Country Report U.S.A. Public Sector Accruals Symposium Organization of Economic Cooperation & Development March 3-4, 2008 R. Scott Bell United States of America, Department of the Treasury Senior Staff Accountant

FY 2007 Accomplishments For the 3 rd year in a row, all major agencies completed their audits within 45 days of fiscal year-end (17 November). For the 3 rd year in a row, all major agencies completed their audits within 45 days of fiscal year-end (17 November). Of the 24 major Federal agencies, 19 received clean opinions, one more than FY 2006Of the 24 major Federal agencies, 19 received clean opinions, one more than FY 2006 The total number of material weaknesses government-wide declined from 41 to 39 (>35% decrease since 2001)The total number of material weaknesses government-wide declined from 41 to 39 (>35% decrease since 2001) 13 agencies earned a clean audit opinion with no material weaknesses (including Justice, Energy, USAID).13 agencies earned a clean audit opinion with no material weaknesses (including Justice, Energy, USAID). The Government issued its consolidated financial report on time by 15 December. The Government issued its consolidated financial report on time by 15 December. For the first time, the Government earned an unqualified audit opinion on its Statement of Social Insurance. For the first time, the Government earned an unqualified audit opinion on its Statement of Social Insurance. For the first time, the Government issued a ‘Citizens Guide to the Financial Report of the U.S. Government’. For the first time, the Government issued a ‘Citizens Guide to the Financial Report of the U.S. Government’.

Where We Are

What Came In & What Went Out In - RevenuesOut - Costs

U.S. Government Accruals $(13.5b) Capitalized Fixed Assets, net of Depreciation 2007 Unified Budget Deficit $163 billion $90.1b Unfunded postemployment benefits + $36.8b Increase in Environmental Liabilities = 2007 Net Cost $275.5 billion + $24.7b Increase in: Environmental Liabilities; Net Capitalized Fixed Assets; Other

An Unsustainable Fiscal Path Key Dates 2006: Medicare benefits exceed taxes. 2006: Medicare benefits exceed taxes. 2017: Social Security benefits exceed taxes. 2017: Social Security benefits exceed taxes. 2019: Full Medicare benefits can not be paid. 2019: Full Medicare benefits can not be paid. 2040: Debt levels exceed WW II historical high. 2040: Debt levels exceed WW II historical high. 2041: Full SSA benefits cannot be paid. 2041: Full SSA benefits cannot be paid. 2080: Costs will = 3 X revenues. 2080: Costs will = 3 X revenues.

What Does this Mean? Historical & Projected U.S. Revenue and Cost as % of GDP

What Does This Mean? Historical & Projected U.S. Debt Held by the Public as % of GDP

Social Insurance Accounting & Sustainability Reporting Debate continues: Debate continues: How should the Federal Government account for its social insurance obligations?How should the Federal Government account for its social insurance obligations? To what extent should the Government recognize a social insurance liability on its balance sheet?To what extent should the Government recognize a social insurance liability on its balance sheet? Short-Term Focus on Sustainability Reporting Short-Term Focus on Sustainability Reporting Get the message out.Get the message out. Contemplating multiple options.Contemplating multiple options. Conventional / unconventional reporting methods.Conventional / unconventional reporting methods. Communicating intergenerational equity.Communicating intergenerational equity.

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