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Summary of Financial Statements and Stewardship Information

Summary of Financial Statements and Stewardship Information

The financial statements were prepared in accordance with federal accounting standards and audited by the independent accounting firm of Ernst & Young LLP under the direction of our Inspector General. The Chief Financial Officers Act requires the preparation and audit of these statements, which are part of our efforts for continuous improvement of financial management. Accurate, timely and reliable financial information is necessary for making sound decisions, assessing performance and allocating resources.

Financial Condition: The following table summarizes trend information concerning components of HHS financial condition—assets, liabilities, and net position. The Consolidated Balance Sheet presents a snapshot of HHS financial condition as of September 30, 2014 compared to FY 2013, and displays assets, liabilities, and net position.

Table 1: Summary of Financial Condition Trends

(in Billions)

Assets and Liabilities 2010 2011 2012 2013 2014 $ Change
(2013-14)
% Change
(2013-14)
Fund Balance with Treasury

$182.2

$166.9

$197.3

$159.2

$177.0

$17.8

11.2

Investments, Net

359.9

325.4

306.4

281.7

278.9

 (2.8)

 (1.0)

Other Assets

21.6

40.6

27.0

29.3

26.4

 (2.9)

 (9.9)

Total Assets

$563.7

$532.9

$530.7

$470.2

$482.3

$12.1

2.6

Accounts Payable

$1.6

$1.2

$1.1

$1.2

1.0

$ (0.2)

 (16.7)

Entitlement Benefits Due and Payable

72.7

80.9

72.5

77.3

91.0

13.7

17.7

Accrued Grant Liability

4.2

4.5

3.7

3.9

3.3

 (0.6)

 (15.4)

Federal Employee and Veterans' Benefits

10.0

10.2

11.0

11.6

12.0

0.4

3.4

Other Liabilities

10.7

8.1

11.2

13.5

16.8

3.3

24.4

Total Liabilities

$99.2

$104.9

$99.5

$107.5

$124.1

$16.6

15.4

Net Position

$464.5

$428.0

$431.2

$362.7

$358.2

$ (4.5)

(1.2)

Total Liabilities & Net Position

$563.7

$532.9

$530.7

$470.2

$482.3

$12.1

2.6

 

Our Consolidated Net Cost of Operations represents the difference between the costs incurred by our programs less associated revenues. We receive the majority of our funding through Congressional appropriations and reimbursement for the provision of goods or services to other federal agencies. Our Consolidated Net Cost of Operations for the year ended September 30, 2014, totaled $952.0 billion.  The majority of FY 2014 net costs relate to Medicare ($518.1 billion) and the Health budget function ($383.4 billion) which includes Medicaid, or more than 94.7 percent of our annual net costs.

The following table shows HHS net cost of operations by major component for the last five years. The FY 2014 Net Cost represents an increase of $55.7 billion or 6.2 percent more than the FY 2013 Net Cost of Operations. Approximately 87.9 percent of the Net Cost of Operations ($837.2 billion) relates to Medicare, Medicaid, CHIP, and other health programs managed by CMS.  Further information on the net cost of operations is available in the FY 2014 Agency Financial Report.

Table 2: Net Cost of Operations

(in Billions)

Segments 2010 2011 2012 2013 2014 $ Change
(2013-14)
 % Change
(2013-14)
Responsibility Segments:              
CMS Gross Cost

$789.7

$817.4

$802.3

$848.9

$910.5

$61.6

7.3

CMS Exchange Revenue

 (60.7)

 (63.7)

 (65.1)

 (69.7)

 (73.3)

 (3.6)

5.2

          CMS Net Cost of Operations

$729.0

$753.7

$737.2

$779.2

$837.2

$58.0

7.4

Other Segments:              
Other Segments Gross Cost

$130.9

$128.2

$121.5

$121.0

$120.5

        $(0.5)  

(0.4)

Other Segments Exchange Revenue

 (3.2)

 (3.8)

 (3.2)

 (3.9)

 (5.7)

 (1.8)

46.2

Other Segments Net Cost of Operations

$127.7

$124.4

$118.3

$117.1

$114.8

    $ (2.3)

(2.0)

Net Cost of Operations

$856.7

$878.1

$855.5

$896.3

$952.0

$55.7

6.2

 

Summary of Management Challenges

The Department is continually striving to improve efficiency and effectiveness in its programs.  Many HHS programs are complex and require long-term strategies for ensuring stable operations.  They include:

  • Implementing, Operating, and Overseeing the Health Insurance Marketplaces
  • Ensuring Appropriate Use of Prescription Drugs in Medicare and Medicaid
  • Protecting an Expanding Medicaid Program from Fraud, Waste, and Abuse
  • Fighting Waste and Fraud and Promoting Value in Medicare Parts A and B
  • Ensuring Quality Nursing Home, Hospice, and Home- and Community-Based Care
  • The Meaningful and Secure Exchange and Use of Electronic Health Information
  • Effectively Operating Public Health and Human Services Programs to Best Serve Program Beneficiaries
  • Ensuring Effective Financial and Administrative Management
  • Protecting HHS Grants and Contract Funds from Fraud, Waste, and Abuse
  • Ensuring the Safety of Food, Drugs and Medical Devices

Detailed information about each management challenge can be found in the FY 2014 Agency Financial Report. In addition, the Government Accountability Office (GAO) has placed four HHS programs on its most recent “High Risk List” that lists programs that may have greater vulnerabilities to fraud, waste, abuse and mismanagement. As a responsible steward of taxpayer resources, HHS is committed to making improvements related to these challenges and high-risk areas.

For more information contact: 

The U.S. Department of Health and Human Services
200 Independence Avenue, S.W., Washington, D.C. 20201
Toll Free: 1-877-696-6775

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Content created by Office of Budget (OB)
Content last reviewed on February 17, 2015