)		Cash Collections	Less Refunds	Net Cash Collections	Increase (Decrease) in Amounts to be Collected	Total Revenues

Civil monetary penalties
	OSHA	$80,119	$(8)	$80,111	$(12,396)	$67,715
	MSHA	24,411	—	24,411	(565)	23,846
	EBSA	15,751	—	15,751	(551)	15,200
	ESA	11,968	(59)	11,909	529	12,438
		132,249	(67)	132,182	(12,983)	119,199

ETA disallowed grant costs		19,815	(2)	19,813	216	20,029
Other		816	(7)	809	—	809

		$152,880	$(76)	$152,804	$(12,767)	$140,037


Custodial revenues in 2005 consisted of the following:

(Dollars in thousands)		Cash Collections	Less Refunds	Net Cash Collections	Increase (Decrease) in Amounts to be Collected	Total Revenues

Civil monetary penalties
	OSHA	$62,548	$—	$62,548	$10,005	$72,553
	MSHA	18,553	—	18,553	(1,202)	17,351
	EBSA	13,654	—	13,654	2,079	15,733
	ESA	12,577	(3)	12,574	509	13,083
		107,332	(3)	107,329	11,391	118,720

ETA disallowed grant costs		4,893	—	4,893	(738)	4,155
Other		18,660	(211)	18,449	298	18,747

		$130,885	$(214)	$130,671	$10,951	$141,622

NOTE 20 — EARMARKED FUNDS

DOL is responsible for the operation of certain earmarked funds. Other earmarked funds include Gifts and Bequests, Panama Canal Commission Compensation Fund, and H-1B Funds. The financial position of the earmarked funds as of September 30, 2006 is shown below.

(Dollars in thousands)				Unemployment	Black Lung Disability	Other	Total
Assets
	Intra-governmental
		Funds with U.S. Treasury		$60,257	$39,251	$330,775	$430,283
		Investments		66,212,640	-	80,348	66,292,988
		Interest receivable from investments		743,299	-	2,234	745,533
		Accounts receivable, net
			Due from other Federal agencies for UCX and UCFE benefits	335,023	-	-	335,023
	Total intra-governmental			67,351,219	39,251	413,357	67,803,827
	Accounts receivable, net
		State unemployment tax		266,544	-	-	266,544
		Due from reimbursable employers		511,659	-	-	511,659
		Benefit overpayments		183,437	8,800	-	192,237
		Other		-	-	2	2
	Advances			474,153	-	3,525	477,678
	Other			-	-	23	23
Total assets				$68,787,012	$48,051	$416,907	$69,251,970
Liabilities
	Intra-governmental
		Accounts payable to DOL agencies		$1,208,229	$-	$-	$1,208,229
		Advances from U.S. Treasury		-	9,631,557	-	9,631,557
		Amounts held for the Railroad Retirement Board		101,514	-	-	101,514
		Other		-	-	7,689	7,689
	Total intra-governmental			1,309,743	9,631,557	7,689	10,948,989
	Accounts payable			-	-	10,654	10,654
	Accrued benefits			1,068,427	21,237	-	1,089,664
	Future workers' compensation benefits			-	-	55,610	55,610
	Other			-	-	622	622
Total liabilities				2,378,170	9,652,794	74,575	12,105,539
Net position
	Cumulative results of operations			66,408,842	(9,604,743)	342,332	57,146,431
Total liabilities and net position				$68,787,012	$48,051	$416,907	$69,251,970

The net results of operations of the earmarked funds for the year ended September 30, 2006 is shown below.

(Dollars in thousands)			Unemployment	Black Lung Disability	Other	Total
Cost, net of earned revenues
	Benefits		$(31,025,168)	$(299,479)	$(2,051)	$(31,326,698)
	Grants		-	-	(51,388)	(51,388)
	Interest		(3,010)	(694,964)	-	(697,974)
	Administrative		(295,807)	(342)	(15,647)	(311,796)
			(31,323,985)	(994,785)	(69,086)	(32,387,856)
	Earned revenue		818,294	-	-	818,294
			(30,505,691)	(994,785)	(69,086)	(31,569,562)
Net financing sources
	Taxes		41,406,645	607,387	-	42,014,032
	Interest		2,780,114	297	3,647	2,784,058
	Reimbursement of unemployment benefits		1,855,188	-	-	1,855,188
	Imputed financing		-	-	238	238
	Transfers-in
		Department of Homeland Security	-	-	390,823	390,823
	Transfers-out
		DOL entities	(3,623,927)	(57,633)	-	(3,681,560)
			42,418,020	550,051	394,708	43,362,779
	Net results of operations		11,912,329	(444,734)	325,622	11,793,217

Net position, beginning of period			54,496,513	(9,160,009)	16,710	45,353,214

Net position, end of period			$66,408,842	$(9,604,743)	$342,332	$57,146,431

NOTE 21 — DEDICATED COLLECTIONS

The Department administers four trust funds that receive dedicated collections. Statement of Federal Financial Accounting Standards 27, Identifying and Reporting Earmarked Funds, became effective in FY 2006. This standard affected existing standards dealing with dedicated collections, and as a result, the Unemployment Trust Fund and the Black Lung Disability Trust Fund are now classified as earmarked funds. The financial position of the two remaining trust funds as of September 30, 2006 is shown below.

(Dollars in thousands)			Longshore and Harbor Workers' Compensation Act	District of Columbia Workmen's Compensation Act
Assets
	Intra-governmental
		Funds with U.S. Treasury	$154	$76
		Investments	73,146	5,611
		Interest receivable from investments	10	1
	Total intra-governmental		73,310	5,688

	Other accounts receivable, net		2,431	412

Total assets			$75,741	$6,100

Liabilities
	Intra-governmental
		Accounts payable to DOL agencies	$2,028	$-
	Accrued benefits		3,382	283
	Other		39,371	3,379
Total liabilities			44,781	3,662

Net position
	Cumulative results of operations		30,960	2,438

Total liabilities and net position			$75,741	$6,100

The net results of operations of each trust fund for the year ended September 30, 2006 is shown below.


(Dollars in thousands)			Longshore and Harbor Workers' Compensation Act	District of Columbia Workmen's Compensation Act
Cost, net of earned revenues
	Benefits		$(133,694)	$(10,112)
Net financing sources
	Interest		2,016	155
	Assessments		138,857	10,789
	Transfers-out
		DOL entities	(2,028)	-
			138,845	10,944
	Net results of operations		5,151	832

Net position, beginning of period			25,809	1,606

Net position, end of period			$30,960	$2,438

DOL is responsible for the operation of four major trust funds. The financial position of each trust fund as of September 30, 2005 is shown below.

(Dollars in thousands)				Unemployment	Black Lung Disability	Longshore and Harbor Workers' Compensation Act	District of Columbia Workmen's Compensation Act
Assets
	Intra-governmental
		Funds with U.S. Treasury		$(273,027)	$41,906	$13,310	$2,066
		Investments		54,805,883	-	60,000	3,000
		Interest receivable from investments		634,736	-	-	-
		Accounts receivable, net
			Due from other Federal agencies
			for UCX and UCFE benefits	344,238	-	-	-
	Total intra-governmental			55,511,830	41,906	73,310	5,066

	Accounts receivable, net
		State unemployment tax		235,182	-	-	-
		Due from reimbursable employers		516,110	-	-	-
		Benefit overpayments		177,640	9,055	-	-
		Other		-	-	1,222	813
	Advances to states			489,177	-	-	-

Total assets				$56,929,939	$50,961	$74,532	$5,879

Liabilities
	Intra-governmental
		Accounts payable to DOL agencies		$1,406,934	$-	$477	$-
		Advances from U.S. Treasury		-	9,186,557	-	-
		Amounts held for the Railroad
		Retirement Board		94,820	-	-	-
	Total intra-governmental			1,501,754	9,186,557	477	-

	Accrued benefits			931,672	24,413	3,234	375
	Other			-	-	45,012	3,898
Total liabilities				2,433,426	9,210,970	48,723	4,273

Net position
	Cumulative results of operations			54,496,513	(9,160,009)	25,809	1,606

Total liabilities and net position				$56,929,939	$50,961	$74,532	$5,879

The net results of operations of each trust fund for the year ended September 30, 2005 is shown below.

(Dollars in thousands)			Unemployment	Black Lung Disability	Longshore and Harbor Workers' Compensation Act	District of Columbia Workmen's Compensation Act
Cost, net of earned revenues
	Benefits		$(31,980,909)	$(327,860)	$(130,883)	$(10,700)
	Interest		(2,699)	(674,894)	-	-
	Administrative		(288,968)	(212)	-	-
			(32,272,576)	(1,002,966)	(130,883)	(10,700)
	Earned revenue		783,657	-	-	-
			(31,488,919)	(1,002,966)	(130,883)	(10,700)

Net financing sources
	Taxes		39,961,204	610,417	-	-
	Interest		2,586,064	646	1,007	62
	Reimbursement of unemployment benefits		1,857,193	-	133,566	11,217
	Transfers-in
		DOL Entities	150	-	-	-
	Transfers-out
		DOL entities	(3,815,031)	(56,662)	(2,023)	-
			40,589,580	554,401	132,550	11,279
	Net results of operations		9,100,661	(448,565)	1,667	579

Net position, beginning of period			45,395,852	(8,711,444)	24,142	1,027

Net position, end of period			$54,496,513	$(9,160,009)	$25,809	$1,606

NOTE 22 — BALANCE SHEET CLASSIFICATIONS AGGREGATED TO CONFORM WITH OMB CIRCULAR NO. A-136 CLASSIFICATIONS

The Department�s consolidated balance sheet has different classifications of certain assets and liabilities from those suggested in OMB Circular No. A-136. The following aggregate Department of Labor classifications into OMB Circular No. A-136 classifications.

(Dollars in thousands)				2006	2005

ASSETS

	Intra-governmental
		Other
			Interest receivable from investments	$745,556	$637,443
			Advances	4	10,812
		Total other		$745,560	$648,255

	Other
		Advances		$555,294	$584,139
	Total other			$555,294	$584,139

LIABILITIES

	Federal employee and veteran benefits
		Future workers' compensation benefits		$548,314	$564,305
	Total Federal employee and veteran benefits			$548,314	$564,305

	Other
		Energy employees occupational illness
		compensation benefits		$6,942,442	$7,436,243
		Accrued leave		97,522	94,852
		Other liabilities		217,313	263,233
	Total other			$7,257,277	$7,794,328