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 |
| 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. | |||||
| 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. | |||||
| 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. | ||||||||||||
| 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.
| 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 | ||