Industry & Economy
Uncle Sam's report card
THE latest Financial Report of the US Government has, for the first time, presented data to facilitate comparative analysis, and also added two new financial statements, viz. the reconciliation of net operating revenue/(cost) to the Budget Surplus to explain the differences between the accrual and budget results; and the disposition of the Budget Surplus to explain how the budgetary surplus was utilised.
Interestingly, the accrual based financial reporting reveals that the deficit for fiscal year 2001 is $515 billion in contrast to a $127-billion budget surplus. Here are a few other excerpts:
No other entity in the world compares in size, scope, and complexity to the US Government. Its budgeted outlays were $1.9 trillion in 2001. A civilian Federal workforce of 2.7 million individuals plus 1.4 million Department of Defense active duty military personnel serves a diverse Nation of more than 278 million Americans.
Although we continue to receive a disclaimer of opinion from our auditors, in this our fifth year of preparing financial statements, we are making progress in our quest to report the financial activities of the US Government timely, reliably, and in a format useful to the readers.
Revenues failed to increase in fiscal 2001; in fact they decreased modestly by $31.1 billion from fiscal 2000 due to lower corporate income-tax receipts reflecting the impact of a weakening economy.
The Government revenue comes from two sources: non-exchange transactions and exchange transactions. Non-exchange revenues arise primarily from exercise of the Government's power to demand payments from the public (e.g. taxes, duties, fines, and penalties). Exchange revenues arise when a Government entity provides goods and services to the public for a price, such as postage.
The Government also issued $35.2 billion in tax rebate checks to individual taxpayers during the fiscal year.
Just 184,000 payroll jobs were added to the economy in fiscal 2001, compared to 2.6 million in the previous fiscal year. Much of the deterioration was in the manufacturing sector, where almost 1 million payroll jobs were lost over the fiscal year.
The President's Budget for 2003 seeks to inaugurate an era of accountability in the conduct of the nation's public business. It takes the first step toward reporting to taxpayers on the relative effectiveness of the thousands of purposes on which their money is spent.
In order to ensure accountability for performance and results, the Administration is using an Executive Branch Management Scorecard. The Administration will use this scorecard to track how well departments and agencies are executing the management initiatives, and where they stand at a given point in time against the overall standards for success. The scorecard employs a simple "traffic light" grading system common today in well-run businesses: green for success, yellow for mixed results, and red for unsatisfactory. Scores are based on five standards for success, viz. human capital, competitive sourcing, financial management, E-Government, and Budget/ performance integration.
The most significant difference between cash basis and GAAP involves the timing of recognition and measurement of revenues and costs. For example, GAAP requires recognition of liabilities for costs related to environmental cleanup when the events requiring such costs occur and, among other things, the Government has acknowledged responsibility for the event. By contrast, current budget concepts recognise such costs later, at the time payment is made for the cleanup.
Stewardship lands include national parks, national forests, wilderness areas, and land used to enhance ecosystems to encourage animal and plant species and to conserve nature. Most stewardship land managed by the Government was once part of the 1.8 billion acres of public domain land acquired between 1781 and 1867.Stewardship land accounts for 28 per cent of the current US land mass.
The Library of Congress (LC) holds the world 's largest library collection, comprising more than 115 million items. The LC receives two copies of every book, pamphlet, map, print, photograph, and piece of music registered for copyright in the US.
The Government is not in a position to estimate the full magnitude of actual damage and loss resulting from federal computer security weaknesses because it is likely that many such incidents are either not detected or not reported. Agencies have not yet established comprehensive security management programmes, which would provide the Government with a framework for resolving computer security problems and managing computer security risks on an ongoing basis.
The message from Secretary of the Treasury, Mr Paul H.O'Neill, signs off bravely: "I believe that the American people deserve the highest standards of accountability and professionalism from their Government and I will not rest until we achieve them."
One wishes that the Indian governmental accounting system too embraced similar sentiments.
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