FINANCIAL STATEMENTS

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

The Accountability of Tax Dollars Act of 2002 requires EEOC to prepare annual financial statements. This is the 12th consecutive year, the agency received an unmodified opinion on EEOC financial statements. I want to thank the staff in the Office of the Chief Financial Officer as well as administrative staff throughout the agency. This would not have been accomplished without your dedication and hard work throughout the fiscal year.

Fiscal year 2015 was a challenging year for EEOC's financial operations. The audit revealed a material weakness in controls over financial reporting. The agency's private sector financial service provider ceased operations at the end of fiscal year 2014 and an interim provider assumed operation of the financial system hardware, software, and financial services; however, several EEOC source and supporting financial documents could not be located. In February 2015, EEOC successfully migrated to the Department of Interior, Interior Business Center (DOI/IBC) shared service solution; Oracle Federal Financials (OFF). On May 2, 2014, the Office of Management and Budget and the Department of the Treasury designated DOI/IBC as one of four federal shared service providers to offer financial systems and services to federal agencies. Working with the DOI/IBC, the agency expects to timely implement government-wide financial requirements, using inexpensive technological innovations, while achieving long-term cost savings.

On the budget front, EEOC's fiscal year 2015 appropriation increased $500,000 above the fiscal year 2014 funding level. These additional funds were earmarked for State and Local Programs. Nevertheless, EEOC was able to continue the hiring effort began during fiscal year 2014. During fiscal year 2015, EEOC hired over 300 external candidates for front-line and support positions restoring much of the staff capacity target. As a result of these efforts and for the first time in over three years, the agency ended the fiscal year with over 2,300 staff on-board. These additional staff will allow us to provide the services requested by the public more expeditiously.

In the last two years, one of my goals has been cost containment of rent. EEOC continued to "freeze the footprint" to realize the cost containment goal. Also, the agency identified one location where initial estimates indicate returning the excess space to GSA is cost beneficial. Before returning the surplus space, the existing office footprint must be reconfigured. In fiscal year 2015, funds were not available to implement the reconfiguration. Therefore, this project was placed on hold. EEOC will continue to research and identify other options to realize rent savings.

During fiscal year 2016, the agency will maintain the focus on budget planning and providing accurate transparent stewardship of funds to meet the EEOC's mission to "stop and remedy unlawful employment discrimination."

Germaine P. Roseboro, CPA, CGFM
Chief Financial Officer

LETTER FROM THE INSPECTOR GENERAL

November 16, 2015

MEMORANDUM

TO: Jenny R. Yang
Chair

FROM: Milton A. Mayo, Jr.

Inspector General

SUBJECT: Audit of the Equal Employment Opportunity Commission's Fiscal Year 2015 Financial Statements (OIG Report No. 2015-01-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 2015. The contract required that the audit be done in accordance with U.S. generally accepted government auditing standards(GAGAS) contained in Government Auditing Standards issued by the Comptroller General of the United States and Office of Management and Budget (OMB) Bulletin 15-02, Audit Requirements for Federal Financial Statements, as amended.

HRK reported that EEOC's fiscal year 2015 financial statements and notes were fairly presented, in all material respects, in accordance with accounting principles generally accepted in the United States of America. In regard to Internal Control over Financial Reporting, HRK noted one (1) material weakness relating to the lack of sufficient controls over financial management. Additionally, the lack of sufficient controls over supporting documentation for personnel expenses was identified as a significant deficiency. HRK noted no instances of non compliance or other matters that were required to be reported under Government Auditing Standards or OMB Bulletin 15-02.

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 GAGAS, 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 whether EEOC's financial management systems substantially complied with Federal Financial Management Improvement Act (FFMIA); or conclusions on compliance with laws and regulations. HRK is responsible for the attached auditor's report dated November 16, 2015, 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:

Mona Papillon
Germaine Roseboro
Raj Mohan
Nicholas Inzeo
John Schmelzer
Lisa Williams
Pierrette McIntire
Peggy Mastroianni
Beverly Barnes
Carlton Hadden
Deidre Flippen

INDEPENDENT AUDITOR'S REPORT

Independent Auditors' Report

Inspector General
U.S. Equal Employment Opportunity Commission

Report on the Financial Statements

We have audited the accompanying consolidated balance sheets of the Equal Employment Opportunity Commission (EEOC), as of September 30, 2015 and 2014, and the related consolidated statements of net cost and changes in net position, and combined statements of budgetary resources, for the fiscal years then ended and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

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 audit contained in Government Auditing Standards issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin No. 15-02, Audit Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 15-02 require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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 the Equal Employment Opportunity Commission as of September 30, 2015 and 2014, and its net cost of operations, changes in net position, and budgetary resources for the fiscal years then ended, in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the information in the Management's Discussion and Analysis, and Required Supplementary Information sections be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Federal Accounting Standards Advisory Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a whole. The information in the Message from the Chief Financial Officer (CFO) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

Internal Control over Financial Reporting

In planning and performing our audits of the financial statements, we considered EEOC's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of EEOC's internal control. Accordingly, we do not express an opinion on the effectiveness of EEOC's internal control. We did not test all internal controls relevant to operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the Appendices below, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.

A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in Exhibit I to be a material weakness.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in Exhibit II to be significant deficiencies.

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

Compliance and Other Matters

As part of obtaining reasonable assurance about whether EEOC's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests of compliance disclosed no instances of noncompliance or other matters that are required to be reported herein under Government Auditing Standards.

EEOC's Responses to Findings

EEOC's responses to the findings identified in our audit are described in Exhibits I and II. EEOC's responses were not subjected to the auditing procedures applied in the audit of the consolidated financial statements and, accordingly, we express no opinion on the responses.

Purpose of the Other Reporting Required by Government Auditing Standards

The purpose of the communication described in the Other Reporting Required by Government Auditing Standards section is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of EEOC's internal control or compliance. Accordingly, this communication is not suitable for any other purpose.

November 16, 2015

Material Weakness
Exhibit I

Lack of Sufficient Controls over Financial Management

The U.S. Equal Employment Opportunity Commission (EEOC) changed accounting service providers during the fiscal year, causing significant issues related to financial management. The conversion consisted of an implementation of a new accounting system that required migration of accounting transactions from the legacy system into the new system. Numerous challenges occurred as a result of this change. Management operated for a majority of the year without adequate controls designed to detect and deter misstatements in its financial data. Additionally, support for financial transactions could not be readily located for review.

Based on our testing, we identified the following weaknesses:

Obligating documents/contracts did not receive proper approval.
Classification (object class) was not consistent with the expense transaction.
Unable to provide supporting documentation for expense transactions, including invoices, receiving reports, and proof of payment.
Unable to provide or readily locate internal control documentation to support the agencies financial management activities, including controls over charge cards, property, plant and equipment, accounts receivable, accounts payable, and all service providers.

Failure to properly record and maintain sufficient documentation over financial management could result in deficiencies in the completeness and existence assertions of assets and liabilities on the Balance Sheets, deficiencies in existence, completeness, and valuation and allocation assertions of program costs on the Statements of Net Cost, as well as noncompliance with laws and regulations.

The Government Accountability Office's (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."

The Office of Management and Budget (OMB) Circular A-123, Management's Responsibility for Internal Control states: "Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting. Reliability of financial reporting means that management can reasonably make the following assertions:

Documentation for internal control, all transactions, and other significant events is readily available for examination."

We recommend that EEOC update its controls over the maintenance of its accounting records. EEOC should ensure that all documentation, whether held by EEOC or its shared service providers, is readily available. EEOC should coordinate with its service providers to identify the type of documentation that is available for each financial transaction, where that information is located, and how long the data is available for review. This information should be clearly documented in EEOC's policies and procedures. Additionally, management should perform a thorough review of its files to ensure that documentation exists, is accurate, and is available for review. EEOC should also perform an assessment over their internal controls over financial management to ensure all documentation has been updated for control and processes in place subsequent to the conversion.

Management's Response: As discussed with the auditors, fiscal year (FY) 2015 was very challenging for EEOC pertaining to the financial system. At the beginning of FY 2015 (October 2014 thru January 2015), EEOC was using FCS and the service providers were GCE and DOT. In February 2015 EEOC converted to DOI/IBC, Oracle Federal Financials (OFF). All transactions entered in the financial system were supported by a valid obligating document, and subsequently when a payment is made, there is a three way matching process (obligating document, receipt of goods and an invoice). EEOC does not make any payment without this matching process. After January 2015, we did not have access to the FCS system and that posed a problem for us in obtaining supporting documentation to satisfy the samples. All invoices are sent directly to the service provider. There was difficulty in obtaining some supporting documentation from the originating offices. We will advise all EEOC's Administrative Officers (AOs) and District Resource Managers (DRMs) to maintain a signed obligating document, and an invoice (courtesy copy from the vendor) in their files for audit purposes.

This situation will not occur for FY 2016 because EEOC's OFF system is under one service provider (IBC). Also, EEOC will review the retention procedures in place at DOI/IBC and document retention procedures over each type of transaction entered into OFF. These will be documented in a financial policy and procedures document.

As a result of the accounting system conversion, penalty interest was paid because invoices were not processed in a timely fashion in FCS. The prior service provider failed to process some invoices and that resulted in penalty interest. EEOC's plan is to work with the service provider to ensure all invoices are processed in accordance with the Prompt Payment Act.

EEOC will work closely with IBC, Administrative Officers (AOs) and District Resource Managers (DRMs) to verify that the correct budget object class is used for all obligating document. Also, we will stress the importance that all obligating documents, credit card statements are signed by the appropriate official. On October 26, 2015, EEOC discussed with IBC that there should not be any default budget object for any transaction in the OFF system. Also, EEOC will document the controls performed by IBC in an EEOC policy and procedures document.

EEOC plans to fully comply with all PBC requests for the audit of FY 2016 financial statements. We will work with IBC to identify documentation that is available for each financial transaction, where it is located and for how long it is available for review. This will be documented in an EEOC financial policy and procedures document.

Auditors' Response: FY 2016 audit procedures will determine whether the corrective actions have been implemented and are operating effectively.

Significant Deficiencies
Exhibit II

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 2015, we tested a sample of 45 employees' personnel expenses and supporting documentation maintained by EEOC in the employees' personnel files (eOPF) for the period of October 1, 2014 through July 31, 2015. Based on our testing, we identified the following exceptions:

Compensation:

Two (2) employees' adjusted base pay rates per the SF-50 do not match the employees' adjusted base pay rates per the Earnings and Leave Statement (ELS).
Two (2) employees' calculated gross pay using hours worked per the ELS and the employees' pay rate indicated in the SF-50 do not match the actual amount per FPPS.

FEHB:

Four (4) employees' calculated employee withholdings using the enrollment code per most recent FEHB enrollment form (SF-2809, SF-2810 or transcript) in eOPF do not match actual employee withholding amount per ELS.
Four (4) employees' calculated agency contributions using the enrollment code per most recent FEHB enrollment form (SF-2809, SF-2810 or transcript) in eOPF do not match actual agency contribution amount per FPPS.

FEGLI:

Three (3) employees' 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.
Three(3) employees' calculated basic and optional FEGLI withholdings using the FEGLI calculator on OPM's website do not match actual FEGLI employee withholdings per ELS.
One(1) employee's calculated agency contributions for FEGLI do not match actual agency contributions per FPPS.

TSP:

Six (6) employees' elected contribution (percentage/dollar amount) per TSP election form (TSP-1 or transcript) in effect for period in eOPF does not agree to contribution on ELS for pay period sampled
Six (6) employees' showed variances between the employee withholding amount per ELS and employee withholding as calculated by the auditor.
Four (4) employees' showed variances between the employer contribution amount per FPPS and employer withholding as calculated by the auditor.

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 audit from FY 2010, FY 2011, FY 2012, FY 2013, and FY 2014.

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: The Office of Chief Human Capital Office (OCHCO) will update our policy and procedure to perform internal audits of the EEOC eOPF system for proper implementation and application of all OPM and EEOC policies and procedures over the recording and maintaining of official personnel records. We currently have an agreement with IBC to automatically post changes made in Employee Express to be data flowed directly in e-OPF.

As for those issues that continue to require hard copy submissions, we plan to correct this going forward by fully utilizing our new WTTS/EODS systems (automated on-boarding system). OCHCO is exploring the option to have a contract with OPM to conduct day forward scanning monthly. In addition, management will continue to perform a thorough review of its employees' personnel files to ensure that documentation is accurate and current.

We have resolved the following findings:

FEGLI:

Four (4) employees had basic coverage, so a form is not needed. When an employee on-boards basic coverage is automatic, a form is needed from the employee to waive basic coverage.
Three(3) employees' FEGLI and SF-50 matches in eOPF and FPPS.

FEHB:

One (1) employees' FEHB form was found and scanned into eOPF.

TSP:

One (1) employees' TSP form was found and scanned into eOPF

Auditors' Response: FY 2016 audit procedures will determine whether the corrective actions have been implemented and are operating effectively.

Status of Prior Year Findings
Exhibit III

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

Status of Prior Year Findings

Title of Finding from FY14 Audit Report	Prior Year Status	Current Year Status
Lack of Sufficient Controls over Supporting Documentation for Personnel Expenses	Significant Deficiency	Significant Deficiency
Lack of Sufficient Controls over Financial Management	Significant Deficiency	Material Weakness

CONSOLIDATED BALANCE SHEETS
As of September 30, 2015 and 2014 (in dollars)
			2015	2014
ASSETS:
Intragovernmental:
Fund Balance With Treasury (Note 2)			$ 71,323,959	$ 74,993,132
	Accounts Receivable, Net (Note 3)		180,888	225,741
		Advances and Prepayments	37,073	1,663,562
Total Intragovernmental			$ 71,541,920	$ 76,882,435
Public:
	Accounts Receivable, Net (Note 3)		301,816	275,960
	General Property, Plant, and Equipment, Net (Note 4)		3,586,677	4,705,555
		Advances and Prepayments	-	25,200
Total Assets			$ 75,430,413	$ 81,889,150

	Stewardship PP&E
LIABILITIES:
Intragovernmental:
		Accounts Payable (Note 6)	$ 436,854	$ 1,073,414
		Employer Payroll Taxes	1,637,387	1,140,968
		Workers's Compensation liability (Note 7)	2,394,245	2,587,587
		Liability of Non-Entity Asset (Note 7)	189	-
		Other Liability (Note 5)	-	66,884
Total Intragovernmental			$ 4,468,675	$ 4,868,853
Public:
		Accounts Payable	18,363,327	20,690,617
		Future worker's compensation liability (Note 7)	11,188,852	12,255,529
		Accrued Payroll	6,473,760	5,535,163
		Employer Payroll Taxes	226,465	339,384
		Accrued annual Leave (Note 7)	18,232,606	18,381,687
		Deferred Revenue	-	127,435
		Amounts collected for restitution (Note 2, 7)	24,626	26,006
TOTAL LIABILITIES			$ 58,978,311	$ 62,224,674

NET POSITION:
	Funds from Dedicated Collections:
		Unexpended Appropriations	4,100	-
		Cumulative Results of Operations	4,219,293	2,852,625
	Total Net Position - Funds from Dedicated Collections		$ 4,223,393	$ 2,852,625
	All Other Funds:
		Unexpended Appropriations - Other Funds	40,369,300	45,228,193
		Cumulative Results of Operations - Other Funds	(28,140,591)	(28,416,342)
	Total Net Position All other Funds		12,228,709	16,811,851
TOTAL NET POSITION			$ 16,452,102	$ 19,664,476
TOTAL LIABILITIES AND NET POSITION			$ 75,430,413	$ 81,889,150
The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF NET COST
for the Years Ended September 30, 2015 and 2014 (in dollars)
COMBATTING EMPLOYMENT DISCRIMINATION THROUGH STRATEGIC LAW ENFORCEMENT
PREVENTING EMPLOYMENT DISCRIMINATION THROUGH EDUCATION AND OUTREACH
			2015	2014

	Private Sector:
		Enforcement	$ 184,214,788	$ 172,025,360
		Mediation	24,750,547	24,163,200
		Litigation	73,190,904	73,273,243
		Intake information	8,839,481	9,087,077
		State and Local	35,130,250	34,928,279
	Total Program Costs - Private Sector		$ 326,125,970	$ 313,477,159
		Revenue	(78,210)	(72,000)
	Net Cost - Private sector		$ 326,047,760	$ 313,405,159


	Federal Sector :
		Hearings	28,993,498	28,302,110
		Appeals	18,032,542	16,850,047
		Mediation	1,060,738	945,839
		Oversight	6,718,006	6,026,682
	Total Program Cost - Federal Sector		$ 54,804,784	$ 52,124,678
		Revenue	-	-
	Net Cost - Federal Sector		$ 54,804,784	$ 52,124,678

	Total Private, Federal Sector
		Program Costs	$ 380,930,754	$ 365,601,837
		Revenue	(78,210)	(72,000)
	Net Cost, Private, Federal Sectors		$ 380,852,544	$ 365,529,837

	Outreach
		Fee Based	1,414,317	3,906,902
		Non-Fee Based	1,767,896	1,492,006
	Total Program Cost - Outreach		3,182,213	5,398,908
		Revenue	(4,152,033)	(3,450,577)
	Net Cost Outreach		$ (969,820)	$ 1,948,331

	Total, All Programs
		Program Cost (Note 16)	384,112,967	371,000,745
		Revenue (Note 11)	(4,230,243)	(3,522,577)
	Net Cost of Operations		$ 379,882,724	$ 367,478,168
The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION
For the Years Ended September 30, 2015 and 2014 (in dollars)
CUMULATIVE RESULTS OF OPERATIONS:
Budgetary Financing Sources:
Other Financing Sources (Non Exchange):
UNEXPENDED APPROPRIATIONS:
Budgetary Financing Sources:
		2015			2014
		Consolidated Funds from Dedicated Collections	Consolidated All Other Funds	Consolidated Total	Consolidated Funds from Dedicated Collections	Consolidated All Other Funds	Consolidated Total
	Beginning Balances	$ 2,852,625	$ (28,416,342)	$ (25,563,717)	$ 3,117,352	$ (28,925,217)	$ (25,807,865)
	Beginning Balances, as Adjusted	$ 2,852,625	$ (28,416,342)	$ (25,563,717)	$ 3,117,352	$ (28,925,217)	$ (25,807,865)

	Appropriations Used	(4,100)	364,259,123	$ 364,255,023	-	346,837,996	346,837,996
	Nonexchange Revenue	-	-	-	-	66,922	66,922
	Imputed Financing (Note 15)	-	17,270,120	17,270,120	-	20,884,320	20,884,320
	Other	-	-	-	-	(66,922)	(66,922)
	Total Financing Sources	(4,100)	381,529,243	381,525,143	-	367,722,316	367,722,316
	Net Cost of Operations	1,370,768	(381,253,492)	(379,882,724)	(264,727)	(367,213,441)	(367,478,168)
	Net Change	1,366,668	275,751	1,642,419	(264,727)	508,875	244,148
	Cumulative Results of Operations	$ 4,219,293	$ (28,140,591)	$ (23,921,298)	$ 2,852,625	$ (28,416,342)	(25,563,717)

	Beginning Balances	$ -	$ 45,228,193	$ 45,228,193	$ -	$ 31,944,943	31,944,943
	Beginning Balances, as Adjusted	-	45,228,193	45,228,193	-	31,944,943	31,944,943

	Appropriations Received (Note 12)	-	364,500,000	364,500,000	-	364,000,000	364,000,000
	Appropriations Used	4,100	(364,259,123)	(364,255,023)	-	(346,837,996)	(346,837,996)
	Other Adjustments	-	(5,099,770)	(5,099,770)	-	(3,878,754)	(3,878,754)
	Total Budgetary Financing Resources	4,100	(4,858,893)	(4,854,793)	-	13,283,250	13,283,250
	Total Unexpended Appropriations	$ 4,100	$ 40,369,300	$ 40,373,400	$ -	$ 45,228,193	45,228,193
	Net Position	$ 4,223,393	$ 12,228,709	$ 16,452,102	$ 2,852,625	$ 16,811,851	19,664,476
The accompanying notes are an integral part of these statements.

COMBINED STATEMENTS OF BUDGETARY RESOURCES
For the Years Ended September 30, 2015 and 2014 (in dollars)
BUDGETARY RESOURCES:
STATUS OF BUDGETARY RESOURCES:
CHANGE IN OBLIGATED BALANCE:
BUDBET AUTHORITY AND OUTLAYS, NET:
			2015	2014
	Unobligated Balance Brought Forward, October 1		$ 8,778,316	$ 11,504,972
	Adjustment to unobligated balance brought forward, October 1 (+ or -)		-	(204,000)
		Unobligated balance brought forward, October 1, as adjusted	8,778,316	11,300,972
	Recoveries of Prior Year Unpaid Obligations		4,258,320	2,842,373
	Other Changes in Unobligated Balance (+ or -)		(5,099,770)	(3,878,754)
	Unobligated Balance from Prior Year Budget Authority, Net		7,936,866	10,264,591
	Appropriations (Discretionary and Mandatory)		364,354,000	364,000,000
	Spending Authority from Offsetting Collections (Discretionary and Mandatory)		4,265,246	3,346,877
	Total Budgetary Resources		$ 376,556,112	$ 377,611,468

	Obligations Incurred (Note 13):		$ 368,860,170	$ 368,833,152
	Unobligated Balance, End of Year:
		Apportioned	3,481,020	1,561,298
		Unapportioned	4,214,922	7,217,018
	Total Unobligated Balance, End of Year		7,695,942	8,778,316
	Total Budgetary Resources		$ 376,556,112	$ 377,611,468

Unpaid Obligations:
	Unpaid Obligations, Brought Forward, October 1 (gross)		$ 65,922,551	$ 44,115,985
	Obligations Incurred		368,860,170	368,833,152
	Outlays (Gross)(-)		(367,356,560)	(344,184,213)
	Recoveries of Prior Year Unpaid Obligations (-)		(4,258,320)	(2,842,373)
	Unpaid Obligations, End of Year		63,167,841	65,922,551
Uncollected Payments:
	Uncollected Customer Payments, Federal Sources, Brought Forward, October 1 (-)		(225,741)	(50,375)
	Change in Uncollected Payments, Federal Sources (+ or -)		23,290	(175,366)
	Uncollected Payments Federal Sources, End of Year		(202,451)	(225,741)
Memorandum (non-add) entries:
	Obligated balance, start of year (+ or -)		$ 65,696,810	$ 44,065,610
	Obligated Balance, End of Year (Net) (Note 2)		$ 62,965,390	65,696,810

	Budget Authority, Gross (Discretionary and Mandatory)		$ 368,619,246	$ 367,346,877
	Actual Offsetting Collections (Discretionary and Mandatory)		(4,288,536)	(3,459,511)
	Change in Uncollected Customer Payments from Federal Sources (Discretionary and Mandatory) (+ or -)		23,290	(175,366)
	Budget authority, net (discretionary and mandatory)		$ 364,354,000	$ 363,712,000

	Outlays, Gross (Discretionary and Mandatory)		$ 367,356,560	$ 344,184,213
	Actual Offsetting Collections (Discretionary and Mandatory) (-)		(4,288,536)	(3,459,511)
	Outlays, Net (Discretionary and Mandatory)		363,068,024	340,724,702
	Agency Outlays, Net (Discretionary and Mandatory)		$ 363,068,024	$ 340,724,702
The accompanying notes are an integral part of these statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015 and September 30, 2014
(In Dollars)

(1) Summary of Significant Accounting Policies

(a) Reporting Entity

The Equal Employment Opportunity Commission (EEOC; Commission) 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 with 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, net cost of operations, changes in net position, and budgetary resources of EEOC, consistent with the Chief Financial Officers' Act of 1990 (CFO Act) and the Government Management Reform Act of 1994. These financial statements have been prepared from the books and records of the EEOC in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and the form and content requirements of the Office of Management and Budget (OMB) Circular No. A-136, and the EEOC's accounting policies, which are summarized in this note. All intra-agency transactions and balances have been eliminated, except in the Statements of Budgetary Resources, which is presented on a combined basis, as required by OMB Circular No. A-136. 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 Oracle Federal Financials (OFF) uses Oracle, which has funds control, management accounting, and a financial reporting system designed specifically for federal agencies.

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 occurs 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 are awarded, or services are received that will require payments during the same or future periods.

(d) Revenues, User Fees and Financing Sources

EEOC receives the majority of the funding needed to support its programs through congressional appropriations. Financing sources are received in 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.

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 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.

(e) Assets and Liabilities

Assets and liabilities presented on EEOC's balance sheets include both entity and non-entity balances. Entity assets are assets that EEOC has authority to use in its operations. Non-entity assets are held and managed by EEOC, but are not available for use in operations. EEOC's non-entity assets represent receivables that, when collected will be transferred to the U.S. 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 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 the U.S. Treasury are fund balances remaining as of the fiscal year-end from which EEOC is authorized to make expenditures and pay liabilities resulting from operational activity, except as restricted by law. The balance consists primarily of appropriated undelivered orders, accounts payables, unavailable balances, and deposit funds that will be disbursed to third parties. EEOC records and tracks appropriated funds in its general funds. Also included in Fund Balance with the U.S. Treasury are fees collected for services which are recorded and accounted for in EEOC's revolving fund.

(g) Accounts Receivable

Accounts receivable consists of amounts owed to 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. All public receivables, collectible in their entirety, become due upon the receipt of a due process notice. Although the allowance is determined by the age of the receivable for financial statement reporting, the actual 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 estimated 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, 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 when the useful life is 2 years or more and the acquisition cost is 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 and the improvements increase the asset life by more than 2 years.

Depreciation or amortization of equipment is computed using the straight-line method over the assets' useful life ranging from 5 to 15 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, is 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.

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 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 employee's basic pay to the tax deferred thrift savings plan and matches employee contributions up to an additional 5% of pay. FERS and CSRS employees can contribute $18,000 and $17,500 of their gross earnings to the plan, for the calendar years 2015 and 2014. However, CSRS employees receive no matching agency contribution. There is also an additional $6,000 and $5,500 that can be contributed as a "catch-up" contribution for those 50 years of age or older, for the calendar years 2015 and 2014.

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 computed based on OPM guidance and recognized as an imputed financing source and benefit program expense. 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 (FEHB) 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 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, as well as a component for claims that have been incurred but have not yet been reported. EEOC computes this estimate using a DOL-provided model for non-CFO Act agencies that uses actual benefit payments for the EEOC from the past 9 to 12 quarters to project these future payments. The estimated liability is not covered by budgetary resources and will require future funding. This estimate is recorded as a noncurrent 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 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 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 include the unobligated balances and undelivered orders of EEOC's appropriated spending authority as of the fiscal year-end that has not lapsed or 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

The Department of the 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, 2015 and September 30, 2014 consists of the following:

	FY 2015	FY 2014
Fund Type
Revolving funds	$ 3,833,757	$ 2,898,331
Appropriated funds	67,465,576	72,068,795
Other fund types	24,626	26,006
Totals	$ 71,323,959	$ 74,993,132

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. Unavailable unobligated balances are not available to fund new obligations because they are expired, they must be re-apportioned, or their use has been permanently or temporarily restricted. 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. 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 $36,068,546 and $38,831,767 for September 30, 2015 and September 30, 2014, respectively.

Annual appropriation balances returned to Treasury along with balances classified as miscellaneous receipts are not included in EEOC's fund balance presented on its balance sheet. For fiscal years ended September 30, 2015 and September 30, 2014, funds in closed accounts of $5,099,770 and $3,878,754 were returned to Treasury. For fiscal years ended September 30, 2015 and September 30, 2014, miscellaneous receipts of $800,892 and $26,006 were returned to Treasury (NOTE: The amounts for the closed accounts are ONLY returned to Treasury at the end of the fiscal year as of September 30, 2015).

Status of Fund Balance with Treasury as of September 30, 2015 and September 30, 2014 consists of the following:

*Note: The status of funds unavailable includes the Revolving Fund sequestration of $638,000 and $492,000 for FY 2015 and FY 2014, respectively.

	FY 2015	FY 2014
Status of Funds
Unobligated balance:
Available	$ 3,481,020	$ 1,561,298
Unavailable	*4,852,923	*7,709,018
Obligated balance not yet disbursed	62,965,390	65,696,810
Non-budgetary Fund Balance with Treasury	24,626	26,006
Totals	$ 71,323,959	$ 74,993,132

(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.

Accounts receivable due to EEOC from the public arise from payroll debts and revolving fund education, training and technical assistance provided to public and private entities or to state and local agencies. An analysis of accounts receivable is performed to determine collectability and an appropriate allowance for uncollectible receivables is recorded. Accounts receivable as of September 30, 2015 and September 30, 2014 are as follows:

	FY 2015	FY 2014
Intragovernmental:
Accounts receivable (see detail below)	$ 283,786	$ 225,741
Allowance for uncollectible receivables	(102,898)	-
Totals	$ 180,888	$ 225,741

	FY 2015	FY 2014
With the public:
Accounts receivable	$ 533,122	$ 485,690
Allowance for uncollectible receivables	(231,306)	(209,730)
Totals	$ 301,816	$ 275,960

Amounts due from various federal agencies are for accounts receivable as of September 30, 2015 and September 30, 2014. These are related to registered participants' training fees due to the revolving fund and appropriated interagency agreements as shown in the table below:

	FY 2015	FY 2014
Agency:
Department of Homeland Security	$ 37,625	$ 51,104
Department of the Treasury	35,145	10,360
Department of the Interior	26,489	8,783
Department of Housing and Urban Development	24,745	26,189
Department of Health and Human Services	24,695	11,349
Social Security Administration	24,605	3,093
Department of Energy	22,538	7,727
Department of the Army	22,038	4,409
Department of Justice	14,536	14,536
Department of the Navy	11,418	5,453
Department of Agriculture	10,834	10,656
Department of Labor	6,174	7,221
Defense Agencies	4,445	-
Department of Commerce	4,332	4,332
National Aeronautics and Space Administration	3,500	3,500
Federal Labor Relations Authority	1,943	-
Environmental Protection Agency	1,899	1,899
Export-Import Bank of US	1,800	1,800
Department of State	1,700	1,700
Selective Service System	1,543	1,543
Department of Education	975	975
Judiciary	658	-
Central Intelligence Agency	149	149
Bureau of Consumer Financial Protection	-	30,000
Department of Defense	-	12,730
Department of the Air Force	-	4,620
Securities and Exchange Commission	-	975
Department of Veterans Affairs	-	638

Totals	$283,786	$225,741

(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, 2015	Cost	Accumulated Depreciation	Net Book Value
Equipment	$ 663,505	$ (663,505)	$ -
Capital leases	193,910	(193,910)	-
Internal use software	4,134,204	(4,134,204)	-
Leasehold improvements	11,772,261	(8,185,584)	3,586,677
Totals	$ 16,763,880	$ (13,177,203)	$ 3,586,677

As of September 30, 2014	Cost	Accumulated Depreciation	Net Book Value
Equipment	$ 875,432	$ (867,099)	$ 8,333
Capital leases	193,910	(193,910)	-
Internal use software	4,134,204	(4,134,204)	-
Leasehold improvements	11,772,261	(7,075,039)	4,697,222
Totals	$ 16,975,807	$ (12,270,252)	$ 4,705,555

Depreciation expense for the periods ended September 30, 2015 and September 30, 2014 is:

FY 2015		FY 2014
$1,118,970		$1,112,378

(5) Non-Entity Assets

The EEOC has $0 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2015, and $66,884 of net receivables to collect on behalf of the U.S. Treasury as of September 30, 2014.

(6) Liabilities Owed to Other Federal Agencies

As of September 30, 2015 and September 30, 2014, the following amounts were owed to other federal agencies:

	FY 2015	FY 2014
Agency:
Department of the Interior	$ 147,405	$ 5,000
General Services Administration	120,846	443,985
Government Printing Office	113,585	36,168
Department of Transportation	19,609	550,377
The Judiciary	15,222	-
Department of Labor	10,353	-
Department of Health and Human Services	9,802	-
Department of Homeland Security	1,108	9,998
Office of Personnel Management	3	2,063
Other Independent Agencies	-	9,705
Environmental Protection Agency	-	8,043
Department of Justice	-	7,625
National Archives and Records Administration	-	450
US Postal Service	(1,079)	-
Totals	$ 436,854	$ 1,073,414

(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, 2015 and September 30, 2014 are shown in the following table:

	FY 2015	FY 2014
Intragovernmental:
Workers' compensation liability	$ 2,394,245	$ 2,587,587
Liability of non-entity asset	189	-
Total intra governmental	2,394,434	2,587,587
Accrued annual leave Custodial liability	18,232,606 -	18,381,687 -
Future workers' compensation liability	11,188,852	12,255,529
Amounts collected for restitution	24,626	26,006
Total liabilities not covered by budgetary resources	31,840,518	33,250,809
Total liabilities covered by budgetary resources	27,137,793	28,973,865
Total liabilities	$ 58,978,311	$ 62,224,674

(8) Liabilities Analysis

Current and non-current liabilities as of September 30, 2015 are shown in the following table:

	Current	Non-Current	Totals
Covered by budgetary resources:
Intragovernmental:
Accounts payable	$ 436,854	$ -	$ 436,854
Employer payroll taxes	1,637,387	-	1,637,187
Total Intragovernmental	2,074,241	-	2,074,241
Accounts payable	18,363,327	-	18,363,327
Accrued payroll	6,473,760	-	6,473,760
Employer payroll taxes	226,465		226,465
Liabilities covered by budgetary resources	$ 27,137,793	-	$ 27,137,793

Liabilities not covered by budgetary resources:
Intragovernmental:
Workers' compensation liability	2,394,245	-	2,394,245
Liability of non-entity asset	189	-	189
Total Intragovernmental	2,394,434	-	2,394,434
Accrued annual leave	18,232,606	-	8,232,606
Custodial liability	-	-
Future workers' compensation liability	-	11,188,852	11,188,852
Amounts collected for restitution	24,626	-	24,626
Liabilities not covered by budgetary resources:	20,651,666	11,188,852	31,840,518
Total liabilities	$ 47,789,459	$ 11,188,852	$ 58,978,311

Current and non-current liabilities as of September 30, 2014 are shown in the following table:

	Current	Non-Current	Totals
Covered by budgetary resources:
Intragovernmental:
Accounts payable	$ 1,073,414	$ -	$ 1,073,414
Employer payroll taxes	1,140,968	-	1,140,968
Other liabilities	66,884	-	66,884
Total Intragovernmental	2,281,266	-	2,281,266
Accounts payable	20,690,617	-	20,690,617
Accrued payroll	5,535,163	-	5,535,163
Employer payroll taxes	339,384	-	339,384
Deferred revenue	127,435	-	127,435
Liabilities covered by budgetary resources	$ 28,973,865	-	$ 28,973,865

Liabilities not covered by budgetary resources:
Intragovernmental:
Workers' compensation liability	1,456,612	1,130,975	2,587,587
Total Intragovernmental	1,456,612	1,130,975	2,587,587
Accrued annual leave	18,381,687	-	18,381,687
Future workers' compensation liability	-	12,255,529	12,255,529
Amounts collected for restitution	26,006	-	26,006
Liabilities not covered by budgetary resources:	19,864,305	13,386,504	33,250,809
Total liabilities	$ 48,838,170	$ 13,386,504	$ 62,224,674

(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 U.S. Treasury or paid by EEOC.

In fiscal years 2015 and 2014, there is one claim for which it is probable that damages will be paid. This pending claim is for overtime to which employees claim they were entitled. An arbitrator has determined that EEOC has some liability in this matter but the amount has not yet been determined and is 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 EEOC's financial statements.

(10) Leases

Operating leases

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 fiscal years 2015 and 2014 are $29,027,598 and $28,200,594, respectively. EEOC does not have any noncancellable operating leases with terms longer than one year.

(11) Earned Revenue

EEOC charges fees to offset costs for education, training and technical assistance. These services are provided to other federal agencies, the public, and 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, 2015 and September 30, 2014 is as follows:

	FY 2015	FY 2014
Reimbursable revenue	$ 78,210	$ 72,000
Fees from services	4,152,033	3,450,577
Total Revenue	$ 4,230,243	$ 3,522,577

(12) Appropriations Received

Warrants received by the Commission as of September 30, 2015 and September 30, 2014 are:

	FY 2015		FY 2014
Warrants received	$ 364,500,000		$ 364,000,000

The EEOC received no warrant reductions for FYs 2015 and 2014.

(13) Obligations Incurred

Direct and Reimbursable obligations, by apportionment category, incurred as of September 30, 2015 and September 30, 2014 are:

	FY 2015	FY 2014
Obligations
Direct A	$ 336,176,132	$ 335,674,189
Direct B	30,035,150	29,487,861
Subtotal Direct Obligations	366,211,282	365,162,050
Reimbursable - Direct A	2,648,888	3,671,102
Total Obligations	$ 368,860,170	$ 368,833,152

(14) Funds from Dedicated Collections (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 a fund from dedicated collections 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 EEOC.

	FY 2015	FY 2014
Balance Sheets
ASSETS
Fund balance with Treasury	$ 3,833,757	$ 2,898,331
Accounts receivable (net of allowance)	394,081	331,911
Advances and prepaid expenses	1,681	913
TOTAL ASSETS	$ 4,229,519	$ 3,231,155

LIABILITIES
Accounts payable	6,125	251,095
Deferred revenue	-	127,435
TOTAL LIABILITIES	$ 6,125	$ 378,530

NET POSITION
Cumulative results of operations	4,223,394	2,852,625
TOTAL LIABILITIES AND NET POSITION	$ 4,229,519	$ 3,231,155

Statements of Net Cost
Program Costs	$ 2,781,265	$ 3,715,304
Revenue	(4,152,033)	(3,450,577)
Net Cost (Revenue)	$ (1,370,768)	$ 264,727

(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 EEOC in fiscal year 2015. Expenses of EEOC paid or to be paid by other federal agencies at September 30, 2015 and September 30, 2014 consisted of:

	FY 2015	FY 2014
Judgment Fund	$ 300,429	$ 1,238,498
Office of Personnel Management:
Pension expenses	7,138,792	10,445,307
Federal employees health benefits (FEHB)	9,797,062	9,168,016
Federal employees group life insurance (FEGLI)	33,837	32,499
Total Imputed Financing	$ 17,270,120	$ 20,884,320

(16) Gross Program Costs and Exchange Revenue:

The Consolidated Statements of Net Cost report EEOC's gross costs less earned revenues to arrive at net cost of operations for each fiscal year presented. The table below shows the value of exchange transactions between EEOC and other federal entities as well as with the public. Intragovernmental and nongovernmental costs and revenues for September 30, 2015 and September 30, 2014 consisted of:

Costs	FY 2015	FY 2014
General Services Administration	$35,133,383	$33,107,370
Office of Personnel Management	58,230,713	56,092,934
Department of Homeland Security	8,186,870	2,696,946
Department of the Interior	7,040,323	1,650,817
Environmental Protection Agency	3,008,454	30,093
Department of Labor	981,294	975,042
US Postal Service	854,981	839,540
Department of Health and Human Services	815,214	377,485
National Science Foundation	385,858	-
Department of the Treasury	305,000	1,238,498
National Archives and Records Administration	201,405	93,800
Library of Congress	184,603	115,177
Government Printing Office	114,938	60,622
The Judiciary	90,578	-
Federal Mediation and Conciliation Services	3,895	-
Department of the Army	3,538	-
Treasury General Fund	-	12,349,848
Department of Transportation	-	2,746,133
Administrative Conference of the US	-	60,000
Other Independent Agencies	-	4,419
National Aeronautics and Space Administration	-	798
Department of Agriculture	-	(1,483)
US Army Corps of Engineers	-	1,750
Intragovernmental Costs	115,541,049	112,439,789
Public costs	268,571,918	258,560,956
Total Program costs	$ 384,112,967	$ 371,000,745

*Funds paid to the U.S. Treasury's General Fund account for employer benefit costs for benefit programs administered by the Social Security Administration.

	FY 2015	FY 2014
Revenue
Department of Defense	$ 268,274	$ 245,225
Department of Homeland Security	128,396	98,382
Department of Justice	116,631	51,883
Department of Agriculture	82,072	89,592
Department of Health and Human Services	72,140	47,516
Bureau of Consumer Financial Protection	69,291	38,320
Department of the Army	58,795	88,869
Department of the Air Force	55,089	70,497
Department of Energy	47,609	50,942
Department of the Navy	40,940	59,219
Department of Labor	38,980	69,808
Department of the Treasury	34,315	36,054
Equal Employment Opportunity Commission	32,098	26,201
Department of the Interior	30,476	64,758
Department of Commerce	24,927	33,715
Department of Veterans Affairs	19,489	42,760
Environmental Protection Agency	16,971	11,787
Nuclear Regulatory Commission	14,528	14,121
Department of Education	12,104	7,835
Securities and Exchange Commission	12,001	8,295
National Aeronautics and Space Administration	11,347	18,537
General Services Administration	10,935	19,148
Department of Transportation	10,868	43,830
Commission on Civil Rights	9,489	2,290
Department of State	7,724	6,467
US Postal Service	7,576	22,104
Federal Trade Commission	6,534	600
Occupational Safety and Health Review Commission	6,137	850
National Labor Relations Board	5,577	7,106
Social Security Administration	4,862	34,083
Department of Housing and Urban Development	4,170	33,638
Government Accountability Office	3,934	1,450
Commodity Futures Trading Commission	2,888	12,975
United States Holocaust Memorial Museum	2,490	-
Central Intelligence Agency	2,419	16,008
Federal Maritime Commission	1,845	700
Railroad Retirement Board	1,842	2,489
Government Printing Office	1,791	4,714
National Foundation on the Arts and the Humanities	1,444	3,988
Consumer Product Safety Commission	1,245	3,945
National Transportation Safety Board	1,245	2,139
National Archives and Records Administration	1,245	1,245
National Railroad Passenger Corporation	1,245	1,245
Federal Labor Relations Authority	1,245	975
Federal Mine Safety and Health Review Commission - Admin Office	1,245	-
Small Business Administration	1,175	5,851
National Science Foundation	975	969
Defense Nuclear Facilities Board	300	-
Smithsonian Institution	300	4,169
Office of Personnel Management	-	23,555
Federal Deposit Insurance Corporation	-	17,177
Executive Office of the President	-	16,284
Tennessee Valley Authority	-	11,005
District Of Columbia - Court Services and Offender - Supervision Agency	-	7,872
Export-Import Bank of US	-	4,464
Federal Housing Finance Agency	-	4,332
Federal Election Commission	-	4,263
The Judiciary	-	3,600
Agency for International Development	-	2,290
Denali Commission	-	2,120
Federal Communications Commission	-	2,120
Federal Retirement Thrift Investment Board	-	2,020
Office of Special Counsel	-	1,594
Selective Service System	-	1,543
Millennium Challenge Corporation	-	1,445
Presidio Trust	-	1,444
Congressional Budget Office	-	1,194
International Trade Commission	-	1,145
Armed Forces Retirement Home	-	638
Office of Government Ethics	-	575
Office Of Compliance	-	300
Intragovernmental earned revenue	1,289,218	1,518,274
Public earned revenue	2,941,025	2,004,303
Total Program earned revenue	4,230,243	3,522,577
Net Cost of Operations	$ 379,882,724	$ 367,478,168

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

Information from the President's Budget and the Combined Statement of Budgetary Resources for the period ended September 30, 2014 is shown in the following tables. A reconciliation is not presented for the period ended September 30, 2015, since the President's Budget for this period has not been issued by Congress.

The differences between the President's 2014 budget and the Combined Statement of Budgetary Resources for 2014 are shown below:

Dollars in millions	Budgetary Resources	Obligations	Outlays
As reported on the Combined Statement of Budgetary Resources for FY 2014	$ 378	$ 369	$ 341
(a) Revolving fund collections not reported in the budget	(4)	-	4
(b) Obligations in the revolving fund (no-year fund) not included in the President's budget	-	(4)	(4)
(c) Carry-forwards and recoveries in the revolving fund (no-year fund) not included in the President's Budget	(1)	-	-
(d) Carry-forwards and recoveries in expired funds	(14)	-	-
(e) Obligations in expired funds	-	(2)	-
(f) Canceled appropriations	4	-	-
(g) Rounding differences	1	1	-
As reported in the President's Budget for FY 2014	$ 364	$ 364	$ 341

(a) 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

The objective of the information shown below is to provide an explanation of the differences between budgetary and financial (proprietary) accounting. This is accomplished by means of a reconciliation of budgetary obligations and non-budgetary resources available to EEOC with its net cost of operations.

	FY 2015	FY 2014
Resources Used to Finance Activities
Current Year Gross Obligations	$ 368,860,170	$ 368,833,152

Budgetary Resources from Offsetting Collections
Spending Authority from Offsetting Collections
Actual Offsetting Collections	(4,415,970)	(3,459,511)
Change in Receivables from Federal Sources	23,290	(175,366)
Change in Unfilled Customer Orders	127,435	-
Recoveries of Prior Year Unpaid Obligations	(4,258,320)	(2,842,373)
Offsetting Receipts	-	-
Other Financing Resources
Imputed Financing Sources	17,270,120	20,884,320
Total Resources Used to Finance Activity	$ 377,606,725	$ 380,240,222

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	(127,435)	(15,097)
Change in Undelivered Orders	2,763,255	(15,234,903)
Current Year Capitalized Purchases	1,281	-
Change in Deferred Revenue	-	15,097
Change in Nonfederal Receivables	37,540	(89,181)

Components of the Net Cost of Operations which do not Generate or use Resources in the Reporting Period Revenues without Current Year Budgetary Effect
Bad Debt Expenses	59,419	30,494
Change in Non-Federal Receivables	-	-
Other Financing Sources Not in the Budget	(17,270,120)	(20,884,320)
Resources/Adjustments that do not affect Net Cost of Operations	-	-
Costs without Current Year Budgetary Effect
Accrued Annual Leave-Future Funded Expense
Depreciation and Amortization	1,118,970	1,112,378
Disposition of Assets	(1,281)	15,434
Future Funded Expenses	(342,423)	(598,365)
Imputed costs	17,270,120	20,884,320
Other Expenses Not Requiring Budgetary Resources	(1,233,327)	(997,911)
Net Cost of Operations	$ 379,882,724	$ 367,478,168

(19) Improper Payments Elimination and Recovery Act

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments Elimination and Recovery Act (IPERA) of 2010, and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA), requires agencies to review all programs and activities and identify those which may be susceptible to significant erroneous payments. For all programs and activities in which the risk of improper payments is significant, agencies are to estimate the annual amount of improper payments in the susceptible programs and activities. Office of Management and Budget (OMB) requires agencies to report the results of their improper payment activities. The IPERIA also requires conducting payment recapture audits.

Circular No. A-136 and Appendix C of Circular No. A-123 require detailed information related to EEOC's Improper Payments Elimination Program, which is provided below. Prior to the passing of IPERIA, which further amended IPIA, agencies were not required to review intra-governmental transactions or payments to employees. IPERIA now requires agencies to review payments to employees as well as Government charge card transactions. Intra-governmental transactions remain the lone exception to IPERIA requirements. Therefore, management identified commercial payments, employee payments and Government charge cards as potential areas to test pending results of an IPAI risk assessment.

In fiscal year 2015, EEOC reviewed the programs and activities it administers to identify those which may be susceptible to significant erroneous payments. The risk assessment included 1) consideration of certain risk factors that are likely to contribute to a susceptibility to significant improper payments, and 2) transaction testing on a sample basis of payments made during fiscal year 2015. The risk assessment was performed for the following programs:

Vendor payments (includes a separate review of travel payments).

Office of Management and Budget (OMB) Memorandum M-15-02 prescribes guidance for agencies to use in implementing IPERA. OMB guidance defines "significant improper payments" for FY 2015 reporting, as those in any particular program or activity that exceed both 105 percent of program outlays and $10 million of all program or activity payments made during the fiscal year ($100 million regardless of the improper payment percentage of total program outlay). In addition, the OMB guidance addresses implementing payment recapture audits, for programs and activities that expend $1 million or more annually, provided it is cost-effective to do so. In accordance with the OMB guidance, EEOC reviewed its programs and activities and determined that none of the agency's programs or activities were susceptible to making significant improper payments and that the implementation of a payment recapture audit would not be cost-effective.

EEOC is cross-serviced by the Department of Interior, Interior Business Center (DOI/IBC) for accounting system support and accounts payable processing. As a result, the implementation of the Do Not Pay (DNP) initiative is a joint responsibility between EEOC and IBC. Prior to making a new contract award, EEOC checks the System for Award Management (SAM) and the Excluded Parties List System (EPLS) for a match. If there is not a match, EEOC submits a new vendor request to IBC. The IBC Vendor Maintenance Team verifies EEOC's entire new employee and Non-Federal Vendor requests against the Department of Treasury's Do Not Pay (DNP) database using the DNP portal on-line search capability. If the IBC Vendor Maintenance Team finds a positive match, they advise EEOC. EEOC reviews the match, determines if the payment is proper, and reports the result.

Based on the results of transaction testing applied to a sample of payments, consideration of risk factors, and reliance on the internal controls in place over the payment process, EEOC determined that none of its programs and activities are susceptible to significant improper payments at or above the threshold levels set by OMB.

In fiscal year 2015, EEOC's testing of its payments resulted in improper payment of $2,681.

Since the level of risk of improper payment is determined to be low and baseline estimates have been established, EEOC is only required to conduct a formal risk assessment every three years unless the program experiences a significant change. EEOC will conduct a follow up review in fiscal year 2016 of its programs and activities to determine whether the programs have experienced any unexpected changes. If so, EEOC will re-assess the programs' risk susceptibility and make a statistically valid estimate of improper payments for any programs determined to be susceptible to significant erroneous payments.

Recapture of Improper Payments

EEOC does not administer grant, benefit or loan programs. Implementation of recapture auditing, if determined to be cost-effective, would apply to vendor payments. Because the definition of payment in the new IPERIA legislation means any payment or transfer of Federal funds to any non-Federal person or entity, EEOC is not required to review, and has not reviewed, intra-governmental transactions.

EEOC has determined that implementing a payment recapture audit program for vendor payments is not cost-effective. That is, the benefits or recaptured amounts associated with implementing and overseeing the program do not exceed the costs, including staff time and resources, or payments to a contractor for implementation, of a payment recapture audit program. In making this determination, EEOC considered its low improper payment rate based on testing conducted in fiscal year 2015. EEOC also considered whether sophisticated software and other cost-efficient matching techniques could be used to identify significant overpayments at a low cost per overpayment, or if labor intensive manual reviews of paper documentation would be required. In addition, EEOC considered the availability of tools to efficiently perform the payment recapture audit and minimize payment recapture audit costs, and determined such tools to not be cost effective.

EEOC will continue to monitor its improper payments across all programs and activities it administers and assess whether implementing payment recapture audits for each program is cost-effective. If through future risk assessments the agency determines a program is susceptible to significant improper payments and implementing a payment recapture program may be cost-beneficial, EEOC will implement a pilot payment recapture audit to measure the likelihood of cost-effective payment recapture audits on a larger scale.

Even though EEOC has determined that implementing a payment recapture audit program for its programs is not cost-effective, the agency strives to recover any overpayments identified through other sources, such as payments identified through statistical samples conducted under the IPERIA. The amounts identified and recovered, by program, are shown below.

**Overpayments Recaptured** (in dollars)
Source	Amount Identified FY 2015	Amount Recovered FY 2015	Cumulative Identified	Cumulative Recovered
Travel Payments	$2,681	$2,681	$8,297	$8,297

(20) Summary of Financial Statement Audit and Management Assurances

Summary of Financial Statement Audit
Audit Opinion-Unmodified
Restatement-No

Material Weakness	Beginning Balance	New	Resolved		Consolidated		Reassessed	Ending Balance
Lack of sufficient control over financial management	0	1		0		0	0	1

Summary of Management Assurances
Effectiveness of Internal Control Over Financial Reporting
Statement of Assurance-Qualified

Material Weakness	Beginning Balance	New	Resolved		Consolidated		Reassessed	Ending Balance
Lack of sufficient control over financial management	0	1		0		0	0	1