2012   Financial Report of the United States Government

Notes to the Financial Statements

Note 19. Other Liabilities

Other Liabilities as of September 30, 2012, and 2011
(In billions of dollars)
Unearned revenue and assets held for others:
Unearned fees for nuclear waste disposal (DOE) and other unearned revenue 56.2 64.4
Assets held on behalf of others 74.5 69.8
Subtotal 130.7 134.2
Employee-related liabilities:
Accrued Federal employees wages and benefits 40.0 35.2
Selected DOE contractors' and D.C. employees’ pension benefits 57.0 55.0
Subtotal 97.0 90.2
International monetary liabilities and gold certificates:
Exchange Stabilization Fund 59.7 60.3
Gold Certificates (Note 2) 11.0 11.0
Subtotal 70.7 71.3
Subsidies and grants:
Farm and other subsidies 11.8 12.5
Grant payments due to State and local governments and others 16.8 18.1
Subtotal 28.6 30.6
Miscellaneous liabilities:
Legal and other contingencies 41.9 38.0
Bonneville Power Administration non-Federal power projects and capital lease liabilities, and disposal liabilities 13.2 13.5
Other miscellaneous 50.5 49.2
Subtotal 105.6 100.7
Total other liabilities 432.6 427.0

Other liabilities represent liabilities that are not separately identified on the Balance Sheets and are presented on a comparative basis by major category.

Unearned Revenue and Assets Held for Others

The Government recognizes a liability when it receives money in advance of providing goods and services or assumes custody of money belonging to others. The Government's unearned revenue from fees DOE has collected from utility companies for the future cost of managing the disposal of nuclear waste is about $32.1 billion and $30.0 billion as of September 30, 2012, and 2011, respectively. Other unearned revenue includes USPS income for such things as prepaid postage, outstanding money orders, and prepaid P.O. Box rentals. FDIC collected prepaid assessments from the financial institutions to address the Deposit Insurance Fund liquidity needs to pay for projected near-term failures and to ensure that the deposit insurance system remained industry-funded. The prepaid collection was based on maintaining assessment rates at their current levels through the end of 2010 and adopting a uniform three basis point increase in assessment rates effective January 1, 2011. An institution's quarterly risk-based deposit insurance assessment thereafter is offset by the amount prepaid until that amount is exhausted or until June 30, 2013, when any amount remaining would be returned to the institution. The DIF's unearned revenue liability was $9.2 billion and $20.4 billion as of September 30, 2012, and 2011, respectively. This decrease is due to the recognition of assessment revenue for the period. Assets held on behalf of others include funds collected in advance and undelivered Defense articles. The Foreign Military Sales program holds $61.8 billion and $58.6 billion as of September 30, 2012, and 2011, respectively for articles and services for future delivery to foreign governments.

Employee-Related Liabilities

This category includes amounts owed to employees at yearend and actuarial liabilities for certain non-Federal employees. Actuarial liabilities for Federal employees and veteran benefits are included in Note 15 and are reported on another line on the balance sheet. The largest liability in the employee-related liabilities category is the amount owed at the end of the fiscal year to Federal employees for wages and benefits (including accrued annual leave). In addition, DOE is liable to certain contractors such as the University of California, which operates the Lawrence Livermore National Laboratory, for contractor employee pension and postretirement benefits, which is about $31.4 billion and $30.2 billion as of September 30, 2012, and 2011, respectively. Also, the Government owed about $10.1 billion and $9.7 billion as of September 30, 2012, and 2011 respectively, for estimated future pension benefits of the District of Columbia's judges, police, firefighters, and teachers.

International Monetary Liabilities and Gold Certificates

Consistent with U.S. obligations in the IMF on orderly exchange arrangements and a stable system of exchange rates, the Secretary of the Treasury, with the approval of the President, may use the Exchange Stabilization Fund to deal in gold, foreign exchange, and other instruments of credit and securities.

Gold certificates are issued in nondefinitive or book-entry form to the Federal Reserve banks. The Government's liability incurred by issuing the gold certificates, as reported on the Balance Sheet, is limited to the gold being held by the Department of the Treasury at the standard value established by law. Upon issuance of gold certificates to the Federal Reserve banks, the proceeds from the certificates are deposited into the operating cash of the U.S. Government. All of the Department of the Treasury's certificates issued are payable to the Federal Reserve banks.

Subsidies and Grants

The Government supports the public good through a wide variety of subsidy and grant programs in such areas as agriculture, medical and scientific research, education, and transportation. USDA programs such as the Conservation Reserve, Tobacco Transition Payment, and Direct and Counter-Cyclical Payment programs account for the majority of the subsidies due, about $8.1 billion, and $8.9 billion as of September 30, 2012, and 2011, respectively.

The Government awards hundreds of billions of dollars in grants annually. These include project grants that are competitively awarded for agency-specific projects, such as HHS grants to fund projects to “enhance the independence, productivity, integration and inclusion into the community of people with developmental disabilities.” Other grants are formula grants, such as matching grants. Formula grants go to State governments for such things as education and transportation programs. These grants are paid in accordance with distribution formulas that have been provided by law or administrative regulations. Of the total liability reported for grants as of September 30, 2012, and 2011, DOT, Education, and HHS collectively owed their grantees about $13.0 billion and $15.0 billion, respectively. Refer to the financial statements and footnotes of the respective agencies for additional information.

Miscellaneous Liabilities

Some of the more significant liabilities included in this category are for (1) legal and other contingencies (see Note 22—Contingencies), (2) Bonneville Power Administration liability to pay annual budgets of several power projects for its electrical generating capacity, and (3) payables due to derivative contracts and the purchases of securities. In addition, many Federal agencies reported relatively small amounts of miscellaneous liabilities that are not otherwise classified.

Last Updated:  February 27, 2013