Introduction to Principal Financial Statements
El Salvador cuts the ribbon on Phoenix
Go-Live with the CFO. Photo: USAID/Bob Bonnaffon
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The Principal Financial Statements have been prepared to
report the financial position and results of operations of
the U.S. Agency for International Development (USAID). The
Statements have been prepared from the books and records of
the Agency in accordance with formats prescribed by the Office
of Management and Budget (OMB) in OMB Circular A-136, Financial
Reporting Requirements. The Statements are in addition
to financial reports prepared by the Agency in accordance
with OMB and U.S. Department of the Treasury directives to
monitor and control the status and use of budgetary resources,
which are prepared from the same books and records. The Statements
should be read with the understanding that they are for a
component of the U.S. Government, a sovereign entity. The
Agency has no authority to pay liabilities not covered by
budgetary resources. Liquidation of such liabilities requires
enactment of an appropriation.
USAID’s principal financial statements and additional
information for FY 2006 and 2005 consist of the following:
The Consolidated Balance Sheet provides
information on amounts available for use by USAID (assets);
the amounts owed (liabilities); and amounts that comprise
the difference between assets and liabilities, which is the
Agency’s net financial position or equity, similar to
the balance sheets reported in the private sector. Comparative
data for 2005 are included and intra-Agency balances have
been eliminated from the amounts presented.
The Consolidated Statement of Net Cost
reports the components of the net costs of the Agency’s
operations for the period. The net cost operations consist
of the gross cost incurred by the Agency less any exchange
(i.e., earned) revenue from our activities. Comparative data
for 2005 are included and intra-Agency balances have been
eliminated from the amounts presented.
The Consolidated Statement of Changes in Net Position
reports the beginning net position, the transactions that
affect net position for the period, and the ending net position.
The components of net position are separately displayed in
two columns: Cumulative Results of Operations and Unexpended
Appropriations to more clearly identify the components of
and changes to Net Position. Comparative data for 2005 are
included and intra-Agency balances have been eliminated from
the amounts presented.
The Combined Statement of Budgetary Resources
provides information on how budgetary resources were made
available for the year and what the status of budgetary resources
was at year-end. Information in this statement is reported
on the budgetary basis of accounting. Comparative data for
2005 are included and intra-Agency balances have been eliminated
from the amounts presented.
The Consolidated Statement of Financing
reconciles net obligations reported on the Statement of Budgetary
Resources to net costs reported on the Statement of Net Costs.
Comparative data for 2005 are included and intra-Agency balances
have been eliminated from the amounts presented.
The Notes to Principal Financial Statements
are an integral part of the financial statements. They provide
explanatory information to help financial statement users
to understand, interpret, and use the data presented. Comparative
FY 2005 Note data may have been restated or recast to enable
comparability with the FY 2006 presentation.
Required Supplementary Information provides
information on intragovernmental asset and liability amounts
along with details on USAID’s budgetary resources at
year-end.
Other Accompanying Information presents
Consolidating Financial Statements that provide detailed program
and fund data supporting the financial statements.
History of USAID's Financial Statements
In accordance with the Government Management Reform Act of
1994 (GMRA), USAID has prepared consolidated fiscal year-end
financial statements since FY 1996. The USAID Office
of Inspector General (OIG) is required to audit these statements,
related internal controls, and Agency compliance with applicable
laws and regulations. From FY 1996 through FY 2000, the OIG
was unable to express an opinion on USAID’s financial
statements because the Agency’s financial management
systems could not produce complete, reliable, timely, and
consistent financial information.
For FY 2001, the OIG was able to express qualified opinions
on three of the five principal financial statements of the
Agency, while continuing to issue a disclaimer of opinion
on the remaining two. For FY 2002, the OIG expressed unqualified
opinions on four of the five principal financial statements
and a qualified opinion on the fifth. This marked the first
time since enactment of the GMRA that USAID received an opinion
on all of its financial statements. We are extremely pleased
that the efforts of both Agency and OIG staff have resulted
in an unqualified opinion on all of the financial statements
since FY 2003.
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