FY 2015 Agency Financial Report
Message from the Secretary
The mission of the U.S. Department of Health and Human Services (HHS) is to enhance and protect the health and well-being of all Americans. We fulfill that mission by providing effective services and fostering advances in medicine, public health, and social services. We are committed to ensuring that every American has access to the building blocks for healthy and productive lives.
I am pleased to present HHS’s Fiscal Year (FY) 2015 Agency Financial Report (AFR). The report highlights our major accomplishments, illustrates how we manage our resources, and outlines our plans to address the challenges we face. At HHS, we are dedicated to meeting the high standards of government reporting and accountability.
FY 2015 Highlights
HHS administers more than 300 programs that enhance the well-being of others. Four important efforts are highlighted below:
Access to Health Care. The Department celebrated two milestone anniversaries this year: the fifth anniversary of the Affordable Care Act and the 50th anniversary of Medicare and Medicaid.
Medicare and Medicaid were signed into law by President Johnson in 1965, providing a foundation for health and financial security for our elderly and most vulnerable citizens. Today, 1 in every 3 Americans is covered by Medicare or Medicaid, and they are a lifeline for families across the nation.
The Affordable Care Act is expanding access to health coverage to millions of Americans, including many who gained coverage for the first time. A recent analysis shows that since the law passed five years ago, 17.6 million people have gained coverage. The rate of uninsurance in America has dropped to the lowest levels on record.
And the Affordable Care Act isn’t just about getting insurance. Thanks to new protections, like certain preventive services at no extra cost, everyone’s insurance is better, no matter where they buy it. Families across America can now rest a little easier knowing that they can’t be dropped just because they get sick or discriminated against if they have a pre-existing condition.
Thanks to the Affordable Care Act, community health centers will continue to be a vital source of quality primary care for uninsured and medically underserved patients. Today, there is a national primary care network of more than 1,300 health centers serving nearly 23 million individuals. The Affordable Care Act provides additional funding to help new centers reach a projected 1.4 million more Americans to increase access to services such as medical, oral, behavioral, pharmacy, and vision care.
Behavioral Health. We are confronting a national opioid abuse crisis. Over the last decade, deaths caused by overdoses of prescription opioid pain relievers and heroin use have increased significantly. The Department is working with state and federal leaders on a coordinated and comprehensive approach to address this crisis. Together, we are focusing on preventing opioid overdose and opioid use disorder, including prescribing practices, increasing access to drugs that reverse opioid overdose, and expanding the use of medication-assisted treatment. Medication-assisted treatment is a comprehensive way to address the needs of individuals that combines the use of medication with counseling and behavioral therapies to treat substance use disorders. HHS will also revise regulations related to prescribing products approved by the Food and Drug Administration for treatment of opioid dependence. This will increase access to evidence-based treatment, helping more people get the treatment necessary for their recovery.
Advancing Science and Research. We recently announced the appointment of nationally recognized experts to the Presidential Advisory Council on Combating Antibiotic-Resistant Bacteria. The council will provide advice, information, and recommendations to HHS on initiatives and policies related to combating antibiotic-resistant bacteria. Antibiotic resistance is a growing public health threat across our country and around the world. The Centers for Disease Control and Prevention has estimated that antibiotic-resistant bacteria are responsible for 2 million infections and 23,000 deaths annually in the U.S.
Work is underway to implement a National Plan for Combating Antibiotic-Resistant Bacteria, a research-driven plan to identify and coordinate action across the Administration to prevent and control outbreaks of resistant pathogens. Detecting, preventing, and controlling antibiotic resistance requires a strategic, coordinated, and global effort. We are working closely with our international partners, recognizing that diseases do not recognize national borders. Together these efforts provide a roadmap to preserve the effectiveness of antibiotics, strengthen surveillance, prevent the transmission of antibiotic-resistant bacteria, further new research, and improve international coordination.
Leaving the Department Stronger. Finally, as we look to leave our Department stronger, we are investing in program integrity initiatives that allow us to crack down on waste, fraud and abuse. These initiatives are projected to yield $22 billion in gross savings for Medicare and Medicaid over the next decade. In 2015, a national fraud takedown led by the Medicare Fraud Strike Force in 17 districts, resulted in charges against 243 individuals for about $712 million in false billings. In addition, the Department suspended a number of providers using authority provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history.
How We Manage Our Resources
As responsible stewards of the public resources that the American taxpayers and Congress entrust to us, one of our most important duties is to practice fiscal responsibility and transparency. To that end, our Department-wide financial statement audit is one of our most important tools. This year, we obtained an unmodified (clean) opinion on the Consolidated Balance Sheets, Statement of Net Cost, Statement of Changes in Net Position, and the Combined Statement of Budgetary Resources. The auditors disclaimed providing an opinion on the Statement of Social Insurance and the Statement of Changes in Social Insurance Amounts, primarily due to the uncertainties surrounding provisions of the Affordable Care Act and the impact of potential changes in law that would impact underlying assumptions of financial projections. These statements were developed based upon current law using information from the 2015 Medicare Trustees Report, as required by standards issued by the Federal Accounting Standards Advisory Board. The “Financial Section” of this report includes more detailed information.
As required by the Federal Managers’ Financial Integrity Act of 1982 (FMFIA) and the Office of Management and Budget’s Circular A-123, Management’s Responsibility for Internal Control, we also evaluated our internal controls and financial management systems. We identified one material weakness, which also constitutes a non-conformance under Section 4 of FMFIA relating to Information System Controls and Security. We also identified one material noncompliance relating to Error Rate Measurement. Management continues efforts to improve our financial reports and systems. The “Management’s Discussion and Analysis” section of this report includes further details. Based on our internal assessments and the auditor’s report, I believe that our financial and performance data are reliable and complete.
Despite our successes, HHS still faces challenges and opportunities for improvement. We have worked closely with the Office of Inspector General to gain its perspective about our most significant management and performance challenges, which are presented in the “Other Information” section under FY 2015 Top Management and Performance Challenges Identified by the Office of Inspector General. The HHS Inspector General identified 10 performance challenges that present opportunities for improvement. These challenges include overseeing the Health Insurance Marketplace, safeguarding privacy and data security, and protecting HHS grants and contract funds from fraud, waste, and abuse.
We look forward to continuing our work to protect the health and well-being of the American people in the coming years. We will build and strengthen relationships with anyone and everyone who shares our passion for impact and progress while helping Americans obtain the building blocks for healthy and productive lives.
/Sylvia M. Burwell/
Sylvia M. Burwell
November 13, 2015
About the Agency Financial Report
The HHS FY 2015 AFR provides fiscal and summary performance results that enable the President, Congress, and the American people to assess our accomplishments for the reporting period October 1, 2014 through September 30, 2015. This report provides an overview of our programs, accomplishments, challenges, and management’s accountability for the resources entrusted to us. We have prepared this report in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-136, Financial Reporting Requirements. This document consists of three primary sections and appendices:
Management’s Discussion and Analysis
The Management’s Discussion and Analysis (MD&A) section provides an overview of the entire report. Specifically, the MD&A presents an overview of performance and financial highlights for FY 2015. It also discusses HHS’s compliance with legal and regulatory requirements, a summary of audit and management assurances, and gives a brief look ahead to FY 2016.
The Financial Section includes the Report of the Independent Auditors, the Department’s Principal Financial Statements, Notes to the Principal Financial Statements, Required Supplementary Stewardship Information, and Required Supplementary Information.
The Other Information section contains additional financial information including the Schedule of Spending, the Improper Payments Information Act Report, and the Office of Inspector General’s FY 2015 assessment of management challenges facing the Department.
The appendices include data that supports the main sections of the AFR. This includes a glossary of acronyms used in the report and resources for connecting with the Department.
The Department has chosen to produce an AFR and Annual Performance Plan and Report. In February 2016, additional reports that will be available on HHS/About HHS/Budget & Performance include:
- FY 2015 HHS Summary of Performance and Financial Information
- FY 2017 Annual Performance Plan and Report
- FY 2017 Congressional Budget Justification
Certificate of Excellence in Accountability Reporting
In May 2015, HHS received the Certificate of Excellence in Accountability Reporting (CEAR) from the Association of Government Accountants (AGA) for its FY 2014 AFR. The CEAR Program was established by the AGA, in conjunction with the Chief Financial Officers Council, to further performance and accountability reporting. FY 2014 marks the second year the Department received this prestigious award. AGA also presented HHS with a Best in Class Award for its Summary of Performance and Financial Information.