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2010 Performance and Accountability Report

Financial Statements

A message from the chief financial officer

I am pleased to present the U.S. Equal Employment Opportunity Commission's financial statements for fiscal year 2010. Our financial statements are an integral component of our Performance and Accountability Report. The Accountability of Tax Dollars Act of 2002 extends to the agency a requirement to prepare and submit audited financial statements. The President's Management Agenda, Improved Financial Performance component among other standards, requires us to obtain and sustain clean audit opinions on our financial statements. The Office of Management and Budget (OMB) issued an updated Circular A-136, Financial Reporting Requirements, on September 29, 2010, which further refined reporting requirements for the PAR submission.  

Our FY 2010 financial statements received an unqualified opinion through the hard work of the dedicated financial and administrative staff in the agency. This is the seventh consecutive year that the EEOC has received an unqualified opinion and represents our continuing successful efforts to improve the financial management of the agency.   We will re-compete the requirements for the agencyís financial business software, hosting, and applications and accounting operations support in FY 2011 for implementation effective October 1, 2011, FY 2012.  The Department of the Interiorís National Business Center currently supports CGIís Momentum® software package, hosting and transaction processing through an inter-agency agreement which expires September 30, 2012.

For FY 2010, the agency received a $367.3 million budget. We completed the fiscal year within budget and improved financial management. Compensation and benefit costs continue to consume a substantial portion of the budget. Office space rent costs are rising consistent with housing the number of employees onboard and approved vacancies. Rent costs remained just under 7% of our total budget. With 8% of the budget dedicated to the State and local program, only 14% of the budget is available for technology, programs, travel, and other general expenses.

The agency is faced with growing workloads. We continue with our hiring program to rebuild staffing levels which were at a historically low level. Beginning at mid year of FY 2009, we began the process to hire investigators, trial attorneys, and other staff to support our systemic enforcement and litigation programs. We continued new hire efforts in FY 2010 as well as automatically backfilling positions as staff retire or leave for other reasons.    Also, we dedicated $2.9 million to address training for our investigators, attorneys, program analysts, and other employees.  

Working with the General Services Administration, the agency is relocating our Washington Field Office (WFO) from our Headquarters office at 131 M Street, NE  in Washington, D.C.  New hiring for both Headquarters human resource functions and the WFO drove the expansion requirements. The WFO will relocate to an area building in the Spring of 2011.  The location will be close to our Headquarters in the same area called NoMa (North of Massachusetts Avenue).   The agency is pleased to continue to be at the forefront of an area for economic re-development within the District of Columbia.   

Working with our Office of Information Technology, the agency competed and awarded two important orders in this past fiscal year. The first order is for Enterprise Applications Support through the GSA Small Business Alliant Government-wide Acquisition Contract (GWAC). The potential contract value is close to $10 million if all the option periods and optional contract line items are funded.  The scope of the contract provides for all applications support throughout the agency.  The second order is for Enterprise Operations Support through the GSA Small Business Alliant Government-wide Acquisition Contract (GWAC).  The potential contract value is close to $10 million if all the option periods and optional contract line items are funded.

As reported in the past, I have identified several critical issues for the agency to focus on to continue to improve its long-term financial health. An update on each item is provided below.

  • Execute a disciplined analysis of future workforce and infrastructure requirements.Unfortunately for many years, the Agency has been unable to slow the growth of the current and future cost of compensation and benefits for current employees, which are on a path to increase to over 71% of the EEOC's budget. These costs include salary, health and life insurance, agency contributions for retirement plans, social security, Medicare, worker's compensation, unemployment insurance, reasonable accommodations, and transit subsidies. The continuing delay in the agency implementing position management means that it will be very difficult to substantially change the cost of the compensation and benefits in future years.

    Three years ago the agency contracted for an independent top-down study of the information technology infrastructure and staffing.  The report called for substantial changes in the governance, organization, use of contracts, server and network operations, desktop management, and the skill mix of staff in order to more effectively spend the $23 million annual budget for the information technology function.  An independent cost/benefit study will be undertaken in FY 2011/2012 for the current data center operating in the Headquarters building.  Special emphasis will be placed on comparing energy consumption, cost of labor, risk factors for the location in Washington, DC, disaster recovery and the economies of scale that could be achieved through a competitive acquisition process. 

  • Recognize and manage competing budget priorities. We continue to manage discretionary budget line items.  However, non-payroll costs continue to increase for homeland security, rent, facility services, and Government-wide programs such as financial management services with a shared service provider.  The Inspector General began a program evaluation of the EEOCís State and Local Program, which consists of about 8% of the annual budget, in the fourth quarter. The evaluation will analyze the overall adequacy, effectiveness, and efficiency of the EEOCís management of its State and Local Program.  The scope of the review includes EEOC's management of financial controls over its transactions with Fair Employment Practice Agencies, and EEOC's performance management of its State and Local Programs (e.g., establishing and periodically evaluating State and Local program performance goals, measures and standards, etc.). 
  • Formulate a long-term performance budget strategy.  The agency continues to look into improved information approaches for annual budget justifications because of the workload by activity and the backlog of casework.  More attention is needed on how we communicate our various workload metrics. Substantial work is required to update a Strategic Plan which expires in FY 2012.

In FY 2011, we will continue the focus on accountability, financial transparency, and results through improved budget planning, performance metrics and financial management.

Jeffrey A. Smith, CPA, CGFM
Chief Financial Officer
U.S. Equal Employment Opportunity Commission

November 15, 2010


November 12, 2010

MEMORANDUM

TO: Jacqueline Berrien, Chair

FROM: Milton A. Mayo, Jr. , Acting Inspector General

SUBJECT: Audit of the Equal Employment Opportunity Commissionís Fiscal Year 2010 Financial Statements (OIG Report No. 2010-03-FIN)

The Office of Inspector General (OIG) contracted with the independent certified public accounting firm of Harper, Rains, Knight and Company, P.A (HRK) to audit the financial statements of the U.S. Equal Employment Opportunity Commission (EEOC) for fiscal year 2010. The contract required that the audit be done in accordance with U.S. generally accepted government auditing standards; Office of Management and Budgetís Bulletin 07-04, Audit Requirements for Federal Financial Statements, and the Government Accountability Office/Presidentís Council on Integrity and Efficiencyís Financial Audit Manual.

HRK issued an unqualified opinion on EEOCís FY 2010 financial statements. In its Report on Internal Control, HRK noted two areas involving internal control and its operation that were considered to be significant deficiencies. These included time and attendance controls and controls over revenue and receivables. In its Report on Compliance with Applicable Laws and Regulations, HRK noted no instances of non compliance with certain laws and regulations applicable to the agency.

In connection with the contract, OIG reviewed HRKís report and related documentation and inquired of its representatives. Our review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, opinions on EEOCís financial statements or conclusions about the effectiveness of internal controls or on whether EEOCís financial management systems substantially complied with FFMIA; or conclusions on compliance with laws and regulations. HRK is responsible for the attached auditorís report dated November 10, 2010 and the conclusions expressed in the report. However, OIGís review disclosed no instances where HRK did not comply, in all material respects, with generally accepted government auditing standards.

EEOC management was given the opportunity to review the draft report and to provide comments. Management comments are included with the report as an attachment.

cc: Claudia Withers
Jeffrey A. Smith
Raj Mohan
Nicholas Inzeo
John Schmelzer
Mary McIver
Lisa Williams
Kimberly Hancher
Peggy Mastroianni
Justine Lisser
Todd Cox


Report of Independent Auditors

 

Inspector General
Equal Employment Opportunity Commission

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of the U.S. Equal Employment Opportunity Commission (EEOC), as of September 30, 2010, and the related consolidated statements of net cost and changes in net position, and combined statement of budgetary resources, for the year then ended. These financial statements are the responsibility of EEOC management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of EEOC as of September 30, 2009 were audited by other auditors whose report, dated November 13, 2009, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and OMB Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of EEOC as of September 30, 2010, and its net cost of operations, changes in net position, and budgetary resources for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Report on Internal Control over Financial Reporting

In planning and performing our audit, we considered EEOCís internal control over financial reporting and compliance. We did this in order to determine our audit procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on internal control. We limited our internal control testing to those controls necessary to achieve the objectives described in OMB Bulletin No. 07-04, as amended. We did not test all internal controls relevant to the operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982. Providing an opinion on internal control was not the objective of our audit. Accordingly, we do not express an opinion on EEOCís internal control over financial reporting and compliance or on managementís assertion on internal control included in Managementsí Discussion and Analysis. However, our work identified the need to improve certain internal controls, as defined above, they are described in Exhibit 1. These deficiencies in internal control, although not considered material weaknesses, represent significant deficiencies in the design or operation of internal control, which adversely affect the entityís ability to meet their internal control objectives or meet OMB criteria for reporting matters under FMFIA.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. Our consideration of the internal control over financial reporting would not necessarily disclose all deficiencies that might be a significant deficiency. A significant deficiency is a deficiency in internal control, or a combination of deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected. Our consideration of the internal control over financial reporting would not necessarily disclose all significant deficiencies that might be a material weakness. A material weakness is a significant deficiency, or combination of significant deficiencies, that result in a more than remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Because of inherent limitations in internal controls, misstatements, losses, or non-compliance may nevertheless occur and not be detected.

Report on Compliance with Applicable Laws and Regulations

The management of EEOC is responsible for complying with laws and regulations applicable to EEOC. As part of obtaining reasonable assurance about whether EEOCís financial statements are free of material misstatement, we performed tests of its compliance with selected provisions of laws and regulations including laws governing the use of budgetary authority and government-wide policies identified in OMB Bulletin No. 07-04, as amended, non-compliance with which could have a direct and material effect on the determination of consolidated and combined financial statements. Our tests disclosed no instances of noncompliance with laws and regulations which would be reportable under U.S. generally accepted government auditing standards or OMB audit guidance.

We limited our tests of compliance to the provisions of laws and regulations referred to in the preceding paragraph. Providing an opinion on compliance with those provisions was not an objective of our audit. Accordingly, we do not express such an opinion.

Other Information

Managementís Discussion and Analysis (MD&A) is not a required part of the financial statements but is supplementary information required by the Federal Accounting Standards Advisory Board and OMB Circular A-136, Financial Reporting Requirements. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the MD&A. However, we did not audit the information and accordingly, we express no opinion on it.

Our audits were conducted for the purpose of forming an opinion on the financial statements of EEOC taken as a whole. The other accompanying information included in this performance and accountability report is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

This report is intended solely for the information and use of the management of the Equal Employment Opportunity Commission, the U.S. Office of Management and Budget, the U.S. Government Accountability Office, and the U.S. Congress and is not intended to be and should not be used by anyone other than these specified parties.

Signature

November 10, 2010

Harper, Rains, Knight & Company, P.A. ē Certified Public Accountants âÄ¢ Consultants

One Hundred Concourse ē 1052 Highland Colony Parkway, Suite 100 ē Ridgeland, Mississippi 39157

Telephone 601.605.0722 ē Facsimile 601.605.0733 ē www.hrkcpa.com

 


Exhibit 1

Significant Deficiencies

1. Lack of Adequate Controls over Time and Attendance

In fiscal years (FY) 2008 and 2009, a significant deficiency relating to the lack of adequate controls over time and attendance was reported.

The following recommendations were made to management:

  • The EEOC Office of Human Resources (OHR) should review and refine controls in place over time and attendance reporting to ensure all employees report accurate and complete information to time keepers.

  • OHR should implement a policy requiring timesheets with incorrect or incomplete information to be returned to employees for correction before certifying time and attendance information in EEOCís online timekeeping system.

In response to the prior year finding, OHR indicated the updated Time Attendance Guidance included policy and procedures to address the deficiencies and that follow-up with timekeepers and certifiers was performed. In addition, OHRís response indicated EEOC had purchased a web based time and attendance system with a planned implementation of January 2011.

During FY 2010, EEOC continued to experience difficulties in providing support for recorded time and attendance, including providing time and attendance support that was incomplete, for the incorrect pay period and not properly approved.

We noted the following during our testing:

  • 3 instances in which no information was provided for the employee
  • 7 instances in which the Bi-weekly Labor Hours Distribution Worksheets provided were for the wrong pay period
  • 5 instances in which Bi-weekly Labor Hours Distribution Worksheets did not indicate pay period end date
  • 20 instances in which the SF-71 Request for Leave forms were not properly approved.

Based on the knowledge OHR is implementing a new system in FY2011, we make the following recommendations:

  • Integrate and document the existence of controls in the web based time and attendance system, set for implementation in January 2011, which address and mitigate the time and attendance deficiencies identified in the current year and two previous years.
  • Establish a policy and procedure to perform internal audits of the EEOC time and attendance system for proper implementation and application of all EEOC policies and procedures over the recording and maintaining of time and attendance.

Managementís Response: Management concurs with the finding and recommendation. See appendix B for managementís detailed response.

2. Lack of Adequate Controls over Revenue and Receivables

In fiscal years (FY) 2008 and 2009, a significant deficiency relating to the lack of adequate controls over revolving fund (RF) revenue and receivables was reported.

It was recommended to management that the Revolving Fund Division (RFD) ensure documentation is maintained to support all transactions recorded in the general ledger.

During fiscal year (FY) 2010, EEOC continued to experience difficulties providing complete and timely documentation supporting RF transactions recorded in the general ledger.

We noted the following during our testing:

  • 4 instances in which the project code on the invoice does not match the document number recorded in Momentum.
  • 24 instances in which the invoices provided do not provide complete support for the recorded transaction in Momentum.

Per interviews with RFD personnel, we were informed that due to systems limitations with the contracted systems to record on-line registrations and payment and the core accounting system, additional manual processes were required to be performed by RFD personnel on a daily basis in order to maintain accurate accounting records over the RF revenue and accounts receivable activity.

Recognizing the manual nature of certain RF revenue and accounts receivable activities, we make the following recommendations:

  • RFD and CFO management should work with the third party contractors of EEOCís on-line registration and payment and core accounting systems to identify potential solutions to systems limitations regarding the recording of RF revenue and accounts receivable transactions.
  • RFD management should continue working with the third party contractor of EEOCís on-line registration and payment system to ensure accurate and complete documentation is maintained and readily available to support all RF transactions recorded in the general ledger.
  • RFD management should document all manual procedures performed to maintain proper RF revenue and accounts receivable balances.
  • RFD management should maintain complete documentation and justifications for all manual RF transactions entered in Momentum by RFD personnel.

Managementís Response: Management generally concurs with the finding and recommendation. See appendix B for managementís detailed responses. While the OCFO concurs with the overall finding, they take exception to their inclusion, as well as the inclusion of the core accounting system, Momentum, in the recommendation and request "the recommendation in the first bullet needs to drop the reference to CFO management and core accounting system limitations."

Auditor Response: Ultimately the OCFO is responsible for all transactions recorded in Momentum and therefore their inclusion in the recommendation is considered necessary to resolve the finding.


Appendix A

Status of Managementís Actions on Prior Year Recommendations

Recommendation Status as of 11-10-2010

OHR should review and refine controls in place over time-and-attendance reporting to ensure that all employees report accurate and complete information to timekeepers. Additionally, OHR should implement a policy requiring return of timesheets with incorrect or incomplete information to employees for correction before certification of time-and-attendance information in EEOCís online timekeeping system.

Unresolved:

Repeat Condition

The CFO, along with the Director of the RFD, should review accrual procedures in place and refine these procedures to ensure that all revenue not earned at yearend is properly classified as deferred in the financial statements.

Resolved

The CFO should work with the Director of RFD to ensure that documentation is maintained to support all transactions recorded in the general ledger.

Unresolved:

Repeat Condition

The CFO should coordinate with the Director of RFD to ensure that timely, complete, and accurate reconciliations are performed between the general ledger and the subsidiary ledger and the differences identified are researched and resolved.

Resolved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Appendix B

Managementís Response

November 9, 2010

 

 

 

 

MEMORANDUM

 

 

TO: Milton A. Mayo, Jr.
Acting Inspector General

FROM: Lisa M. Williams /s/
Chief Human Capital Officer

SUBJECT: Transmittal of Draft FY 2010 Financial Statement Audit Report of the EEOC

In response to Exhibit 1, Number 1, Lack of Adequate Controls over Time and Attendance, we understand the listed findings.

To improve control over our time and attendance (T&A) system, in January 2011, the EEOC is transitioning to Quicktime which is an automated web-based T&A system that allows employee entry of time, as well as traditional timekeeper data entry. The system provides for extensive editing to ensure that data meets relational edits and regulatory requirements. T&A's must be validated and certified through electronic signatures before updating and producing payroll interface files. Quicktime currently provides payroll interfaces for our existing Federal Personnel and Payroll System (FPPS).

We are providing mandatory training sessions, webinars, and workshops for all timekeepers and certifiers. Web-based training is currently available on inSite for all Agency end users.

As a result of this new T&A system, we hope to improve the internal controls and provide more integrity to the overall T&A process.

If you have any questions regarding the above, you may contact me or Tonya Williams at ext. 4341.


November 9, 2010

MEMORANDUM

TO: Milton A. Mayo, Jr.
Acting Inspector General

FROM: Jeffrey A. Smith Signature of Jeffrey A. Smith
Chief Financial Officer

SUBJECT: November 5, 2010 Transmittal - Draft FY 2010 Financial Statement Audit of the EEOC

We have no comments on the draft for the "Opinion on the Financial Statements" and "Report on Compliance with Applicable Laws and Regulations."

For the draft "Report on Internal Control over Financial Reporting" we have no comments on "1. Lack of Adequate Controls over Time and Attendance" notes and recommendations.

For the draft internal control report, we have comments on "2. Lack of Adequate Controls over Revenue and Receivables." Our comments deal with the RFD personnel interviews and the recommendation in the first bullet. RFD personnel are incorrect by suggesting there are system limitations with the core accounting system that cause additional manual processes. The facts are that the contracted system sends over invalid project codes to the core accounting system. The core accounting system correctly rejects them in the edit process. Also, the contracted system sometimes sends over incorrect collections and refunds. There would be no manual intervention if valid project codes and collections and refunds were correctly interfaced to the core accounting system from the contracted system. To allow incorrect data into the core accounting system would compromise financial data quality. As a result, the recommendation in the first bullet needs to drop the reference to CFO management and core accounting system limitations.

As noted, similar revolving fund findings and recommendations carried forward without resolution from the fiscal year 2008 and 2009 internal control reports. As we recommended in 2009, we again recommend an independent third party professional services firm conduct a detail evaluation of the revolving fund accounting processes and procedures as well as the third party accounts receivable and collection system. Hopefully, an evaluation coupled with system and procedure changes will eliminate these findings for the fiscal year 2011 financial audit.


November 9, 2010

MEMORANDUM

TO: Milton A. Mayo, Jr., Acting Inspector General

FROM: Nicholas M. Inzeo, Director, Office of Field Programs

SUBJECT: Management's Comments Regarding Auditor's Draft Report on Internal Controls

In the November 5, 2010, report from Harper, Rains, Knight & Co., P.A., the auditors noted a lack of adequate controls over revenue and receivables in the Revolving Fund.

We agree with the auditor's finding. While the Revolving Fund staff has worked closely with the contractor responsible for the registration process and the agency's financial management staff, we agree that there is more to be done in this area. However, during the audit process there appeared to be some instances in which there existed uncertainty with respect to what the auditor required in the form of support for some of the samples provided.

Further, just prior to completion of the audit of the Revolving Fund controls, a new Program Director was selected and after being briefed by staff directly involved in this process agrees that additional steps are warranted to ensure this finding is not repeated in the future. Over the next year, the Director will work to identify what changes are warranted in the existing process and to implement those changes as quickly as possible. She also plans to work with the registration contractor to ensure that information required for future audits is available in a timely manner and format to satisfy audit requirements.


Limitations of the Financial Statements

EEOC has prepared its financial statements to report its financial position and results of operations, pursuant to the requirements of the Accountability of Tax Dollars Act of 2002, the Government Management Reform Act of 1994, and OMB Circular A-136, Financial Reporting Requirements.

While the EEOC statements have been prepared from its books and records in accordance with the formats prescribed by the Office of Management and Budget, the statements are in addition to the financial reports used to monitor and control budgetary resources, which are prepared from the same books and records.

These statements should be read with the understanding that they are for a component of the United States Government, a sovereign entity. Liabilities, not covered by budgetary resources, cannot be liquidated without the enactment of an appropriation by Congress and payment of all liabilities, other than for contracts, can be abrogated by the federal government.

Equal Employment Opportunity Commission
Consolidated Balance Sheets
As of September 30, 2010 and 2009
(in dollars)
          FY 2010   FY 2009
ASSETS      
  Intragovernmental:      
    Fund balance with treasury (Note 2) $75,935,795   $67,020,955
    Accounts receivable (Note 3) 198,677   35,446
    Advances 24,454   30,475
  Total intragovernmental assets 76,158,926   67,086,876
  Accounts receivable, net (Note 3) 161,213   242,277
  General property and equipment, net (Note 4) 9,398,382   10,721,177
  Advances and prepaid expenses 28,047   192,407
TOTAL ASSETS 85,746,568   78,242,737
LIABILITIES      
    Intragovernmental    
      Accounts payable (Note 6) 135,502   2,136,357
      Employer payroll taxes 2,939,399   2,463,234
      Worker's compensation liability (Note 7) 3,067,745   2,448,172
      Amounts due to Treasury for non-entity assets (Note 5) 11,294   158
      Other -   65
    Total intragovernmental liabilities 6,153,940   7,047,986
    Accounts payable 17,209,182   15,035,936
    Accrued payroll 11,798,293   10,521,260
    Accrued annual leave (Note 7) 19,129,396   18,254,091
    Future worker's compensation liability (Note 7) 12,130,585   10,416,049
    Capital lease liability (Note 10) 53,229   97,967
    Amounts Collected for Restitution 5,647   13,629
    Deferred revenue 166,385   92,961
TOTAL LIABILITIES 66,646,657   61,479,879

             
NET POSITION      
  Unexpended appropriations 40,758,839   33,679,695
  Cumulative results of operations -- earmarked funds (Note 14) 3,225,285   3,501,721
  Cumulative results of operations -- other funds (24,884,213)   (20,418,558)
  Total net position 19,099,911   16,762,858
TOTAL LIABILITIES AND NET POSITION $85,746,568   $78,242,737

The accompanying notes are an integral part of these statements

Equal Employment Opportunity Commission
Consolidated Statements of Net Cost
For the Periods Ended September 30, 2010 and 2009
(in dollars)





FY2010
FY2009    
JUSTICE, OPPORTUNITY, AND INCLUSIVE WORKPLACES          
  Private Sector:          
      Enforcement $188,434,637   $174,642,554    
      Mediation 26,620,822   23,511,571    
      Litigation 72,348,736   65,684,810    
      Outreach 10,670,284   10,944,770    
      Training 2,350,087   2,979,274    
      State and Local 35,597,007   32,395,350    
  Total program costs - Private Sector 336,021,573   310,158,329    
    Revenue (1,874,875)   (2,068,152)    
  Net cost - Private Sector 334,146,698   308,090,177    
  Federal Sector:          
      Hearings 29,714,117   28,672,078    
      Appeals 15,562,283   14,788,592    
      Mediation 426,109   635,200    
      Oversight 5,740,544   4,227,175    
      Training 3,003,186   2,750,099    
    Total Program costs - Federal Sector 54,446,239   51,073,144  
    Revenue (2,390,861)   (2,094,083)    
  Net cost - Federal Sector 52,055,378   48,979,061    
Totals all programs          
    Program costs 390,467,812   361,231,473    
    Revenue (Note 11) (4,265,736)   (4,162,235)    
Net Cost of Operations $386,202,076   $357,069,238    

The accompanying notes are an integral part of these statements

Equal Employment Opportunity Commission
Consolidated Statement of Changes in Net Position
For the Years Ended September 30, 2010 and 2009
(in dollars)
         FY2010   FY2009    
      Earmarked Funds (Note 14)   All Other Funds   Consolidated   Earmarked Funds (Note 14)   All Other Funds   Consolidated    
Cumulative Results of Operations                          
Beginning Balances: $3,501,721   $(20,418,558)   $(16,916,837)   $4,248,975   $(28,935,511)   $(24,686,536)    
  Budgetary Financing Sources:                          
    Unexpended appropriations - used -   358,051,143   358,051,143   -   346,903,037   346,903,037    
  Other Financing Sources:                          
    Imputed financing sources (Note 15) -   23,408,842   23,408,842   -   17,935,900   17,935,900    
Total Financing Sources -   381,459,985   381,459,985   -   364,838,937   364,838,937    
Net Cost of Operations (276,436)   (385,925,640)   (386,202,076)   (747,254)   (356,321,984)   (357,069,238)    
Net Change (276,436)   (4,465,655)   (4,742,091)   (747,254)   8,516,953   7,769,699    
Cumulative Results of Operations 3,225,285   (24,884,213)   (21,658,928)   3,501,721   (20,418,558)   (16,916,837)    
                                 
Unexpended Appropriations










   
Beginning Balances: $-   $33,679,695   $33,679,695   $-   $38,806,307   $38,806,307    
  Budgetary Financing Sources:                          
    Appropriations received (Note 12) -   367,303,000   367,303,000   -   343,925,000   343,925,000    
    Recissions and canceled appropriations -   (2,172,713)   (2,172,713)   -   (2,148,575)   (2,148,575)    
    Unexpended appropriations - used -   (358,051,143)   (358,051,143)   -   (346,903,037)   (346,903,037)    
Total Budgetary Financing Sources -   7,079,144   7,079,144   -   (5,126,612)   (5,126,612)    
Total Unexpended Appropriations -   40,758,839   40,758,839   -   33,679,695   33,679,695    
Net Position $3,225,285   $15,874,626   $19,099,911   $3,501,721   $13,261,137   $16,762,858    
         
     
   

The accompanying notes are an integral part of these statements

Equal Employment Opportunity Commission
Combined Statement of Budgetary Resources
For the Periods ending September 30, 2010 and 2009
(in dollars)
               FY2010   FY2009
Budgetary Resources      

Unobligated balance, brought forward, October 1: $10,955,899   $10,036,948
  Recoveries of prior year unpaid obligations 2,729,962   2,617,976
  Budget authority:      
    Appropriation (Note 12) 367,303,000   343,925,000

  Spending authority from offsetting collections:      
      Earned:      
        Collected 4,311,567   4,357,071
        Change in receivables from Federal sources 32,130   (2,437)
    Change in unfilled customer orders:      
      Advance received 73,424   92,961
        Subtotal 371,720,121   348,372,595
      Permanently not available (2,172,713)   (2,148,575)
        Total Budgetary Resources $383,233,269   $358,878,944
Status of Budgetary Resources      
  Obligations incurred      
    Direct obligations (Note 13) 367,077,775   343,332,356
    Reimbursable obligations 4,405,598   4,590,689
        Subtotal 371,483,373   347,923,045
  Unobligated balance      
    Apportioned 1,545,207   1,112,688
  Unobligated balance not available 10,204,689   9,843,211

      Total Status of Budgetary Resources $383,233,269   $358,878,944

     
-   -
Change in Obligated Balance:      

Obligated balance, net      
    Unpaid obligations brought forward October 1 56,333,363   66,139,861
    Less: Uncollected customer payments from      
      Federal sources, brought forward, October 1: (282,002)   (284,438)
    Total unpaid obligated balance 56,051,361   65,855,423
  Obligations incurred, net 371,483,373   347,923,045
  Less: Gross outlays (360,592,371)   (355,111,568)
  Less: Recoveries of prior year unpaid obligations, net (2,729,962)   (2,617,976)
  Change in uncollected customer payments from Federal sources (32,130)   2,437
  Obligated balance, net, end of period      
    Unpaid obligations 64,494,402   56,333,363
    Less: Uncollected customer payments from Federal sources (314,131)   (282,002)
    Total, unpaid obligation balance, net, end of period 64,180,271   56,051,361
Net Outlays:      

Net Outlays:      
    Gross outlays 360,592,371   355,111,568
    Less: Offsetting collections (4,384,991)   (4,450,032)
    Net Outlays $356,207,380   $350,661,536

The accompanying notes are an integral part of these statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010 and 2009

(In Dollars)

(1)        Summary of Significant Accounting Policies

(a)        Reporting Entity

The Equal Employment Opportunity Commission (EEOC) was created by Title VII of the Civil Rights Act of 1964 (78 Stat. 253:42 U.S.C. 2000e et seq) as amended by the Equal Employment Opportunity Act of 1972 (Public Law 92261), and became operational on July 2, 1965. Title VII requires that the Commission be composed of five members, not more than three of whom shall be of the same political party. The members are appointed by the President of the United States of America, by and with the consent of the Senate, for a term of 5 years. The President designates one member to serve as Chairman and one member to serve as Vice Chairman. The General Counsel is also appointed by the President, by and with the advice and consent of the Senate for a term of 4 years.

In addition, based on the EEOC Education Technical Assistance and Training Revolving Fund Act of 1992 (P.L. 102-411), the EEOC is authorized to charge and receive fees to offset the costs of education, technical assistance and training.

The Commission is concerned with discrimination by public and private employers of 15 or more employees (excluding elected or appointed officials of state and local governments), public and private employment agencies, labor organizations with 15 or more members or agencies which refer persons for employment or which represent employees of employers covered by the Act, and joint labor-management apprenticeship programs of covered employers and labor organizations. The Commission carries out its mission through investigation, conciliation, litigation, coordination, regulation in the federal sector, and through education, policy research, and provision of technical assistance.

(b)        Basis of Presentation

These financial statements have been prepared to report the consolidated financial position of the EEOC, consistent with the Chief Financial Officersí Act of 1990 and the Government Management Reform Act of 1994. This means that any intra-agency transactions have been eliminated. These financial statements have been prepared from the books and records of the EEOC in accordance with generally accepted accounting principles (GAAP) using guidance issued by the Federal Accounting Standards Advisory Board (FASAB), the Office of Management and Budget (OMB) and the EEOCís accounting policies, which are summarized in this note. These consolidated financial statements present proprietary information while other financial reports also prepared by the EEOC pursuant to OMB directives are used to monitor and control the EEOCís use of federal budgetary resources.

(c)        Basis of Accounting

The Commissionís integrated Financial Management System uses CGIís Momentum, which is a highly flexible financial accounting, funds control, management accounting, and financial reporting system designed specifically for federal agencies. Momentum complies with the Financial Systems Integration Officeís core requirements for federal financial systems.

Financial transactions are recorded in the financial system, using both an accrual and a budgetary basis of accounting. Under the accrual method, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to the receipt or payment of cash. Budgetary accounting facilitates compliance with legal requirements and mandated controls over the use of federal funds. It generally differs from the accrual basis of accounting in that obligations are recognized when new orders are placed, contracts awarded, and services received that will require payments during the same or future periods. Any EEOC intra-entity transactions have been eliminated in the consolidated financial statements.

(d)        Revenues, User Fees and Financing Sources

The EEOC receives the majority of the funding needed to support its programs through congressional appropriations. Financing sources are received in direct and indirect annual and no-year appropriations that may be used, within statutory limits for operating and capital expenditures. Appropriations used are recognized as an accrual-based financing source when expenses are incurred or assets are purchased.

The EEOC also has a permanent, indefinite appropriation. These additional funds are obtained through fees charged to offset costs for education, training and technical assistance provided through the revolving fund. The fund is used to pay the cost (including administrative and personnel expenses) of providing education, technical assistance, and training by the Commission. Revenue is recognized as earned when the services have been rendered.

An imputed financing source is recognized to offset costs incurred by the EEOC and funded by another federal source, in the period in which the cost was incurred. The types of costs offset by imputed financing are: (1) employeesí pension benefits; (2) health insurance, life insurance and other post-retirement benefits for employees; and (3) losses in litigation proceedings. Funding from other federal agencies is recorded as an imputed financing source.

(e)        Assets and Liabilities

Assets and liabilities presented on the EEOCís balance sheets include both entity and non-entity balances. Entity assets are assets that the EEOC has authority to use in its operations. Non-entity assets are held and managed by the EEOC, but are not available for use in operations. The EEOCís non-entity assets represent receivables that, when collected will be transferred to the United States Treasury.

Intra-governmental assets and liabilities arise from transactions between the Commission and other federal entities. All other assets and liabilities result from activity with non-federal entities.

Liabilities covered by budgetary or other resources are those liabilities of the EEOC for which Congress has appropriated funds, or funding is otherwise available to pay amounts due. Liabilities not covered by budgetary or other resources represent amounts owed in excess of available congressionally appropriated funds or other amounts. The liquidation of liabilities not covered by budgetary or other resources is dependent on future congressional appropriations or other funding.

(f)        Fund Balance with the U.S. Treasury

Fund Balances with Treasury are cash balances remaining as of the fiscal year-end from which the EEOC is authorized to make expenditures and pay liabilities resulting from operational activity, except as restricted by law. The balance consists primarily of appropriations. The EEOC records and tracks appropriated funds in its general funds. Also included in Fund Balance with Treasury are fees collected for services which are recorded and accounted for in the EEOCís revolving fund.

(g)        Accounts Receivable

Accounts receivable consists of amounts owed to the EEOC by other federal agencies and from the public.

Intra-governmental accounts receivable represents amounts due from other federal agencies. The receivables are stated net of an allowance for estimated uncollectible amounts. The method used for estimating the allowance is based on analysis of aging of receivables and historical data.

Accounts receivable from non-federal agencies are stated net of an allowance for estimated uncollectible amounts. The allowance is determined by considering the debtorís current ability to pay, their payment record, and willingness to pay and an analysis of aged receivable activity.  The allowance for accounts receivable is computed as follows: Accounts receivable between 365 days and 720 days old are computed at 50% and those older than 720 days are calculated at 100%.

(h)        Property, Plant and Equipment

Property, plant and equipment consist of equipment, leasehold improvements and capitalized software. There are no restrictions on the use or convertibility of property, plant and equipment.

For property, plant and equipment, the EEOC capitalizes equipment (including capital leases) with a useful life of more than 2 years and an acquisition cost of $100,000 or more. Leasehold improvements and capitalized software are capitalized with a useful life of 2 years or more and an acquisition cost of at least $200,000.

Expenditures for normal repairs and maintenance for capitalized equipment and capitalized leases are charged to expense as incurred unless the expenditure is equal to or greater than $100,000 and the improvement increases the assetís useful life by more than 2 years.  For Leasehold improvements and capitalized software the amount must be greater than $200,000 or the improvements increases the asset life by more than 2 years.

During fiscal year 2009, the capitalization threshold for equipment and software and repairs and maintenance meeting the criteria was $25,000 and Leasehold improvements was $100,000. 

Depreciation or amortization of equipment is computed using the straight-line method over the assetsí useful lives ranging from 5 to15 years. Copiers are depreciated using a 5-year life. Computer hardware is depreciated over 10 to 12 years. Capitalized software is amortized over a useful life of 2 years. Amortization of capitalized software begins on the date it is put in service, if purchased, or when the module or component has been successfully tested if developed internally. Leasehold improvements are amortized over the remaining life of the lease.

The EEOC leases the majority of its office space from the General Services Administration. The lease costs approximate commercial lease rates for similar properties.

(i)         Advances and Prepaid Expenses

Amounts advanced to EEOC employees for travel are recorded as an advance until the travel is completed and the employee accounts for travel expenses.

Expenses paid in advance of receiving services are recorded as a prepaid expense until the services are received.

 (j)        Accrued Annual, Sick and Other Leave and Compensatory Time

Annual leave, compensatory time and other leave time, along with related payroll costs, are accrued when earned, reduced when taken, and adjusted for changes in compensation rates. Sick leave is not accrued when earned, but rather expensed when taken.

(k)        Retirement Benefits

EEOC employees participate in the Civil Service Retirement System (CSRS) or the Federal Employeesí Retirement System (FERS). On January 1, 1987, FERS went into effect pursuant to Public Law 99-335. Most employees hired after December 31, 1983, are automatically covered by FERS and Social Security.  Employees hired prior to January 1, 1984 could elect to either join FERS and Social Security or remain in CSRS.

For employees under FERS, the EEOC contributes an amount equal to 1% of the employeeís basic pay to the tax deferred thrift savings plan and matches employee contributions up to an additional 4% of pay. FERS and CSRS employees can contribute $16,500 of their gross earnings to the plan, for the calendar years 2010 and 2009.  However, CSRS employees receive no matching agency contribution.  There is also an additional $5,500 that can be contributed as a ďcatch-upĒ contribution for those 50 years of age or older, for the calendar years 2010 and 2009.

The EEOC recognizes the full cost of providing future pension and Other Retirement Benefits (ORB) for current employees as required by SFFAS No. 5, Accounting for Liabilities of the Federal Government. Full costs include pension and ORB contributions paid out of EEOC appropriations and costs financed by the U.S. Office of Personnel Management (OPM). The amount financed by OPM is recognized as an imputed financing source. Reporting amounts such as plan assets, accumulated plan benefits, or unfunded liabilities, if any, is the responsibility of OPM.

Liabilities for future pension payments and other future payments for retired employees who participate in the Federal Employees Health Benefits Program (FEHBP) and the Federal Employees Group Life Insurance Program (FEGLI) are reported by OPM rather than EEOC.

(l)         Workersí Compensation

A liability is recorded for estimated future payments to be made for workersí compensation pursuant to the Federal Employeesí Compensation Act (FECA). The FECA program is administered by the U.S. Department of Labor, (DOL) which initially pays valid claims and subsequently seeks reimbursement from federal agencies employing the claimants. Reimbursements to the DOL on payments made occur approximately 2 years subsequent to the actual disbursement. Budgetary resources for this intra-governmental liability are made available to the EEOC as part of its annual appropriation from Congress in the year that reimbursement to the DOL takes place. A liability is recorded for actual un-reimbursed costs paid by DOL to recipients under FECA.

Additionally, an estimate of the expected future liability for death, disability, medical and miscellaneous costs for approved compensation cases is recorded. The EEOC employs an actuary to compute this estimate using a method that utilizes historical benefit payment patterns related to a specific period to predict the ultimate payments related to the current period. The estimated liability is not covered by budgetary resources and will require future funding. This estimate is recorded as a future liability.

(m)       Contingent Liabilities

Contingencies are recorded when losses are probable, and the cost is measurable. When an estimate of contingent losses includes a range of possible costs, the most likely cost is reported, but where no cost is more likely than any other, the lowest possible cost in the range is reported.

(n)        Amounts Collected for Restitution

The courts directed an individual to pay amounts to the EEOC as restitution to several claimants named in a court case. These monies will be paid to claimants as directed by the courts.

(o)        Cost Allocations to Programs

Costs associated with the EEOCís various programs consist of direct costs consumed by the program, including personnel costs, and a reasonable allocation of indirect costs. The indirect cost allocations are based on actual hours devoted to each program from information provided by EEOC employees.

(p)        Unexpended Appropriations

Unexpended appropriations represent the amount of EEOCís unexpended appropriated spending authority as of the fiscal year-end that is unliquidated or is unobligated and has not lapsed, been rescinded or withdrawn.

(q)        Income Taxes

As an agency of the federal government, EEOC is exempt from all income taxes imposed by any governing body, whether it is a federal, state, commonwealth, local, or foreign government.

(r)        Use of Estimates

Management has made certain estimates and assumptions in reporting assets and liabilities and in the footnote disclosures. Actual results could differ from these estimates. Significant estimates underlying the accompanying financial statements include the allowance for doubtful accounts receivable, contingent liabilities and future workersí compensation costs.


(2)        Fund Balance with Treasury

Treasury performs cash management activities for all federal agencies. The net activity represents Fund Balance with Treasury. The Fund Balance with Treasury represents the right of the EEOC to draw down funds from Treasury for expenses and liabilities.  Fund Balance with Treasury by fund type as of September 30, 2010 and 2009 consists of the following:



FY 2010



FY 2009

Fund Type






Revolving funds

$

3,194,351

 

$

3,698,564

Appropriated funds

 

72,735,817

 

 

63,308,696

Other fund types

 

5,627

 

 

13,695

Totals

$

75,935,795


$

67,020,955

The status of the fund balance is classified as unobligated available, unobligated unavailable, or obligated. Unobligated funds, depending on budget authority, are generally available for new obligations in the current year of operations. The unavailable amounts are those appropriated in prior fiscal years, which are not available to fund new obligations.  The obligated, but not yet disbursed, balance represents amounts designated for payment of goods and services ordered but not yet received, or goods and services received, but for which payment has not yet been made. 

The Fund Balance with Treasury includes items for which budgetary resources are not recorded, such as deposit funds and miscellaneous receipts. These funds are shown in the table below as a Non-budgetary Fund Balance with Treasury.

The undelivered orders at the end of the period consist of $32,464,528 and $26,399,459 for FY 2010 and FY 2009, respectively.

For fiscal years ended September 30, 2010 and 2009, funds in closed accounts of $2,172,713 and $2,148,575 were returned to Treasury.

Status of Fund Balance with Treasury as of September 30, 2010 and 2009 consists of the following:



FY 2010



FY 2009

Status of Funds






Unobligated balance:

 

 

 

 

 

Available

$

1,545,207

 

$

1,112,688

Unavailable

 

10,204,689

 

 

9,843,211

Obligated balance not yet disbursed

 

64,180,271

 

 

56,051,361

Non-budgetary Fund Balance with Treasury

 

5,628

 

 

13,695

Totals

$

75,935,795


$

67,020,955

(3)        Accounts Receivable, Net

Intra-governmental accounts receivable due from federal agencies arise from the sale of services to other federal agencies. This sale of services generally reduces the duplication of effort within the federal government resulting in a lower cost of federal programs and services. While all receivables from federal agencies are considered collectible, an allowance for doubtful accounts is sometimes used to recognize the occasional billing dispute.  In FY 2010 and FY 2009, this was not deemed necessary.

Accounts receivable due to EEOC from the public arise from enforcement or prevention and training services provided to public and private entities or state and local agencies. An analysis of accounts receivable is performed to determine collectibility and an appropriate allowance for uncollectible receivables is recorded.  The allowance for accounts receivable is computed as follows:  Accounts receivable between 365 days and 720 days old are computed at 50% and those older than 720 days years are calculated at 100%.  Accounts receivable as of September 30, 2010 and 2009 are as follows:



FY 2010



FY 2009

Intra-governmental:






Accounts receivable (see detail below)

$

           198,677

 

$

35,446

Allowance for uncollectible receivables

 

-     

 

 

-     

Totals

$

198,677


$

35,446

 


FY 2010



FY 2009

With the public:






Accounts receivable

$

298,798

 

$

487,942

Allowance for uncollectible receivables

 

(137,585)

 

 

(245,665)

Totals

$

 161,213


$

 242,277

Amounts due from various federal agencies are for accounts receivable as of September 30, 2010 and 2009. These are related to registered participantsí training fees due to the revolving fund and appropriated interagency agreements as shown in the table below:




FY 2010



FY 2009

Agency






Defense Agencies

$

48,286

 

$

-

Social Security Administration

 

25,710

 

 

-

International Trade Commission

 

19,200

 

 

-

Department of Energy

 

18,558

 

 

-

Department of Homeland Security

 

17,928

 

 

300

Department of the Interior

 

15,692

 

 

-

Environmental Protection Agency


9,495

 

 

1,395

Department of Agriculture

 

8,060

 

 

4,690

National Aeronautics and Space Administration

 

7,775

 

 

-

Department of Education

 

7,425

 

 

-

Department of Health and Human Services

 

4,249

 

 

874

The Judiciary

 

3,500

 

 

698

Department of Justice

 

2,550

 

 

-

General Services Administration

 

2,550

 

 

-

Department of State

 

2,000

 

 

1,095

Department of Treasury

 

 1,725

 

 

9,690

Architect of the Capitol

 

1,725

 

 

350

Department of Labor

 

950

 

 

    -

Office of Personnel Management

 

350

 

 

-

Department of Transportation

 

349

 

 

-

Office of Special Counsel

 

300

 

 

-

National Science Foundation

 

300

 

 

-

Department of the Army

 

-

 

 

8,069

Selective Service System

 

-

 

 

3,000

Department of the Navy

 

-

 

 

1,945

Department of Veterans Affairs

 

-

 

 

1,095

Department of Housing and Urban Development

 

-

 

 

1,095

Agency for International Development

 

-

 

 

850

Executive Office of the President

 

-

 

 

300

Totals

$

198,677


$

35,446

(4)        Property, Plant and Equipment, Net

Property, plant and equipment consist of that property which is used in operations and consumed over time. The following tables summarize cost and accumulated depreciation of property, plant and equipment.

As of September 30, 2010

 

Cost

   

Accumulated
Depreciation

   

Net Book
Value

Equipment

$

911,642

 

$

(813,662)

 

$

97,980

Capital leases

 

193,910

 

 

(155,681)

 

 

38,229

Internal use software

 

4,134,204

 

 

(4,084,786)

 

 

49,418

Leasehold improvements

 

11,772,261

 

 

(2,559,506)

 

 

    9,212,755

Totals

$

17,012,017

 

$

(7,613,635)

 

$

9,398,382

As of September 30, 2009

 

Cost

   

Accumulated
Depreciation

   

Net Book
Value

Equipment

$

911,642

 

$

(744,927)

 

$

166,715

Capital leases

 

286,857

 

 

(207,855)

 

 

79,002

Internal use software

 

4,134,204

 

 

(4,026,147)

 

 

108,057

Leasehold improvements

 

11,772,261

 

 

(1,404,858)

 

 

  10,367,403

Totals

$

17,104,964

 

$

(6,383,787)

 

$

10,721,177

Depreciation expense for the periods ended September 30, 2010 and 2009 is:

FY 2010


FY 2009

$   1,321,405


$   1,134,782

(5)        Non-Entity Assets

The EEOC has $11,314 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2010 and $158 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2009. Cash collections of $80,815 were returned to Treasury as of September 30, 2010 and $236,055 were returned to Treasury as of September 30, 2009 as instructed by Treasury.


(6)        Liabilities Owed to Other Federal Agencies

As of September 30, 2010 and 2009, the following amounts were owed to other federal agencies:

Agency:


FY 2010



FY 2009

Department of Interior

$

69,554

 

$

86,000

General Services Administration

 

56,638

 

 

825,400

National Archives and Records

 

9,000

 

 

12,051

Department of Health and Human Services

 

310

 

 

762

Department of Homeland Security

 

-

 

 

1,179,392

Department of the Treasury

 

-

 

 

16,125

Office of Personnel Management

 

-

 

 

15,047

Department of Agriculture

 

-

 

 

1,580

Totals

$

135,502


$

2,136,357

(7)        Liabilities Not Covered by Budgetary Resources

Liabilities not covered by budgetary resources represent amounts owed in excess of available congressionally appropriated funds or other amounts.

Liabilities not covered by budgetary resources as of September 30, 2010 and 2009 are shown in the following table:



FY 2010



FY 2009

Intra-governmental:

 


 

 


     Accrued workerís compensation

$

3,067,745

 

$

2,448,172

Total intra-governmental

 

3,067,745

 

 

2,448,172

Accrued annual leave

 

19,129,396

 

 

18,254,091

Workerís compensation due in the future

 

12,130,585

 

 

10,416,049

Capital lease liability

 

53,229

 

 

97,967

Total liabilities not covered by budgetary resources

 

34,380,955

 

 

31,216,279

Total liabilities covered by budgetary resources

 

32,265,702

 

 

30,263,600

Total liabilities

$

66,646,657


$

61,479,879

The EEOC employs an actuary to determine the future workersí compensation liability.


(8)        Liabilities Analysis

Current and non-current liabilities as of September 30, 2010 are shown in the following table:



Current



Non-Current



Totals

Covered by budgetary resources:









Intra-governmental:

 

 

 

 

 

 

 

 

    Accounts payable

$

135,502

 

$

-

 

$

135,502

    Payroll taxes

 

2,939,399

 

 

-

 

 

2,939,399

    Due to Treasury

 

11,294

 

 

-

 

 

11,294

    Other

 

-

 

 

-

 

 

-

Total Intra-governmental

 

3,086,195

 

 

-

 

 

3,086,195

Accounts payable

 

17,209,182

 

 

-

 

 

17,209,182

Accrued payroll

 

11,798,293

 

 

-

 

 

11,798,293

Amounts collected for restitution

 

5,647

 

 

-

 

 

5,647

Unearned revenue

 

166,385

 

 

-

 

 

166,385

Liabilities covered by budgetary resources

 

        32,265,702

 

 

-

 

 

        32,265,702

Liabilities not covered by budgetary
resources
:

 

 

 

 

 

 

 

 

Intra-governmental:

 

 

 

 

 

 

 

 

   Workerís compensation

 

1,254,127

 

 

1,813,618

 

 

3,067,745

Total Intra-governmental

 

1,254,127

 

 

1,813,618

 

 

3,067,745

Accrued annual leave

 

19,129,396

 

 

-

 

 

19,129,396

Actuarial workerís compensation

 

 

 

 

12,130,585

 

 

12,130,585

Capital lease liability

 

53,229

 

 

-

 

 

53,229

Liabilities not covered by budgetary
resources

 

20,436,752

 

 

13,944,203

 

 

34,380,955

Total liabilities

$

52,702,454

 

$

13,944,203

 

$

66,646,657

 


Current and non-current liabilities as of September 30, 2009 are shown in the following table:



Current



Non-Current



Totals

Covered by budgetary resources:









Intra-governmental:

 

 

 

 

 

 

 

 

    Accounts payable

$

2,136,357

 

$

-

 

$

2,136,357

    Payroll taxes

 

2,463,234

 

 

-

 

 

2,463,234

    Due to Treasury

 

158

 

 

-

 

 

158

    Other

 

65

 

 

-

 

 

65

Total Intra-governmental

 

4,599,814

 

 

-

 

 

4,599,814

Accounts payable

 

15,035,936

 

 

-

 

 

15,035,936

Accrued payroll

 

10,521,260

 

 

-

 

 

10,521,260

Amounts collected for restitution

 

13,629

 

 

-

 

 

13,629

Unearned revenue

 

92,961

 

 

-

 

 

92,961

Liabilities covered by budgetary resources

 

        30,263,600

 

 

-

 

 

30,263,600

Liabilities not covered by budgetary
resources
:

 

 

 

 

 

 

 

 

Intra-governmental:

 

 

 

 

 

 

 

 

   Workerís compensation

 

866,464

 

 

1,581,708

 

 

2,448,172

Total Intra-governmental

 

866,464

 

 

1,581,708

 

 

2,448,172

Accrued annual leave

 

18,254,091

 

 

-

 

 

18,254,091

Actuarial workerís compensation

 

 

 

 

10,416,049

 

 

10,416,049

Capital lease liability

 

53,229

 

 

44,738

 

 

97,967

Liabilities not covered by budgetary
resources

 

19,173,784

 

 

12,042,495

 

 

31,216,279

Total liabilities

$

49,437,384

 

$

12,042,495

 

$

61,479,879

(9)        Contingent Liabilities

EEOC is a party to various administrative proceedings, legal actions and claims that may eventually result in the payment of substantial monetary claims to third parties, or in the reallocation of material budgetary resources. Any financially unfavorable administrative or court decision could be funded from either the various claims to judgment funds maintained by Treasury or paid by EEOC. In FY 2010 and FY 2009 $0 was recorded for contingent liabilities, which are the amounts considered probable and measurable by EEOCís management and legal counsel. In addition, for FY 2010, there is one claim for which it is reasonably possible that damages will be paid. This pending claim is for overtime to which employees claim they were entitled.  The estimated amount of this claim is between three million ($3,000,000) and five million ($5,000,000). The chance of this claim succeeding is less than probable, but more than remote. The agency has and will continue to vigorously contest these claims.  In the opinion of EEOCís management, the ultimate resolution of pending litigation will not have a material effect on the EEOCís financial statements.


(10)      Leases

Capital Leases

The EEOC has several capital leases for copiers in the amount of $193,910 for FY 2010. These leases can be canceled without penalty. The future lease payments and net capital lease liability as of September 30, 2010 is as follows:

Fiscal Year


Future
Payments

2011

$

58,423

2012

 

-

2013

 

-

2014

 

-

2015

 

-

Thereafter

 

-

Total future lease payments

 

58,423

Less: imputed interest

 

(5,194)

Net capital lease liability

$

53,229

None of the future lease payments are covered by budgetary resources.

Operating leases

The EEOC has several cancelable operating leases with the General Services Administration (GSA), for office space which do not have a stated expiration. The GSA charges rent that is intended to approximate commercial rental rates. Rental expenses for operating leases during FYs 2010 and 2009 are $26,761,804 and $28,249,730, respectively. The EEOC has estimated its future minimum liability on GSA operating leases by adding inflationary adjustments to the FY 2010 lease rental expense. Future estimated minimum lease payments, for 5 fiscal years under GSA as of September 30, 2010 are:

Fiscal Year


Estimated
Payments

2011

$

31,498,282

2012

 

31,714,518

2013

 

32,157,936

2014

 

32,388,667

2015

 

32,626,320

Total

$

160,385,723


(11)      Earned Revenue

The EEOC charges fees to offset costs for education, training and technical assistance. These services are provided to other federal agencies, the public, and to some State and Local agencies, as requested. In the chart below, the fees from services does not include intra-agency transactions. The Commission also has a small amount of reimbursable revenue from contracts with other federal agencies to provide on-site personnel. Revenue earned by the Commission as of September 30, 2010 and 2009 was as follows:



FY 2010



FY 2009

Reimbursable revenue

$

72,000

 

$

54,000

Fees from services

 

4,193,736

 

 

4,108,234

      Total Revenue

$

4,265,736


$

4,162,234

(12)     Appropriations Received

Warrants received by the Commission as of September 30, 2010 and 2009 are:

FY 2010

FY 2009

$   367,303,000

$   343,925,000

There was no rescission for the warrant received by the EEOC for fiscal years 2010 and 2009.

(13)    Apportionment Categories of Obligations Incurred: Direct vs. Reimbursable Obligations

Direct and Reimbursable obligations as of September 30, 2010 and 2009 are:

Obligations

 

FY 2010

   

FY 2009

Direct A

$

 337,357,195

 

$

317,633,031

Direct B

 

29,720,580

 

 

25,699,325

  Subtotal Direct Obligations

 

367,077,775

 

 

343,332,356

Reimbursable - Direct A

 

4,405,598

 

 

4,590,689

Total Obligations

$

371,483,373

 

$

347,923,045

(14)      Earmarked Funds (Permanent Indefinite Appropriations)

The Commission has permanent, indefinite appropriations from fees earned from services provided to the public and to other federal agencies. These fees are charged to offset costs for education, training and technical assistance provided through the revolving fund. This fund is an earmarked fund and is accounted for separately from the other funds of the Commission.  The fund is used to pay the cost (including administrative and personnel expenses) of providing education, technical assistance and training by the Commission. Revenue is recognized as earned when the services have been rendered by the EEOC.

Balance Sheet as of September 30,  2010 and 2009

2010


2009

ASSETS

 

 

 

Fund balance with Treasury

$     3,194,351

 

$     3,698,564

Accounts receivable (net of allowance)

250,216

 

201,021

Advances and prepaid expenses

34,822

 

53,271

TOTAL ASSETS

$     3,479,389

 

$     3,952,856

LIABILITIES

 

 

 

Accounts payable

87,719

 

358,174

Deferred revenue

166,385

 

92,961

TOTAL LIABILITIES

254,104

 

451,135

NET POSITION

 

 

 

Cumulative results of operations

3,225,285

 

3,501,721

TOTAL LIABILITIES AND NET POSITION

$     3,479,389

 

$     3,952,856

Statement of Net Cost for the Period Ended September 30,  2010 and 2009

2010


2009

Program Costs

$   4,470,171

 

$   5,098,263

Revenue

(4,193,736)

 

(4,351,009)

Net Cost (Revenue)

$        276,435

 

$        747,254

The Revenue includes $- and $242,774 of intra-agency revenue for fiscal years ended September 30, 2010 and 2009, respectively that is eliminated in the Principal Statements.

(15)      Imputed Financing

OPM pays pension and other future retirement benefits on behalf of federal agencies for federal employees. OPM provides rates for recording the estimated cost of pension and other future retirement benefits paid by OPM on behalf of federal agencies. The costs of these benefits are reflected as imputed financing in the consolidated financial statements. The U.S. Treasuryís Judgment Fund paid certain judgments on behalf of the EEOC. Expenses of the EEOC paid or to be paid by other federal agencies at September 30, 2010 and 2009 consisted of:



FY 2010



FY 2009

Office of Personnel Management:

 



 


    Pension expenses

$

11,516,849

 

$

7,151,267

    Federal employees health benefits (FEHB)

 

11,857,772

 

 

10,753,053

    Federal employees group life insurance (FEGLI)

 

34,221

 

 

31,580

Total Imputed Financing

$

23,408,842


$

17,935,900

(16)      Intragovernmental Costs and Exchange Revenue:



FY 2010



FY 2009

Costs

 

 

 

 

 

Office of Personnel Management

$

  58,277,450

 

$

  49,023,789

General Services Administration

 

32,005,834

 

 

48,444,292

Social Security Administration

 

11,822,271

 

 

10,560,337

Federal Retirement Thrift Investment Board

 

6,184,892

 

 

5,462,791

Department of the Interior

 

3,705,328

 

 

3,719,215

Department of Homeland Security

 

2,669,509

 

 

3,186,614

Department of Labor

 

1,597,932

 

 

1,431,707

Department of Transportation

 

1,263,758

 

 

1,080,592

Department of Health and Human Services

 

427,997

 

 

284,370

Department of Commerce

 

100,750

 

 

39,000

National Archives and Records Administration

 

70,910

 

 

72,581

Government Printing Office

 

62,122

 

 

146,962

Library of Congress

 

58,687

 

 

92,966

Department of the Treasury

 

39,796

 

 

183,536

Other agencies

 

102,227

 

 

41,202

     Intragovernmental Costs

 

118,389,463

 

 

123,769,954

     Public costs

 

272,078,349

 

 

237,461,519

         Total Program costs

$

390,467,812


$

361,231,473




FY 2010



FY 2009

Revenue

 

 

 

 

 

Defense Agencies

$

576,127

 

$

492,130

Other Agencies

 

         383,966

 

 

         365,615

Department of Homeland Security

 

141,207

 

 

261,371

Department of Labor

 

81,716

 

 

54,000

Department of Veterans Affairs

 

79,796

 

 

72,995

Department of Justice

 

75,931

 

 

77,705

Department of the Treasury

 

75,357

 

 

134,217

Department of Agriculture

 

61,252

 

 

117,735

Social Security Administration

 

61,100

 

 

82,414

Department of Transportation

 

50,863

 

 

66,873

Department of Energy

 

48,199

 

 

35,556

Department of Commerce

 

42,480

 

 

37,675

Office of Personnel Management

 

28,810

 

 

-

Department of Interior

 

26,609

 

 

0

United States Postal Service

 

25,501

 

 

24,253

Department of Health and Human Services

 

21,402

 

 

91,833

Department of Education

 

17,059

 

 

-

General Services Administration

 

16,222

 

 

-

Tennessee Valley Authority

 

13,759

 

 

-

Environmental Protection Agency

 

12,659

 

 

202,503

Department of State

 

12,262

 

 

-

National Labor Relations Board

 

10,296

 

 

-

Department of Housing and Urban Development

 

10,010

 

 

23,547

Department of the Air Force

 

-

 

 

37,675

Department of the Army

 

-

 

 

35,320

U.S. Nuclear Regulatory Commission

 

-

 

 

30,611

Department of the Navy

 

-

 

 

14,128

     Intragovernmental earned revenue

 

1,872,583

 

 

2,319,613

     Public earned revenue

 

2,393,153

 

 

1,842,622

         Total Program earned revenue (Note 11)


4,265,736



4,162,235

Net Cost of Operations

$

386,202,076


$

357,069,238


(17)      Explanation of Differences between the Statement of Budgetary Resources and the Budget of the United States Government

The EEOCís budget is allocated to Justice, Opportunity, and Inclusive Workplaces.

Information from the Presidentís Budget and the Combined Statement of Budgetary Resources for the period ended September 30, 2009 is shown in the following tables. A reconciliation is not presented for the period ended September 30, 2010, since the Presidentís Budget for this period has not been issued by Congress.

Dollars in millions

Presidentís Budget
FY 2009 actual
as of 9/30/09


Statement of
Budgetary Resources
FY 2009 as of 9/30/09

Estimated  FY 2010

Estimated
FY 2011

Budgetary resources

$          344

 

$         359

$      367

$     385

Total new obligations

343

 

348

367

385

Total outlays

350

 

351

363

393

The differences between the Presidentís 2009 budget and the Combined Statement of Budgetary Resources for 2009 are shown below:

Dollars in millions


Budgetary Resources


Obligations


Outlays (g)

As reported on the Combined Statement of
Budgetary Resources for FY 2009

 

$          359

 

$          348

 

$          351

Revolving fund collections not reported in the budget

(a)

(4)

 

 

 

4

Obligations in the revolving fund and no-year fund
not included in the Presidentís budget

(b)

 

 

(5)

 

(5)

Carry-forwards and recoveries in the revolving fund
and no-year fund not included in the Presidentís
Budget

(c)

(3)

 

 

 

 

Carry-forwards and recoveries in expired funds

(d)

(10)

 

 

 

 

Obligations in expired funds

(e)

 

 

 

 

 

Canceled appropriations

(f)

2

 

 

 

 

Rounding differences

(g)

 

 

 

 

 

As reported in the Presidentís Budget for FY 2009


$          344


$          343


$          350

 


(a)        The EEOCís revolving fund provides training and charges fees to offset the cost. The collections are reported on the Combined Statement of Budgetary Resources as a part of total budgetary resources, but are not reported in the Presidentís Budget.

(b)        The obligations incurred by the revolving fund and no year fund are not a part of the Presidentís Budget but are included in total obligations incurred in the Combined Statement of Budgetary Resources.

(c)        Revolving funds and no-year funds have carry-overs of unobligated balances and recoveries of obligations that are included in total resources on the Combined Statement of Budgetary Resources, but are not included in the Presidentís Budget.

(d)        Expired funds have carry-overs of unobligated balances and recoveries of obligations that are included in total resources on the Combined Statement of Budgetary Resources until they are canceled, but are not included in the Presidentís Budget.

(e)        New obligations in expired funds are shown as a part of obligations incurred on the Combined Statement of Budgetary Resources, but are not included in the Presidentís Budget.

(f)        Canceled appropriations are not shown in the Presidentís Budget, but are reported as a reduction to resources in the Combined Statement of Budgetary Resources.

(g)        Difference due to rounding by millions.


(18)      Reconciliation of Net Cost of Operations to Budget

Equal Employment Opportunity Commission
Reconciliation of Net Cost of Operations (Proprietary) to Budget
For the Month Ended September 30, 2010 and 2009
           

FY 2010

 

FY 2009

Resources Used to Finance Activities

     

Current Year Gross Obligations

 $    371,483,373

 

$     347,923,045

Budgetary Resources from Offsetting Collections

     
 

Spending Authority from Offsetting Collections

     
   

Earned

       
     

Collected

 

(4,311,567)

 

(4,357,071)

     

Change in Receivable from Federal Sources

(32,130)

 

2,437

 

Recoveries of Prior Year Unpaid Obligations

(2,729,962)

 

(2,617,976)

                 

Other Financing Resources

       
 

Imputed Financing Sources

 

23,408,842

 

17,935,900

                 

Total Resources Used to Finance Activity

$   387,818,556

 

$   358,886,335

                 

Resources Used to Finance Items Not Part of the Net Cost of Operations

     

Budgetary Obligations and Resources not in the Net Cost of Operations

     
 

Change in Unfilled Customer Orders

73,424

 

92,961

 

Change in Undelivered Orders

       (6,065,069)

 

        6,716,453

 

Current Year Capitalized Purchases

(44,738)

 

(11,282,666)

 

Deferred Revenue

 

(166,385)

 

(92,961)

                 

Components of the Net Cost of Operations which do not Generate

     

or Use Resources in the Reporting Period Revenues without Current Year Budgetary Effect

     
 

Other Financing Sources Not in the Budget

      (23,408,842)

 

      (17,935,900)

                 

Costs without Current Year Budgetary Effect

     
 

Depreciation and Amortization

           1,321,405

 

           1,134,782

 

Disposition of Assets

 

1,389

 

34,740

 

Future Funded Expenses

 

1,494,878

 

1,145,815

 

Imputed costs

 

23,408,842

 

17,935,900


Bad Debt Expense

 

(99,691)

 

122,290


Other Expenses Not Requiring Budgetary Resources

1,868,307

 

311,489

Net Cost of Operations

 

$386,202,076

 

$357,069,238