HHS received a clean audit from the Office of the Inspector General on its consolidated financial statements for fiscal year 2003.
The department last year increased its "net position" by $9 billion, or 2.7%, bringing it to $326 billion, according to its annual performance and accountability report, released Thursday.
The net position consists of the cumulative net results of operations and unexpended appropriations, or those funds provided to HHS by Congress that remain unused at the end of the fiscal year.
Total net expenses for 2003 were $510 billion, a $38 billion, or 8.1%, increase over FY 2002. Three agencies--CMS, the Administration for Children and Families and the National Institutes of Health--accounted for a combined 95% of the cost of operations, with net costs of $416 billion, $48 billion and $23 billion, respectively.
HHS assets increased $11 billion, or 3%, to a total of $389 billion, the report says. Liabilities increased $3 billion, or 4.4%, to $63 billion and were attributed primarily to a $4 billion, or 8%, increase in due and payable entitlement benefits from the CMS insurance programs.
The department reports it is currently implementing a $700 million Unified Financial Management System (UFMS), as part of Secretary Tommy Thompson's "One HHS" initiative, scheduled for full implementation in FY 2007.
The purpose of the endeavor "is to achieve greater economies of scale, eliminate duplication, and provide better service delivery," Thompson said in June 2001.
HHS has 65,000 employees and more than 300 programs and is the largest health insurer in the country. It also is the government's largest grant-making agency, providing more than $200 billion of the $350 billion in federal funds awarded in FY 2002. HHS funds more than 50,000 research investigators affiliated with about 2,000 university, hospital and other research facilities, the report says.
"We administer more grant dollars than all other federal agencies combined," Thompson writes in his introduction to the report. "Our Medicare program processes more than 1 billion claims per year. Our Food and Drug Administration alone regulates products that represent 25 cents of every dollar in U.S. consumer spending. In so many ways, HHS is the federal agency that most affects Americans in their everyday lives."