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Budgetary Highlights
The Congress does not provide funding for the individual ACF programs by the thirteen major programs, however. To understand the funding for each major program, it is necessary to begin with Congressional appropriations for each of ACF’s fourteen budget accounts. In FY 1998, Congress appropriated total funding of $36.6 billion to these accounts as follows: Appropriations Provided to Budget Accounts by the Congress $’s in millions
FY 1998 funding for all ACF programs is equal to approximately 10.2% of HHS-wide appropriations. This total includes direct appropriations and amounts pre-appropriated for FY 1998 in FY 1996 as part of welfare reform. The total for FY 1998 is $0.5 billion more than the amount that ACF received for FY 1997, mostly due to increases in the Head Start and TANF programs. Appropriations for ACF are often further subdivided according to budget function classifications. These classifications break programs down according to the purposes for which the funds are spent. In FY 1998, there were four budget function classifications which apply to ACF: Training programs, Social Services programs, Other Income Security programs and Criminal Justice Assistance programs. To proceed from a budget display of funding to one which shows total resources available for each of the thirteen major programs requires both rearrangement and addition. The chart that follows rearranges the Congress’ appropriations according to the ACF major programs. For each, the chart shows both the amounts received for each major program discussed above, and how these amounts break down across functional budget classifications. Only funds actually appropriated for FY 1998 (current and pre-appropriated amounts) are shown on the following chart.
Distribution of Appropriated Funds—FY 1998 Budget Functional Classifications
An additional $169.5 million was appropriated in FY 1998 for Social Services Research and for Federal Administration of the above programs. The charts discussed so far have only included appropriations for FY 1998 for each major program. Other resources exist, however, and must be added in to give a true picture of the total resources available for each major program. These other resources are displayed in the Budget Resources section of the Statement of Budgetary Resources (see Financial Statements). They include the following: $’s in millions
Similarly, when looking at the full cost of (as opposed to resources for) ACF programs, it is also necessary to factor in the unallocated amount of funds appropriated for Federal administration (salaries and benefits, etc.) of each major program, related research funding, and unexpended balances (obligated or unobligated) remaining from prior years. The table below displays the full cost in FY 1998 of ACF programs (based on program expenditures reported by grantees as of September 30, 1998), broken out by each of the thirteen major programs and functional budget classifications.
Statement of Net Cost--FY 1998
Financial Performance and Analysis Working from the above table and display helps in understanding the ACF financial statements. For the first time, these statements present data from both the perspective of full cost accounting and displayed by major program for ACF. Since this is a new approach, the FY 1998 ACF audited financial statements are not being presented alongside those for the previous year. The ACF Statement of Financial Position (its balance sheet) shows ACF assets and liabilities for the agency as a whole. ACF is a grant-making organization that uses funds appropriated by the Congress to support authorized entitlement and discretionary programs. Grants are made available under ACF programs to State, county, territory, city and tribal governments as well as public and private local agencies. The Statement of Financial Position reflects ACF’s grants-awarding nature. As of September 30, 1998, ACF assets were overwhelmingly either fund balances with the Treasury (97.4%)—the equivalent of cash in the bank (most of which, however, has already been committed to grantees), or advances and prepayments (1.9%). Advances are cash outlays made to grantees or others to cover part or all of the recipients’ anticipated expenses; prepayments are payments made to grantees to cover certain periodic expenses before those expenses are incurred. In FY 1998, ACF assets also included $124 million in accounts receivable, which reflect the results of audit disallowances, and $48 million in interest receivable. Almost all of these receivables, however, are non-entity assets; that is, once recouped they will be returned to the Treasury rather than to ACF. ACF liabilities were minimal in FY 1998, resulting mainly from accounts payable (10%) and a Custodial Liability (80%) for miscellaneous amounts owed to the Treasury (including the disallowances to be collected which are shown as an offsetting entry on the asset side of the balance sheet). Remaining FY 1998 liabilities are minimal, resulting mainly from accrued payroll and benefits (3%), accrued leave liability (5%), and workman’s compensation (1%). ACF’s net position is derived almost entirely from unexpended appropriations, very slightly offset by the cumulative results of operations. Unexpended appropriations consist of undelivered orders (obligated funds for services not yet received) and unobligated funds. Cumulative results of operations represent the agency’s equity, that is, the net difference between its expenses and its financing sources, over the most recent five year period. Examples of funds contributing to the cumulative results of operations include lapsed funds and deobligations. Despite fluctuations in individual programs, funding for the agency as a whole has gone up over time, albeit with larger increases in key discretionary programs like Head Start and Child Care. At the same time, the Congress continues to level fund many of ACF’s remaining programs. Still, most of the growth in funding through FY 1998 remains in the entitlement programs. Funding for Federal administration peaked in FY 1995, and has declined or increased only slightly since. ACF pays almost all of its grants through the Department's Payment Management System (PMS). This system electronically transfers funding to grant recipients. ACF's use of PMS has been critical to insuring a strong performance record under the Cash Management Improvement Act (CMIA). This Act and its implementing regulations govern when funds are drawn down by States and is intended to insure that neither the Federal government nor States should benefit from use of the cash. Equally strong is the record of prompt payment for ACF vendors, which are paid by the Department's Program Support Center (PSC). 
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