Home > About EEOC > Budget and Performance

Financial Statements

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

I am pleased to report that Equal Employment Opportunity Commission (EEOC) received an unqualified audit opinion on the FY 2012 financial statements. Also, there were no violations for noncompliance with laws and regulations. This could not have been accomplished without the outstanding efforts of the EEOC employees who worked diligently throughout the year to achieve a favorable audit report.

The EEOC has received clean opinions from FY 2004 when audited statements were required in compliance with the Accountability of Tax Dollars Act of 2002. FY 2012 makes the ninth consecutive year. Other FY 2012 accomplishments include:

October 2011: the agency implemented its first outsourced financial cloud system. The new system, Financial Cloud Solutions (FCS) was implemented on time and within budget. The FCS has an Oracle Federal Financial Core and is operated by a private sector vendor. The vendor processes payments and miscellaneous collections, operates the FCS and E2 travel helpdesks, and operates and maintains the software.
November 2011: in support of the White House Policy to improve cash flow for small businesses - the EEOC began paying small vendors in 15 days or less of receipt of proper documentation. From November 2011 - September 2012, the agency paid 772 small vendors a total of $7 million.

During February 2012, the Commission approved the fiscal years 2012 - 2016 strategic plan. The new plan contains budgetary resource Performance Measure 14 - the EEOC's budgetary resources for FY 2014 - 2017 align with the strategic plan. This measure emphasizes the importance of long term planning and the allocation and re-allocation of actual resources if required to fund strategic objectives. The FY 2012 performance target for this measure was met.

These positive outcomes are proof of the commitment to improved budget planning and financial management. In FY 2013, the EEOC will continue improvements that will allow it to effectively meet its mission to "stop and remedy unlawful employment discrimination".

Germaine P. Roseboro, CPA, CGFM
Chief Financial Officer

INSPECTOR GENERAL'S AUDIT REPORT

November 16, 2012

MEMORANDUM

TO: Jacqueline Berrien, Chair

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

SUBJECT: Audit of the Equal Employment Opportunity Commission's Fiscal Year 2012 Financial Statements (OIG Report No. 2012-01-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 2012. The contract required that the audit be done in accordance with U.S. generally accepted government auditing standards contained in Government Auditing Standards issued by the Comptroller General of the United States and Office of Management and Budget's Bulletin 07-04, Audit Requirements for Federal Financial Statements, as amended.

HRK issued an unqualified opinion on EEOC's FY 2012 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 the lack of sufficient controls over supporting documentation for personnel expenses and the lack of sufficient controls over financial reporting. 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 HRK's 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 EEOC's financial statements or conclusions about the effectiveness of internal controls or on whether EEOC's financial management systems substantially complied with FFMIA; or conclusions on compliance with laws and regulations. HRK is responsible for the attached auditor's report dated November 15, 2012 and the conclusions expressed in the report. However, OIG's 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 in the report.

The Office of Management and Budget issued Circular Number A-50, Audit Follow Up, to ensure that corrective action on audit findings and recommendations proceed as rapidly as possible. EEOC Order 192.002, Audit Follow up Program, implements Circular Number A-50 and requires that for resolved recommendations, a corrective action work plan should be submitted within 30 days of the final evaluation report date describing specific tasks and completion dates necessary to implement audit recommendations. Circular Number A-50 requires prompt resolution and corrective action on audit recommendations. Resolutions should be made within six months of final report issuance.

cc: Claudia Withers
Germaine Roseboro
Raj Mohan
Nicholas Inzeo
John Schmelzer
Mary McIver
Lisa Williams
Kimberly Hancher
Peggy Mastroianni
Todd Cox

INDEPENDENT AUDITORS' REPORT

Independent Auditors' Report

Inspector General

U.S. Equal Employment Opportunity Commission

We have audited the accompanying consolidated balance sheets of the U.S. Equal Employment Opportunity Commission (EEOC), as of September 30, 2012 and 2011, and the related consolidated statements of net cost and changes in net position, and combined statements of budgetary resources, for the years 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 audits.

We conducted our audits 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 audits 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 audits provide a reasonable basis for our opinion.

In our audits of the EEOC for fiscal years 2012 and 2011, we found

the financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles,
no material weaknesses in internal control over financial reporting (including safeguarding of assets) and compliance with laws and regulations, and
no reportable noncompliance with laws and regulations we tested.

The following sections discuss in more detail (1) these conclusions, (2) our conclusions on Management's Discussion and Analysis and other supplementary information, and (3) our and management's responsibilities.

Opinion on the Financial Statements
In our opinion, the financial statements including the accompanying notes present fairly, in all material respects, the financial position of EEOC as of September 30, 2012 and 2011, and its net cost of operations, changes in net position, and budgetary resources for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Consideration of Internal Control
In planning and performing our audits, we considered EEOC's 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 EEOC's internal control over financial reporting and compliance or on management's assertion on internal control included in Managements' Discussion and Analysis. However, for the controls we tested, we found no material weaknesses in internal control over financial reporting (including safeguarding of assets) and compliance.

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. 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. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that the design or operation of one or more internal controls will not allow management or employees, in the normal course of performing their duties, to promptly detect or prevent errors, fraud, or noncompliance in amounts that would be material to the financial statements. We consider the deficiencies described in Exhibit I to be a significant deficiency.

Our internal control work would not necessarily disclose all deficiencies in internal control that might be material weaknesses or other significant deficiencies.

We noted certain additional matters that we will report to management of EEOC in a separate letter.

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 EEOC's 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 auditing standards generally accepted in the United States of America 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.

Consistency of Other Information
Management's 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.

Responsibilities
EEOC's management is responsible for (1) preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, (2) establishing, maintaining, and assessing internal control to provide reasonable assurance that the broad control objectives of the Federal Managers' Financial Integrity Act are met, and (3) complying with applicable laws and regulations.

We are responsible for obtaining reasonable assurance about whether the financial statements are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. We are also responsible for (1) obtaining a sufficient understanding of internal control over financial reporting and compliance to plan the audit, (2) testing compliance with selected provisions of laws and regulations that have a direct and material effect on the financial statements and laws for which OMB audit guidance requires testing, and (3) performing limited procedures with respect to certain other information appearing in the Annual Financial Statement.

In order to fulfill these responsibilities, we

examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements;
assessed the accounting principles used and significant estimates made by management;
evaluated the overall presentation of the financial statements;
obtained an understanding of the entity and its operations, including its internal control related to financial reporting (including safeguarding assets), and compliance with laws and regulations (including execution of transactions in accordance with budget authority);
tested relevant internal controls over financial reporting, and compliance, and evaluated the design and operating effectiveness of internal control;
considered the design of the process for evaluating and reporting on internal control and financial management systems under the Federal Managers' Financial Integrity Act; and
tested compliance with selected provisions of laws and regulations that have a direct and material effect on the financial statements and those required by OMB Bulletin No. 07-04, as amended.

We did not evaluate all internal controls relevant to operating objectives as broadly defined by the Federal Managers' Financial Integrity Act, such as those controls relevant to preparing statistical reports and ensuring efficient operations. We limited our internal control testing to controls over financial reporting and compliance. Because of inherent limitations in internal control, misstatements due to error or fraud, losses, or noncompliance may nevertheless occur and not be detected. We also caution that projecting our evaluation to future periods is subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with controls may deteriorate. In addition, we caution that our internal control testing may not be sufficient for other purposes.

We did not test compliance with all laws and regulations applicable to EEOC. We limited our tests of compliance to selected provisions of laws and regulations that have a direct and material effect on the financial statements and those required by OMB audit guidance that we deemed applicable to the EEOC's financial statements for the fiscal year ended September 30, 2012. We caution that noncompliance may occur and not be detected by these tests and that such testing may not be sufficient for other purposes.

We performed our audits in accordance with auditing standards generally accepted in the United States of America and OMB audit guidance.

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 U.S. 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.

November 15, 2012

Significant Deficiencies
Exhibit 1

Lack of Sufficient Controls over Supporting Documentation for Personnel Expenses
The U.S. Equal Employment Opportunity Commission (EEOC) does not properly maintain supporting documentation for personnel expenses recorded in the general ledger. EEOC maintains personnel files for all employees to ensure that wages and elections for withholdings and benefits are consistent with the employee's intent. These files have minimum standards for accuracy, relevancy, necessity, timeliness, and completeness.

In FY 2012, we tested a sample of 78 employees' personnel expenses and supporting documentation maintained by EEOC in the employees' personnel files (eOPF) for the period of October 1, 2011 through June 30, 2012. Based on our testing, we identified the following exceptions:
- Fifteen (15) employees' enrollment code per most recent FEHB enrollment form (SF-2809, SF-2810 or transcript) in eOPF does not agree to enrollment code on LES for pay period sampled.
- Five (5) employees do not have a FEHB enrollment form (SF-2809, SF-2810 or transcript) in eOPF.
- Two (2) employees' have no FEGLI election form (SF-2817, FE 2004 or RI 76-27) in eOPF; therefore, elected FEGLI coverage per most recent FEGLI election form (SF-2817, FE 2004 or RI 76-27) in eOPF does not agree to election code per SF-50 effective during pay period sampled.
- Eight (8) employees' elected coverage per most recent FEGLI election form (SF-2817, FE 2004 or RI 76-27) in eOPF does not agree to election code per SF-50 effective during pay period sampled.
- Five (5) employees' have no TSP election form (TSP-1 or transcript) in eOPF; therefore, contribution (percentage/dollar amount) per most recent TSP election form (TSP-1 or transcript) in eOPF does not agree to contribution on LES for pay period sampled.
- Twenty-eight (28) employees' elected contribution (percentage/dollar amount) per most recent TSP election form (TSP-1 or transcript) in eOPF does not agree to contribution on LES for pay period sampled.
These exceptions were caused by insufficient controls in place at EEOC to ensure proper and timely documentation is maintained in the eOPF. We identified similar exceptions in our audits from FY 2010 and FY 2011.

EEOC's failure to properly record and maintain official personnel records increases the risk for improper calculations of liabilities on the Balance Sheets and improper calculations of program costs on the Statements of Net Cost.

The Government Accountability Office's (GAO) GAO Standards for Internal Control in the Federal Government (Green Book) states: "Internal control and all transactions and other significant events need to be clearly documented, and the documentation should be readily available for examination. The documentation should appear in management directives, administrative policies, or operating manuals and may be in paper or electronic form. All documentation and records should be properly managed and maintained."

To address this issue, we recommend that EEOC update its controls over the maintenance of its official personnel files. Additionally, management should perform a thorough review of its employees' personnel files to ensure that documentation is current and complete.

Management's Response: Management concurs with the finding. As mentioned in last year's report, we partnered with the Interior Business Center (IBC) (DOI) to provide a means to have the actions taken in Employee Express by our employees which will allow them to flow automatically to their e-OPFs. This data feed went live June 2, 2011. The data feed contains all FEHB, FEHB Premium Conversion, TSP, and TSP Catch-up records since the first day of FEHB open season (11/8/10) through the live date. After this date, IBC would send the actions on a daily basis Monday through Friday. While this process is working efficiently, the lack of resources has been and still is an issue. The Benefits Assistant in charge of this function went out on maternity leave during last year (which was reported in our last audit response), returned and now has left the agency. In order to process daily actions from Employee Express (with some employees making changes on a daily basis) appropriate resources are required. However, we have found in the meantime, to ensure that our separating employees' e-OPFs are complete. We receive a report bi-weekly from IBC that contains Employee Express actions, which in turn we download and scan into their e-OPF prior to releasing them. In order to improve on the resource issue, OHR is committed to partner with the Veterans Administration's wounded veterans in order to secure a volunteer to work with us to begin to put a process in place and clear up the backlog.

Auditors' Response: FY 2013 audit procedures will determine whether the corrective actions have been implemented and are operating effectively.

Lack of Sufficient Controls over Financial Reporting

In FY 2012, EEOC implemented the new Financial Cloud Solutions (FCS) accounting and reporting system to replace its legacy system Momentum. EEOC encountered implementation issues related to the new FCS system, including weaknesses identified in the conversion, the development of new reconciliation processes, and implementation of new complimentary user controls. As a result, the ability of management to perform their day-to-day procedures was significantly impacted. Specifically we noted the following issues:

Reconciliation of Data: EEOC identified differences between user reports/subledgers and the FCS general ledger; however no support was provided evidencing the reconciliations and the subsequent resolution of identified issues. Prompt resolution of differences is an essential component of financial data integrity, and its absence compromises the integrity of the financial reporting.

Complimentary User Controls: EEOC did not fully implement the complementary user controls identified in the SSAE 16 Type II report provided by its service provider. Implementation of all user controls is an essential component of EEOC's financial management control structure, and the absence of implementing complimentary user controls can compromise the integrity of the internal controls at EEOC's and EEOC's ability to rely on the SSAE 16 report.

Manual Adjustments: EEOC does not have controls in place to identify, review, and maintain documentation of manual adjustments entered by its service provider. Management review and acceptance of all manual adjustments is essential to management determining the appropriateness of transactions posted to the general ledger.

Policy and Procedure: EEOC did not update its standard operating procedures for each transaction cycle after implementation of its new accounting and reporting system, FCS. GAO Standards for Internal Control state "Internal control and all transactions and other significant events need to be clearly documented, and the documentation should be readily available for examination. The documentation should appear in management directives, administrative policies, or operating manuals and may be in paper or electronic form. All documentation and records should be properly managed and maintained.' Documentation of standard operating procedures is an essential component of internal control, the lack of documentation compromises the internal controls of EEOC.

To address these issues, we recommend EEOC (a) identify and update all policies and procedures impacted by the implementation of FCS, (b) document and monitor the implementation of all complimentary user control considerations, (c) implement stringent reconciliations and resolution procedures over financial reporting reconciliations of management reports/subledgers to FCS general ledger data, and (d) implement procedures over manual adjustments made by its service provider that meet the same rigor and documentation standards as internally generated manual adjustments.

Managements Response: EEOC will implement a review of the trial balance at least weekly to determine that the proprietary and budgetary accounts are in balance. For instance:

General ledger proprietary account 1010 (disbursements) agrees with budgetary account 4902.
General ledger proprietary account 1310 (accounts receivable) agrees with the subsidiary ledger.
General ledger proprietary account 2110 (accounts payable) agrees with subsidiary ledger and budgetary account 4901.
General ledger account 4801 agrees with the unliquidated obligations subsidiary.
Proprietary revenue agrees with budgetary revenue.
Proprietary expenses agree with budgetary expenses.

We agree with recommendation and will update the standard operating procedure (SOP) guides that affect the accounting in FCS. The Financial Operations Division will update the relevant SOPs.

EEOC is revising the JV standard operating procedures to include all items in the recommendation.

Auditors Response: FY 2013 audit procedures will determine whether the corrective actions have been implemented and are operating effectively.

Equal Employment Opportunity Commission
Consolidated Balance Sheets
As of September 30, 2012 and 2011
*(in dollars)*
			FY 2012	FY 2011
ASSETS
	Intragovernmental:
		Fund balance with treasury (Note 2)	$ 53,993,070	$ 56,239,598
		Accounts receivable (Note 3)	129,952	52,841
		Advances	24,454	24,454
	Total intragovernmental		54,147,476	56,316,893
	Accounts receivable, net (Note 3)		385,187	380,840
	General property and equipment, net (Note 4)		6,954,068	8,128,795
	Advances		38,634	29,352
TOTAL ASSETS			61,525,365	64,855,880
LIABILITIES
	Intragovernmental
		Accounts payable (Note 6)	871,217	1,089,755
		Employer payroll taxes	1,070,691	1,092,771
		Worker's compensation liability (Note 7)	2,794,487	3,205,664
		Amounts due to Treasury for non-entity assets (Note 5)	8,384	43,556
	Total intragovernmental liabilities		4,744,779	5,431,746
	Accounts payable		18,088,604	17,905,815
	Accrued payroll		4,106,517	4,302,190
	Accrued annual leave (Note 7)		18,698,273	19,339,327
	Future worker's compensation liability (Note 7)		13,459,331	13,656,749
	Amounts Collected for Restitution		56,163	14,823
	Deferred revenue		117,163	70,605
	Other Liabilities		40,263	-
TOTAL LIABILITIES			59,311,093	60,721,255

NET POSITION
	Unexpended appropriation - other funds		27,513,783	28,793,935
	Cumulative results of operations - earmarked funds		2,492,669	3,333,431
	Cumulative results of operations -- other funds		(27,792,180)	(27,992,741)
	Total net position		2,214,272	4,134,625
TOTAL LIABILITIES AND NET POSITION			$ 61,525,365	$ 64,855,880

The accompanying notes are an integral part of these statements

Equal Employment Opportunity Commission
Consolidated Statements of Net Cost
For the Years Ended September 30, 2012 and 2011
*(in dollars)*
				FY2012	FY2011
JUSTICE, OPPORTUNITY, AND INCLUSIVE WORKPLACES
	Private Sector:
			Enforcement	$ 181,595,308	$ 195,350,522
			Mediation	26,327,014	28,538,765
			Litigation	75,857,359	79,605,289
			Outreach	7,834,644	9,544,830
			Training	3,732,110	2,171,914
			State and Local	35,051,856	34,577,545
	Total program costs - Private Sector			330,398,291	349,788,865
		Revenue		(2,042,998)	(2,123,421)
	Net cost - Private Sector			328,355,293	347,665,444
	Federal Sector:
			Hearings	29,440,922	30,927,760
			Appeals	15,642,877	16,322,697
			Mediation	747,297	997,832
			Oversight	6,099,157	6,421,506
			Training	793,726	2,506,918
		Total Program costs - Federal Sector		52,723,979	57,176,713
		Revenue		(1,551,947)	(2,313,541)
	Net cost - Federal Sector			51,172,032	54,863,172
Totals all programs
		Program costs		383,122,270	406,965,578
		Revenue (Note 11)		(3,594,945)	(4,436,962)
Net Cost of Operations				$ 379,527,325	$ 402,528,616

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, 2012 and 2011
*(in dollars)*
				FY 2012			FY 2011
				Earmarked Funds (Note 14)	All Other Funds	Consolidated	Earmarked Funds (Note 14)	All Other Funds	Consolidated
Cumulative Results of Operations
	Beginning Balances:			$ 3,333,431	$ (27,992,741)	$ (24,659,310)	$ 3,225,285	$ (24,884,213)	$ (21,658,928)
		Adjustments:
			Changes in accounting principles	-	-	-	-	-	-
			Corrections of errors	-	-	-	-	-	-
	Beginning balance, as adjusted			$ 3,333,431	$ (27,992,741)	$ (24,659,310)	$ 3,225,285	$ (24,884,213)	$ (21,658,928)
	Budgetary Financing Sources:
			Appropriations - used	-	358,428,095	358,428,095	-	376,125,486	376,125,486
			Non-exchange revenue	-	5,946	5,946	-	-	-
	Other Financing Sources (Non-Exchange):
			Imputed financing sources (Note 15)	-	20,460,314	20,460,314	-	23,402,748	23,402,748
			Other	-	(7,231)	(7,231)	-	-	-
Total Financing Sources				-	378,887,124	378,887,124	-	399,528,234	399,528,234
Net Cost of Operations				(840,762)	(378,686,563)	(379,527,325)	108,146	(402,636,762)	(402,528,616)
Net Change				(840,762)	200,561	(640,201)	108,146	(3,108,528)	(3,000,382)
Cumulative Results of Operations				2,492,669	(27,792,180)	(25,299,511)	3,333,431	(27,992,741)	(24,659,310)

Unexpended Appropriations
Beginning Balances:				$ -	$ 28,793,935	$ 28,793,935	$ -	$ 40,758,839	$ 40,758,839
	Adjustments:
	Beginning Balance, as adjusted			-	28,793,935	28,793,935	-	40,758,839	40,758,839

	Budgetary Financing Sources:
			Appropriations received (Note 12)	-	360,000,000	360,000,000	-	367,303,000	367,303,000
			Other adjustments	-	(2,852,057)	(2,852,057)	-	(3,142,418)	(3,142,418)
			Appropriations - used	-	(358,428,095)	(358,428,095)	-	(376,125,486)	(376,125,486)
Total Budgetary Financing Sources				-	(1,280,152)	(1,280,152)	-	(11,964,904)	(11,964,904)
Total Unexpended Appropriations				-	27,513,783	27,513,783	-	28,793,935	28,793,935
Net Position				$ 2,492,669	$ (278,397)	$ 2,214,272	$ 3,333,431	$ 801,194	$ 4,134,625

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, 2012 and 2011
*(in dollars)*
				FY2012	FY2011
Budgetary Resources
	Unobligated balance, brought forward, October 1:			$ 14,391,006	$ 11,749,896
	Recoveries of prior year unpaid obligations			3,803,692	5,139,461
	Other changes in unobligated balance			(2,852,057)	(3,142,418)
Unobligated balance from Prior Year Budget Authority, Net				15,342,641	13,746,939
		Appropriations (discretionary and mandatory) (Note 12)		360,000,000	367,303,000
			Spending authority from offsetting collections	4,773,786	4,465,802
			Total Budgetary Resources	$ 380,116,427	$ 385,515,741
Status of Budgetary Resources
	Obligations incurred (Note 13)			$ 368,647,926	$ 371,124,735
	Unobligated balance, end of year:
		Apportioned		594,052	2,107,523
		Unapportioned		10,874,449	12,283,483
		Total unobligated balance, end of year		11,468,501	14,391,006
			Total Budgetary Resources	$ 380,116,427	$ 385,515,741
				0.00	0.00
Change in Obligated Balance:
		Unpaid obligations brought forward October 1 (gross)		$ 42,190,850	$ 64,494,402
		Uncollected customer payments from Federal sources, brought forward, October 1:		(357,082)	(314,131)
		Obligated balance, start of year (net) as adjusted		41,833,768	64,180,271
	Obligations incurred			368,647,926	371,124,735
	Outlays (gross) (-)			(364,283,739)	(388,288,826)
	Change in uncollected customer payments from Federal sources (+ or -)			74,143	(42,951)
	Recoveries of prior year unpaid obligations (-)			(3,803,692)	(5,139,461)
	Obligated balance, end of period (net)			$ 42,468,406	$ 41,833,768

	Obligated balance, end of year
		Unpaid obligations, end of year (gross)		$ 42,751,345	$ 42,190,850
		Uncollected customer payments from Federal sources, end of year		(282,939)	(357,082)
		Oligation balance, end of year (net)		$ 42,468,406	$ 41,833,768

Budget Authority and Outlays, Net:
	Budget authority, gross (discretionary and mandatory)			$ 364,773,786	$ 371,768,802
	Actual offsetting collections (discretionary and mandatory)			(4,847,929)	$ (4,422,851)
	Change in uncollected customer payments from Federal sources
	Change in uncollected customer payments from Federal sources (discretionary and mandatory) (+ or -)			74,143	(42,951)
	Budget authority, net (discretionary and mandatory)			$ 360,000,000	$ 367,303,000

	Outlays, gross (discretionary and mandatory)			$ 364,283,739	388,288,826
	Actual offsetting collections (discretionary and mandatory) (-)			(4,847,929)	(4,422,851)
		Less: Distributed Offsetting receipts
	Outlays, net (discretionary and mandatory)			$ 359,435,810	$ 383,865,975

The accompanying notes are an integral part of these statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(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 Officers' 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 preparedfrom the books andrecords 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 EEOC's 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 EEOC's use of federal budgetary resources.

(c) Basis of Accounting

The Commission's integrated Financial Cloud Solutions (FCS) uses Global Computer Enterprises, Inc (GCE) Oracle, which has funds control, management accounting, and a financial reporting system designed specifically for federal agencies. FCS complies with the Financial Systems Integration Office's 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 accrualmethod, 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) employees' 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 EEOC's 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 EEOC's 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 EEOC's 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 debtor's 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 asset's 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.

Depreciation or amortization of equipment is computed using the straight-line method over the assets' 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 Employees' 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 toJanuary 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 employee's 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 $17,000 of their gross earnings to the plan, for the calendar years 2012 and $16,500 for 2011. However, CSRS employees receive no matching agency contribution. There is also an additional $5,500 that can be contributed as a "catch-up" contribution for those 50 years of age or older, for the calendar years 2012 and 2011.

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) Workers' Compensation

A liability is recorded for estimated future payments to be made for workers' compensation pursuant to the Federal Employees' 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 EEOC's 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 EEOC's 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 workers' 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, 2012 and 2011 consists of the following:

		FY 2012		FY 2011
Fund Type
Revolving funds	$	2,352,769	$	3,206,507
Appropriated funds		51,584,138		53,018,267
Other fund types		56,163		14,824
Totals	$	53,993,070	$	56,239,598

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 $18,677,191 and $17,854,128 for FY 2012 and FY 2011, respectively.

For fiscal years ended September 30, 2012 and 2011, funds in closed accounts of $2,852,057 and $2,407,813 were returned to Treasury.

Status of Fund Balance with Treasury as of September 30, 2012 and 2011 consists of the following:

		FY 2012		FY 2011
Status of Funds
Unobligated balance:
Available	$	594,052	$	2,107,523
Unavailable		10,874,449		12,283,483
Obligated balance not yet disbursed		42,468,406		41,833,768
Non-budgetary Fund Balance with Treasury		56,163		14,824
Totals	$	53,993,070	$	56,239,598

(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 2012 and FY 2011, 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, 2012 and 2011 are as follows:

		FY 2012		FY 2011
Intra-governmental:
Accounts receivable (see detail below)	$	129,952	$	52,841
Allowance for uncollectible receivables		-		-
Totals	$	129,952	$	52,841

		FY 2012		FY 2011
With the public:
Accounts receivable	$	504,405	$	533,942
Allowance for uncollectible receivables		(119,218)		(153,102)
Totals	$	385,187	$	380,840

Amounts due from various federal agencies are for accounts receivable as of September 30, 2012 and 2011. These are related to registered participants' training fees due to the revolving fund and appropriated interagency agreements as shown in the table below:

		FY 2012		FY 2011
Agency
Department of Agriculture	$	4,135	$	12,001
Department of Housing and Urban Development		1,095		9,960
Independent Agencies		-		8,093
Department of Labor		9,889		7,470
Department of Homeland Security		4,874		5,415
Environmental Protection Agency		1,700		2,845
Defense Agencies		6,810		2,345
Department of State		2,550		2,095
Department of Treasury		4,875		1,444
Department of Justice		2,792		698
Department of Energy		8,082		300
Social Security Administration		-		175
International Trade commission		61,775		-
National Aeronautics and Space Administration		975		-
Architect of the Capital		19,450		-
Office of Special Counsel		950		-
Totals	$	129,952	$	52,841

(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, 2012		Cost		Accumulated Depreciation		Net Book Value
Equipment	$	908,432	$	(858,772)	$	49,660
Capital leases		193,910		(193,910)		-
Internal use software		4,134,204		(4,134,204)		-
Leasehold improvements		11,772,261		(4,867,853)		6,904,408
Totals	$	17,008,807	$	(10,054,739)	$	6,954,068

As of September 30, 2011		Cost		Accumulated Depreciation		Net Book Value
Equipment	$	908,432	$	(837,744)	$	70,688
Capital leases		193,910		(193,910)		-
Internal use software		4,134,204		(4,134,204)		-
Leasehold improvements		11,772,261		(3,714,154)		8,058,107
Totals	$	17,0008,807	$	(8,880,012)	$	8,128,795

Depreciation expense for the periods ended September 30, 2012 and 2011 is:

FY 2012		FY 2011
$ 1,174,726		$ 1,269,588

(5) Non-Entity Assets

The EEOC has $8,384 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2012 and $2,709 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2011. Cash collections of $96,950 were returned to Treasury as of September 30, 2012 and $101,481 were returned to Treasury as of September 30, 2011 as instructed by Treasury.

(6) Liabilities Owed to Other Federal Agencies

As of September 30, 2012 and 2011, the following amounts were owed to other federal agencies:

Agency:		FY 2012		FY 2011
General Services Administration	$	691,049	$	958,639
Department of Interior		112,847		112,554
National Archives and Records		10,000		12,405
Department of Homeland Security		6,745		6,000
Department of Labor		23,026		0
Government Printing Office		25,415		0
US Army Corps of Engineers		(213)		0
Department of Health and Human Services		2,348		157
Totals	$	871,217	$	1,089,755

(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, 2012 and 2011 are shown in the following table:

		FY 2012		FY 2011
Intra-governmental:
Accrued worker's compensation	$	2,794,487	$	3,205,664
Total intra-governmental		2,794,487		3,205,664
Accrued annual leave		18,698,273		19,339,327
Worker's compensation due in the future		13,459,331		13,656,749
Total liabilities not covered by budgetary resources		34,952,091		36,201,740
Total liabilities covered by budgetary resources		24,359,002		24,519,515
Total liabilities	$	59,311,093	$	60,721,255

(8) Liabilities Analysis

Current and non-current liabilities as of September 30, 2012 are shown in the following table:

		Current		Non-Current		Totals
Covered by budgetary resources:
Intra-governmental:
Accounts payable	$	871,217	$	-	$	871,217
Payroll taxes		1,070,691		-		1,070,691
Due to Treasury		-		-		-
Other		8,384		-		8,384
Total Intra-governmental		1,950,292		-		1,950,292
Accounts payable		18,088,604		-		18,088,604
Accrued payroll		4,106,517		-		4,106,517
Payroll Taxes		-		-		-
Amounts collected for restitution		56,163		-		56,163
Unearned revenue		117,163		-		117,163
Other Liabilities		40,263		-		40,263
Liabilities covered by budgetary resources		24,359,002		-		24,359,002
Liabilities not covered by budgetary resources:
Intra-governmental:
Worker's compensation		1,675,668		1,118,819		2,794,487
Total Intra-governmental		1,675,668		1,118,819		2,794,487
Accrued annual leave		18,698,273		-		18,698,273
Actuarial worker's compensation				13,459,331		13,459,331
Capital lease liability		-		-		-
Liabilities not covered by budgetary resources		20,373,941		14,578,150		34,952,091
Total liabilities	$	44,732,943	$	14,578,150	$	59,311,093

Current and non-current liabilities as of September 30, 2011 are shown in the following table:

		Current		Non-Current		Totals
Covered by budgetary resources:
Intra-governmental:
Accounts payable	$	1,089,755	$	-	$	1,089,755
Payroll taxes		1,092,771		-		1,092,771
Due to Treasury		-		-		-
Other		43,556		-		43,556
Total Intra-governmental		2,226,082		-		2,226,083
Accounts payable		17,905,815		-		17,905,815
Accrued payroll		4,302,190		-		4,302,190
Amounts collected for restitution		14,823		-		14,823
Unearned revenue		70,605		-		70,605
Liabilities covered by budgetary resources		24,519,515		-		24,519,515
Liabilities not covered by budgetary resources:
Intra-governmental:
Worker's compensation		1,454,164		1,751,500		3,205,664
Total Intra-governmental		1,454,164		1,751,500		3,205,664
Accrued annual leave		19,339,327		-		19,339,327
Actuarial worker's compensation				13,656,749		13,656,749
Liabilities not covered by budgetary resources		20,793,491		15,408,249		36,201,740
Total liabilities	$	45,313,006	$	15,408,249	$	60,721,255

(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 the Treasury or paid by the EEOC. In FY 2012 and FY 2011 $0 was recorded for contingent liabilities, which are the amounts considered probable and measurable by EEOC's management and legal counsel. In addition, for FY 2012, 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 seven million ($7,000,000). The chance of this claim succeeding is less than probable, but more than remote. An arbitrator has determined that the EEOC has some liability in this matter but the amount has not yet been determined or unknown as of the date of the financial statements. In the opinion of EEOC's management, the ultimate resolution of this pending litigation will not have a material effect on the EEOC's financial statements.

(10) Leases

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 2012 and 2011 are $27,888,290 and $27,591,597, respectively. The EEOC has estimated its future minimum liability on GSA operating leases by adding inflationary adjustments to the FY 2012 lease rental expense. Future estimated minimum lease payments, for 5 fiscal years under GSA as of September 30, 2012 are:

Fiscal Year		Estimated Payments
2013	$	31,169,000
2014		31,636,535
2015		32,305,993
2016		32,785,700
2017		33,375,843
Total	$	161,273,071

(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, 2012 and 2011 was as follows:

		FY 2012		FY 2011
Reimbursable revenue	$	169,645	$	72,000
Fees from services		3,425,300		4,364,962
Total Revenue	$	3,594,945	$	4,436,962

(12) Appropriations Received

Warrants received by the Commission as of September 30, 2012 and 2011 are:

FY 2012	FY 2011
$ 360,000,000	$ 367,303,000

Rescissions for the warrants received by the EEOC for fiscal years 2012 and 2011 are:

FY 2012	FY 2011
$ 0	$ 734,606

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

Direct and Reimbursable obligations as of September 30, 2012 and 2011 are:

Obligations		FY 2012		FY 2011
Direct A	$	334,164,524	$	337,544,454
Direct B		29,590,160		29,395,659
Subtotal Direct Obligations		363,754,684		366,940,113
Reimbursable - Direct A		4,893,242		4,184,622
Total Obligations	$	368,647,926	$	371,124,735

(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, 2012 and 2011	2012	2011
ASSETS
Fund balance with Treasury	$ 2,352,771	$ 3,206,507
Accounts receivable (net of allowance)	247,364	309,920
Advances and prepaid expenses	47,944	46,569
TOTAL ASSETS	$ 2,648,079	$ 3,562,996
LIABILITIES
Accounts payable	38,246	158,960
Deferred revenue	117,163	70,605
TOTAL LIABILITIES	155,409	229,565
NET POSITION
Cumulative results of operations	2,492,669	3,333,431
TOTAL LIABILITIES AND NET POSITION	$ 2,648,078	$ 3,562,996

Statement of Net Cost for the Period Ended September 30, 2012 and 2011	2012	2011
Program Costs	$ 4,266,062	$ 4,256,816
Revenue	(3,425,300	(4,364,962)
Net Cost (Revenue)	$ 840,762	$ (108,146)

(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. Treasury's 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, 2012 and 2011 consisted of:

		FY 2012		FY 2011
Judgment Fund Office of Personnel Management:	$	77,333	$	442,268
Pension expenses		8,712,626		10,280,115
Federal employees health benefits (FEHB)		11,635,919		12,644,646
Federal employees group life insurance (FEGLI)		34,436		35,719
Total Imputed Financing	$	20,460,314	$	23,402,748

(16) Intragovernmental Costs and Exchange Revenue:

		FY 2012		FY 2011
Costs
Office of Personnel Management	$	58,337,749	$	61,817,560
General Services Administration		34,189,729		35,653,034
Treasury General Fund (SSA)		12,241,478		12,583,268
Federal Retirement Thrift Investment Board		28,145		6,810,147
Department of the Interior		439,962		4,184,564
Department of Homeland Security		2,787,814		2,872,525
Department of Labor		1,189,811		1,562,866
Department of Transportation		82,754		1,549,626
Department of Health and Human Services		590,316		303,849
Other agencies		-		152,798
Department of Commerce		63,250		142,750
Environmental Protection Agency		71,523		121,579
Department of Agriculture		4,971		-
National Archives and Records Administration		80,279		81,416
Department of Justice		(518)		-
National Science foundation		256,719		-
National Labor Relations Board		4,174		-
Library of Congress		50,424		72,856
Department of Education		-		53,000
US Army Corps of Engineers		2,125		-
Government Printing Office		65,415		26,561
Department of the Treasury		58,681		-
Intragovernmental Costs		110,544,801		127,988,399
Public costs		272,577,469		278,977,179
Total Program costs	$	383,122,270	$	406,965,578

		FY 2012		FY 2011
Revenue
Defense Agencies	$	413,788	$	530,911
Department of Homeland Security		132,636		379,527
Other Agencies		268,607		196,039
Department of Health and Human Services		53,563		110,084
Department of the Interior		74,172		85,624
Department of the Treasury		27,484		75,682
Department of Energy		90,210		70,027
Department of Veterans Affairs		47,837		69,914
Department of Agriculture		106,192		57,349
Department of Justice		65,700		57,310
Social Security Administration		31,047		55,850
Department of Labor		80,091		54,291
Environmental Protection Agency		5,817		47,802
Department of Transportation		39,171		39,426
Office of Personnel Management		25,112		36,184
Department of Commerce		13,465		30,470
Department of State		6,951		25,124
General Services Administration		2,786		20,949
United States Postal Service		17,107		17,474
Department of Education		6,336		10,367
Department of Housing and Urban Development		17,535		10,230
Pension Benefit Guaranty Corporation		-		-
Consumer Financial Protection Bureau		-		-
Judiciary		7,500
National Aeronautics and Space Administration		3,800		-
General Accounting Office		-		7,956
National Labor Relations Board		-		7,309
Government Printing Office		1,564		6,369
Tennessee Valley Authority		13,475		5,714
Intragovernmental earned revenue		1,551,947		2,007,982
Public earned revenue		2,042,998		2,428,980
Total Program earned revenue (Note 11)		3,594,945		4,436,962
Net Cost of Operations	$	379,527,325	$	402,528,616

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

The EEOC's budget is allocated to Justice, Opportunity, and Inclusive Workplaces.

Information from the President's Budget and the Combined Statement of Budgetary Resources for the period ended September 30, 2011 is shown in the following tables. A reconciliation is not presented for the period ended September 30, 2012, since the President's Budget for this period has not been issued by Congress.

Dollars in millions	President's Budget FY 2011 actual as of 9/30/11	Statement of Budgetary Resources FY 2011 as of 9/30/11	Estimated FY 2012	Estimated FY 2013
Budgetary resources	$ 366	$ 385	$ 360	$ 374
Total new obligations	366	371	360	374
Total outlays	384	384	355	372

The differences between the President's 2011 budget and the Combined Statement of Budgetary Resources for 2011 are shown below:

Dollars in millions		Budgetary Resources	Obligations	Outlays (g)
As reported on the Combined Statement of Budgetary Resources for FY 2011		$ 385	$ 371	$ 384
Revolving fund collections not reported in the budget	(a)	(4)		4
Obligations in the revolving fund and no-year fund not included in the President's budget	(b)		(4)	(4)
Carry-forwards and recoveries in the revolving fund and no-year fund not included in the President's Budget	(c)	(3)
Carry-forwards and recoveries in expired funds	(d)	(14)
Obligations in expired funds	(e)
Canceled appropriations	(f)	2
Rounding differences	(g)		(1)
As reported in the President's Budget for FY 2011		$ 366	$ 366	$ 384

(a) The EEOC's 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 President's Budget.

(b) The obligations incurred by the revolving fund and no year fund are not a part of the President's 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 President's 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 President's 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 President's Budget.

(f) Canceled appropriations are not shown in the President's 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, 2012 and 2011

				FY 2012	FY 2011
Resources Used to Finance Activities
Current Year Gross Obligations				$ 368,647,926	$ 371,124,735

Budgetary Resources from Offsetting Collections
	Spending Authority from Offsetting Collections
		Earned
			Collected	(4,847,929)	(4,518,631)
			Change in Receivable from Federal Sources	74,143	(42,951)
	Recoveries of Prior Year Unpaid Obligations			(3,803,692)	(5,139,461)

Other Financing Resources
	Imputed Financing Sources			20,460,314	23,402,748

Total Resources Used to Finance Activity				$ 380,530,762	$ 384,826,440

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			46,559	(95,780)
	Change in Undelivered Orders			(823,064)	14,610,401
	Current Year Capitalized Purchases			-	(53,229)
	Deferred Revenue			(46,559)	(70,605)

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			(20,460,314)	(23,402,748)

Costs without Current Year Budgetary Effect
	Depreciation and Amortization			1,174,726	1,269,588
	Disposition of Assets			-	-
	Future Funded Expenses			(1,052,231)	347,851
	Imputed costs			20,460,314	23,402,748
	Bad Debt Expense			(29,972)	(63,427)
	Other Expenses Not Requiring Budgetary Resources			(272,896)	1,757,377

Net Cost of Operations				$ 379,527,325	$ 402,528,616

(19) Improper Payments Elimination and Recovery Act

The Improper Payments Elimination and Recovery Act (IPERA) (Public Law No. 111-204) which amended the Improper Payments Information Act (Public Law No. 107-300), defines requirements to reduce improper and erroneous payments made by federal government. In addition, the Office of Management and Budget (OMB) issued guidance (Memorandum M-11-16) which defines "significant improper payments" and prescribes the reporting requirements for agencies with programs that are susceptible to significant improper payments. Significant improper payments as defined by OMB guidance are those that exceed both 2.5 percent of a program's annual payments and $10 million. The EEOC reviewed its programs and activities in accordance with the above guidance and determined that none of the agency's programs or activities is susceptible to making significant improper payments.

The IPERA and OMB Memorandum M-11-16 also provide guidance to agencies for implementing payment recapture audits, for programs and activities that expend $1 million or more annually, provided it is cost-effective to do so. The EEOC considered the criteria specified in the above guidance in determining whether it would be cost-effective to implement a payment recapture audit program at the EEOC and concluded that it would not be cost-effective to do so. In arriving at our determination, the EEOC reached our conclusion by considering the nature (type), volume and amounts of disbursements, the degree of risk for making improper payment, and the existence and effectiveness of controls that have been placed into operation to prevent such payments. We also noted the EEOC has not made significant improper payments in prior years.