|
|
This section of the Annual Report presents BLM's financial statements. We believe these statements are a fair and accurate presentation of our financial position and results of operations. This is reflected in the unqualified audit opinion rendered on these financial statements by the independent auditors. Sound financial management is a top priority for the Bureau at all levels of the organization.
The financial statements in this section have been prepared to represent the financial position, net cost of operations, and changes in net position of the BLM pursuant to the requirements of the Chief Financial Officers Act of 1990. While the statements have been prepared from BLM's books and records in accordance with the guidance provided by the Office of Management and Budget, the statements differ from financial reports used to monitor and control budgetary resources that are prepared from the same books and records.
The statements should be read with the realization that they are for a component of a sovereign entity, that liabilities not covered by budgetary resources cannot be liquidated without enactment of an appropriation, and that payment of all liabilities other than for contracts can be abrogated by the sovereign entity.
The Bureau is funded by (1) Congressional appropriations; (2) reimbursements for work performed by the BLM on behalf of other Federal agencies or for the public, including State and local governments; (3) collections of public land revenues that are available to fund BLM operations; and (4) donations made to the Bureau.
BLM's funding increased by 4 percent, approximately $50 million, in fiscal year 1997. Major components of the year-to-year change included a one-time appropriation of $47 million paid in exchange for land selection rights of the Haida Alaska Native Corporation, a $37 million reduction in funding for the Oregon and California Grant Lands activities, and a $24 million increase in the Wildland Fire Management appropriation. The Bureau's principal appropriation--Management of Land and Resources--increased only $9 million, or approximately 1.5 percent, from its fiscal year 1996 funding level.
Claims on government resources that are likely to arise in the future are considered contingent liabilities. The BLM is a party to a number of lawsuits where the plaintiff is seeking monetary damages. Five claims that are currently pending involve probable payouts totaling $7,900,000, and this amount has been accrued as a contingent liability.
In addition, actions required by statute to remediate hazardous waste on the public lands may represent a substantial claim on BLM's future resources. The Comprehensive Environ-mental Response, Compensation, and Liability Act of 1980 requires Federal agencies to report sites where hazardous wastes are or have been stored, treated, or disposed of, and requires responsible parties, including Federal agencies, to clean up releases of hazardous substances. As the principal administrator of the public lands, the BLM is responsible for the proper management and tracking of hazardous wastes resulting from operations on the public lands and is potentially responsible for cleaning up hazardous material sites and disposal facilities on the public lands. Virtually all of the hazardous substance releases arise from non-BLM and non-Federal uses of the lands, such as illegal dumping, transportation spills, landfills, mining operations, pipelines, and agricultural uses.
In its previous annual reports, the BLM acknowledged that the costs of cleanup and payment of judgements or settlements of claims could be substantial over the long term. The BLM has recorded $6,625,000 in its financial records and in its financial statements as the future funding required for costs that the BLM is likely to pay. At this time it is not possible to estimate the comprehensive costs of public lands cleanup liability or to determine the portion of such costs that will represent a claim on BLM's resources. Substantial portions of the costs of cleanup will be incurred by, or recovered from, responsible parties.
Of the total of $14,525,000 reported in this year's financial statements, it is likely that the bulk of these judgements or settlements would not represent a claim against BLM's funding; instead they would be paid from the Justice Department's judgement fund.
The BLM purchases or constructs infrastructure assets such as buildings, roads, water and sewer systems, recreational facilities, and transportation systems consisting of roads and trails. These assets permit the enjoyment and use of the public lands for recreation, revenue generation, and other purposes. There is, however, a significant maintenance backlog relative to these infrastructure assets.
Since the bulk of public land improvements are not held for sale or for the generation of revenue, any impairment in the value of individual assets is not considered significant by management in measuring BLM's financial results. Public land improvements are held principally for the use and enjoyment of the public and the Bureau. BLM management believes that increased maintenance would benefit public land improvements, but the system of assets, taken as a whole, is maintained in a state of repair that permits the public lands to be used and managed.
BUREAU OF LAND MANAGEMENT
CONSOLIDATED COMPARATIVE STATEMENTS OF FINANCIAL POSITION
SEPTEMBER 30, 1997 AND 1996
(dollars in thousands)
|
1997 |
1996 |
|
|
Assets: Entity Assets: Intragovernmental Assets: Fund Balances with Treasury (Note 2) Accounts Receivable (Note 3) Governmental Assets: Accounts Receivable, Net (Note 3) Travel Advances Cash in Imprest Funds Operating Materials and Supplies Inventory, Net (Note 4) Gas and Storage Rights, Net (Note 4) Stockpile Materials (Note 4) Property and Equipment, Net (Note 5) Total Entity Assets
Non-Entity Assets: Intragovernmental Assets: Fund Balances with Treasury (Note 2) Governmental Assets: Accounts Receivable, Net (Note 3) Unmatured Timber Sales Contracts (Note 6) Total Non-Entity Assets
Total Assets (Note 7) |
$ 469,577 9,385
2,628 264 531 1,521 4,250 1,078 365,065 227,179 1,081,478
168,159
2,030 93,579 263,768
$ 1,345,246 |
$ 444,688 9,061
1,697 104 563 1,667 7,211 1,079 366,235 278,923 1,111,228
166,502
514 99,670 266,686
$ 1,377,914 |
| The accompanying notes are an integral part of these statements. | ||
|
1997 |
1996 |
|
|
Liabilities and Net Position: Liabilities: Liabilities Covered by Budgetary Resources: Intragovernmental Liabilities: Accounts Payable Debt to Treasury (Note 8) Governmental Liabilities: Accounts Payable Accrued Payroll and Benefits (Note 9) Undistributed Collections (Note 10) Deposit Funds (Note 11) Deferred Credits (Note 12) Total Liabilities Covered by Budgetary Resources
Liabilities Not Covered by Budgetary Resources: Intragovernmental Liabilities: Workers and Unemployment Compensation Payable (Note 13) Governmental Liabilities: Accrued Annual Leave (Note 14) Accrued Contingent Liabilities (Note 15) Total Liabilities Not Covered by Budgetary Resources
Contingent Liabilities (Note 15) Total Liabilities
Net Position: Unexpended Appropriations (Note 16) Cumulative Results of Operations Net Position
Total Liabilities and Net Position |
$ 2,962 1,357,204
15,415 25,165 141,287 27,562 95,452 1,665,047
7,696
40,703 14,525 62,924
1,727,971
374,267 (756,992 ) (382,725 )
$ 1,345,246 |
$ 6,665 1,365,204
19,350 21,365 145,391 18,771 101,352 1,678,098
8,134
39,461
47,595
1,725,693
346,903 (694,682 ) (347,779 )
$ 1,377,914 |
BUREAU OF LAND MANAGEMENT
CONSOLIDATED COMPARATIVE STATEMENTS OF NET COST OF OPERATIONS
AND CHANGES IN NET POSITION
FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 1997 AND 1996
(dollars in thousands)
|
1997 |
1996 |
|
|
STATEMENTS OF NET COST OF OPERATIONS Costs: Operating Expenses (Note 17) Cost of Goods Sold Depreciation and Amortization Interest Expense Unfunded Expenses (Note 18) Total Costs Revenues: Sales of Goods and Services--Public Sales of Goods and Services--Intragovernmental Gain on Disposition of Assets Total Revenues Net Cost of Operations
Deferred Maintenance (Note 19)
Net Cost of Operations
STATEMENTS OF CHANGES IN NET POSITION Net Cost of Operations Financing Sources: Appropriations Used Intragovernmental Transfers--Net Imputed Financing (Note 20) Donations Total Financing Sources
Transfers to Treasury or Other Agencies
Net Results of Operations
Prior Period Adjustment (Note 21)
Net Change in Cumulative Results of Operations
Increase in Unexpended Appropriations
Net Change in Net Position Net Position, Beginning Balance
Net Position, Ending Balance |
$ 1,210,573 16,562 24,036 113 15,329 1,266,613
199,516 43,599 746 243,861 1,022,752
$ 1,022,752
$ (1,022,752 )
1,129,176 1,183 47,060
1,177,419
162,193
(7,526 )
(54,784 )
(62,310 )
27,364
(34,946 ) (347,779 )
$ (382,725 ) |
$ 1,033,276 16,184 19,782 108 2,211 1,071,561
197,939 42,422 672 241,033 830,528
$ 830,528
$ (830,528 )
1,036,446 (54,924 )
(53 ) 981,469
161,404
(10,463 )
(10,463 )
85,739
75,276 (423,055 )
$ (347,779 ) |
| The accompanying notes are an integral part of these statements. | ||
These financial statements have been prepared to report the financial position and results of operations of the Bureau of Land Management (BLM), as required by the Chief Financial Officers Act of 1990. The consolidating financial statements present financial information by fund group. They have been prepared from BLM's financial records in accordance with the form and content of agency financial statements as specified by the Office of Management and Budget (OMB). The statements have been prepared in accordance with OMB Bulletins No. 94-01 and 97-01, and the BLM accounting policies that are summarized in this note. These statements are different from the financial reports submitted to OMB for purposes of monitoring and controlling the obligation and expenditure of budgetary resources.
The BLM, a bureau of the Department of the Interior (DOI), was established on July 16, 1946, through the consolidation of the General Land Office and the Grazing Service in accordance with the provisions of Sections 402 and 403 of the President's Reorganization Plan No. 3 of 1946 (60 Stat. 1097). The BLM's functions are set forth in Section 301 of the Federal Land Policy and Management Act of 1976 (43 USC 1731).
On March 12, 1996, Secretary Babbitt signed Order Number 3198, transferring the Department's Helium Operations from the U.S. Bureau of Mines to the BLM. This was done under the authority of Section 2 of Reorganization Plan No. 3 of 1950 (64 Stat. 1262), as amended. The helium production fund was established by the Helium Act (50 U.S.C. 10), enacted March 3, 1925, and amended by the Helium Act Amendments of 1960 (P.L. 86-777).
The accompanying consolidated financial statements include all appropriated funds, as well as all other funds for which the BLM maintains financial records. Financial records are maintained by fund types as described below:
1. General Funds: These funds consist of expenditure accounts used to record financial transactions arising from Congressional appropriations as well as receipt accounts. The principal general fund expenditure accounts maintained are:
a. Management of Lands and Resources
b. Wildland Fire Management
c. Payments in Lieu of Taxes
d. Oregon and California Grant Lands
2. Special Funds: The BLM maintains both special fund receipt accounts and special fund expenditure accounts. Collections made into special fund expenditure accounts are available receipts and are considered BLM revenue. These collections are included in amounts transferred to Treasury and are recorded as appropriations. Collections made into special fund receipt accounts are earmarked by law for a specific purpose but are not generated from a continuing cycle of operations. Receipts are deposited as collected. Funds deposited into special fund receipt accounts typically arise from sales of public lands and materials, sales of timber, fees and commissions, mineral leases, and other charges for services provided by the BLM to users of the public lands. Amounts deposited into special fund receipt accounts are subject to various distribution formulas as specified by law.
3. Revolving Funds: This type of fund is used to finance and manage a continuous cycle of business-type operations. The BLM maintains a Working Capital Fund (WCF) as a single administrative unit established to finance and account for services and commodities furnished to various program activities. The WCF was established in 1978 under Section 306 of the Federal Land Policy and Management Act of 1976 (Public Law 94-579) with an initial investment of $2,000 in appropriated funds. Since that time, additional equity has been provided through intragovernmental transfers or donations of inventories, capital equipment, and other assets. Transfers or donations are made without reimbursement to the donating activity. All additional income to the WCF has been generated through charges to BLM's programs or other government agencies. The services provided by the WCF include motor vehicles, stores, a sign shop, a Departmental forms center, and the collection and disbursement of receipts from surface management of the Naval Oil Shale Reserve under an October 2, 1987, memorandum of understanding with the Department of Energy. In addition, the WCF provides funding for travel advances and petty cash funds held by imprest fund cashiers.
In addition to the WCF, Helium Operations is funded through a public enterprise revolving fund. This fund was established with monies from the U.S. Treasury to manage the Federal helium program, which includes helium production, storage, conservation, and sales activities. Funding for current management of this program is provided by sales of helium.
4. Trust Funds: The BLM maintains two trust accounts to carry out specific programs under trust agreements and statutes. The Land and Resource Management Trust Fund contains monies contributed by non-Federal organizations for resource development, protection, and management; conveyance of lands omitted in original surveys; and public surveys requested by individuals. The Alaska Townsite Trustee Fund receives money from the sale of town lots to non-natives and is available to cover the expenses involved in selling and maintaining townsites.
5. Deposit Funds: These funds are maintained to account for receipts awaiting proper classification or receipts held in escrow until ownership is established, at which time proper distribution can be made. Refer to Note 11.
The BLM maintains its accounting records on both an accrual accounting basis and a budgetary accounting basis. Under the accrual method, revenues are recognized when earned and expenses are recognized when incurred, without regard to the receipt or payment of cash. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds. Significant interfund balances and transactions have been eliminated.
The BLM receives most of the funding needed to support its programs through annual, multiyear, and no-year appropriations that may be used, within statutory limits, for operating and capital expenditures. Additional amounts are obtained through reimbursements for services performed for other Federal agencies, State and local governments, and the private sector. Finally, the BLM receives imputed financing from the Office of Personnel Management (OPM) for current and future pension and retirement benefits paid by OPM on behalf of the BLM.
Revenues, such as those from reimbursable agreements, are recognized when earned. These revenues may be used to offset the cost of producing products or furnishing services, and to recover the costs of overhead.
Receipts are either available to the BLM for expenditure or are received by the BLM on behalf of others and are passed on to the U.S. Department of the Treasury (Treasury) or distributed to other governmental agencies. Gross receipts are reported as cash is received, while amounts billed but not yet received are included in both accounts receivable and undistributed receipts. Bad debt expenses relating to those receivables are not considered to be a BLM expense; they are charged against undistributed receipts. Transfers of receipts to Treasury and others are reported on the accrual basis. That portion of the transfers that will not be disbursed until the subsequent fiscal year is also included in undistributed receipts. Thus, the net position of the BLM is not affected by these activities relating to collections, whether they be billings, bad debt expenses, or timing differences between the receipt of such collections and their subsequent disbursement.
Helium fund sales are authorized by Chapter 10 of Title 50 of the United States Code, enacted March 3, 1925, as amended by Public Law 86-777, dated September 13, 1960, entitled "Helium Act Amendments of 1960". Paragraph 167a(4) authorizes the Secretary to, "dispose of, by lease or sale, property, including wells, lands, or interest therein, not valuable for helium production, and oil, gas, and byproducts of helium operations not needed for Government use, except that property determined by the Secretary to be 'excess' within the meaning of section 3(e) of the Federal Property and Administrative Services act of June 30, 1949, as amended (40 U.S.C. 471 et. seq.); and to issue leases to the surface of lands or structures thereon for grazing or other purposes when the same may be done without interfering with the production of helium..."
Funds received under this chapter, including funds from the sale of helium or other products resulting from helium operations and from the sale of excess property, are credited to the helium production fund. This fund is available without fiscal year limitation to carry out the provisions of the "Helium Act," including any research relating to helium. Amounts accumulating in the fund in excess of amounts the Secretary deems necessary to carry out the Helium Act and contracts negotiated thereunder are paid to Treasury and credited against any amounts borrowed from Treasury.
The helium fund is authorized to retain all receipts, which include, but are not limited to, fees, penalties, interest, and administrative charges on past due receivables and proceeds from the sale of its assets. Fees, penalties, interest, and administrative charges are credited to a revenue account and are recorded as a financing source. Gains and losses are computed when assets are sold and recorded as a financing source or use of finances respectively.
The BLM does not maintain cash in commercial bank accounts. Cash receipts and disbursements are processed by Treasury. Fund balances with Treasury include appropriated, revolving, and trust funds that are available to pay current liabilities and finance authorized purchase commitments. Also included are various other receipt and expenditure funds. Cash balances held outside Treasury are not material. Further details on fund balances with Treasury are contained in Note 2.
Accounts receivable consist of amounts owed to the BLM by other Federal agencies or by the public. Amounts earned through the provision of services to the public are not recognized as receivables until billed. Receivables from other federal agencies and certain state government agencies are recognized when the revenue is earned. The BLM recognizes bad debts arising from uncollectible accounts receivable by establishing an allowance for doubtful accounts based upon past experience in collecting accounts receivable and analysis of outstanding balances. See Note 3 for additional information concerning accounts receivable.
Except for Helium Operations, BLM's inventory and operating materials and supplies consist of materials and supplies that will be consumed in future operations. Inventory is held by the WCF for use in BLM's resource management programs and is also maintained for sign construction, employee uniforms, and the DOI forms function. The use of inventory accounts is declining in BLM, and that inventory still on hand is stated at cost using the average cost method. Beginning in FY 1995, operating materials and supplies were accounted for based on the purchases method. Under this method, operating materials and supplies are expensed when purchased. The purchases method of accounting is in accordance with Statement of Federal Financial Accounting Standards Number 3, published October 27, 1993, by the Office of Management and Budget.
The helium inventory held for sale is the actual above-ground refined helium at the end of the fiscal year, plus an estimate of the amount of stockpile helium to be sold in the following fiscal year. The helium stockpile inventory is stored in a partially depleted natural gas reservoir. The cost to purchase the stockpile helium was $12.058 per mcf. The volume of helium is accounted for on a perpetual inventory basis. Each year, the amount of helium is verified by collecting reservoir data and using generally accepted petroleum engineering principles to calculate the volume. The calculated volumes support the volume carried in the inventory. At a reservoir abandonment pressure of 25 psia, 95 percent of the stockpile is deemed recoverable. The amount of helium that is eventually recovered will depend on the future price of helium and the ability to control the mixing of native gas and stockpile helium. Gas and storage rights for the storage of helium are recorded at cost. A depletion allowance is computed annually to record the gas consumed in the processing of helium for sale.
Helium Operations' consumable inventory consists of tools, supplies, small machinery, etc., consumed in the production and extraction of helium. The items in inventory are physically verified and adjusted annually. The moving average method is used to value all helium inventories.
Except for Helium Operations, BLM's inventory is not held for sale, nor is any of the inventory or operating materials and supplies balance held in reserve for future use or sale. There is no excess, obsolete, or unserviceable inventory or operating materials and supplies, nor is there any inventory held for repair. The BLM does not hold any other related property, including forfeited property, foreclosed property, seized property, commodities, or stockpile materials. Note 4 provides more information on BLM's inventory.
This category consists of acquired lands; structures, facilities and improvements; automated data processing (ADP) software; equipment and vehicles; construction in progress and property being held pending disposition. Prior to FY 1995, roads, trails, and bridges were also included in this category.
Statement of Federal Financial Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant, and Equipment, and SFFAS No. 8, Supplementary Stewardship Reporting, have been issued by the Federal Accounting Standards Advisory Board. The standards recommend different accounting treatments for different types of property, plant, and equipment (PP&E), and provide for a distinction between general PP&E and stewardship PP&E. The former are PP&E used to provide general government services or goods. The latter include stewardship land--all land held by the Federal government that is not acquired for or in connection with an item of general PP&E--and heritage assets, including PP&E that have historical or natural significance.
The standards recommend that Federal entities establish appropriate capitalization thresholds. The BLM has established a capitalization threshold of $250 per facility/site for real property components of general PP&E. Prior to FY 1995, the BLM had no minimum capitalization threshold for real property. The capitalization threshold for personal property remains unchanged.
The standards provide for capitalized property to continue to be reported on the Statement of Financial Position. PP&E that are not capitalized--because they are under the capitalization threshold, or because they are stewardship PP&E--are to be expensed in the period of acquisition. The standards require a separate stewardship report to provide relevant information regarding stewardship PP&E. The BLM started providing the stewardship report in the FY 1996 Annual Report and have expanded the stewardship report this year, even though the standards do not require a complete stewardship report until FY 1998.
Capitalized property and equipment are recorded as follows:
1. General PP&E real property is capitalized at cost, if the aggregate cost of the site/facility is $250 or more. Acquired land associated with capitalized assets is recorded separately from the structures, facilities, and improvements. Structures such as buildings that are used by the BLM but administered by the General Services Administration or other Federal agencies are not recognized as BLM assets.
2. Purchased ADP software is capitalized at cost if the acquisition cost is $5 or more and the estimated useful life is 2 years or more. Internally developed software is not capitalized.
3. Equipment and vehicles are capitalized at cost if the acquisition cost is $5 or more and the estimated useful life is 2 years or more.
4. Costs are accumulated in a construction in progress account for capitalizable general PP&E under construction or being acquired in incremental stages until the property is completed or totally acquired. At that time, the property is transferred to the appropriate asset account(s).
Depreciation for WCF vehicles and heavy equipment is recorded using the straight-line method, based upon useful lives ranging from 2 to 20 years with a 20 percent residual value.
Depreciation for non-WCF equipment and purchased ADP software is based on useful lives of up to 30 years, with a residual value of 10 percent. Except in the helium fund, prior to FY 1997, the BLM did not depreciate structures, facilities, and other improvements. Beginning in FY 1997, however, the BLM has initiated depreciation for all capitalized real property, and has recorded the current year depreciation as well as the depreciation applicable to prior periods.
The basis for capitalization of donated property and equipment is the estimated fair market value.
Information on property and equipment values is found in Note 5.
Liabilities represent the amount of monies or other resources that are likely to be paid by the BLM as the result of transactions or events that have already occurred. However, no liability can be paid by the BLM absent an appropriation. Liabilities for which an appropriation has not been enacted are, therefore, classified as liabilities not covered by budgetary resources, with no certainty that the appropriations will be enacted. In addition, BLM liabilities arising from sources other than contracts can be abrogated by the Government, acting in its sovereign capacity.
Debt to Treasury is a liability of the Helium Fund. Borrowings occurred at various dates. Amounts borrowed became due 25 years from the date the funds were borrowed and are now past due.
Net worth debt is the amount due for the net capital and retained earnings of the Helium Fund established under 50 U.S.C. 10, Section 164, enacted March 3, 1925 (prior to amendment by the Helium Act Amendments of 1960), as determined by the Secretary as of September 13, 1960, plus any monies expended thereafter by the Department of the Interior from funds provided in the Supplemental Appropriation Act, 1959, for construction of a helium plant at Keyes, Oklahoma.
Borrowing from Treasury refers to funds borrowed under 50 U.S.C. 10, Section 167j, which authorizes borrowings to acquire and construct helium plants and facilities and for other related purposes including the purchase of helium.
Interest on borrowing is compound interest on the debt described above that has not been repaid to Treasury. While the debt was current, interest was calculated annually at rates determined by the Secretary of the Treasury, taking into consideration the current average market yields of outstanding marketable obligations of the United States having maturities comparable to the investments authorized. The interest rate on the net capital and retained earnings was determined as of September 13, 1960, and the interest rate on additional borrowing was determined as of the time of each borrowing. The U.S. Treasury short-term borrowing rate was used to calculate the annual interest expense while the debt was past due. With the passage of the Helium Privatization Act of 1996, Public Law 104-273, enacted October 9, 1996, no further interest expense occurs. The Act defines the amount repayable to the United States as all funds required to be repaid as of October 1, 1995, with no further interest accruing on the debt.
Additional information on debt to Treasury appears in Note 8.
Amounts associated with the payment of annual leave are accrued while leave is being earned by employees, and this accrual is reduced as leave is taken. Each year the balance in the accrued annual leave account is adjusted to reflect current pay rates. To the extent current or prior year appropriations are not available to finance annual leave, future financing sources will be used.
Sick leave and other types of leave are expensed as taken because they are nonvesting in nature.
The BLM is a party to various administrative proceedings, legal actions, environmental suits, and claims brought by or against it. Contingent liabilities are recorded in the accounting records when the event potentially leading to the recognition of a liability is probable, and a reliable estimate of the scope of the potential liability is available. Further information on contingent liabilities is found in Note 15.
Nearly half of the BLM's employees participate in the Civil Service Retirement System (CSRS), to which the BLM makes matching contributions. The BLM does not report CSRS assets, accumulated plan benefits, or unfunded liabilities, if any, applicable to its employees. Reporting such amounts is the responsibility of the Office of Personnel Management (OPM).
On January 1, 1987, the Federal Employees Retirement System (FERS) became effective 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, were authorized to elect to join FERS and Social Security or to remain in CSRS. FERS offers a savings plan to which the BLM automatically contributes 1 percent of pay and matches any employee contribution up to an additional 4 percent of pay. For employees in FERS, the BLM contributes the employer's matching share for Social Security; the BLM contributes the employer's matching share of Medicare, 1.45 percent, for both FERS and CSRS employees.
Effective in FY 1997, the BLM recognizes its share of the expense of employee benefit programs and future pension outlays incurred by OPM and the imputed financing source applicable to the expense. Further information on imputed financing is available in Note 20.
The BLM has entered into some lease arrangements that potentially qualify as capital leases. However, the BLM has historically not considered lease arrangements for inclusion as assets. The dollar value of leases that could qualify as capital leases is not considered material.
The components of Net Position are defined as follows:
1. Unexpended appropriations include undelivered orders and unobligated balances; the latter may include both available and unavailable amounts.
2. Cumulative results of operations is comprised of 1) the difference between revenues and expenses, 2) the net amount of transfers of assets in and out without reimbursement, and 3) donations, all since inception of the fund(s).
Comparative data for the prior fiscal year is presented in order to provide an understanding of changes in BLM's financial position and operations. Several regulatory changes necessitated a restatement of FY 1996 data so that valid comparisons could be made between FY 1996 and FY 1997. These included substituting the Statements of Net Cost and the Statements of Changes in Net Position for the Statements of Operations and Changes in Net Position, as required by OMB Bulletin 97-01; changes in the definition of revenue pursuant to SFFAS No. 7; and the addition of eliminating entries caused by the change from preparing combining statements to preparing consolidating statements.
U.S. Government cash is accounted for on an overall consolidated basis by Treasury. The balances shown on the Combined Comparative Statements of Financial Position represent BLM's right to draw on Treasury for valid expenditures. The balances consist of general fund receipt accounts, general fund expenditure accounts, trust funds, revolving funds, special fund receipt accounts, special fund expenditure accounts, and deposit funds. Refer to Note 1(B). Fund balances as shown on BLM's records are reconciled periodically with Treasury's records.
| Obligated | Unobligated
|
Total | ||
|---|---|---|---|---|
| Available | Restricted | |||
| Entity Assets: | ||||
| Appropriated Funds | $197,979 | $190,213 | $11,497 | $399,689 |
| Helium Fund | 1,385 | 34,666 | 36,051 | |
| Working Capital Fund | 12,408 | 8,664 | 21,072 | |
| Trust Funds | 2,564
|
10,201
|
|
12,765
|
| 214,336
|
243,744
|
11,497
|
469,577
|
|
| Non-Entity Assets: | ||||
| Other Fund Types |
|
|
168,159
|
168,159
|
| Total Fund Balances | $214,336
|
$243,744
|
$179,656
|
$637,736
|
| Obligated | Unobligated
|
Total | ||
|---|---|---|---|---|
| Available | Restricted | |||
| Entity Assets: | ||||
| Appropriated Funds | $170,391 | $199,860 | $7,646 | $377,897 |
| Helium Fund | 2,059 | 33,795 | 35,854 | |
| Working Capital Fund | 11,349 | 9,746 | 21,095 | |
| Trust Funds | 2,012
|
7,830
|
|
9,842
|
| 185,811
|
251,231
|
7,646
|
444,688
|
|
| Non-Entity Assets: | ||||
| Other Fund Types |
|
|
166,502
|
166,502
|
| Total Fund Balances | $185,811
|
$251,231
|
$174,148
|
$611,190
|
Accounts receivable represent amounts owed to the BLM. Entity accounts receivable represent amounts that the BLM has authority to use. Entity intragovernmental accounts receivable represent amounts due from other Federal agencies, while entity governmental accounts receivable represent amounts due from non-Federal entities. Non-entity accounts receivable are amounts that are generated by BLM's programs but are not available to the programs. All of the non-entity accounts receivable represent amounts due from non-Federal entities.
|
Entity |
Non-Entity |
|||
|
Intra-Governmental |
Governmental |
Governmental |
Total |
|
| Accounts Receivable | $9,385 | $6,102 | $4,322 | $19,809 |
| Less Allowance for Doubtful Accounts |
|
3,474
|
2,292
|
5,766
|
| Accounts Receivable, Net | $9,385
|
$2,628
|
$2,030
|
$14,043
|
|
Entity |
Non-Entity |
|||
|
Intra-Governmental |
Governmental |
Governmental |
Total |
|
| Accounts Receivable | $9,061 | $6,522 | $3,050 | $18,633 |
| Less Allowance for Doubtful Accounts |
|
4,825
|
2,536
|
7,361
|
| Accounts Receivable, Net | $9,061
|
$1,697
|
$ 514
|
$11,272
|
|
1997 |
1996 |
|
| Inventory, Net: | ||
| Working Capital Fund: | ||
| Inventory | $ 501 | $ 2,384 |
| Less Allowance for Loss on Inventory | 151 | 166 |
| 350
|
2,218 |
|
| Helium Fund: | ||
| Above-Ground Refined Helium for Sale | 1,428 |
2,346 |
| Below-Ground Crude Helium for Sale | 2,472 |
2,647 |
| 3,900
|
4,993 |
|
| Inventory, Net | $ 4,250
|
$ 7,211 |
| Gas and Storage Rights, Net: | ||
| Gas and Storage Rights | $ 1,538 |
$ 1,538 |
| Less Accumulated Depletion Allowance | 460
|
459 |
| Gas and Storage Rights, Net | $ 1,078
|
$ 1,079 |
| Stockpile Materials: | ||
| Below-Ground Crude Helium | $ 365,065
|
$ 366,235 |
| Valuation methods and other information regarding inventories are presented in Note 1(G). | ||
| Acquisition Value | Accumulated Depreciation | Net Book Value | |
| Acquired Land |
$ 10,055 |
$ |
$ 10,055 |
| Structures, Facilities, and Improvements | 126,217 | 72,426 | 53,791 |
| ADP Software | 1,893 | 1,226 | 667 |
| Equipment and Vehicles | 254,580 | 146,563 | 108,017 |
| Construction in Progress | 51,662 | 51,662 | |
| Property Being Held Pending Disposition |
7,279 |
4,292 |
2,987 |
| Total |
$ 451,686 |
$ 224,507 |
$ 227,179 |
| Acquisition Value | Accumulated Depreciation | Net Book Value | |
| Acquired Land |
$ 5,952 |
$ |
$ 5,952 |
| Structures, Facilities, and Improvements | 125,252 | 14,082 | 111,170 |
| ADP Software | 1,564 | 1,155 | 409 |
| Equipment and Vehicles | 245,303 | 136,936 | 108,367 |
| Construction in Progress | 48,040 | 48,040 | |
| Property Being Held Pending Disposition |
14,046 |
9,061 |
4,985 |
| Total |
$ 440,157 |
$ 161,234 |
$ 278,923 |
Depreciation is recorded using the straight line method over a period of 2 to 30 years. Capitalization criteria are discussed in Note 1(H).
Beginning in FY 1997, all capitalized real property is being depreciated. Previously, only Helium Operations was recording depreciation expense for real property. Accumulated depreciation was calculated for all real property from the time of acquisition through September 30, 1997. The portion applicable to FY 1997 is recorded as depreciation expense, and the portion prior to FY 1997 is recorded as a prior period adjustment. Additional discussion of this adjustment may be found in Notes 1(H) and 21.
Unmatured timber sales contracts represent the obligation and the right of contractors to cut specific quantities of timber within a defined time period at a set price. These contracts represent future revenue to the U.S. Government that will materialize in future accounting periods as contracts are fulfilled by the cutting of timber. Also see Note 12.
For financial reporting purposes, the BLM has not recognized the value of negotiable securities or certificates of deposit pledged to guarantee performance of contracts. These instruments are accepted in lieu of bond coverage in the following programs: solid or fluid energy minerals extraction (oil, gas, coal, etc.), rights-of-way on the public or other lands, and certain contracts (performance bonds). Interest earned is paid to the owner of the security or certificate of deposit and is not available to the BLM. At September 30, 1997, the value of these securities was $4,788; at September 30, 1996, the value was $6,134. Since these assets are not available to the BLM unless a customer defaults on an agreement, they are not recognized as BLM assets or liabilities.
| 1997 | 1996 | |
| Principal: | ||
| Net Worth Debt | $ 37,343 | $ 37,343 |
| Additional Borrowing from Treasury | 251,650
|
251,650
|
| 288,993
|
288,993
|
|
| Interest: | ||
| Beginning Balance |
1,076,211 |
1,084,211 |
| Repayments |
(8,000 ) |
(8,000 ) |
|
1,068,211 |
1,076,211 |
|
| Total Debt to Treasury |
$ 1,357,204 |
$ 1,365,204 |
| Refer to Note 1(I) for a description of net worth debt, additional borrowing from Treasury, and interest. | ||
A liability is recognized for the salaries and benefits earned by employees but not yet paid at the close of the fiscal year. At September 30, 1997, accrued payroll liabilities were $25,165, primarily representing 12 days of earned but unpaid compensation for BLM's workforce. At September 30, 1996, accrued payroll liabilities were $21,365, primarily for 11 days of earned but unpaid compensation.
Undistributed collections represent amounts collected into unavailable special receipt funds that have not yet been transferred to other funds.
The BLM processes collections from various sources for activities related to public land administration. At any given time, the BLM may have collections that have not been specifically classified. These amounts are held in suspense pending further classification or resolution.
Deferred credits consist of unmatured timber sales contracts, advances from customers of the helium fund, and special fund billed amounts. Unmatured timber sales contracts are described in Note 6. Customer advances in the helium fund represent advance payments on helium purchases and storage contracts. Special fund billed amounts are a combination of advance bills for anticipated obligations, as well as actual bills for obligations already incurred.
| 1997 | 1996 | |
| Unmatured Timber Sales Contracts |
$ 93,579 |
$ 99,670 |
| Customer Advances--Helium Fund | 1,287 | 1,224 |
| Special Fund Billed Amounts | 586
|
458
|
| Total Deferred Credits |
$ 95,452 |
$ 101,352 |
Workers and unemployment compensation payable represents the Department of Labor estimate of these liabilities.
| 1997 | 1996 | |
| Workers Compensation Payable |
$ 6,953 |
$ 7,225 |
| Unemployment Compensation Payable | 743
|
909
|
| Total |
$ 7,696 |
$ 8,134 |
The BLM allocates annual leave not covered by budgetary resources to the two funds with the most planned labor activity. The accrual is updated annually based on actual labor hours and current pay rates.
Judgements and Claims: The BLM is a party to a number of lawsuits where the plaintiff is seeking monetary damages. In the opinion of BLM management and legal counsel, a reasonable estimate of the potential liability of these claims cannot be made. However, for five claims estimated at $13,500, the probable payout is reasonably estimable at $7,900. The BLM's future financial condition will not likely be materially affected. The Justice Department's judgement fund will likely pay these judgements or settlements.
Environmental Cleanup: The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act require Federal agencies to report sites where hazardous wastes are or have been stored, treated, or disposed of, and require responsible parties, including Federal agencies, to clean up releases of hazardous substances. The BLM faces major challenges in cleaning up hazardous substance releases on the public lands. Virtually all of these releases arise from non-BLM and non-Federal uses of the lands, such as illegal dumping, transportation spills, landfills, mineral development operations, pipelines, and airports. Substantial portions of the costs of cleanup will be incurred by, or recovered from, responsible parties.
The BLM has identified over fifty small emergency response actions which will require future funding. This type of action is usually mitigated without performing a study and, generally, the responsible party is not found, which results in BLM bearing the expense. Future funding required as of September 30, 1997, is estimated at $978.
Larger sites require one or more studies to determine the scope of the contamination and the possible cleanup techniques. Cleanup costs are inestimable until the study is complete. When the studies are complete, several cleanup options are generally suggested with the approximate range of cost of each, and BLM management determines the most appropriate course of action.
In these larger sites, efforts are made to identify and locate potentially responsible parties who are held liable for the cost of studies and cleanup. Frequently, litigation is required to enforce payment. As of September 30, 1997, approximately 30 studies were underway or were planned, with future costs estimated at almost $3,000. The BLM will probably pay $1,252 of that total. For another 26 sites, the future cleanup costs are estimated in excess of $20,000, with the BLM cost likely to be approximately $4,395.
Abandoned Mine Lands: A BLM Task Force issued a status report on Abandoned Mine Lands (AML) to the Director during FY 1997. According to that report, in an area of 7.4 million acres, almost 7,000 AML sites were verified containing over 6,600 safety hazards. During the period 1993 - 1996, an abatement of public safety hazards occurred in 537 sites. The report estimated that over 70,000 AML sites could exist on BLM-administered land. The BLM faces a significant exposure to lawsuits or claims for damages resulting from injury or death at one or more of these sites. We have no basis for estimating the future financial impact of this situation.
The BLM has recorded a total of $14,525 as a contingent liability and an expense in FY 1997.
| 1997 | 1996 | |
| Unobligated, Available |
$ 206,494 |
$ 208,956 |
| Undelivered Orders | 167,773
|
137,947
|
| Total Unexpended Appropriations |
$ 374,267 |
$ 346,903 |
|
1997 |
1996 |
|
| Personal Services and Benefits | $ 573,400 | $ 522,005 |
| Travel and Transportation | 38,098 | 28,749 |
| Rental, Communication, and Utilities | 60,565 | 60,936 |
| Printing and Reproduction | 3,286 | 2,376 |
| Contractual Services | 231,146 | 155,206 |
| Supplies and Materials | 74,157 | 44,298 |
| Property and Equipment Not Capitalized | 38,431 | 23,049 |
| Bad Debts | (1,420) | 4,600 |
| Grants, Subsidies, and Contributions | 192,910
|
192,057
|
| Total Operating Expenses | $ 1,210,573
|
$ 1,033,276
|
|
1997 |
1996 |
|
| Management of Lands and Resources | $ 659,594 | $ 557,708 |
| Payments in Lieu of Taxes | 113,526 | 115,995 |
| Oregon and California Grant Lands | 108,352 | 86,530 |
| Other Appropriated Funds | 328,907
|
271,003
|
| Subtotal, Appropriated Funds | 1,210,379 | 1,031,236 |
| Trust Funds | 8,144 | 6,616 |
| Working Capital Fund | 7,477 | 6,450 |
| Helium Fund | 3,446
|
3,641
|
| Total Operating Expenses | 1,229,446 | 1,047,943 |
| Less Eliminations | (18,873)
|
(14,667)
|
| Net Operating Expenses | $ 1,210,573
|
$ 1,033,276
|
Unfunded expenses consists of four categories: the change in accrued annual leave for BLM personnel, the change in the liability for Workers and Unemployment Compensation, the total probable BLM expense for environmental cleanup, and other contingent liabilities. The environmental cleanup expense and other contingent liabilities are being reported for the first time in FY 1997; in subsequent reports, the change in these liabilities will be reported, similarly to the other categories.
|
1997 |
1996 |
|
| Environmental Cleanup Expenses | $ 6,625 | $ |
| Other Contingent Liabilities | 7,900 | |
| Annual Leave | 1,242 | 1,439 |
| Workers and Unemployement Compensation | (438)
|
772
|
| Total Unfunded Expenses | $ 15,329
|
$ 2,211
|
The BLM purchases or constructs infrastructure assets such as buildings, roads, water and sewer systems, recreational facilities, and transportation systems consisting of roads and trails. Taken as a whole, these assets are maintained in a state of repair that permits the use and management of public lands.
Nevertheless, there is a significant maintenance backlog relative to the infrastructure assets, and BLM management believes that increased maintenance, reducing the backlog, would benefit public land improvements. Because the bulk of public land improvements are not held for sale or used for the generation of revenue, any impairment in the value of individual assets is not considered significant by management in measuring the financial results of the BLM.
Statement of Federal Financial Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal Government, establishes accounting and reporting standards for liabilities relating to the Federal employee benefit programs, including retirement, health benefits, and life insurance. The Office of Personnel Management (OPM) is responsible for paying the cost of these benefits, and the employing agencies have not been recognizing any of the cost.
Under the provisions of SFFAS No. 5, employing agencies must recognize the cost of pensions and other retirement benefits during their employees' active years of service, and must recognize the current annual cost of the Federal Employee Health Benefit (FEHB) program and the Federal Employee Group Life Insurance (FEGLI) program.
OPM actuaries have provided the employing agencies with rates for calculating the estimated cost of pension and other retirement benefits as of September 30, 1997. They have also provided rates for use in calculating the cost of FEHB and FEGLI for FY 1997. The Department provided labor cost data for the BLM to use in applying the OPM rates to calculate the total imputed cost of these benefits. While BLM funds are not used to pay for these personnel benefits, these costs are BLM operating expenses which must be reported to accurately reflect the cost of doing business. The use of OPM funds for this purpose is an imputed source of financing for BLM.
Except for Helium Operations, before FY 1997, capitalized real property was not depreciated in the BLM. During the year, BLM developed and implemented a plan to change this and other property management issues. Real property data has been validated and recorded in the accounting system, using a capitalization threshhold of $250 per site. Part of this process included the application of uniform useful life criteria and the identification of actual acquisition dates. Depreciation was calculated from acquisition through September 30, 1997, and included in accumulated depreciation. That portion of the depreciation attributable to FY 1997 was recorded as a current expense, while the portion relating to earlier years is reported as a prior period adjustment.
The Helium Privatization Act of 1996 (Public Law 104-273), enacted October 9, 1996, directs the privatizing of the Department of the Interior's Federal Helium Refining Program. Under this law, Interior shall cease producing, refining, and marketing refined helium within 18 months of enactment. Interior may store, transport, and withdraw crude helium and maintain and operate crude helium storage facilities in existence on the date of enactment. The Department may also enter into agreements with private parties for the recovery and disposal of helium on Federal lands and may grant leasehold rights to any such helium. The sale of stockpile crude helium will commence no later than January 1, 2005, and will continue until January 1, 2015, at which time the helium reserves should be reduced to 600 million cubic feet.