The financial statements were prepared in accordance with federal accounting standards and audited by the independent accounting firm of Ernst & Young LLP under the direction of our Inspector General. The Chief Financial Officers Act requires the preparation and audit of these statements, which are part of our efforts for continuous improvement of financial management. Accurate, timely and reliable financial information is necessary for making sound decisions, assessing performance and allocating resources.
Financial Condition: The following table summarizes trend information concerning components of HHS financial condition—assets, liabilities, and net position. The Consolidated Balance Sheet presents a snapshot of HHS financial condition as of September 30, 2015 compared to FY 2014, and displays assets, liabilities, and net position.
Table 1: Summary of Financial Condition Trends
(in Billions)
| Assets and Liabilities | 2012 | 2013 | 2014 | 2015 | $ Change (2014-15) |
% Change (2014-15) |
|---|---|---|---|---|---|---|
| Fund Balance with Treasury | $197.3 | $159.2 | $177.0 | $219.5 | $42.5 | 24 |
| Investments, Net | 306.4 | 281.7 | 278.9 | 269.7 | (9.2) | (3) |
| Other Assets | 27.0 | 29.3 | 26.4 | 22.9 | 1.4 | 9 |
| Total Assets | $530.7 | $470.2 | $482.3 | $528.8 | $46.5 | 10 |
| Accounts Payable | $1.1 | $1.2 | 1.0 | 0.9 | $(0.1) | (10) |
| Entitlement Benefits Due and Payable |
72.5 | 77.3 | 91.0 | 108.1 | 17.1 | 19 |
| Accrued Grant Liability | 3.7 | 3.9 | 3.3 | 14.3 | (11.0) | 333 |
| Federal Employee and Veterans' Benefits |
11.0 | 11.6 | 12.0 | 12.1 | 0.1 | 1 |
| Other Liabilities | 11.2 | 13.5 | 16.8 | 16.0 | (0.8) | (5) |
| Total Liabilities | $99.5 | $107.5 | $124.1 | $151.4 | $27.3 | 22 |
| Net Position | $431.2 | $362.7 | $358.2 | $377.4 | $19.2 | 5 |
| Total Liabilities & Net Position | $530.7 | $470.2 | $482.3 | $528.8 | $46.5 | 10 |
Our Consolidated Net Cost of Operations represents the difference between the costs incurred by our programs less associated revenues. We receive the majority of our funding through Congressional appropriations and reimbursement for the provision of goods or services to other federal agencies. Our Consolidated Net Cost of Operations for the year ended September 30, 2015, totaled $1.0 trillion. The majority of FY 2015 net costs relate to Medicare ($547.1 billion) and the Health budget function ($431.0 billion) which includes Medicaid, or almost 95 percent of our annual net costs.
The following table shows HHS net cost of operations by major component for the last five years. The FY 2015 Net Cost represents an increase of $78.0 billion or 8 percent more than the FY 2014 Net Cost of Operations. Approximately 88.7 percent of the Net Cost of Operations ($913.3 billion) relates to Medicare, Medicaid, CHIP, and other health programs managed by CMS. Further information on the net cost of operations is available in the FY 2015 Agency Financial Report.
Table 2: Net Cost of Operations
(in Billions)
| Segments | 2012 | 2013 | 2014 | 2015 | $ Change (2014-15) |
% Change (2014-15) |
|---|---|---|---|---|---|---|
| Responsibility Segments: | ||||||
| CMS Gross Cost | $802.3 | $848.9 | $910.5 | $1011.3 | $100.8 | 11 |
| CMS Exchange Revenue | (65.1) | (69.7) | (73.3) | (98.0) | (24.7) | 34 |
| CMS Net Cost of Operations | $737.2 | $779.2 | $837.2 | $913.3 | $76.1 | 9 |
| Other Segments: | ||||||
| Other Segments Gross Cost | $121.5 | $121.0 | $120.5 | $120.7 | $0.2 | 0 |
| Other Segments Exchange Revenue |
(3.2) | (3.9) | (5.7) | (4.0) | (1.7) | (30) |
| Other Segments Net Cost of Operations |
$118.3 | $117.1 | $114.8 | $116.7 | $1.9 | 2 |
| Net Cost of Operations | $855.5 | $896.3 | $952.0 | $1030.0 | $78.0 | 8 |
Summary of Management Challenges
The Department is continually striving to improve efficiency and effectiveness in its programs. Many HHS programs are complex and require long-term strategies for ensuring stable operations. These management challenges, as identified by the HHS Office of the Inspector General, include:
- Protecting an Expanding Medicaid Program from Fraud, Waste, and Abuse
- Fighting Waste, Fraud and Abuse in Medicare Parts A and B
- The Meaningful and Secure Exchange and Use of Electronic Health Information and Health Information Technology
- Administration of Grants, Contracts, and Financial and Administrative Management Systems
- Ensuring Appropriate Use of Prescription Drugs
- Ensuring Quality in Nursing Home, Hospice, and Home- and Community-Based Care
- Implementing, Operating, and Overseeing the Health Insurance Marketplaces
- Reforming Delivery and Payment in Health Care ProgramsEffectively Operating Public Health and Human Services Programs
- Ensuring the Safety of Food, Drugs and Medical Devices
Detailed information about each management challenge can be found in the FY 2015 Agency Financial Report which can be accessed here. In addition, the Government Accountability Office (GAO) has placed four HHS programs on its most recent “High Risk List” that lists programs that may have greater vulnerabilities to fraud, waste, abuse and mismanagement. As a responsible steward of taxpayer resources, HHS is committed to making improvements related to these challenges and high-risk areas.
For more information contact please visit us here or:
The U.S. Department of Health and Human Services
200 Independence Avenue, S.W., Washington, D.C. 20201
Toll Free: 1-877-696-6775
