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1999 Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
A. Basis of Presentation
B. Reporting Entity
NSF is led by a presidentially-appointed director and governed by the National Science Board ("The Board"). The Board is composed of 24 members, representing a cross-section of American leadership in science and engineering research and education, appointed by the President for six-year terms. The NSF Director is a member ex officio of the Board.
NSF is authorized by the general authority of the Foundation as found in United States Code Title 42, Section 1870 (f), to receive and use funds donated by others, if such funds are donated without restriction other than they be used in the furtherance of the mission of the Foundation. These donations are non-appropriated funds received from foreign governments, private companies, academic institutions, nonprofit foundations and individuals. Donated funds are accepted into the NSF trust fund account either as unrestricted or as earmarked contributions to specific NSF programs that the Foundation holds in trust for disbursal to its awardees. Foreign donations are deposited initially in a commercial bank as a convenient wire-transfer depository. When needed for program support purposes, they are transferred into an account at the U.S. Treasury. Interest earnings on the commercial bank deposits are used for the same purposes as the principal donations. Funds are made available for obligation as necessary to support NSF programs.
C. Basis of Accounting
D. Revenues and Other Financing Sources
Appropriations are recognized as a financing source at the time the related program or administrative expenses are incurred. Revenues from reimbursable agreements are recognized when the services are provided and the related expenditures are incurred. Donations are recognized as revenues when funds are received. Reimbursable agreements are mainly for grant administrative services provided by NSF on behalf of other federal agencies.
E. Fund Balance with the U.S. Treasury and Cash
NSF has also established commercial bank accounts to hold some donated funds in trust, in interest bearing accounts as permitted by the contributors. These funds are collateralized by the bank through the U.S. Treasury.
F. Accounts Receivable
H. General Property, Plant and Equipment (PP&E)
The FY 1999 PP&E balance consists of Equipment, Aircraft, Buildings and Structures, Leasehold Improvements, and Construction in Progress. These balances are comprised of PP&E maintained "in-house" by NSF to support agency operations and PP&E under the U.S. Antarctic Program (USAP). USAP property is currently the custodial responsibility of Antarctic Support Associates, the NSF contractor for the program.
The NSF headquarters building is leased by the GSA. NSF is billed by GSA for the leased space at rent based upon commercial rates for comparable space. The cost of the headquarters building is not capitalized in NSF’s financial statements. The cost of some leasehold improvements performed by GSA are financed with NSF appropriated funds. The leasehold improvements are capitalized in NSF’s financial statements as they are transferred to NSF upon completion, if the leasehold improvements meet NSF’s capitalization threshold. Amortization is calculated using the straight-line method over the lesser of their useful lives or the unexpired lease term.
NSF’s PP&E capitalization policy reflects agency specific guidance provided by the Federal Accounting Standards Advisory Board (FASAB) in FY 1997, which stated that PP&E under the USAP should be capitalized, as NSF maintained "operational" responsibility for the support of science activities in Antarctica. However, FASAB agreed that PP&E used by awardees for research and development activities, which NSF is prohibited by statue from operating, should not be included in NSF asset balances. Although NSF retains title to the property to facilitate transfer to subsequent awardees, operations and control of this PP&E are transferred to awardees responsible for coordinating, directing, and conducting research utilizing the PP&E resources. Current standards do not fully address this situation. Until standards are developed to more fully address this issue, FASAB has issued interim guidance that considers NSF’s ownership interest in this PP&E to be "limited in practice to an interest similar to a reversionary interest," and directed the agency to exclude these items from the balance sheet. Rather, costs incurred to acquire such PP&E are treated as expense and shown as costs and investments in research and development in the required supplemental stewardship information.
I. Advances from Others
J. Accounts Payable
K. Annual, Sick and Other Leave
L. Employee Benefits
M. Cumulative Results of Operations
N. Retirement Plan
Although NSF funds a portion of the benefits under FERS and CSRS relating to its employees and withholds the necessary payroll deductions, the agency has no liability for future payments to employees under these plans, nor does NSF report CSRS, FERS, or Social Security assets, or accumulated plan benefits, on its financial statements. Reporting such amounts is the responsibility of the Office of Personnel Management (OPM) and FERS. In 1999, NSF’s contributions to CSRS and FERS were $2,854,178 and $4,170,618.
SFFAS No.5 requires employing agencies to recognize the cost of pensions and other retirement benefits during their employees' active years of service. OPM actuaries determine pension cost factors by calculating the value of pension benefits expected to be paid in the future, and communicate these factors to the agency for current period expense reporting. Information was also provided by OPM regarding the full cost of health and life insurance benefits. In FY 1999, NSF recognized $2,733,256 of pension expenses, $2,635,415 of post-retirement health benefits expenses and $14,503 of post-retirement life insurance expenses, beyond amounts actually paid. NSF recognized an offsetting revenue of $5,383,174 as imputed financing sources for the extent of these intragovernmental expenses that will be paid by OPM.
O. Contingencies: Claims and Lawsuits
Claims and lawsuits have also been made and filed against awardees of the Foundation by third parties. NSF is not a party to these actions and NSF believes there is no possibility that NSF will be legally required to satisfy such claims. Judgments or settlements of claims against awardees that impose financial obligation on them may be claimed as costs under the applicable contract, grant, or cooperative agreement and thus may affect the allocation of program funds in future fiscal years. In the event that the likelihood of loss on such claims by awardees becomes probable, their amounts can be reasonably estimated and Foundation management determines that it will probably pay them, NSF will recognize these potential payments as expenses.
P. Use of Estimates
Q. Tax Status
Note 2. Fund Balance with Treasury
Fund Balance with Treasury consisted of the following components as of September 30, 1999:
"Other Funds" consists of $47,021,836 received from a corporation that registered second level Internet domain names under NSF cooperative agreement and nonexpenditure
transfer authorizations, deposits, holdings, and miscellaneous receipt accounts. The nonexpenditure transfer authorizations are appropriation allocations from other government agencies and include 21,267,055 Indian rupees converted at September 30, 1999, to U.S. dollars at the prevailing Treasury rate of 43.25 rupees to $1 US, or $491,724. The Trust Fund includes amounts donated to NSF. Unavailable balances include recovered expired appropriations and other amounts related to expired authority and holdings, which are unavailable for NSF use.
Note 3. Accounts Receivable, Net
The Intragovernmental Accounts Receivable of $974,504 consists of reimbursements and repayments due from other government agencies.
As of September 30, 1999, NSF recorded Accounts Receivable of $262,387 due from public sources, net of allowances. This amount represents $560,113 in Accounts Receivable and an allowance of $297,726 for amounts that are anticipated to be uncollectible. The following presents a reconciliation of Accounts Receivable that are anticipated to be uncollectible at September 30, 1999:
Note 4. Advances
As of September 30, 1999, Advances consisted of the following components:
Note 5. General Property, Plant and Equipment, Net
The components of General Property, Plant and Equipment as of September 30, 1999 were:
Note 6. Liabilities Not Covered By Budgetary Resources
As of September 30, 1999, Liabilities Not Covered by Budgetary Resources consisted of the following:
Note 7. Other Liabilities
Other Liabilities represent current accrued employer contributions for payroll and benefits, disbursements in transit, accrued payroll and benefits and various employee related liabilities for payroll and benefit deductions. As of September 30, 1999, Other Liabilities consisted of:
Note 8. Employee Benefits
Employee Benefits consisted of the following components as of September 30, 1999:
These amounts represent $260,218 of unreimbursed cost to the Department of Labor (DOL) for actual compensation paid to recipients under Federal Employee’s Compensation Act (FECA). FECA provides income and medical cost protection to cover Federal employees injured on the job or who have a work-related injury or occupational disease, and beneficiaries of employees whose death is attributable to a job related injury or occupational disease. The U.S. Department of Labor initially pays valid claims and bills the employing federal agency.
The estimated liability of $1,245,000 is for future worker’s compensation calculated by the DOL and includes the expected liability for death, disability, medical, and miscellaneous costs for approved compensation cases. The liability is determined using a method that utilizes historical benefit payment patterns related to a specific incurred period and annual benefit payments discounted to present value using OMB’s economic assumptions for 10-year Treasury notes and bonds. To account for the effects of inflation on the liability, wage and medical inflation factors are applied to the calculation of future benefits.
Note 9. Lease Liabilities
In FY 1999, NSF acquired three copiers under Lease to Ownership plans. The lease periods range from four to five years. Future payments under these leases as of September 30, 1999 are:
Note 10. Unexpended Appropriations
Unexpended Appropriations consisted of the following components at September 30, 1999:
The Undelivered Orders balance does not include the Undelivered Orders balances of the Trust Fund account, reimbursable agreements with other agencies, and other funds.
Note 11. Statement of Net Cost – Major Program Descriptions
NSF’s primary business is to make merit-based grants and cooperative agreements to individual researchers and groups, in partnership with colleges, universities, and other public, private, state, local, and federal institutions, throughout the U.S. By providing these resources, NSF contributes to the health and vitality of the U.S. research and education system, which enables and enhances the nation’s capacity to sustain growth and prosperity. These grants are managed through eight programmatic organizations within NSF that review and evaluate competitive proposals submitted by the science and engineering community for its consideration. The NSF organizations are: Biological Sciences; Computer and Information Science and Engineering; Engineering; Geosciences; Mathematical and Physical Sciences; Social, Behavioral and Economic Sciences; Education and Human Resources; and the Office of Polar Programs.
These NSF organizations make investments in science and engineering in two functional program areas: research projects and related programs, and education programs. Approximately 95 percent of NSF’s costs are directly related to these investments. A third investment is made to support management and administration activities of NSF.
Research programs provide investments in cutting edge research that yields new discoveries. These investments help to maintain the nation’s capacity to excel in science and engineering, particularly in academic institutions. NSF provides support for large, multi-user research facilities that meet the need of access to state-of-the art research facilities that otherwise would be unavailable to academic scientists, and for staff and support personnel to assist scientists and engineers in conducting research at facilities.
Education programs help ensure that an adequate, well prepared workforce of scientists and engineers can maintain leadership in science and technology, both now and in the future, and help all students to achieve the mathematics and science skills needed to thrive in an increasingly technological society.
Salary and Expenses and Inspector General (IG) investments provide for salaries and benefits of persons employed at NSF; general operating expenses, including key activities to advance the NSF information systems technology and to enhance staff training; and audit and IG activities. Costs such as depreciation of NSF assets are also included. These indirect costs are allocated to NSF programs based on each program’s direct costs.
In accordance with OMB Bulletin 97-01, cost incurred for services provided to other federal entities are reported in the full cost of NSF programs and are identified as "intragovernmental."
Earned revenues are funding sources provided through reimbursable agreements with other federal entities. Earned revenues are recognized when the related program or administrative expenses are incurred and are deducted from the full cost of the programs to arrive at the net cost of operating NSF’s programs.
Note 12. Budget Authority
The Budget Authority balance includes $36,912,547 of donations, interest, and penalties.
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