Notes to OPM 2023 Agency Financial Report

September 30, 2023 and 2022 ($ in millions)

Note 1, Summary of Significant Accounting Policies

A. Reporting Entity

The United States (U.S.) Office of Personnel Management (OPM) is the Federal Government’s human resources (HR) agency. It was created as an independent agency of the Executive Branch of Government on January 1, 1979. Many of the functions of the former Civil Service Commission were transferred to OPM at that time.

The accompanying financial statements present OPM’s financial position, net cost of operations, changes in net position, and status of budgetary resources, as required by the Chief Financial Officers Act of 1990 (CFO Act), the Government Management Reform Act of 1994 (GMRA), and OMB Circular A-136, “Financial Reporting Requirements.” The financial statements include all accounts — appropriation, trust, trust revolving, special and revolving funds — under OPM’s control. OPM is a component of the U.S. Government. For this reason, some of the assets and liabilities reported may be eliminated for Government-wide reporting because they are offset by assets and liabilities of another U.S. Government entity. These financial statements should be read with the realization that they are for a component of the U.S. Government.

The financial statements comprise the following major programs administered by OPM: The funds related to the operation of the Retirement Program, the Health Benefits Program, and the Life Insurance Program. The statutory authority for OPM’s Federal employees’ benefit programs can be found in Title 5, United States Code (USC); Chapters 83 and 84 provide a complete description of the Civil Service Retirement and Disability Fund’s provisions; Chapter 89 provides a complete description of the Employees’ Health Benefits Fund and the Retired Employees’ Health Benefits Fund provisions; and Chapter 87 provides a complete description of the Employees’ Group Life Insurance Fund provisions. Sections 802 and 803 of P.L. 109- 435, the Postal Accountability and Enhancement Act (Postal Act), amended certain provisions of Chapters 83 and 89 of Title 5 dealing with the Retirement Program and the Health Benefits Program, respectively. In January 2025, Title I, Section 101 of The Postal Service Reform Act of 2022 (PSRA, P. L. 117-108) requires OPM to establish the Postal Service Health Benefits Program (PSHBP), a separate health benefit program for United States Postal Service (USPS) employees, annuitants, and their eligible family members that will operate in parallel to the Federal Employees Health Benefits Program (FEHBP). In addition, the financial statements also encompass OPM’s Revolving Fund Programs as well as Salaries and Expenses.

Retirement Program

The Program consists of two defined-benefit pension plans: the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS), which consists of three (3) participant contribution rates. Together, the two plans cover substantially all full-time, permanent civilian Federal employees. The CSRS, implemented in 1921, is a stand-alone plan, providing benefits to most Federal employees hired before 1984. The FERS uses Social Security as its base and provides an additional defined benefit and a voluntary thrift savings plan to most employees entering the Federal service after 1983. The FERS was established in 1986 and when it became effective on January 1, 1987, CSRS Interim employees with less than 5 years of creditable civilian service on December 31, 1986, were automatically converted to FERS. The FERS – Revised Annuity Employees (RAE) was established in 2012 and became effective on January 1, 2013, and the FERS – Further Revised Annuity Employee (FRAE) was established in 2013 and became effective on January 1, 2014. Both defined-benefit pension plans are operated via the Civil Service Retirement and Disability Fund (CSRDF), a trust fund. Title 5, USC, Chapters 83 and 84, provide a complete description of the CSRDF’s provisions. OPM does not administer the voluntary Thrift Savings Plan.

Health Benefits Program

The Program provides comprehensive health insurance benefits to Federal employees, annuitants, their eligible family members, and other eligible persons. The Program, implemented in 1960, is operated through two trust revolving funds: the Employees’ Health Benefits Fund and the Retired Employees’ Health Benefits Fund. Title 5, USC, Chapter 89 provides a complete description of the funds’ provisions. To provide benefits, OPM contracts with more than 77 FEHB carriers. Most contracts with carriers that provide fee-for-service benefits are experience-rated, with the amount contributed by and for participants affected by, among other things, the number and size of claims. Most Health Maintenance Organizations (HMO) contracts are community-rated, so the amount of profit and administrative expenses charged to the FEHB Program by the carrier can be no more than what is allowed in the large group market overall.

On December 20, 2006, President Bush signed into law the Postal Act, P.L. 109-435. Title VIII of the Postal Act made significant changes in the laws dealing with the funding of CSRS benefits and the funding of retiree health benefits for employees of the USPS. The Postal Act required the USPS to make statutorily defined payments to the Postal Service Retiree Health Benefits (PSRHB) Fund through 2016 and actuarially determined prefunding payments beginning in 2017. The Postal Service Reform Act (PSRA) of 2022 repealed the required prefunding payments, eliminated all past due payments, and defined a new formula for payments into the Postal Service Retiree Health Benefits Fund (PSRHBF) beginning in 2026. The new payments are not meant to prefund post-retirement health benefits; they have the net effect of the USPS drawing claims costs instead of premiums for their annuitants from the fund. The PSRHB Fund is included in the Health Benefits Program.

Life Insurance Program

The Federal Employees’ Group Life Insurance (FEGLI) Program provides group, term-life insurance coverage to Federal employees and retirees. The Program was implemented in 1954 and significantly modified in 1980. It is operated through the Federal Employees Group Life Insurance Fund, a trust revolving fund, and is administered, virtually in its entirety, by the Metropolitan Life Insurance Company under contract with OPM. Title 5, USC, Chapter 87 provides a complete description of the fund’s provisions. The Program provides Basic life insurance (which includes accidental death and dismemberment coverage) and three packages of optional coverage.

Revolving Fund Programs

OPM provides various HR-related services to other Federal agencies, such as pre-employment testing and employee training. These activities are financed through an intra-governmental revolving fund.

Salaries and Expenses

Salaries and Expenses provide the budgetary resources OPM uses for administrative purposes in support of the Agency’s mission and programs. These resources are furnished by annual, multiple-year, and no-year appropriations. Annual appropriations are made for a specified fiscal year and are available for new obligations only during that fiscal year. Multiple-year appropriations are available for a definite period in excess of one fiscal year. No-year appropriations are available for obligation without fiscal year limitation.

B. Basis of Accounting and Presentation

Basis of Accounting

OPM’s financial statements reflect both accrual and budgetary accounting transactions. Under the accrual method of accounting, exchange revenue is recognized when earned and expenses are recognized when incurred, without regard to the receipt or payment of cash.

Basis of Presentation

The OPM fiscal year ends September 30. The accompanying financial statements account for all resources for which OPM is responsible. These financial statements present the financial position, results of operations, changes in net position, and the combined budgetary resources of OPM, as required by the CFO Act of 1990 and expanded by the GMRA of 1994. The financial statements are prepared from the books and records of OPM activities in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) promulgated by the Federal Accounting Standards Advisory Board (FASAB¹) and presented in the format prescribed by the OMB Circular A-136.

OPM has prepared comparative financial statements for the Consolidated and Consolidating Balance Sheets, Consolidated and Consolidating Statements of Net Cost, Consolidated and Consolidating Statements of Changes in Net Position, and the Combined and Combining Statements of Budgetary Resources.

Consolidated Statements of Net Operations: To derive its net cost of operations, OPM deducts the earned revenues associated with its gross cost of providing benefits and services on the accompanying Consolidated Statements of Net Cost.

Consolidated Statements of Changes in Net Position: The Consolidated Statements of Changes in Net Position separately discloses other financing sources including appropriations, net cost of operations, and cumulative results of operations.

Combined Statements of Budgetary Resources: The budgetary accounting concepts are recognized in the Combined Statements of Budgetary Resources. The Combined Statements of Budgetary Resources present:

1. Budgetary resources² for the fiscal year. OPM’s budgetary resources include unobligated balances of resources from prior years and new resources, consisting of appropriations, and spending authority from offsetting collections.
2. Status of those budgetary resources which include obligated³ amounts and unobligated⁴ amounts for the fiscal year. OPM’s obligations are direct and reimbursable. Direct obligations are incurred and paid immediately. A reimbursable obligation reflects the cost incurred to perform services or provide goods that must be paid back by the recipients. OPM classifies all of its incurred obligations as direct, with the exception of the Revolving Fund Programs, which only incurs reimbursable obligations.
3. Outlays⁵, Net, and Distributing Offsetting Receipts (cash transactions) for the fiscal year, which is comprised of Outlays less Actual Offsetting Receipts (cash transactions) and includes:
1. Outlays, Net, which is comprised of Outlays, Gross less Actual Offsetting Collections⁶.

2. Agency Outlays, Net, which is comprised of Outlays, Net less Distributed Offsetting Receipts. Distributed Offsetting Receipts represents actual collections from the public or from other federal entities, net of disbursements, that are credited to certain receipt accounts (general fund, special fund, trust fund, and gift and donation receipt accounts) and budget clearing accounts, and for which the net receipts recorded to this line offset the budget outlays of the agency that conducts the activity generating the receipts.

   Budgetary accounting is based on concepts set forth by OMB Circular A-11, Preparation, Submission, and Execution of the Budget, as amended, which provides instructions on budget execution. Budgetary accounting is designed to recognize the budgetary resources and the related status of those budgetary resources, including the obligation and outlay of funds according to legal requirements, which in many cases is made prior to the occurrence of an accrual-based transaction. Budgetary accounting is essential for compliance with legal constraints and controls over the use of Federal funds.

Financial Statement Classifications

Intragovernmental and With the Public: SFFAS No. 1 distinguishes between Intragovernmental and Governmental (referred to as With the Public) assets and liabilities. Intragovernmental assets and liabilities arise from transactions among Federal entities. Intragovernmental assets are claims other Federal entities owe to OPM. Intragovernmental liabilities are claims OPM owes to other Federal entities, whereas With the Public assets and liabilities arise from transactions with public entities. The term public entities encompass domestic and foreign persons and organizations outside the U.S. Government. With the Public assets are claims of OPM against public entities. With the Public liabilities are amounts that OPM owes to public entities.

Throughout these financial statements, intragovernmental assets, liabilities, revenue and cost have been classified according to the type of entity with which the transactions are associated. The majority of OPM's gross cost to provide Retirement, Health and Life Insurance benefits are classified as costs With the Public because the recipients of these benefits are Federal employees, retirees, and their survivors and families.

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C. Use of Management’s Estimates

The preparation of financial statements in accordance with GAAP requires management to make certain estimates. These estimates affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of earned revenues and costs during the reporting period. Actual results could differ from the estimates.

D. Entity vs. Non-Entity Assets

Statement of Federal Financial Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities, distinguishes between entity and non-entity assets. Entity assets are those the reporting entity has the legal authority to use in its operations. Non-entity Assets refers to assets received from the public. All OPM assets are entity assets.

E. Appropriations and Funding Sources

OPM receives new budgetary resources each fiscal year in the form of appropriations, trust fund receipts, and spending authority from offsetting collections. In addition, OPM normally carries-over a balance of unobligated budgetary resources from the prior fiscal year, which is generally unavailable for obligation, but may be drawn-upon should new budgetary resources be insufficient to cover obligations incurred. The $146 million increase from the ending balance in the prior year to the beginning balance in the current year’s Unobligated Balance is due to the recovery of funds that were originally deemed unavailable being received.

Appropriations

By an act of Congress, OPM receives budgetary resources in the form of appropriations that allow it to incur obligations to pay (1) the Government’s share of the cost of health and life insurance benefits for Retirement Program annuitants and (2) in part, the administrative and operating expenses of OPM. In addition, the General Fund of the U.S. Government transfers an amount annually to the OPM CSRDF to subsidize, in part, the underfunding of the CSRDF. OPM’s appropriations are ‘definite,’ in that the amount of the authority is stated at the time it is granted, and ‘annual,’ in that the authority is available for obligation only during the current fiscal year. At fiscal year-end, any unobligated balances in the appropriations that fund the Government’s share of the cost of health and life insurance benefits are returned to U.S. Department of the Treasury (Treasury). Existing obligated balances can be used to make payments, but unobligated balances are not available for new obligations. Budgetary resources, including any related obligations and payables, are ‘cancelled’ at the end of the five-year expiration period. All cancelled funding is returned to Treasury.

Trust Fund Receipts

The amounts collected by OPM and credited to the CSRDF and PSRHBF generate budgetary resources in the form of trust fund receipts. Trust fund receipts are immediately appropriated and available to cover the valid obligations of the CSRDF and PSRHBF as they are incurred. At the end of each fiscal year, the amount by which OPM’s collections have exceeded its incurred obligations are temporarily precluded from obligation and added to OPM’s trust fund balance. For FY 2023 and FY 2022, the PSRHB funds are used to pay annual premium costs for the USPS post 1971 current annuitants [See Note 10]. The PSRHBF operates similarly to the CSRDF.

Spending Authority from Offsetting Collections

The amount collected by OPM and credited to the Health Benefits, Life Insurance and Revolving Fund Programs generates budgetary resources in the form of ‘spending authority from offsetting collections’ (SAOC). During the fiscal year, the obligations incurred by OPM for these programs may not exceed their SAOC or the amounts apportioned by OMB, whichever is less. At year-end, the balance of SAOC more than obligations incurred is brought forward into the subsequent fiscal year but is generally unavailable for obligation. Amounts collected by OPM and credited to the CSRDF [and the PSRHBF] generate budgetary resources in the form of trust fund receipts.

F. Program Funding

Retirement Program

Service-cost represents an estimate of the amount of contributions which, if accumulated and invested over the careers of participants, will be sufficient to fully fund their future CSRS or FERS benefits. OPM’s Office of the Actuaries has determined that the service-cost for most or “regular” CSRS participants is 56.5 percent and 50.4 percent of basic pay for FY 2023 and FY 2022, respectively. For FERS, the service cost for most or “regular” FERS participants is 24.7 percent and 22.4 percent of basic pay for FY 2023 and FY 2022, respectively, and for “regular” FERS-FRAE participants is 25.5 percent and 23.2 percent of basic pay for FY 2023 and FY 2022, respectively. Different service-costs apply for participants under FERS-RAE, Postal Service participants, and participants covered under special retirement provisions such as law enforcement officers, firefighters, and air traffic controllers.

CSRS

Both CSRS participants and their employing agencies, except for USPS, are required by statute to make contributions to CSRS coverage. Regular CSRS participants and their employers each contributed 7.0 percent of pay in both FY 2023 and FY 2022. The combined 14.0 percent of pay does not cover the service cost of a CSRS benefit. To lessen the shortfall, Treasury is required by statute to transfer an amount annually from the General Fund of the United States to the CSRDF [See Note 1G.]; for FY 2023 and FY 2022, this amount was $35.5 billion and $34.3 billion, respectively, for the CSRS.

FERS

Both FERS participants and their employing agencies are required by statute to make contributions for FERS coverage. In addition, Treasury is required by statute to transfer an amount from the General Fund of the United States to the CSRDF for the FERS Supplemental Liability; for FY 2023 and FY 2022, this amount was $14.4 billion and $12.0 billion, respectively. There are currently three FERS participant contribution rates for most regular participants:

1. For most participants who entered before calendar year 2013, the FERS participant contribution rate is 0.8 percent of pay for FY 2023 and FY 2022. The rate is equal to the CSRS participant contribution rate less the prevailing Old Age Survivor and Disability Insurance deduction rate.
2. FERS-RAE, which was established under the Middle Class Tax Relief and Job Creation Job Act of 2012, P.L. 112-96, Section 5001 – Federal Employees Retirement, generally applies for participants who entered during calendar year 2013. For most FERS-RAE participants, the participant contribution rate is 3.1 percent of pay.
3. FERS-FRAE, which was established under Section 401 of the “Bipartisan Budget Act of 2013,” P.L. 113-67, Sec. 401, generally applies for participants entering on or after January 1, 2014. For most FERS-FRAE participants, the participant contribution rate is 4.4 percent of pay. Note: There is no difference in the FERS basic benefit paid to FERS Regular, FERS-RAE, and FERS-FRAE employees. However, the basic benefit for congressional employees and Members of Congress under FERS-RAE and FERS-FRAE is different than the basic benefit paid to those groups under FERS.

Health Benefits Program

The program (except for the PSRHB Fund) is funded on a “pay-as-you-go” basis, with both participants and their employing agencies making contributions on approximately a 30 percent to 70 percent basis (some categories of enrollees are responsible for the entire premium amount (e.g., Temporary Continuation of Coverage, former spouses)). OPM contributes the “employer” share for Retirement Program annuitants via an appropriation. The program continues to provide benefits to active employees, or their survivors, after they retire (post-retirement benefits). Except for the USPS, agencies are not required to make premium contributions for their annuitants.

Life Insurance Program

The program is funded on a “pay-as-you-go” basis, with both participants and their employing agencies making contributions to Basic life insurance coverage, generally on a two-thirds to one-third basis; OPM contributes the “employer” share for Retirement Program annuitants via an appropriation. The program is funded using the “level premium” method, where contributions paid by and for participants remain fixed until age 65 but overcharge during early years of coverage to compensate for higher rates of expected outflows in later years. A small portion, 0.02 percent of the pay of participating employees in FY 2023 and FY 2022, of post-retirement life insurance coverage is not funded.

Revolving Fund Programs

OPM’s Revolving Fund Programs provide a continuing cycle of HR services primarily to Federal agencies on a reimbursable basis. Each program is operated at rates established by OPM to be adequate to recover costs over a reasonable period. Receipts derived from operations are, by law, available in their entirety for use of the fund without further action by Congress. Since the Revolving Fund’s programs charge full cost, customer-agencies do not recognize imputed costs. OPM provides receiving entities of such services with full cost information through billings based on reimbursable agreements for services rendered. Examples of OPM Revolving Fund programs include USAJOBS and Human Resource Solutions.

Salaries and Expenses

The Salaries and Expenses (S&E) account and the Office of Inspector General (OIG) S&E account finance most of OPM’s operating expenses and have three funding sources: 1) salaries and expenses appropriation, 2) transfers from the trust fund accounts, and 3) reimbursements. Funds to administer these programs are transferred from the Trust Fund accounts to the respective administrative S&E account as costs are incurred.

G. Financing Sources Other than Earned Revenue

OPM receives inflows of assets from financing sources other than earned revenue. These financing sources are not deducted from OPM’s gross cost of providing benefits and services on the Consolidated Statements of Net Cost but added to its net position on the Consolidated Statements of Changes in Net Position. OPM’s major financing sources other than earned revenue are:

Imputed Financing (and related Imputed Costs)

Goods and services are received from other federal entities at no cost or at a cost less than the full cost to the providing federal entity. Consistent with accounting standards, certain costs of the providing entity that are not fully reimbursed by OPM are recognized as imputed cost in the Statement of Net Cost and are offset by imputed revenue included in the Other Financing Sources on the Statement of Changes in Net Position. Such imputed costs and imputed financing relate to business-type activities, employee benefits, and claims to be settled by the Treasury Judgment Fund. However, unreimbursed costs of goods and services other than those identified above are not included in our financial statements.

Transfer-in from the General Fund

The Treasury is required by law to transfer an amount annually to the Retirement Program from the General Fund of the U.S. Government to subsidize in part the under-funding of the CSRS. The CSRS is funded by employee and agency contributions and remaining funds from the General Fund. The transfer from the General Fund is recorded as a transfer-in and a transfer-out within the Retirement Fund and therefore does not appear on the statement of changes in net position. The obligation and disbursement are reflected in the statement of budgetary resources.

Appropriations Used

By an act of Congress, OPM receives appropriated authority allowing it to incur obligations and make expenditures to cover the operating costs of the Agency (“Salaries and Expenses”) and the Government’s share of the cost of health and life insurance benefits for Retirement Program annuitants. OPM recognizes appropriations as “used” at the time it incurs these obligations against its appropriated authority.

H. Fund Balance with Treasury

OPM does not maintain cash in a commercial bank, but rather in Treasury. OPM’s Fund Balance with Treasury (FBWT) includes the amount available for OPM to pay current liabilities and finance authorized purchases, except as restricted by law. FBWT comprises the aggregate total of OPM’s unexpended, un-invested balances in its appropriation, trust, revolving, and trust revolving accounts. All of OPM’s collections are deposited and its expenditures are paid from one of its FBWT accounts. OPM invests FBWT balances associated with the Retirement, Health Benefits, and Life Insurance Programs that are not immediately needed to cover expenditures unless there is a Debt Issuance Suspension Period (DISP).

I. Investments, Net

The Federal Government does not set aside assets to pay future benefits or other expenditures. OPM invests the excess FBWT for the funds associated with the Retirement, Health Benefits, and Life Insurance Programs in securities guaranteed by the United States as to principal and interest. OPM’s investments in Federal securities consists of non-marketable, market-based, Par-value Government Account Series (GAS) securities, both market-based notes and par-value Certificates of Indebtedness. OPM invests the excess FBWT in the specific security type to match the need to pay future benefits or other expenditures with when the funds will be available. Investments are stated at the original acquisition cost, net of amortized premium and discount. Premiums and discounts are amortized into interest income over the term of the investment, using the interest method.

Market-based Notes

The notes consist of interest-bearing, market-based Treasury securities purchased from Treasury at a discount/premium. These investments are presented on the OPM’s Consolidated Balance Sheet at acquisition cost, net of amortization of the discount/premium. The discount is amortized over the life of the note using the interest method. Under the interest method, the effective interest rate (the actual interest yield on amounts invested) multiplied by the carrying amount of the note at the start of the accounting period equals the interest income recognized during the period (the carrying amount changes each period by the amount of the amortized discount/premium). The amount of the amortization of the discount/premium is the difference between the effective interest recognized for the period and the nominal interest for the note. Health Benefits and Life Insurance Programs’ monies are invested, some in market-based securities that mirror the terms of marketable Treasury securities; monies that are immediately needed for expenditure are invested in overnight market-based securities. These market-based securities have some market value risk.

Par-value GAS securities and Certificates of Indebtedness

Retirement Program and the PSRHB Fund portion of the Health Benefits Program monies are invested initially in Certificates of Indebtedness (Certificates), which are issued by the Treasury at par value and mature on the following September 30. The Certificates are routinely redeemed at face value to pay for authorized program expenditures. Each September 30, all outstanding Certificates are rolled over into special GAS securities that are issued by Treasury at par value, with a yield equaling the average of all marketable Treasury securities with four or more years to maturity.

The Retirement Program also carries securities issued by the Federal Financing Bank (FFB) and a small number of other securities.

Debt Issuance Suspension Period (DISP)

Section 8348 of Title 5, U.S. Code, authorizes the Secretary of the Treasury to suspend additional investments of Treasury securities in the CSRDF if such additional investment could not be made without causing the public debt of the United States to exceed the public debt limit. In addition, the Secretary may sell or redeem securities, obligations, and other invested assets of the CSRDF before maturity to prevent the public debt from exceeding the public debt limit. The Secretary may redeem such investments only during a Debt Issuance Suspension Period (DISP) and only to the extent necessary to obtain a number of payments authorized to be made from the CSRDF during such period. Further, the Postal Act requires that investments of the PSRHBF be made in the same manner as investments of the CSRDF.

On January 19, 2023, The Secretary of the Treasury announced that the U.S. has reached its statutory debt limit and a DISP would on January 19, 2023. During this period, Treasury took extraordinary measures, including those described above, to avoid exceeding the statutory debt limit. The U.S. Government is required to pay the CSRDF and the PSRHBF the amount of “foregone interest”, those Funds would have otherwise earned had such an extraordinary measure not taken place. On June 3, 2023, with the use of the Fiscal Responsibility Act of 2023, Public Law 118-5, the Statutory Debt Limit was suspended through January 1, 2025. On this date, Treasury discontinued its use of extraordinary measures and resumed normal debt management operations.

J. Accounts Receivable, Net

Accounts Receivables are recognized primarily when OPM performs reimbursable services or sells goods/services and consist of amounts owed to OPM intragovernmental and amounts owed from the public. Based on past collection experience and an analysis of outstanding amounts, Accounts Receivable are reduced to net realizable value by an Allowance for Uncollectible Accounts, when appropriate for both receivables intragovernmental and with the public receivables. The PSRA of 2022 repealed required prefunding payments of future postal service retiree health benefits and cancelled the amounts past due to the PSRHBF but did not affect the amounts due from the USPS to the CSRDF for CSRS and FERS.

K. General Property, Plant, and Equipment, Net

OPM capitalizes major long-lived software and equipment. Software costing over $500 thousand is capitalized at the cost of either purchase or development and is amortized using a straight-line method over a useful life of five years. Equipment costing over $25 thousand is capitalized at purchase cost and depreciated using the straight-line method over five years. The cost of minor purchases, repairs and maintenance is expensed as incurred.

L. Other Assets

This represents the balance of assets held by the experience-rated carriers participating in the Health Benefits Program and by the Life Insurance Program carrier, pending disposition on behalf of OPM.

M. Liabilities

Liabilities represent probable and measurable future outflows of resources as a result of past transactions or events and are recognized when incurred, regardless of whether there are budgetary resources available to pay the liabilities. However, OPM has no authority to liquidate a liability, unless budgetary resources have been appropriated and made available through legislation.

Liabilities Covered and not Covered by Budgetary Resources

Liabilities covered by budgetary resources include those liabilities for which Congress appropriated funds and are otherwise available to pay amounts due as of the Balance Sheet dates. Liabilities not covered by budgetary resources are amounts owed in excess of available, congressionally appropriated funds and, therefore, no budgetary resources are available to pay amounts due as of the Balance Sheet dates but will require future funding to liquidate the obligation. Since no budgetary resources have been made available to liquidate the Pension, post-Retirement Health Benefits (PRHB), and Actuarial Life Insurance Liabilities, they are disclosed as being liabilities not covered by budgetary resources. In addition, OPM's due to the Treasury Judgment Fund, contingent liabilities, unfunded annual leave, and future estimates workers compensation do not have budgetary resources associated with the liability. (Refer to Note 7, Liabilities not covered by budgetary resources)

Current and Noncurrent Liabilities

OPM discloses its other liabilities between current and noncurrent liabilities in accordance with SFFAS No. 1. The current liabilities represent liabilities that OPM expects to settle within the 12 months of the Balance Sheet dates. Noncurrent liabilities represent liabilities that OPM does not expect to be settled within the 12 months of the Balance Sheet dates (refer to Note 7, Liabilities not covered by budgetary resources).

Accounts Payable

Accounts Payable includes amounts owed but not yet paid to Intragovernmental and Other with the public entities for goods and services received by OPM. OPM estimates and records accruals when services and goods are performed or received.

N. Benefits Due and Payable

Benefits due and payable are comprised of two categories of accrued expenses. The first reflects claims filed by participants of the Retirement, Health Benefits and Life Insurance Programs that are unpaid in the current reporting period and includes an estimate of health benefits and life insurance claims incurred but not yet reported. The second is a liability for premiums payable to community-rated carriers participating in the Health Benefits Program that is unpaid in the current reporting period.

O. Actuarial Liabilities and Associated Expenses

OPM records actuarial liabilities [the Pension Liability, PRHB Liability, and the Actuarial Life Insurance Liability] and associated expenses. These liabilities are measured as of the first day of the year, with a “roll-forward,” or projection, to the end of the year. The “roll-forward” considers all major factors that affect the measurement that occurred during the reporting year, including pay raises, cost of living allowances, and material changes in the number of participants. The Prior Service Credit recognized in the prior year and included in the calculation of PRHB expense in Note 5 is the impact of a plan amendment on the PRHB liability. The PSRA of 2022 amended the FEHB by adding the PSHBP and requiring Medicare participation by those eligible to receive coverage in the Postal program.

Long Term Interest Rate Assumptions

For CSRS and for FERS, OPM’s actuaries determine a single interest rate that produces an actuarial liability equivalent to that produced under the 10-year average historical yield curve. OPM’s actuaries round the single equivalent interest rate to the nearest 0.1 percent. OPM’s actuaries use a 10-year measuring period for determining the yield curve, taking the 40-quarter arithmetical average of spot rates for zero-coupon Treasuries measured through March 31 of the current fiscal year. OPM’s measuring period methodology has been in place under SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from Changes in Assumptions and Selecting Discount Rates and Valuation Dates, since FY 2010. The March 31 ending date was selected based on the publication dates of source material to meet OPM’s financial reporting deadlines. Zero-coupon rates were published by the Treasury’s Office of Thrift Supervision through December 31, 2011. The Treasury Office of Economic Policy continued publication of zero-coupon rates according to this methodology for the subsequent quarters in 2012 and 2013.

Beginning in 2014, the Treasury began publishing rates according to a revised zero-coupon yield curve methodology (with historical rates published according to this revised methodology for year 2003 forward). The curve provides yields at semi-annual increments for 100 years. The previously published yield curves had extended only to year 30, and for valuations performed prior to 2014 OPM’s actuaries had applied the 30-year rate for discounting cash flows beyond 30 years.

P. Commitments and Contingencies

In accordance with SFFAS No. 5, Accounting for Liabilities of the Federal Government, as amended by SFFAS No. 12, Recognition of Contingent Liabilities Arising from Litigation: An Amendment of SFFAS No. 5, Accounting for Liabilities of the Federal Government, OPM recognizes contingent liabilities in OPM’s Consolidated Balance Sheets and Consolidated Statements of Net Cost when the loss is determined to be probable and reasonably estimable. In the event of an adverse judgment against the Government, some of the liabilities may be payable from Treasury. OPM evaluates all contingent liabilities based on three criteria: probable, reasonably possible, and remote. OPM recognizes that the estimated liability may be a specific amount or a range of amounts. If some amount within the range is a better estimate than any other amount within the range, that amount is recorded. If no amount within the range is a better estimate than any other amount, the minimum amount of the range is recorded and the range and a description of the nature of the contingency are disclosed. OPM records an accrual for contingent liabilities if it is probable and reasonably estimable and discloses those contingencies that are reasonably possible in Note 8, Commitments and Contingencies, of the financial statements. OPM does not disclose or record contingent liabilities when the loss is considered remote. For matters where OPM’s Counsel is unable to express an opinion regarding the likely outcome of the case and an estimate of the potential liability cannot be made, the total amount claimed against the government is classified as Reasonably Possible and disclosed if available.

Q. Net Position

Net position is the residual difference between assets and liabilities and consists of Unexpended Appropriations and Cumulative Results of Operations.

Unexpended Appropriations

Unexpended appropriations consist of unobligated and undelivered order balances. Unobligated balances are amounts of remaining budgetary resources available for obligation, which have not been rescinded or withdrawn. Undelivered orders are the amount of obligations incurred for goods and/or services ordered, but not yet received.

Cumulative Results of Operations

Cumulative results of operations (CRO) consist of the net difference since inception between: (1) expenses and losses; (2) revenue and gains; and (3) other financing sources. The balance of OPM’s CRO is negative due to the recognition of actuarial expenses that will be liquidated in future periods.

R. Expenses

Expenses are recognized when there are outflows, usage of assets, or incurrences of liabilities (or a combination) from carrying out functions related to OPM’s activity and related programs, for which benefits do not extend beyond the present operating period. For financial reporting purposes, operating expenses are recognized in the period incurred.

Gross Cost of Providing Benefits and Services

OPM’s gross cost of providing benefits and services is classified by responsibility segment. All program costs (including Salaries and Expenses) are directly traced, assigned, or allocated on a reasonable and consistent basis to one of four responsibility segments.

S. Revenue and Other Financing Sources

In accordance with SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, revenue is classified as either exchange revenue or non-exchange revenue.

Exchange Revenue

Exchange revenue is an inflow of resources to an entity that it has earned; it arises when each party to a transaction sacrifices value and receives value in return. All of OPM’s revenue is classified as exchange revenue and the two sources of earned revenue include (1) earning on its investments; and (2) the Contributions to the Retirement, Health Benefits and Life Insurance Programs by and for participants.

Federal reporting standards require that earnings on investments be classified in the same manner as the predominant source of revenue that funds the investments; OPM, therefore, classifies earnings on investments as earned revenue. Employing agency and participant contributions to the Retirement, Health Benefits and Life Insurance Programs and the scheduled payment contributions to the PSRHB Fund are classified as exchange revenue, since they represent exchanges of money and services in return for current and future benefits.

Exchange revenue is presented in the Consolidated Statements of Net Cost and serves to offset the costs of these goods and services. The consolidated Statements of Net Cost provides users with the ability to ascertain whether OPM’s exchange revenue are sufficient to cover the total cost it has incurred to provide Retirement, Health, and Life Insurance benefits.

T. Tax Status

As an agency of the Federal Government, OPM is generally exempt from all income taxes imposed by any governing body, whether it is a Federal, State, Commonwealth, Local, or Foreign Government.

U. Parent-Child Reporting Allocation Transfer

OPM is a party to an allocation transfer with another Federal agency, the Department of Health and Human Services (HHS), which is the parent. OPM is the receiving (child) entity. Allocation transfers are legal delegations by one department of its authority to obligate budget authority and outlay funds to another department. A separate “Health Insurance Reform Implementation Fund,” account 024075X0119, was created in the Treasury as a subset of the HHS fund account for tracking and reporting purposes. All allocation transfers of balances are credited to this account, and subsequent obligations and outlays incurred by the OPM are charged to this allocation account as OPM executes the delegated activity on behalf of the HHS. The financial activity related to this allocation transfer is reported in the financial statements of the parent entity, HHS, from which the underlying legislative budget authority, appropriations, and apportionments are derived. The remaining cash and budgetary balances were transferred to parent HHS fund in February FY 2022 to close the child fund within OPM.

V. Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow certain presentations and disclosures to be modified, if needed, to prevent the disclosure of classified information.

Note 2, Fund Balance with Treasury

Status of Fund Balance with Treasury

OPM’s unexpended balances are comprised of its FBWT and its investments (at par, net of original discount). Obligated and unobligated balances reported for the Status of FBWT do not agree with obligated and unobligated balances reported in the Combined Statement of Budgetary Resources due to budgetary balances that are supported by amounts other than FBWT, such as federal budgetary receivables and unfilled customer orders. These resources provide budget authority; however, do not contribute to FBWT on the Balance Sheet until collected. FY 2023 had approximately $3.3 billion in available resources, and $251 million of unavailable resources from uncollected budgetary resources that were excluded. In FY 2022, approximately $3.1 billion were excluded from obligated, not yet disbursed balances. OPM did not have any FBWT related to Non-Budgetary accounts such as deposit, clearing or unavailable receipt funds in FY 2023 or FY 2022. The following table presents portions of OPM’s temporary reductions, unexpended balances that are obligated, unobligated and precluded from obligation as of September 30, 2023 and 2022.

Table 15 – Fund Balance with Treasury (in millions)
September 30, 2023

Unexpended Balances		Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
FBWT		$1,123	$1,822	$13	$786	$3,744
Investments	1,036,636	57,508	52,249	-	1,146,393
Total, Unexpended Balances	$1,037,759	$59,330	$52,262	$786	$$1,150,137
Status of Fund Balances	Unobligated: Available	-	128	593	(151)	570
	Unobligated: Unavailable	-	19,000	49,983	322	69,305
	Obligated not yet Disbursed	9,640	8,137	1,686	615	20,078
	Temporarily Precluded from Obligation at the End of the Year (Refer to Note 10)	1,028,114	32,050	-	-	1,060,164
	Temporary Reductions and Rounding	5	15	-	-	20
Total, Status of Fund Balances	$1,037,759	$59,330	$52,262	$786	$1,150,137

Fund Balance with Treasury (in millions)
September 30, 2022

Unexpended Balances		Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
FBWT		$12	$1,732	$11	$771	$2,526
Investments	1,011,679	62,790	50,746	-	1,125,215
Total, Unexpended Balances	$1,011,691	$64,522	$50,757	$771	$1,127,741
Status of Fund Balances	Unobligated: Available	-	-	-	587	587
	Unobligated: Unavailable	-	22,900	49,262	188	72,350
	Obligated not yet Disbursed	8,872	6,002	1,495	(4)	16,365
	Temporarily Precluded from Obligation at the End of the Year (Refer to Note 10)	1,002,814	35,607	-	-	1,038,421
	Temporary Reductions and Rounding	5	13	-	-	18
Total, Status of Fund Balances	$1,011,691	$64,522	$50,757	$771	$1,127,741

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Note 3, Investments

All of OPM’s investments are in securities issued by other Federal entities and are therefore classified as intragovernmental. See Note 1I for further explanation, including the amortization method. All OPM’s investments are with the Department of the Treasury (Treasury), either in Government Account Series (GAS) securities or with the Federal Financing Bank securities, held by trust funds - the Retirement, Health Insurance, and Life Insurance programs.

The cash receipts collected from the public for the trust funds are deposited in the Treasury, which uses the cash for general Government purposes. Treasury securities are issued to OPM as evidence of its receipts. Treasury securities are an asset to OPM and a liability to the Treasury. Because OPM and the Treasury are both parts of the Government, these assets and liabilities offset each other from the standpoint of the Government as a whole. They are eliminated in consolidation for the Financial Report of the United States Government.

Treasury securities provide OPM with authority to draw upon the Treasury to make future benefit payments or other expenditures. When OPM requires redemption of these Treasury securities to make expenditures, the Government finances those expenditures out of accumulated cash balances by raising taxes or other receipts, borrowing from the public, repaying less debt, or curtailing other expenditures. This is the same way the Government finances all other expenditures.

When a security is redeemed and not carried to maturity, there is a risk that the fund could receive less value in return for the security it gave up. The Health Benefit and Life Insurance funds had approximately $110 billion and $114 billion invested as of September 30, 2023 and 2022, respectively, the majority of which are market- based and have market value risk. The following table summarizes OPM’s Investments, Net by Program, all trust funds, as of September 30, 2023 and 2022, respectively:

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Note 4, Accounts Receivable, Net

Intragovernmental

The balances comprising OPM’s intragovernmental accounts receivable as of September 30, 2023 and 2022 are reported in the following table, respectively:

Table 17 – Accounts Receivable, Net – Intragovernmental (in millions)
September 30, 2023

Receivable	Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
Employer contributions receivable	$24,565	$875	$24	-	$25,464
Other	-	-	-	(34)	(34)
Allowance	(22,704)	-	-	-	(22,704)
Total, Intragovernmental Accounts Receivable, Net	$1,861	$875	$24	$(34)	$2,726

Accounts Receivable, Net – Intragovernmental (in millions)
September 30, 2022

Receivable	Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
Employer contributions receivable	$19,860	$809	$22	-	$20,691
Other	-	-	-	(38)	(38)
Allowance	(18,148)	-	-	-	(18,148)
Total Accounts Receivable, Net - Intragovernmental	$1,712	$809	$22	$(38)	$2,505

The Postal Service Reform Act of 2022, P.L. 117-108, changes the method in which required payments into the PSRHBF are calculated, and cancelled the payments due from Postal Service under Section 8909a. Pursuant to P.L. 117-108, OPM wrote off the $57 billion receivables due from the Postal Service to the PSRHB in FY 2022. Additionally, FY 2022 accrued Postal Service receivables related to PSRHBF were reversed. Section 8348 (h) and Section 8423 (b) of Title 5, U.S.C., requires USPS to make annual contributions to the Civil Service Retirement and Disability Fund (CSRDF) for both CSRS and FERS. As of September 30, 2023 total contributions owed was $22.7 billion, of which OPM has deemed uncollectible due to continued growth and aging of the receivable as a result of USPS budget constraints. Therefore, in accordance with SFFAS No. 1 and Technical Bulletin 2020-1 Allowance for Intragovernmental Receivables, OPM considers the $22.7 billion owed by USPS as an allowance of doubtful accounts in FY 2023, due to USPS budget constraints. All other intragovernmental receivables are considered collectible.

With the Public

The balances comprising the accounts receivable, net OPM classifies as “with the public” as of September 30, 2023 and 2022, respectively, are presented, in the following table. See Note 1J for the methodology used to determine the allowance.

Table 18 – Accounts Receivable, Net - With the Public (in millions)
September 30, 2023

Receivable	Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
Participant contributions receivable	$238	$1,203	$196	-	$1,637
Overpayment of benefits [net of allowance of $6]	387	-	-	-	387
Due from carriers [net of allowance of $0]	-	35	-	-	35
Other	1	-	-	-	1
Total Accounts Receivable, Net - With the Public	$626	$1,238	$196	-	$2,060

Accounts Receivable, Net - With the Public (in millions)
September 30, 2022

Receivable	Retirement Program	Health Benefits Program	Life Insurance Program	Other	Total
Participant contributions receivable	$205	$1,132	$187	-	$1,524
Overpayment of benefits [net of allowance of $6]	380	-	-	-	380
Due from carriers [net of allowance of $0]	-	32	-	-	32
Other	-	-	-	-	-
Total Accounts Receivable, Net - With the Public	$585	$1,164	$187	-	$1,936

Included in the Accounts Receivable, Net - With the Public are criminal restitution orders. As of September 30, 2023, the Retirement Program and the Health Benefits Program had a balance of $63.9 million for criminal restitution orders. As of September 30, 2022, the Retirement Program and the Health Benefits Program had a balance of $60.3 million for criminal restitution orders.

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Note 5, Federal Employee Benefits Payable

A.Federal Employee Benefits Payable

Federal Employee Benefits Payable include actuarial estimates of all future post-employment benefits for retirement, health and life programs based on certain economic assumptions. In addition, it includes claims or benefits on behalf of employees that have not yet been submitted to the insurer, premiums due to carriers, actual benefits due to employees and their beneficiaries, estimates for future workers compensation benefits and unpaid leave earned that will be funded by future budgetary resources.

The table below provides a breakdown of the Federal Employee Benefits Payable reported on the Balance Sheet as of September 30, 2023 and 2022, respectively.

Table 19 – Federal Employee Benefits Payable (in millions)

Federal Employee Benefits Payable	FY 2023	FY 2022
Actuarial Pension Liability	$2,676,100	$2,479,000
Actuarial Health Insurance Liability	380,137	411,673
Actuarial Life Insurance Liability	64,500	61,258
Total Actuarial Liabilities	$3,120,737	$2,951,931
Liability for Employee Benefits and Claims not yet submitted to carrier	5,488	5,925
Post Retirement Benefits Due and Payable to Carriers and Beneficiaries	10,386	9,758
Other7	38	28
Total Federal Employee Benefits Payable	$3,136,649	$2,967,642

B. Reconciliation of Actuarial Liabilities

The table below provides a reconciliation of current year activity in actuarial liabilities by program as of September 30, 2023, and 2022, respectively. Current year actuarial estimates are based on economic assumptions described in section C.

C. Actuarial Liability Economic Assumptions

Pension Benefits

The OPM Office of the Actuaries, in computing the Pension Liability and associated Pension Expense, applies economic assumptions to historical cost information to estimate the Government’s future cost to provide CSRS and FERS benefits to current and future retirees. The estimate is adjusted by the time value of money and the probability of having to pay benefits due to assumed decrements for mortality, morbidity, and terminations. Actuarial gains or losses occur to the extent that actual experience differs from these assumptions used to compute the Pension Liability and associated Pension Expense.

The economic assumptions used to calculate the Pension Liability and related Pension Expense under SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from Changes In Assumptions and Selecting Discount Rates and Valuation Dates are based on 10-year historical averages. See Note 1.O for further information. These economic assumptions differ from those established by OPM under guidance from the CSRS Board of Actuaries for the determination of certain statutory funding payments for CSRS and FERS. The following table presents the significant economic assumptions in accordance with SFFAS No. 33 to compute the Pension Liability as of September 30, 2023, and 2022, respectively:

Table 21 - Pension Economic Assumptions

Pension Economic Assumptions	FY 2023		FY 2022
	CSRS	FERS	CSRS	FERS
Inflation	2.6%	2.6%	2.0%	2.0%
Interest Rate/Discount Rate	2.4%	3.0%	2.3%	2.9%
Cost of Living Adjustment10	2.6%	2.3%	2.0%	1.8%
Rate of Increase in Salary	2.1%	2.1%	1.6%	1.6%

Post Retirement Health Benefits

The OPM Office of the Actuaries, in computing the PRHB Liability and associated expense, applies economic assumptions to historical cost information to estimate the Government’s future cost of providing PRHB to current employees and retirees. The estimate is adjusted by the time value of money and the probability of having to pay benefits due to factors such as mortality, retirements, and terminations. Actuarial gains or losses will occur to the extent that actual experience differs from the assumptions used to compute the PRHB Liability and associated expense, and due to changes to the actuarial assumptions. The amount for Federal Employee Benefits Payable for Post-Retirement Health Benefits on the Balance Sheet also includes claims payable and benefits due to Health Insurance carriers.

The following table presents the significant economic assumptions used to compute the PRHB Liability and related expense for the year ended September 30, 2023, and 2022.

Table 22 - Post Retirement Health Benefits Economic Assumptions

Post Retirement Economic Assumptions	FY 2023	FY 2022
Interest Rate11	3.1%	3.1%
Increase in per capita cost of covered benefits12	4.9%	4.5%
Ultimate medical trend rate	4.0%	3.4%

The increase in the per capita cost of covered benefits assumed by OPM’s actuaries has a significant effect on the amounts reported as the PRHB Liability and associated expense. A one percentage point change in the per capita cost of covered benefits assumption would have the following effects in FY 2023 and FY 2022, as shown in the table below.

Table 23 – Post-Retirement Health Benefits of Assumptions (in millions)

Effects of Assumptions	FY 2023		FY 2022
	One Percent Increase	One Percent Decrease	One Percent Increase	One Percent Decrease
PRHB Liability	$441,060	$330,609	$478,229	$357,429

Post-Retirement Health Benefits of Assumptions (in millions)
September 30, 2023

Per Capita Normal Cost at Valuation Date		One Percent Increase	One Percent Decrease
Postal	$6,801	$8,405	$5,524
Non Postal*	$9,222	$11,830	$7,221

Post-Retirement Health Benefits of Assumptions (in millions)
September 30, 2022

Per Capita Normal Cost at Valuation Date		One Percent Increase	One Percent Decrease
Postal	$4,265	$5,362	$3,406
Non Postal*	$9,429	$12,161	$7,345

Life Insurance Benefits

The Actuarial Life Insurance Liability (ALIL) is the expected present value (EPV) of future benefits to be paid to, or on behalf of, existing Life Insurance Program participants, less the EPV of future contributions to be collected from those participants. As of September 30, 2023, the total amount of FEGLI insurance in-force was estimated at $800.8 billion ($692.2 billion employees + $108.6 billion annuitants). As of September 30, 2022, the total amount of FEGLI insurance in-force was estimated at $766.7 billion ($659.8 billion employees + $106.9 billion annuitants).

In applying SFFAS No. 33 for calculating the ALIL, OPM’s actuary uses salary increase and interest rate yield curve assumptions that are consistent with those used for computing the CSRS and FERS Pension Liability in FY 2023 and FY 2022. This entails the determination of a single equivalent interest rate that is specific to the ALIL. See the table below.

Table 24 - Life Insurance Economic Assumptions

Economic Assumptions	FY 2023	FY 2022
Interest Rate	2.8%	2.8%
Rate of increases in salary	2.1%	1.6%

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Note 6, Other Liabilities

Other Liabilities are liabilities not reported elsewhere in the Balance Sheet. They consist of funded and unfunded intragovernmental and public liabilities. Trust Funds included Unfunded Leave in Other Liabilities for FY 2022. However, Unfunded Leave has been modified to be included under the Federal Employee Benefits Payable line for FY 2023. The following table presents the other liabilities reported on the consolidated balance sheet as of September 30, 2023 and 2022.

Table 25 – Other Liabilities (in millions)

Other Liabilities		September 30, 2023	September 30, 2022
Intragovernmental Other:	Employer Contributions and Payroll Taxes Payable	$5	$3
	Judgment Fund Payable	260	-
	Unfunded FECA Liability	1	2
	Other Liabilities	6	2
Total Intragovernmental		$272	$7
With the Public Other:	Withholdings Payable	1,182	1,100
	Other Liabilities with Related Budgetary Obligations	487	357
	Contingent Liabilities	190	169
	Accrued Funded Payroll and Leave	5	7
	Unfunded Annual Leave	-	9
Total With the Public		$1,864	$1,642
Total Other Liabilities		$2.136	$1,649

Health Benefits Program

In prior years, OPM was a party to litigation in which certain Health Benefits Program carriers were seeking relief for alleged underpayment of premiums. As a result of one adverse court decision, the Department of Justice, which represented OPM in the litigation, settled most of the remaining cases (one other case was tried and lost). Judgments/settlements in those cases were paid from the Treasury Judgment Fund (TJF). However, because any underpayments that may have occurred resulted from inaccuracies in the number of contributions by or on behalf of employee-participants that were remitted to OPM by the employing agencies (which remittances came from the respective agencies’ appropriations), OPM has neither the legal responsibility nor the legal authority to reimburse the TJF. The Treasury continues to assert that OPM is liable to reimburse the TJF for the amount of the judgments/settlements. As a result, OPM carries $260 million as of September 30, 2023, as Intragovernmental Other Liabilities due to the Treasury. Prior to FY 2023, this liability was reported on the balance sheet as Intragovernmental Accounts Payable.

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Note 7, Liabilities Not Covered by Budgetary Resources

Liabilities covered by budgetary resources include those liabilities for which Congress appropriated funds and are otherwise available to pay amounts due as of the Balance Sheet dates.

Liabilities not covered by budgetary resources are amounts owed in excess of available, congressionally appropriated funds and, therefore, no budgetary resources are available to pay amounts due as of the Balance Sheet dates but will require future funding to liquidate the obligation. Since no budgetary resources have been made available to liquidate the Pension, post-Retirement Health Benefits (PRHB), and Actuarial Life Insurance Liabilities, they are disclosed as being liabilities not covered by budgetary resources. In addition, OPM's payable due to the Treasury Judgment Fund, contingent liabilities, unfunded annual leave and future estimates of workers compensation do not have budgetary resources associated with the liability. OPM estimates approximately $184 million of the liabilities not covered by budgetary resources to be considered current liabilities as they are expected to become due within the next fiscal year. The unfunded liabilities as of September 30, 2023 and 2022, are presented in the following table:

Table 26 – Liabilities Not Covered by Budgetary Resources (in millions)

Liabilities Not Covered by Budgetary Resources	September 30, 2023	September 30, 2022
Intragovernmental: Other Liabilities	$267	$4
Federal Employee Benefits Payable	3,120,775	2,951,959
Other Liabilities	190	178
Total Liabilities Not Covered by Budgetary Resources	$3,121,232	$2,952,141
Total Liabilities Covered by Budgetary Resources	$17,729	$17,611
Total Liabilities	$3,138,961	$2,969,752

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Note 8, Commitments and Contingencies

OPM is party to various administrative proceedings, legal actions, and claims. For legal actions where the Office of General Counsel considers adverse decisions “probable” or “reasonable possible” and the amounts are reasonably estimable, information is disclosed below. In many cases, tort claims are administered and resolved by the U.S. Department of Justice, and any amounts necessary for resolution are obtained from a special Judgment Fund maintained by the Treasury. In accordance with the FASAB’s Interpretation No. 2, Accounting for Treasury Judgment Fund Transactions, costs incurred by the Federal Government are to be reported by the agency responsible for incurring the liability, or to which liability has been assigned, regardless of the ultimate source of funding. No amounts have been accrued in the financial records for claims where the amount of potential loss cannot be estimated, or the likelihood of an unfavorable outcome is less than probable. Additionally, as of September 30, 2023, and 2022, there are cases and claims not brought under the Federal Tort Claims Act, where there is at least a reasonable possibility that a loss may occur, for which the potential range of loss cannot be determined.

The amounts as of September 30, 2023, and 2022 are presented in the table below.

Table 27 – Commitments and Contingencies (in millions)

September 30		Accrued Liabilities	Estimated Range of Loss
			Lower End	Upper End
FY 2023 Legal Contingencies:	Probable	$190	$190	$697
	Reasonably Possible		$5	$72
FY 2022 Legal Contingencies:	Probable	$169	$169	$679
	Reasonably Possible		$5	$70

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Note 9, Net Cost by Strategic Goals

In FY 2022, OPM began implementing a new strategic plan for FY 2022-FY 2026. This plan was released in March 2022 and contains four strategic goals and corresponding objectives to serve as champions of talent for the Federal Government, leading Federal agencies in workforce policies, programs, and benefits in service to the American people. The four strategic goals are summarized in the chart below. Additional mission activities and mission support activities not directly aligned to a strategic goal are reported separately as “Additional Mission and Mission Support Activities.”

OPM’s Mission Statement:

We are champions of talent for the Federal Government. We lead Federal agencies in workforce policies, programs, and benefits in service to the American people.

• OPM Strategic Goal 1: Position the federal government as a model employer, improving the Government-wide satisfaction index score by 4 points
• OPM Strategic Goal 2: Transform OPM’s organizational capacity and capability to better serve as the leader in Federal human capital management
• OPM Strategic Goal 3: Create a human-centered customer experience by putting the needs of OPM’s customers at the center of OPM’s workforce services, policy, and oversight, increasing OPM’s customer satisfaction index score for targeted services to 4.3 out of 5
• OPM Strategic Goal 4: Provide innovative and data-driven solutions to enable agencies to meet their missions, increasing the percentage of users throughout Government who agree that OPM offered innovative solutions while providing services or guidance by 4 points

Note: The Total program cost includes any actuarial gain/loss from experience on pension, ORB, or OPEB actuarial liabilities (see Note 5). The actuarial gain/loss from assumptions are shown separately.

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Note 10, Availability of Unobligated Balances

Retirement Program

Historically, OPM’s trust fund receipts have exceeded the amount needed to cover the Retirement Program’s obligations. The excess of trust fund receipts over incurred obligations is classified as being temporarily precluded from obligation. These receipts, however, remain assets of the CSRDF and will become immediately available, if circumstances dictate, to meet obligations to be incurred in the future.

The following table presents the unobligated balance of the CSRDF that is included in the Retirement Program that is temporarily precluded from obligation for September 30, 2023 and 2022, respectively:

Table 29 – Availability of Unobligated Balances – Retirement Program (in millions)

September 30	2023	2022
Temporarily precluded from obligation at the beginning of the year	$1,002,814	$977,977
Plus: Trust fund receipts during the year	130,215	122,050
Plus: Appropriations Received	49,889	46,380
Less: Obligations Incurred during the year, net of PY recoveries	154,804	143,593
Excess of trust fund receipts over obligations incurred during the year	25,300	24,837
Temporarily Precluded from Obligation at the End of the Year	$1,028,114	$1,002,814

Health Benefits Program

OPM administers the Health Benefits Programs through three trust revolving funds. A trust revolving fund is a single account that is authorized to be credited with receipts and incur obligations and expenditures in support of a continuing cycle of business-type operations in accordance with the provisions of statute. The unobligated balance in OPM’s trust revolving funds is available for obligation and expenditure, upon apportionment by OMB, without further action by Congress.

Additionally, FY 2023 and 2022 receipts included interest income. The following table presents the unobligated balance of the PSRHB Fund included in the Health Benefits Program that is temporarily precluded from obligation as of September 30, 2023 and 2022.

Table 30 – Availability of Unobligated Balances – Health Benefits Program (in millions)

September 30	2023	2022
Temporarily precluded from obligation at the beginning of the year	$35,607	$38,849
Plus: Special Fund receipts during the year	795	909
Less: Obligations Incurred during the year, net of PY recoveries	4,352	4,151
Excess of Special Fund receipts over obligations incurred during the year	(3,557)	(3,242)
Temporarily Precluded from Obligation at the End of the Year	$32,050	$35,607

Revolving Fund Programs

OPM’s Revolving Fund Programs are administered through an intragovernmental revolving fund. An intragovernmental revolving fund is designed to carry-out a cycle of business-type operations with other Federal agencies or separately funded components of the same agency. The unobligated balance in OPM’s intragovernmental revolving fund is available for obligation and expenditure, upon apportionment by OMB, without further action by Congress.

Salary and Expenses

OPM funds its administrative costs through annual, multiple-year, and “no-year” appropriations. For its annual appropriations, the unobligated balance expires at the end of the applicable fiscal year. For OPM’s multiple-year appropriations, the unobligated balance remains available for obligation and expenditure for a specified period in excess of a fiscal year. For its no-year appropriations, the unobligated balance is carried forward and is available for obligation and expenditure indefinitely until the objectives for which it was intended have been accomplished.

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Note 11, Apportionment Categories of Incurred Obligations

An apportionment is a distribution by OMB of amounts available for obligation. Apportioned amounts appear on different groups of lines in the Application of Budgetary Resources section of an apportionment. Amounts are identified in an apportionment: by time - [Category A]; by program, project or activity [Category B]; or by a combination of program, project or activity and time period [Category AB]. If an account is not subject to an apportionment, it is considered exempt [E]. Each of OPM’s trust funds have an exempt account that receives warrants from the U.S. General Fund each fiscal year to subsidize current year premium costs incurred by the Retirement, Health, and Life benefit programs. The following table details the direct and reimbursable obligations that have been incurred against each apportionment category as of September 30, 2023 and 2022, respectively.

Table 31 – Apportionment Categories of Incurred Obligations (in millions)
September 30, 2023

Program	Category	Direct	Reimbursable	Total
Retirement Program	B	$104,920	-	$104,920
Retirement Program	E	49,889	-	49,889
Health Benefits Program	B	69,081	-	69,081
Health Benefits Program	E	14,495	-	14,495
Life Insurance Program	B	3,871	-	3,871
Life Insurance Program	E	43	-	43
Revolving Fund Program	B	-	628	628
Salaries and Expenses	A&B	559	210	769
Total		$242,858	$838	$243,696

Apportionment Categories of Incurred Obligations (in millions)
September 30, 2022

Program	Category	Direct	Reimbursable	Total
Retirement Program	B	$97,214	-	$97,214
Retirement Program	E	46,380	-	46,380
Health Benefits Program	B	66,557	-	66,557
Health Benefits Program	E	13,835	-	13,835
Life Insurance Program	B	4,206	-	4,206
Life Insurance Program	E	43	-	43
Revolving Fund Program	B	-	599	599
Salaries and Expenses	A&B	547	183	730
Total		$228,782	$782	$229,564

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Note 12, Comparison of Combined Statements of Budgetary Resources to the President’s Budget

OPM reports information about budgetary resources in the Combined Statements of Budgetary Resources (SBR) and for presentation in the “President’s Budget.” The President’s Budget for FY 2025, which will contain the actual budgetary resources information for FY 2023, will be available on a later date at President’s Budget | The White House. The President’s Budget for FY 2024, which contains actual budgetary resource information for FY 2022, was released on March 9, 2023. See the table below for comparison of Combined Statements of Budgetary Resources to the President’s Budget.

Table 32 – Comparison of Combined Statements of Budgetary Resources to the President’s Budget (in millions)

Comparison	Budgetary Resources	New Obligations & Upward Adjustments (Total)	Distributed Offsetting Receipts	Net Outlays
Combined Statement of Budgetary Resources	$302,501	$229,564	$47,829	$113,073
Expired Funds	(98)	(23)	-	-
Distributed Offsetting Receipts	-	-	(47,829)	47,829
Reconciling Differences/Rounding	(2)	(3)	-	-
Budget of the U.S. Government	$302,401	$229,538	-	$160,902

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Note 13, Undelivered Orders End of Period

Federal and Non-Federal Undelivered orders represent goods and services ordered and obligated which have not been received. This includes any orders for which we have paid in advance, but for which delivery or performance has not yet occurred prior to fiscal year-end. Undelivered orders as of September 30, 2023 and 2022, are presented in the table below.

Table 33 – Undelivered Orders End of Period (in millions)
September 30, 2023

Undelivered Orders	Unpaid			Paid
Program	Federal	Non-Fed	Total Unpaid	Federal	Non-Fed	Total paid
Revolving Fund	$114	$171	$285	$3	-	$3
Salaries & Expenses	119	168	$287	3	-	$3
Totals	$233	$339	$572	$6	-	$6

Undelivered Orders End of Period (in millions)
September 30, 2022

Undelivered Orders	Unpaid			Paid
Program	Federal	Non-Fed	Total Unpaid	Federal	Non-Fed	Total paid
Revolving Fund	$85	$222	$307	$2	-	$2
Salaries & Expenses	86	93	179	3	-	3
Totals	$171	$315	$486	$5	$-	$5

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Note 14, Reconciliation of Net Cost to Net Outlays

Budgetary and financial accounting information differ. Budgetary accounting is used for planning and control purposes and relates to both the receipt and use of cash, as well as reporting the federal deficit. Financial accounting is intended to provide a picture of the government’s financial operations and financial position, so it presents information about costs arising from the consumption of assets and the incurrence of liabilities. The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual basis, provides an explanation of the relationship between budgetary and financial accounting information. As required by SFFAS No. 7, as amended by SFFAS No. 53, OPM has reconciled the net cost of operations, reported in the Statement of Net Costs, to the net outlays, reported on the Statement of Budgetary Resources.

The reconciliation serves not only to identify costs paid for in the past and those that will be paid in the future, but also to assure integrity between budgetary and financial accounting. The analysis below illustrates this reconciliation by listing the key differences between net cost and net outlays. Per OMB Circular A-136, the key differences fall into three categories. (1) Components of net cost that are not part of net outlays, (2) Component of net outlays that are not part of net outlays, and (3) Other Temporary Timing Difference section. OPM did not have any activity to report in the third category in FY 2023 and FY 2022, therefore, not disclosed.

U.S. Office Of Personnel Management Combined Reconciliation of Net Operating Cost and Net Budgetary Outlays September 30, 2023 (in millions)

Reconciliation of Net Cost to Net Outlays		Intra-governmental	With the Public	Total FY 2023
Net Operating Cost		$(102,513)	$313,011	$210,498
Components of Net Operating Cost Not Part of the Budgetary Outlays:	Property, Plant, and Equipment Depreciation	-	(2)	(2)
Increase/(Decrease) in Assets:	Accounts Receivable	221	124	345
	Advances and Prepayments	1	-	1
	Investments	320	-	320
	Other Assets	1	295	296
(Increase)/Decrease in Liabilities:	Accounts Payable	263	(2)	261
	Federal Employee Benefits Payable	-	(169,002)	(169,002)
	Advances from Others and Deferred Revenues	(21)	46	25
	Other Liabilities	(263)	(227)	(490)
Other Financing Sources:	Imputed Financing Sources	(35)	-	(35)
	Appropriated Trust Funds Receipts	131,010	-	131,010
	Other Miscellaneous Items	3	-	3
Total Components of Net Operating Cost Not Part of the Budget Outlays		$131,500	$(168,768)	$(37,268)
Financing Sources:	Transfers out (in) without reimbursements	9	-	9
Total Components of the Budgetary Outlays that are Not Part Net Operating Cost		$9	-	$9
Net Outlays (Calculated Total)		$28,996	$144,243	$173,239
Misc. Items:	Distributed Offsetting Receipts			(50,730)
Agency Outlays, Net				$122,509

U.S. Office Of Personnel Management Combined Reconciliation of Net Operating Cost and Net Budgetary Outlays for the Periods Ended September 30, 2022 (in millions)

Reconciliation of Net Cost to Net Outlays		Intra-governmental	With the Public	Total FY 2022
Net Operating Cost		$(95,311)	$386,696	$291,385
Components of Net Operating Cost Not Part of the Budgetary Outlays:	Property, Plant, and Equipment Depreciation	-	(3)	(3)
Increase/(Decrease) in Assets:	Accounts Receivable	(1,145)	(169)	(1,314)
	Advances and Prepayments	5	-	5
	Investments	(113)	-	(113)
	Other Assets	-	(45)	(45)
(Increase)/Decrease in Liabilities:	Accounts Payable	(56)	60	4
	Salaries and Benefits	-	(251,817)	(251,817)
	Advances from Others and Deferred Credits	(2)	(6)	(8)
	Other Liabilities	-	(81)	(81)
Financing Sources:	Imputed Financing Sources	(22)	-	(22)
Total Components of Net Operating Cost Not Part of the Budget Outlays		$(1,333)	$(252,061)	$(253,394)
Components of the Budget Outlays That Are Not Part of Net Operating Cost:	Acquisition of capital assets	-	-	-
Financing Sources:	Transfers out (in) without reimbursements	(49)	-	(49)
Total Components of the Budgetary Outlays that are Not Part Net Operating Cost		(49)	-	(49)
Misc. Items:	Distributed Offsetting Receipts	(47,789)	(40)	(47,829)
	Appropriated Trust Fund Receipts	116,734	6,226	122,960
Total Misc. Items		$68,945	$6,186	$75,131
Net Outlays		$(27,748)	$140,821	$113,073

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Note 15, Health Benefits / Life Insurance Program Concentrations

During FY 2023 and FY 2022, over three-fourths of the Health Benefits Program’s benefits were administered by the Blue Cross and Blue Shield Association, a fee-for-service carrier that provides experience-rated benefits.

For the Life Insurance Program, nearly all the benefits were administered by the Metropolitan Life Insurance Company in each of the fiscal years.

Note 16, Reclassification of Statement of Net Cost and Statement of Changes in Net

Position for FR Compilation

To prepare the Financial Report of the U.S. Government (FR), the Department of the Treasury requires agencies to submit an adjusted trial balance, which is a listing of amounts by U.S. Standard General Ledger account that appears in the financial statements. Treasury uses the trial balance information reported in the Government-wide Treasury Account Symbol Adjusted Trial Balance System (GTAS) to develop a Reclassified Balance Sheet, Reclassified Statement of Net Cost, and a Reclassified Statement of Changes in Net Position for each agency, which are accessed using GTAS. Treasury eliminates all intragovernmental balances from the reclassified statements and aggregates lines with the same title to develop the FR statements.

This note shows the Office of Personnel Management financial statements and the Office of Personnel Management reclassified statements prior to elimination of intragovernmental balances and prior to aggregation of repeated FR line items. A copy of the 2022 FR can be found here: 2022 Financial Report (FR), and a copy of the 2023 FR will be posted to this site as soon as it is released.

The term “intragovernmental” is used in this note to refer to amounts that result from other components of the Federal Government. The term “non-Federal” is used in this note to refer to Federal Government amounts that result from transactions with non-Federal entities. These include transactions with individuals, businesses, non-profit entities, and State, local, and foreign governments.

Table 34 – Reclassification of Statement of Net Cost and Statement of Changes in Net Position (in millions)
Office of Personnel Management Statement of Net Cost - September 30, 2023

Financial Statement Line	Amounts
Gross Costs	$235,438
Total Gross Costs	$235,428
Earned Revenue	136,781
Total Earned Revenue	$136,781
Gain/Loss on Pension, ORB, or OPEB Assumption Changes	111,851
Net Cost of Operations	$210,498

Line Items Used to Prepare FY 2023 Governmentwide-SNC - September 30, 2023

Reclassified Financial Statement Line	Other than Dedicated Collections (with Eliminations) Amounts
Non-federal gross cost	$230,541
Federal gross cost - Benefits program costs	4
Federal gross cost - Imputed costs	35
Federal gross cost - Buy/Sell cost13	4,848
Total Gross Costs	$235,428
Non-federal earned revenue	29,381
Federal earned revenue - Benefits program revenue	79,106
Federal earned revenue - Buy/Sell revenue13	1,117
Federal earned revenue - Federal securities interest revenue including associated gains and losses	27,174
Federal earned revenue - Collections transferred in to a TAS other than the General Fund	3
Total Earned Revenue	$136,781
Gains/losses from changes in actuarial assumptions	111,851
Net Cost of Operations	$210,498

Office of Personnel Management Statement of Changes in Net Position - September 30, 2023

Financial Statement Line			Amounts
Unexpended Appropriations	Unexpended Appropriations Beginning Balance		$371
	Financing Sources:	Appropriations Received	65,252
		Adjustments	$(630)
		Appropriations Used	$(64,610)
		Total Financing Sources	12
Total Unexpended Appropriations - Ending Balance			$383
Cumulative Results of Operations	Cumulative Results, Beginning Balance		$(1,830,578)
	Financing Sources:	Appropriations Used	64,610
		Transfer-In/Out Without Reimbursement	(9)
		Other Financing Sources	31
		Total Financing Sources	64,632
	Net Cost of Operations		210,498
	Net Change		(145,866)
	Cumulative Results of Operations - Ending Balance		$(1,976,444)
	Net Position		$(1,976,061)

Line Items Used to Prepare FY 2023 Governmentwide-SCONP - September 30, 2023

Reclassified Financial Statement Line			Other than Dedicated Collections (with Eliminations) Amounts
Unexpended Appropriations	Net Position, Beginning Balance		$371
	Financing Sources:	Appropriations Received as Adjusted (1/2)	65,252
		Appropriations Received as Adjusted (2/2)	(634)
		Non-expenditure transfers-in of unexpended appropriations and financing sources	2
		Non-expenditure transfers-out of unexpended appropriations and financing sources 14	2
		Appropriations Used	(64,610)
Total Financing Sources			12
Net Position, End of Period			$383
Cumulative Results of Operations	Net Position, Beginning Balance		$(1,830,578)
	Financing Sources:	Appropriations Expended	64,610
		Transfers without reimbursement14	(9)
		Imputed Financing Sources	34
		Other taxes and receipts	2
		Non-Entity collections transferred to the General Fund of the U.S. Government	(5)
Total Financing Sources			64,632
Net Cost of Operations14			210,498
Calculated Net Change			(145,866)
Net Position, End of Period			$(1,976,444)
Net Position, End of Period			$(1,976,061)

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