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Office of Budget

Fiscal Year 2006 Performance and Accountability Report
Published November 15, 2006

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Consolidated Financial Statements

DEPARTMENT OF VETERANS AFFAIRS CONSOLIDATED BALANCE SHEETS (dollars in millions)
As of September 30, 2006 2005
The accompanying Notes are an integral part of these financial statements.
ASSETS
INTRAGOVERNMENTAL
Fund Balance with Treasury (Note 3) $16,129 $17,087
Investments (Note 5) 12,873 13,286
Accounts Receivable, Net (Note 6) 107 72
Other Assets 53 40
TOTAL INTRAGOVERNMENTAL ASSETS 29,162 30,485
PUBLIC
Investments (Note 5) 183 178
Accounts Receivable, Net (Note 6) 1,163 920
Loans Receivable, Net (Note 7) 2,337 2,320
Cash (Note 4) 28 87
Inventories and Related Properties, Net (Note 8) 69 76
General Property, Plant and Equipment, Net (Note 9) 11,638 11,232
Other Assets 30 46
TOTAL PUBLIC ASSETS 15,448 14,859
TOTAL ASSETS $44,610 $45,344
LIABILITIES
INTRAGOVERNMENTAL
Accounts Payable $92 $66
Debt 983 2,193
Other Liabilities (Note 13) 1,992 2,619
TOTAL INTRAGOVERNMENTAL LIABILITIES 3,067 4,878
PUBLIC
Accounts Payable 835 570
Liabilities for Loan Guarantees (Note 7) 3,272 3,465
Federal Employee and Veterans Benefits Liability (Note 11) 1,155,612 1,124,376
Environmental and Disposal Liabilities (Note 12) 384 376
Insurance Liabilities (Note 15) 11,633 12,014
Other Liabilities (Note 13) 7,154 7,077
TOTAL PUBLIC LIABILITIES 1,178,890 1,147,878
TOTAL LIABILITIES 1,181,957 1,152,756
NET POSITION
Unexpended Appropriations - Earmarked Funds (Note 17) (6,965) -
Unexpended Appropriations - All Other Funds 8,239 2,306
Cumulative Results of Operations - Earmarked Funds (Note 17) 7,849 -
Cumulative Results of Operations - All Other Funds (1,146,470) (1,109,718)
TOTAL NET POSITION (1,137,347) (1,107,412)
TOTAL LIABILITIES AND NET POSITION $44,610 $45,344
DEPARTMENT OF VETERANS AFFAIRS CONSOLIDATED STATEMENTS OF NET COST (dollars in millions)
for the Years Ended September 30, 2006 2005
The accompanying Notes are an integral part of these financial statements.
NET PROGRAM COSTS (NOTE 19)
Medical Care $29,103 $28,399
Medical Education 1,101 542
Medical Research 813 659
Compensation 31,879 29,596
Pension 3,752 3,627
Education 2,304 2,202
Vocational Rehabilitation and Employment 709 700
Loan Guaranty (823) (1,432)
Insurance 104 148
Burial 376 332
NET PROGRAM COSTS BEFORE CHANGES IN VETERAN BENEFITS ACTUARIAL LIABILITIES 69,318 64,773
Compensation 31,100 197,300
Burial 100 500
SUBTOTAL 31,200 197,800
NET NON-PROGRAM COSTS 944 859
NET COST OF OPERATIONS (NOTE 19) $101,462 $263,432
DEPARTMENT OF VETERANS AFFAIRS CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION (dollars in millions)
FOR THE YEARS ENDED SEPTEMBER 30, 2006 AND 2005 Earmarked Funds All Other Funds Eliminations FY 2006 Consolidated Total FY 2005 Consolidated Total
The accompanying Notes are an integral part of these financial statements.
Cumulative Results of Operations
Beginning Balance $781 (1,115,470) 4,971 $(1,109,718) $(915,368)
Budgetary Financing Sources
Appropriations Used - 72,561 - 72,561 69,659
Nonexchange Revenue - 9 - 9 7
Donations 28 - - 28 27
Transfer without Reimbursement 5,009 - (5,009) - -
Other Financing Sources (Non-Exchange)
Donations of Property 25 1 - 26 15
Transfers In/Out Reimbursement 1 (1,369) 1,156 (212) (1,371)
Imputed Financing - 1,303 - 1,303 1,323
Other - - (1,156) (1,156) (578)
Total Financing Sources 5,063 72,505 (5,009) 72,559 69,082
Net Cost of Operations (2,043) 103,505 - 101,462 263,432
Net Change 7,106 (31,000) (5,009) (28,903) (194,350)
Ending Balance - Cumulative Results 7,887 (1,146,470) (38) (1,138,621) (1,109,718)
Unexpended Appropriations
Beginning Balance - 7,277 (4,971) 2,306 2,642
Budgetary Financing Sources
Appropriations Received - 71,747 - 71,747 69,589
Appropriations Transferred In/Out (6,965) 1,971 5,009 15 16
Other Adjustments - (234) - (234) (282)
Appropriations Used - (72,560) - (72,560) (69,659)
Total Budgetary Financing Sources (6,965) 924 5,009 (1,032) (336)
Total Unexpended Appropriations (6,965) 8,201 38 1,274 2,306
Total Net Position $922 (1,138,269) - $(1,137,347) $1,107,412
DEPARTMENT OF VETERANS AFFAIRS COMBINED STATEMENT OF BUDGETARY RESOURCES (NOTE 20) (DOLLARS IN MILLIONS)
for the Year Ended September 30, 2006 Budgetary Non-Budgetary Credit Program
The accompanying Notes are an integral part of these financial statements.
Budgetary Resources
Unobligated Balance at the Beginning of the Period $16,135 $5,707
Recoveries of Prior Year Obligations 3 -
Budget Authority: Appropriations Received 74,577 -
Budget Authority: Borrowing Authority - 522
Spending Authority from Offsetting Collections: Earned 5,404 1,792
Spending Authority from Offsetting Collections: Change in Unfilled Customer Orders 1,087 -
Subtotal 81,068 2,314
Nonexpenditure Transfers, net 15 -
Permanently Not Available (315) (1,733)
Total Budgetary Resources $96,906 $6,288
Status of Budgetary Resources
Obligations Incurred $79,948 $2,728
Unobligated Balance Available 13,966 -
Unobligated Balance Not Yet Available 2,992 3,560
Total Status of Budgetary Resources $96,906 $6,288
Change in Obligated Balance
Obligated Balance, Net Beginning of Period $8,230 $77
Obligations Incurred 79,948 2,728
Less Gross Outlays (78,911) (2,653)
Less Recoveries of Prior Year Unpaid Obligations, Actual (3) -
Change in Uncollected Customer Payments from Federal Sources (1,155) (25)
Obligated Balance, Net End of Period $8,109 $127
Net Outlays
Gross Outlays $78,911 $2,653
Less Offsetting Collections (5,336) (1,767)
Less Distributed Offsetting Receipts (3,065) (1,369)
Net Outlays $70,510 $(483)
DEPARTMENT OF VETERANS AFFAIRS COMBINED STATEMENT OF BUDGETARY RESOURCES (NOTE 20) (DOLLARS IN MILLIONS)
for the Year Ended September 30, 2005 Budgetary Non-Budgetary Credit Program
The accompanying Notes are an integral part of these financial statements.
Budgetary Resources
Unobligated Balance at the Beginning of the Period $15,667 $4,476
Recoveries of Prior Year Obligations - -
Budget Authority: Appropriations Received 72,361 -
Budget Authority: Borrowing Authority - 1,824
Spending Authority from Offsetting Collections: Earned 4,927 4,422
Spending Authority from Offsetting Collections: Change in Unfilled Customer Orders 323 -
Subtotal 77,611 6,246
Nonexpenditure Transfers, net 16 -
Permanently Not Available (328) (2,248)
Total Budgetary Resources $92,966 $8,474
Status of Budgetary Resources
Obligations Incurred $76,831 $2,767
Unobligated Balance Available 13,570 5
Unobligated Balance Not Yet Available 2,565 5,702
Total Status of Budgetary Resources $92,966 $8,474
Change in Obligated Balance
Obligated Balance, Net Beginning of Period $10,034 $93
Obligations Incurred 76,831 2,767
Less Gross Outlays (78,623) (2,783)
Less Recoveries of Prior Year Unpaid Obligations, Actual (12) -
Change in Uncollected Customer Payments from Federal Sources - -
Obligated Balance, Net End of Period $8,230 $77
Net Outlays
Gross Outlays $78,623 $2,783
Less Offsetting Collections (5,250) (4,422)
Less Distributed Offsetting Receipts (2,784) -
Net Outlays $70,589 $(1,639)
DEPARTMENT OF VETERANS AFFAIRS CONSOLIDATED STATEMENTS OF FINANCING (NOTE 21) (dollars in millions)
for the Years Ended September 30, 2006 2005
The accompanying Notes are an integral part of these financial statements.
Resources Used to Finance Activities
Obligations Incurred $82,676 $79,598
Less Spending Authority from Offsetting Collections and Adjustments (8,286) (9,684)
Obligations Net of Offsetting Collections and Adjustments 74,390 69,914
Less Offsetting Receipts (4,434) (2,784)
Net Obligations 69,956 67,130
Donations of Property 25 15
Transfers-out (213) (1,945)
Imputed Financing 1,303 1,323
Other Financing Sources - 4
Total Resources Used to Finance Activities 71,071 66,527
Resources That Do Not Fund Net Cost of Operations
Change in Amount of Goods, Services and Benefits Ordered But Not Yet Provided 320 (690)
Resources that Finance the Acquisition of Assets (4,005) (3,843)
Resources that Fund Expenses Recognized in Prior Periods (611) (2,326)
Budgetary Offsetting Collections and Receipts that Do Not Affect Net Cost of Operations 3,488 4,555
Other - (4)
Total Resources that Do Not Fund Net Costs of Operations (808) (2,308)
Total Resources Used to Finance the Net Cost of Operations 70,263 64,219
Costs That Do Not Require Resources in the Current Period
Increase in Annual Leave Liability 29 46
Increase in Environmental and Disposal Liability 9 35
Reestimates of Credit Subsidy Expense (1,110) (437)
Increase in Exchange Revenue Receivable from the Public (265) (548)
Increase in Veterans Benefits Actuarial Liability 31,263 197,800
Depreciation and Amortization 870 1,289
Bad Debts Related to Uncollectible Non-Credit Reform Receivables 227 420
Loss on Disposition of Assets 86 119
Other 90 489
Total Costs That Do Not Require Resources in the Current Period 31,199 199,213
Net Cost of Operations $101,462 $263,432


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