jurisdiction: US

text: b'U.S. DEPARTMENT\nOF COMMERCE\n\nF i s cal Y ear\n\n\n\n\n2010\nPERFORMANCE &\nACCOUNTABILIT Y\nREPORT\n\x0c D E PA R T M E N T O F C O M M E R C E W E B A D D R E S S E S\n\n FOR PLANNING AND PERFORMANCE\n\nDepartment of Commerce Bureau of Economic Analysis National Technical Information Service\nhttp://www.commerce.gov/ http://www.bea.gov http://www.ntis.gov/\n\nDepartment of Commerce Strategic Plan, Performance \xe2\x97\x86\xe2\x97\x86 BEA\xe2\x80\x99s Mission, Vision, Values, and Role \xe2\x97\x86\xe2\x97\x86 Annual Report\nReports and Performance Plans http://bea.gov/about/mission.htm http://www.ntis.gov/pdf/FinRpt2009.pdf\nhttp://www.osec.doc.gov/bmi/budget/budgetsub_perf_\nstrategicplans.htm \xe2\x97\x86\xe2\x97\x86 BEA Strategic Plan for FY 2010-FY 2014 U.S. Patent and Trademark Office\n http://bea.gov/about/pdf/strategic_plan_matrix_2010-2014.pdf http://www.uspto.gov\nEconomic Development Administration Annual Reports\nhttp://www.eda.gov/AboutEDA/Annualreport.xml \xe2\x97\x86\xe2\x97\x86 Release Dates for 2010 \xe2\x97\x86\xe2\x97\x86 Performance and Accountability Report\n http://www.bea.gov/newsreleases/2010rd.htm http://www.uspto.gov/web/offices/com/annual/\nInternational Trade Administration Strategic Plan\nhttp://trade.gov/pdfs/ITA_stratplan2007.pdf National Institute of Standards and Technology \xe2\x97\x86\xe2\x97\x86 President\xe2\x80\x99s Budget and Strategic Plan\n http://www.uspto.gov/web/offices/ac/comp/budg/\nMinority Business Development Agency \xe2\x97\x86\xe2\x97\x86 NIST Performance Evaluation\xe2\x80\xa8 index.html\nPortal/Annual Report http://www.nist.gov/director/planning/impact_assessment.cfm\nhttp://www.mbda.gov National Telecommunications and Information\n \xe2\x97\x86\xe2\x97\x86 NIST Technology Innovation Program Administration\nBureau of Industry and Security Annual Report http://www.nist.gov/tip/ Annual Reports\nhttp://www.bis.doc.gov/ http://www.ntia.doc.gov/\n \xe2\x97\x86\xe2\x97\x86 NIST Manufacturing Extension Partnership \xe2\x80\x93 MEP Impacts\xe2\x80\xa8\nCensus Bureau http://www.nist.gov/mep/impacts-reports-research.cfm National Oceanic and Atmospheric Administration\nhttp://www.census.gov Budget and Performance\n http://www.noaa.gov/budget/\nEconomics and Statistics Administration\nhttp://www.esa.doc.gov/ Office of Inspector General\n http://www.oig.doc.gov/\n\n\n\n\n B U D G E T A N D P E R F O R M A N C E C O N TA C T S\n\nDepartmental Management Economics and Statistics Administration/ U.S. Patent and Trademark Office\n Bill Tatter, btatter@doc.gov, Bureau of Economic Analysis Alexandria Emgushov,\n \t 202-482-5979 \t Joanne Buenzli, jbuenzli@doc.gov, \t alexandria.emgushov@uspto.gov,\n Steve Shapiro, sshapiro@doc.gov, \t 202-482-3038 \t 571-272-6296\n \t 202-482-3700\n International Trade Administration National Institute of Standards and Technology\nOffice of Inspector General Dondi Staunton, dondi.staunton@trade.gov, Francisco Balicao, francisco.balicao@nist.gov,\n John Webb, jwebb@oig.gov, \t 202-482-5204 \t 301-975-5510\n \t 202-482-1719 Jason Boehm, jason.boehm@nist.gov,\n Bureau of Industry and Security \t 301-975-9678\nEconomic Development Administration Gay Shrum, gshrum@bis.doc.gov,\n Jim LeDuc, jleduc@eda.doc.gov, \t 202-482-1058 National Technical Information Service\n \t 202-482-4924 Brad Burke, bburke@bis.doc.gov, Teresa Grant, tgrant@ntis.gov,\n Bryan Borlik, bborlik@eda.doc.gov \t 202-482-6006 \t 703-605-6472\n \t 202-482-3901 Mary Houff, mhouff@ntis.gov,\n Minority Business Development Agency \t 703-605-6611\nCensus Bureau Ron Marin, rmarin@mbda.gov,\n Camelia Carter, camelia.m.carter@census.gov, \t 202-482-3341 National Telecommunications and Information\n \t 301-763-3874 Edith McCloud, emccloud@mbda.gov, Administration\n Sheryl Williams, sheryl.a.williams@census.gov, \t 202-482-6224 \t Charles Franz, cfranz@ntia.doc.gov,\n \t 301-763-3571 \t 202-482-1826\n National Oceanic and Atmospheric Administration\n Mary Choi, mary.choi@noaa.gov,\n \t 202-482-2621\n Heidi Keller, heidi.keller@noaa.gov,\n \t 202-482-2855\n\n\n\n\n For additional copies of the FY 2010 Performance and Accountability Report, please contact\n the Department of Commerce, Office of Budget, 202-482-4648, or refer to the people noted above under Departmental Management.\n\x0cU.S. DEPARTMENT\nOF COMMERCE\n\nF i s cal Y ear\n\n\n\n\n2010\nPERFORMANCE &\nACCOUNTABILIT Y\nREPORT\n\x0c T H E D E PA RT M E N T AT A G L A N C E\n\n\nHistory and Enabling Legislation Strategic Goals\n\nThe Department of Commerce was originally established by Goal 1: Maximize U.S. competitiveness and enable economic\nCongressional Act on February 14, 1903 as the Department growth for American industries, workers, and consumers\n\n\n\n\n Mik\nof Commerce and Labor (32 Stat. 826; 5 U.S.C. 591) and was\nsubsequently renamed the U.S. Department of Commerce by Goal 2: Promote U.S. innovation and industrial competitiveness\nPresident William H. Taft on March 4, 1913 (15 U.S.C. 1512). Goal 3: Promote environmental stewardship\nThe defined role of the new Department was \xe2\x80\x9cto foster,\n\n\n\n Fi\npromote, and develop the foreign and domestic commerce, Management Integration Goal: Achieve organizational and\nthe mining, manufacturing, and fishery industries of the management excellence\nUnited States.\xe2\x80\x9d\n Location\nMission\n The Department is headquartered in Washington, D.C., at the\nThe Department of Commerce creates the conditions for Herbert Clark Hoover Building, which is located on eight acres\neconomic growth and opportunity by promoting innovation, of land covering three city blocks. The Department also has\nentrepreneurship, competitiveness, and stewardship. field offices in all states and territories and maintains offices\n in more than 70 countries worldwide.\n\n Program Bureaus Employees\n\n \xe2\x96\xa0\t Economic Development Administration (EDA) During FY 2010, the Department expanded to over 120,000\n \xe2\x96\xa0\t Economics and Statistics Administration (ESA) employees to cover the Decennial Census. Apart from the\n \xe2\x97\x8f\t Bureau of Economic Analysis (BEA) Decennial Census, the Department has approximately 40,000\n \xe2\x97\x8f\t Census Bureau employees.\n \xe2\x96\xa0\t International Trade Administration (ITA)\n \xe2\x96\xa0\t Bureau of Industry and Security (BIS) Financial Resources\n \xe2\x96\xa0\t Minority Business Development Agency (MBDA)\n \xe2\x96\xa0\t U.S. Patent and Trademark Office (USPTO) The Department\xe2\x80\x99s FY 2009 and FY 2010 budgets were\n \xe2\x96\xa0\t National Institute of Standards and Technology approximately $25.7 billion and $13.9 billion (budget\n (NIST) authority), respectively.\n \xe2\x96\xa0\t National Technical Information Service (NTIS)\n \xe2\x96\xa0\t National Telecommunications and Information\n Internet\n Administration (NTIA)\n \xe2\x96\xa0\t National Oceanic and Atmospheric The Department\xe2\x80\x99s Internet address is www.commerce.gov.\n Administration (NOAA)\n\n\n\n II F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0ck e - < 100 100-200\n NUMBER OF EMPLOYEES\n\n 200-400 400-1,000 1,000-5,000 >5,000\n\n\n\n\nix D E PA R T M E N T O F C O M M E R C E E M P L OY E E S B Y L O C AT I O N\n\n\n\n\n Algeria Guatemala Portugal\n American Samoa Hong Kong Puerto Rico\n Argentina Hungary Qatar\n Australia India Romania\n Austria Indonesia Russia\n Belgium Iraq Saudi Arabia\n Brazil Ireland Senegal\n Bulgaria Israel Serbia\n Canada Italy Singapore\n Chile Japan South Africa\n China Jordan South Korea\n Columbia Kazakhstan Slovakia\n Costa Rica Kenya Spain\n Croatia Kuwait Sweden\n Czech Republic Libya Switzerland\n Dominican Republic Malaysia Taiwan\n Ecuador Mexico Thailand\n Maryland 11,985 Colorado 1,420 Egypt Morocco Turkey\n Virginia 9,696 Texas 1,390 El Salvador Netherlands Tunisia\n Finland Nigeria United Arab Emirates\n Indiana 4,676 Florida 1,298 France Pakistan United Kingdom\n District of Columbia 3,390 New York 1,096 Germany Panama Ukraine\n California 2,045 Other States 13,312 Ghana Peru Venezuela\n Washington 1,739 Other Nations/ 414 Greece Philippines Vietnam\n Territories Guam Poland\n\n\n\n\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n III\n\x0c Table of Contents\n Statement from the Secretary\t VI\n How to Use this Report\t XI\n\n Management\xe2\x80\x99s Discussion and Analysis \t 1\n\n Mission and Organization\t 2\n FY 2010 Performance and Financial Highlights\t 3\n The Department of Commerce Process for Strategic Planning and Performance Reporting\t 7\n Most Important Results \t 13\n Management Controls \t 31\n Federal Managers\xe2\x80\x99 Financial Integrity Act (FMFIA) of 1982 \t 32\n Federal Financial Management Improvement Act (FFMIA) of 1996 \t 38\n Report on Audit Follow-up \t 38\n Biennial Review of Fees\t 38\n American Recovery and Reinvestment Act (ARRA) of 2009 Programs\t 39\n High Risk Issue/2010 Decennial Census\t 56\n High Priority Performance Goals\t 57\n\n FY 2010 Performance Section\t 69\n\n Introduction to the Performance Section\t 70\n Strategic Goal 1 - Maximize U.S. competitiveness and enable economic growth\n for American industries, workers, and consumers \t 71\n Objective 1.1 \xe2\x80\x93\t Foster domestic economic development as well as export opportunities (EDA, ITA, MBDA) \t 75\n Objective 1.2 \xe2\x80\x93\t Advance responsible economic growth and trade while protecting American security\n (ITA, BIS)\t 84\n Objective 1.3 \xe2\x80\x93\t Advance key economic and demographic data that support effective decision-making\n of policymakers, businesses, and the American public (ESA/Census, ESA/BEA) \t 90\n Objective 1.4 \xe2\x80\x93 Position manufacturers to compete in a global economy (NIST)\t 96\n\n\n Strategic Goal 2 \xe2\x80\x93 Promote U.S. innovation and industrial competitiveness\t 101\n Objective 2.1 \xe2\x80\x93 Advance measurement science and standards that drive technological change (NIST, NTIS) \t 105\n Objective 2.2 \xe2\x80\x93 Protect intellectual property and improve the patent and trademark system (USPTO) \t 112\n Objective 2.3 \xe2\x80\x93 Advance global e-commerce as well as telecommunications and information services (NTIA) \t 117\n\n\n\n\nIV F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c Strategic Goal 3 \xe2\x80\x93 Promote environmental stewardship \t 125\n Objective 3.1 \xe2\x80\x93 Protect, restore, and manage the use of coastal and ocean resources (NOAA)\t 129\n Objective 3.2 \xe2\x80\x93 Advance understanding of climate variability and change (NOAA)\t 135\n Objective 3.3 \xe2\x80\x93 Provide accurate and timely weather and water information (NOAA)\t 140\n Objective 3.4 \xe2\x80\x93 Support safe, efficient, and environmentally sound commercial navigation (NOAA)\t 146\n\n\n Management Integration Goal \xe2\x80\x93 Achieve organizational and management excellence (DM, OIG)\t 155\n\n FY 2010 Financial Section\t 165\n\n Message from the Chief Financial Officer\t 166\n Financial Management and Analysis \t 167\n Debt Management \t 176\n Payment Practices \t 177\n Analysis of FY 2010 Financial Condition and Results \t 179\n Limitations of the Financial Statements \t 183\n Principal Financial Statements \t 185\n Consolidated Balance Sheets \t 187\n Consolidated Statements of Net Cost \t 188\n Consolidated Statements of Changes in Net Position \t 189\n Combined Statements of Budgetary Resources \t 190\n Notes to the Financial Statements \t 191\n Consolidating Balance Sheet \t 253\n Required Supplementary Information \t 257\n Required Supplementary Stewardship Information \t 265\n Independent Auditors\xe2\x80\x99 Report \t 279\n\n Appendices\t 293\n\n Appendix A: Performance and Resource Tables\t 295\n Appendix B: Stakeholders and Crosscutting Programs\t 348\n Appendix C: Management Challenges\t 349\n Appendix D: Improper Payments Information Act (IPIA) of 2002, as Amended, Reporting Details \t 368\n Appendix E: Summary of Financial Statement Audit and Management Assurance \t 372\n Appendix G: Glossary of Key Acronyms \t 373\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n V\n\x0cS tatement from the S ecretar y\n\n\n\n\n Statement from the Secretary\n\n I\xe2\x80\x8a\n \xe2\x80\x8aam pleased to present the Department of Commerce\xe2\x80\x99s fiscal year (FY) 2010 Performance\n and Accountability Report (PAR). The PAR describes our accomplishments and\n \xe2\x80\x8a challenges in maximizing U.S. competitiveness, enabling economic growth, fostering\n U.S. leadership in science and technology, and promoting environmental stewardship.\n It also provides information on our financial management and performance.\n\n Economic Growth\n\n On January 27, 2010, in his first State of the Union address, President Obama announced\n the creation of a new National Export Initiative (NEI). Since that time, the Department\xe2\x80\x99s\n Advocacy Center has assisted U.S. companies competing for export opportunities,\n supporting $11.4 billion in exports and an estimated 70,000 jobs. The Department\xe2\x80\x99s\n Commercial Service officers stationed around the world have helped more than 2,000\n companies generate $3.8 billion worth of exports. Two recent trade agreements with\n China and Russia involving pork and poultry products are valued at more than $1 billion. We have coordinated 18 trade missions\n to 24 countries that involved more than 160 companies. Lastly, the Department has continued to join forces with other agencies\n and organizations to further the NEI. For example, in July 2010, the Department and the U.S. Postal Service announced the launch\n of a new partnership to identify current U.S. Postal Service customers who are already exporting their goods and help them\n expand to additional international markets.\n\n The Department, through the International Trade Administration (ITA), has made strong progress toward improving trade,\n particularly in the area of ensuring a level playing field. During FY 2009, 56 percent of market access and compliance cases,\n totaling over $25 billion in value, were successfully resolved, compared with 39 percent in FY 2008. Similarly, 30 percent of\n industry-specific trade barriers addressed by ITA during FY 2009 were removed or prevented. We are focused on achieving further\n progress in trade and other critical economic growth outcomes for U.S. businesses and workers.\n\n The Economics and Statistics Administration\xe2\x80\x99s (ESA) Bureau of Economic Analysis (BEA) and Census Bureau continued to upgrade\n the quality and availability of critical economic and demographic information for policymakers, business leaders, and the public.\n The Census Bureau successfully completed the field operations for the 2010 Decennial Census, the largest non-military activity\n undertaken by the U.S. government. The Census Bureau is now compiling the data to determine the final population counts of\n each state and the Nation. The Census Bureau will release this data no later than December 31, 2010. Population data from\n the Decennial Census, which is mandated by the Constitution, supports the reapportionment of Congress as well as state and\n local legislative bodies, and is also used to allocate over $400 billion in annual federal program funds. The Census Bureau\n received $1 billion in American Recovery and Reinvestment Act (ARRA) funding to hire new personnel for partnership and outreach\n efforts to minority communities and hard-to-reach populations, increase targeted media purchases, and conduct field operations.\n By focusing on effectively managing risk as the Decennial Census operations proceeded, the Census Bureau completed the 2010\n Census more than $1.7 billion under budget. This was largely due to exceeding the estimated mail-back response rate and higher\n worker productivity.\n\n One of BEA\xe2\x80\x99s primary goals in 2010 was to maintain and improve the relevance and usefulness of its economic accounts.\n It continued to explore the development of new statistics such as quarterly gross domestic product (GDP) by industry, state\n personal consumption expenditures, and industry-level production accounts. It also began work to develop new estimation\n models for service sector statistics that will allow a quicker and more flexible response to current and future changes in the\n economy. At the same time, BEA continued its progress on satellite accounts, publishing an update of the account for research\n and development, and proceeding with research into prices and spending measures for the health satellite account.\n\n\n VI F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c S tatement from the S ecretar y\n\n\n\nThe Department, through the Economic Development Administration (EDA), assists U.S. industries, communities, and workers\nthrough investments in public infrastructure and technology, which in turn attract private capital investment and create new\njobs. As of FY 2010, EDA investments made in FY 2007, FY 2004, and FY 2001 generated nearly $6.6 billion in private investment\nand created or retained 102,000 jobs. In addition, EDA funded 68 ARRA grants through its existing program structure in FY 2009\nwhich are projected to create or retain 25,635 long-term jobs based on grantee estimates. Consistent with the intent of the\nARRA, EDA\xe2\x80\x99s ARRA investments focused on infrastructure projects that will promote immediate job growth and retention. To\nhelp advance President Obama\xe2\x80\x99s innovation agenda, EDA successfully led two major, multi-department funding competitions\nin FY 2010: the Energy Regional Innovation Cluster (e-RIC) initiative, a pilot initiative to spur regional economic growth while\ndeveloping innovative energy-efficient building technologies; and the i6 Challenge to accelerate the commercialization of\nuniversity and federal research to take ideas from the lab to the marketplace, producing the small businesses that are the engine\nof job creation in the United States.\n\nThe Minority Business Development Agency (MBDA) promotes the ability of minority businesses to succeed in the local, national, and\nglobal economies by providing direct client services through a nationwide network of minority business centers. MBDA continued\nits upward trend of increasing the dollar value of contract and financial awards secured by minority firms, from $2.0 billion in\nFY 2008 to $3.0 billion in FY 2009 to $3.3 billion in FY 2010. More than 5,800 new jobs were created in FY 2010 as a result of\nMBDA\xe2\x80\x99s work with minority-owned companies.\n\nThe Bureau of Industry and Security (BIS) administers and enforces the dual-use export control system, which regulates exports\nof sensitive goods and technology that have legitimate civilian uses, but could also have military or terrorism-related uses.\nIn FY 2010, the Department took the first step in the President\xe2\x80\x99s effort to reform U.S. encryption controls by eliminating the review\nof readily available encryption items such as cell phones and household appliances. The United States will now be able to focus its\nresources on more sensitive encryption items. BIS was also heavily engaged with other agencies in developing plans to effectively\nimplement the President\xe2\x80\x99s Export Control Reform Initiative.\n\nFinally, the National Institute of Standards and Technology\xe2\x80\x99s (NIST) Hollings Manufacturing Extension Partnership (MEP) supported\nits clients, primarily small manufacturers, in generating an estimated $2.1 billion in increased sales, $1.6 billion in capital\ninvestment, and $1.1 billion in cost savings during FY 2009 (MEP results have a one-year time lag).\n\nOur new CommerceConnect office near Detroit, MI made significant strides in helping local businesses to access multiple federal\nprograms from one location. CommerceConnect is a single stop shop to access the Department\xe2\x80\x99s 70+ programs, services, and\npartner resources. We plan on expanding the CommerceConnect program to the Gulf Coast using a regional approach and to\n16 other cities using current Department facilities.\n\nScience and Information\n\nA vigorous, flexible, and efficient intellectual property (IP) protection system is critical to encouraging investments that build our\nindustries, businesses, and jobs. The Department is committed to ensuring that the United States has a first-class IP protection\nsystem to support innovation throughout the 21st century.\n\nIn FY 2010, the U.S. Patent and Trademark Office (USPTO) identified and implemented tools and policies that increased patent\nquality and timeliness. We are committed to further efforts to address the many challenges that remain to achieving significant\nsustainable reductions in patent pendency\xe2\x80\x94now averaging over 25 months for first action and 35 months for total pendency\xe2\x80\x94to\nlevels that fully enable and reward entrepreneurship and innovation.\n\nUSPTO found efficiencies by redesigning systems and procedures, including the analysis of examiner workflow so that it could\nremove redundant processes. USPTO closely studied patent processing systems to determine where improvements would provide\nthe greatest increase in efficiency or increase in examination capacity. USPTO introduced a multi-track application pathway that\ngives applicants control over prioritizing their applications and assists management in balancing workload. USPTO\xe2\x80\x99s improved\nprocesses will create a streamlined examination process to improve patent quality and timeliness.\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n VII\n\x0cS tatement from the S ecretar y\n\n\n\n\n The Patent Organization maintained a strong focus on quality in FY 2010, with a final rejection/allowance compliance rate of\n 96.3 percent. The final rejection/allowance compliance rate gives the percentage of utility, plant, reissue, and design allowances\n and final rejections reviewed that were found to be compliant with applicable rules and laws regarding final patentability\n determination.\n\n Over the last five years, the Trademark Organization has met nearly all its performance targets. The examination quality of\n office actions in the Trademark Organization has met and exceeded goals, ranging above 95 percent accuracy in recent years.\n Approximately 97 percent of all first actions and final decisions (approvals and rejections) met statutory and compliance rates for\n quality of decision-making and writing. The Trademark organization\xe2\x80\x99s total pendency improved from 11.2 months in FY 2009 to\n 10.5 months in FY 2010.\n\n NIST supports the Nation\xe2\x80\x99s innovative capacity and expands markets for new technological applications through its sound,\n science-based measurements and standards. For example, NIST is coordinating the development of interoperability standards for\n the Smart Grid and issued an initial set of cyber security guidelines and other elements of a Smart Grid Interoperability Standards\n Framework after significant stakeholder engagement. In the area of healthcare, NIST and the Department of Health and Human\n Services are working to develop a suite of software tools to support a health information technology (IT) testing infrastructure\n in close collaboration with a broad array of public and private stakeholders. NIST also continued to conduct innovative scientific\n measurement research as part of the President\xe2\x80\x99s Plan for Science and Innovation.\n\n The NIST Technology Innovation Program (TIP) supports high-risk, high-reward innovative research in areas of critical national\n need at U.S. businesses, universities, national laboratories, and non-profit research institutions. TIP announced in January 2009\n nine projects for award to address critical national needs in civil infrastructure, representing up to $88.2 million in new research,\n $42.5 million of it funded by TIP. In December 2009, TIP announced another 20 projects for award\xe2\x80\x9412 that address manufacturing\n and eight in civil infrastructure\xe2\x80\x94representing up to $146 million in new research with up to $71 million in TIP funding. Awarded\n projects demonstrate TIP\xe2\x80\x99s commitment to multi-disciplinary approaches and to encouraging teaming arrangements. Seventy-\n three participants are involved in 29 projects. Seventeen of the 29 projects are joint ventures. TIP offers a unique opportunity for\n funding collaborative cutting-edge research.\n\n NIST has successfully obligated $580 million in ARRA funds directed at projects intended to stimulate technological innovation\n and strengthen U.S. scientific and technological capabilities. Highlights of NIST ARRA efforts include $180 million in cost-\n shared grants that are supporting the construction of 16 new research facilities at 15 universities and one non-profit research\n organization; $34.5 million to support 27 cutting-edge research efforts at companies, universities, and non-profit research\n organizations across 18 states; and $180 million in upgrades to NIST facilities that will enable new research capabilities\n (e.g., Structural Fire Resistance Laboratory) and improve the energy efficiency of NIST operations through extensive installation\n of solar panels across campus.\n\n The National Telecommunications and Information Administration\xe2\x80\x99s (NTIA) responsibilities have increased considerably with the\n enactment of the ARRA. NTIA and the U.S. Department of Agriculture\xe2\x80\x99s Rural Utilities Service are administering a $7 billion\n initiative to expand broadband access and adoption. Specifically, NTIA awarded over $4.2 billion in grants to expand the\n availability and adoption of broadband services. These projects will extend broadband access to unserved and underserved areas\n of the country and to vulnerable populations, including minorities, low income residents, the aged, the unemployed, and people\n with disabilities. Specifically, these projects will deploy broadband infrastructure, enhance capacity at public computing centers,\n and support projects to encourage non-users to subscribe to broadband services. The objectives of the Broadband Technology\n Opportunities Program (BTOP) include:\n\n \xe2\x97\x8f\xe2\x97\x8f Broadband access in unserved and underserved areas;\n \xe2\x97\x8f\xe2\x97\x8f Broadband education, awareness, training, access, equipment, and support;\n \xe2\x97\x8f\xe2\x97\x8f Broadband access and use by public safety agencies; and,\n \xe2\x97\x8f\xe2\x97\x8f Stimulation of broadband demand, economic growth, and job creation.\n\n\n\n VIII F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c S tatement from the S ecretar y\n\n\n\n\nEnvironmental Stewardship\n\nThe National Oceanic and Atmospheric Administration (NOAA) continued to improve the fish stock sustainability index (FSSI), its\ncomprehensive measure for sustainability of 230 U.S. fish stocks selected for their importance to commercial and recreational fisheries.\nDuring FY 2010, NOAA rebuilt the following five fish stocks, important to commercial and recreational fisheries, to optimal population\nlevels: North Atlantic swordfish, Georges Bank haddock, George\xe2\x80\x99s Bank/Gulf of Maine Pollock, Atlantic coast spiny dogfish, and\nSt. Matthews Island blue king crab. These stocks had been under rebuilding plans due to low population levels caused by overfishing\nand other factors. To help rebuild fisheries and sustain fishermen, communities, vibrant working waterfronts, and culturally important\nfishing traditions, NOAA also released a national catch share policy to encourage the consideration and use of catch shares. Catch\nshare programs, which include limited access privilege programs and individual fishing quotas, dedicate a secure share of fish to\nindividual fishermen, cooperatives or fishing communities. Catch shares are used in 14 fisheries managed by six fishery management\ncouncils from Alaska to Florida and are being developed in additional fisheries. Both here and in other countries, catch shares are\nhelping eliminate overfishing and achieve annual catch limits, improve fishermen\xe2\x80\x99s safety and profits, and reduce the negative\nbiological and economic effects of the race for fish that develops with some traditional fishery management.\n\nThe Deepwater Horizon oil spill was one of the worst man-made environmental disasters our country has ever experienced. NOAA\nwas integrally involved in the response and will continue to play a pivotal role in the months and years ahead, assessing and resolving\nrestoration issues. NOAA scientific advice and management was critical to ensuring the safety of seafood and saving, assessing, and\nrehabilitating Gulf wildlife, including endangered sea turtles, and protecting critical habitat through response strategies and the\npublication of the Environmental Sensitivity Index. Aerial oil mapping teams fed detailed observations to NOAA modeling experts for\ndaily publication of oil trajectories\xe2\x80\x94forecasts of oil amount and movement\xe2\x80\x94critical to responders and local communities. The modeling\nteam generated the Loop Current Diagram that helped indicate the probability of longer term flow toward the Florida peninsula and/\nor East Coast, the Long Term Forecast that showed oil distribution probabilities, and 3D subsea models to help determine the fate of\noil dispersed in the water column. These products have been vital decision-making tools for the federal on-scene coordinator, small\nbusinesses, state governments, local authorities, fisheries managers, responders, and homeowners. National Incident Command relied\non and gave special praise to NOAA\xe2\x80\x99s Environmental Response Management Application (ERMA) that showed response assets and\ninformation as layers on a map, becoming the primary image for the Deepwater Horizon response.\n\nIndividuals, business leaders, and decisionmakers across widely diverse sectors\xe2\x80\x94from agriculture to energy to transportation\xe2\x80\x94are\nincreasingly asking NOAA for information about climate variability and change in order to make the best choices for their families,\ncommunities, and businesses. The Department and NOAA unveiled a new Web site, www.climate.gov, which serves as a single point of\nentry for NOAA\xe2\x80\x99s climate information, data, products, and services. The site is in response to growing user demand for useful climate\ninformation and will continue to develop based on user demand, comments, and feedback. One feature is the new Web-based climate\nscience magazine, ClimateWatch, featuring videos, images, and articles of scientists in their own words, discussing their recent work\nin the field. Known as the NOAA Climate Services Portal, the site addresses the needs of four key audiences: educators, decisionmakers\nand policy leaders, scientists and applications-oriented data users, and business users and the public. NOAA also expanded its\nRegionally Integrated Science and Assessment (RISA) teams which play a critical role in both climate science and service development\nby providing integrated assessment in 11 different regions of the United States. RISAs are regional \xe2\x80\x9ccenters of excellence\xe2\x80\x9d that work\nwith users to co-develop climate science and services. In future years, the sustained regional capacity of RISAs can help NOAA address\nthe Nation\xe2\x80\x99s priorities for climate service and adaptation.\n\nOn March 4, 2010, NOAA successfully launched Geostationary Operational Environmental Satellite Series P (GOES-P) from Cape\nCanaveral, FL. GOES-P, renamed GOES-15 once it reached final orbit, underwent a series of tests for approximately six months before\ncompleting its \xe2\x80\x9ccheck-out\xe2\x80\x9d phase. After check-out, GOES-15 was placed into orbital storage mode and remains ready for activation\nif one of the operational GOES fail. GOES-15 took its first infrared image of Earth on April 26, 2010. GOES-15 is the final spacecraft\nin the latest series of NOAA geostationary satellites. It joined three other NOAA operational GOES spacecraft that help the Agency\xe2\x80\x99s\nforecasters track life-threatening weather\xe2\x80\x94from tornadoes, floods, and hurricanes to solar activity that can impact the satellite-\nbased electronics and communications industry. GOES-15 will capture higher resolution images of weather patterns and atmospheric\nmeasurements than those provided by earlier satellites. The higher resolution imagery allows forecasters to pinpoint the location of\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n IX\n\x0cS tatement from the S ecretar y\n\n\n\n\n severe weather with greater accuracy. GOES-15 will also provide better data for space and solar weather thanks to its Solar X-Ray\n Imager (SXI). SXI data will improve forecasts and warnings for solar disturbances, protecting billions of dollars of commercial and\n government assets in space and on the ground. This vital information will also reduce the effect of power surges for the satellite-\n based electronics and communications industry.\n\n Program Data, Department-wide Management, and Financial Performance\n\n The Department\xe2\x80\x99s financial data and performance results for FY 2010 are provided together in this report in response to the Reports\n Consolidation Act of 2000. This information is crucial in helping us to effectively administer our programs, determine their success,\n and make adjustments that may be necessary to improve the quality of program operation and service delivery.\n\n For the 12th year in a row, the independent auditors tasked with reviewing our financial statements have provided an unqualified\n opinion. Our financial management systems have been found to be in substantial compliance with the Federal Financial Management\n Improvement Act (FFMIA) of 1996, and, in accordance with Office of Management and Budget (OMB) Circulars A-136 and A-11, the\n financial and performance data published in this report are substantially complete and reliable.\n\n The Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982 (FMFIA) and OMB Circular A-123 provide the framework within which\n Departmental and operating unit managers may determine whether adequate internal controls are in place and operating as they\n should. We rely on a wide range of studies conducted by programmatic and administrative managers, the Office of Inspector General\n (OIG), the Government Accountability Office (GAO), and others to assist in this effort. Based on activities undertaken during FY 2010,\n the Department\xe2\x80\x99s system of internal controls, taken as a whole, is consistent with FMFIA. IT security certification and accreditation\n had been reported as a material weakness from FY 2001 through FY 2009. Based on progress that has been made in this area as\n well as a shift in emphasis toward IT security assessments, the Department considers the material weakness to be resolved. Although\n significant progress has resulted in the closure of the material weakness, we believe that IT security concerns are not fully resolved\n and that additional enhancements continue to be needed in the future.\n\n To better manage its programs, in FY 2010 the Department incorporated a balanced scorecard approach to management, by not only\n emphasizing budget and finance, but also customer, internal business process, and learning and growth perspectives into management\n activities. This approach focuses on themes that reflect the priorities of our Department. The Department also took a more integrated,\n crosscutting approach with regard to its programs. In the current Departmental Balanced Scorecard, bureaus tend to cross themes,\n goals, and objectives, giving a greater emphasis to our three programmatic themes of Economic Growth, Science and Information, and\n Environmental Stewardship, and our three management themes of Customer Service, Organizational Excellence, and Workforce along\n with a greater integration of programs. The Department plans on having its FY 2011 \xe2\x80\x93 FY 2016 strategic plan follow the structure\n of the Departmental balanced scorecard. Individual bureau scorecards follow the structure of the Departmental scorecard while\n providing greater detail about their programs.\n\n In Conclusion\n\n Again, I am proud to submit this report on the FY 2010 performance of the Department, and hope it provides a useful summary\n of the results of the Department and its 47,000 employees.\n\n\n\n\n Gary Locke\n Secretary of Commerce\n November 15, 2010\n\n\n\n\n X F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c How to use this report\n T\n his Performance and Accountability Report (PAR) for FY 2010 provides the\n Department of Commerce\xe2\x80\x99s financial and performance information, enabling\n the President, Congress, and the American people to assess the Department\xe2\x80\x99s\n performance as provided by the requirements of the:\n\n \xe2\x97\x8f\xe2\x97\x8f Reports Consolidation Act of 2000 and other laws\n \xe2\x97\x8f\xe2\x97\x8f Government Management Reform Act of 1994\n \xe2\x97\x8f\xe2\x97\x8f Government Performance and Results Act (GPRA) of 1993\n \xe2\x97\x8f\xe2\x97\x8f Chief Financial Officers (CFO) Act of 1990\n \xe2\x97\x8f\xe2\x97\x8f Federal Managers\xe2\x80\x99 Financial Integrity Act (FMFIA) of 1982.\n\n The assessment of the Department\xe2\x80\x99s performance contained in this report compares\n performance results to the Department\xe2\x80\x99s strategic goals and performance goals.\n The Department\xe2\x80\x99s Strategic Plan, Performance Plan, and annual PARs are available on\nthe Department\xe2\x80\x99s Web site at http://www.osec.doc.gov/bmi/budget/budgetsub_perf_strategicplans.htm. The Department welcomes\nfeedback on the form and content of this report.\n\nThis report is organized into the following major components:\n\nStatement from the Secretary of Commerce\nThe Secretary\xe2\x80\x99s statement includes an assessment of the reliability and completeness of the financial and performance information\npresented in the report and a statement of assurance on the Department\xe2\x80\x99s management controls as required by the FMFIA.\n\nManagement\xe2\x80\x99s Discussion and Analysis (MD&A)\nThis section provides an overview of the financial and performance information contained in the Performance Section, Financial Section,\nand Appendices. The MD&A includes an overview of the Department\xe2\x80\x99s organization, highlights of the Department\xe2\x80\x99s most important\nperformance goals and results, current status of systems and internal control weaknesses, and Department programs under the American\nRecovery and Reinvestment Act (ARRA) of 2009.\n\nPerformance Section\nThis section provides the annual performance information as required by Office of Management and Budget (OMB) Circular A-11 and\nGPRA. Included in this section is a detailed discussion and analysis of the Department\xe2\x80\x99s performance in FY 2010. For each service and\nmajor office, the results are presented by each performance outcome or objective within the four Department strategic goals.\n\nFinancial Section\nThis section contains the details of the Department\xe2\x80\x99s finances in FY 2010 including information on the Department\xe2\x80\x99s financial\nmanagement, debt management, payments management, audited financial statements, other supplemental financial information, and\nthe independent auditors\xe2\x80\x99 report.\n\t\nAppendices\nThis section provides summary charts of performance information, a listing of key stakeholders, a discussion of key management\nchallenges identified by the Office of Inspector General (OIG) including actions taken to address them, financial information, and a\nglossary of acronyms. A discussion of measure and outcome changes from the FY 2009 PAR, and of the data sources of performance\nmeasures, appears at the end of the Web site version of the PAR located at http://www.osec.doc.gov/bmi/budget/FY10PAR.html.\n\nFor additional copies of this report, please call the Department of Commerce, Office of Budget, at 202-482-4648 or email either Bill Tatter at BTatter@doc.gov\nor Steve Shapiro at SShapiro@doc.gov. A listing of Web addresses and email addresses of other Departmental and bureau staff appears on the inside\nfront cover.\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n XII F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cM anagement \xe2\x80\x99s\nD iscussion\nand\nA nalysis\n\x0c MISSION AND ORGANIZATION\n\n\n\n Mis s ion\n\n The Department of Commerce creates the conditions for\n economic growth and opportunity by promoting innovation,\n entrepreneurship, competitiveness, and stewardship.\n\n\n\n\n2 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n F Y\xe2\x80\xaf 2 0 1 0 P erformance and F inancial H ighlights\n\n P erformance H I G H L I G H T S\n\n\n\n\n\xe2\x80\x8aO \xe2\x80\x8a\n verall performance results for the Department show\n that of the 119 performance targets, 77 percent were\n at or above target, nine percent slightly below target,\nand 14 percent not on target. These results are slightly better\nthan FY 2001 when the Department achieved 73 percent of its\ntargets. To the right is a summary of Departmental performance\ndating back to FY 2001. Below are the funding and full-time\nequivalent (FTE) levels by strategic goal and financial highlights.\nIt should be noted that FY 2010 was an unusual year in which\nthe Department conducted the 2010 Decennial Census, resulting\nin a large increase in FTE and funding for FY 2010. Beginning on\npage 16 is a summary of the performance results by strategic goal.\nThis summary provides a snapshot of the targeted achievements.\nDiscussions and highlights of successes can be found in the\nperformance discussions of each performance goal.\n\n\n\n\n Percentage\n (Dollars in Millions)1 Change FY 2010 FY 2009\n\n For the Years Ended September 30, 2010 and 2009\n Obligations by Strategic Goal:\n Strategic Goal 1: Maximize U.S. Competitiveness and Enable Economic\n Growth for American Industries, Workers, and Consumers2 +57.8% $\t 7,581.3 $\t 4,804.4\n Strategic Goal 2: Promote U.S. Innovation and Industrial Competitiveness2 +87.5% $\t 7,334.2 $\t 3,912.1\n Strategic Goal 3: Promote Environmental Stewardship +12.1% $\t 5,781.7 $\t 5,158.0\n Management Integration Goal: Achieve Organizational and Management\n Excellence +16.2% $\t 94.0 $\t 80.9\n TOTAL OBLIGATIONS +49.0% $\t20,791.2 $\t13,954.4\n Full Time Equivalents (FTEs) by Strategic Goal:\n Strategic Goal 1: Maximize U.S. Competitiveness and Enable Economic\n Growth for American Industries, Workers, and Consumers2 +230.2% \t 96,720 \t 29,294\n Strategic Goal 2: Promote U.S. Innovation and Industrial Competitiveness2 -0.8% \t 12,664 \t 12,768\n Strategic Goal 3: Promote environmental stewardship -2.7% \t 11,709 \t 12,031\n Management Integration Goal: Achieve Organizational and Management\n Excellence +16.0% \t 341 \t 294\n TOTAL FTEs +123.3% \t 121,434 \t 54,387\n\n 1Performance funding may differ from funding shown in financial statements because the performance funds do not include one-time funds for unexpected\n\n events (e.g., Hurricane Katrina) or reimbursable work that cannot be planned. In these cases, the funding is not factored into bureau performance amounts.\n Also funding reflects obligations as opposed to costs. An example of the difference is the NTIA Broadband Technology Opportunities Program where over\n $4 billion was obligated in FY 2010, however the costs incurred was significantly less.\n 2For Strategic Goal 1, the funding and FTE rose significantly in FY 2010 as a result of the 2010 Decennial Census. For Strategic Goal 2, the funding and FTE rose\n\n significantly as a result of the NTIA Broadband Technology Opportunities Program.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 3\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n F inancial H ighlights\n\n Percentage\n (Dollars in Thousands) Change FY 2010 FY 2009\n\n As of September 30, 2010 and 2009\n Condensed Balance Sheets:\n\n ASSETS:\n\n Fund Balance with Treasury 0% $\t 25,785,547 $\t 25,671,762\n General Property, Plant, and Equipment, Net +9% 7,394,711 6,758,827\n Direct Loans and Loan Guarantees, Net +6% 540,147 511,092\n Other -30% 712,365 1,015,104\n\n TOTAL ASSETS +1% $\t 34,432,770 $\t 33,956,785\n\n LIABILITIES:\n Unearned Revenue +2% $\t 1,332,395 $\t 1,311,270\n Spectrum Auction Proceeds Liability to Federal Communications\n Commission -92% 33,838 400,451\n Federal Employee Benefits +12% 769,035 687,434\n Accounts Payable -9% 462,693 505,944\n Accrued Grants +72% 766,204 446,207\n Debt to Treasury +6% 517,930 487,275\n Accrued Payroll and Annual Leave +4% 561,154 540,082\n Other -2% 236,916 242,102\n\n TOTAL LIABILITIES +1% $\t 4,680,165 $\t 4,620,765\n\n NET POSITION:\n\n Unexpended Appropriations -2% $\t 12,882,192 $\t 13,136,522\n Cumulative Results of Operations +4% 16,870,413 16,199,498\n\n TOTAL NET POSITION +1% $\t 29,752,605 $\t 29,336,020\n\n TOTAL LIABILITIES AND NET POSITION +1% $\t 34,432,770 $\t 33,956,785\n\n\n\n For the Years Ended September 30, 2010 and 2009\n\n Condensed Statements of Net Cost:\n\n Strategic Goal 1: Maximize U.S. Competitiveness and Enable\n Economic Growth for American Industries, Workers, and Consumers +108% $7,878,604 $3,794,414\n Strategic Goal 2: Promote U.S. Innovation and Industrial\n Competitiveness -33% 1,262,005 1,880,001\n Strategic Goal 3: Promote Environmental Stewardship +9% 4,523,471 4,152,324\n\n TOTAL NET COST OF OPERATIONS +39% $13,664,080 $9,826,739\n\n Total Gross Costs +32% $16,527,409 $12,540,517\n Less: Total Earned Revenue +6% (2,863,329) \t (2,713,778)\n\n Total Net Cost Of Operations $13,664,080 $9,826,739\n\n\n\n\n 4 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n re v iew of financial position and R E S U L T S\n\n\n\n Assets\n\n The Department had total assets of\n $34.4 billion as of September 30,\n 2010. This represents an increase of\n $476 million or 1 percent over total assets\n of $34.0 billion at September 30, 2009.\n General Property, Plant, and Equipment,\n Net increased $636 million or 9 percent,\n mainly due to an increase in satel-\n lites/weather systems of $558 million.\n Other Assets decreased by $303 million\n or 30 percent, primarily due to a decrease\n of $264 million in Advances and Prepay-\n ments to another federal agency for the\n National Telecommunications and Infor-\n mation Administration\xe2\x80\x99s (NTIA) Public\n Safety Interoperable Communications\n grant program.\n\n\n Liabilities\n\n The Department had total liabilities of\n $4.7 billion as of September 30, 2010.\n This represents an increase of $59 million\n or 1 percent as compared to total liabili-\n ties of $4.6 billion at September 30, 2009.\n Accrued grants increased by $320 million\n or 72 percent, primarily resulting from\n the Economic Development Administra-\ntion\xe2\x80\x99s (EDA) accrued grants increase of $209 million which resulted from additional funding under the American Recovery and\nReinvestment Act (ARRA) of 2009 and a FY 2010 supplemental appropriation for a major storms and flooding disaster that\noccurred in 2010. NTIA accrued grants also increased by $90 million, primarily for the Broadband Technology Opportunities\nProgram. Federal Employee Benefits increased by $82 million or 12 percent, primarily from the effects of changes in economic and\nother assumptions on the actuarial valuation for the National Oceanic and Atmospheric Administration (NOAA) Corps Retirement\nSystem, and also from the effect of increased Decennial Census employees on the valuation of the Department\xe2\x80\x99s Actuarial FECA\nLiability. There was a large decrease of $367 million or 92 percent in NTIA\xe2\x80\x99s Spectrum Auction Proceeds Liability to the Federal\nCommunications Commission (FCC). This liability represents FCC auction proceeds for which licenses have not yet been granted\nby FCC. During FY 2010, the liability was primarily reduced by net auction proceeds for which licenses have been granted, and by\nFCC administrative fees.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 5\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Net Cost of Operations\n\n In FY 2010, Net Cost of Operations amounted to $13.7 billion, which consists of Gross Costs of $16.5 billion less Earned Revenue\n of $2.8 billion. Strategic Goal 1 includes Gross Costs of $8.1 billion related to maximizing U.S. competitiveness and enabling\n economic growth for U.S. industries, workers, and consumers. Strategic Goal 2 includes Gross Costs of $3.6 billion related to\n promoting U.S. innovation and industrial competitiveness. Strategic Goal 3 includes Gross Costs of $4.8 billion related to promoting\n environmental stewardship. The Strategic Goal 1 increase in FY 2010 Net Cost of Operations over FY 2009 of $4.1 billion or 108\n percent is primarily due to an increase in Gross Costs of $3.6 billion for the Census Bureau\xe2\x80\x99s Decennial and Periodic Censuses\n major program. The Strategic Goal 2 decrease in FY 2010 Net Cost of Operations over FY 2009 of $618 million or 33 percent\n is primarily due to a large decrease in Gross Costs for NTIA\xe2\x80\x99s Digital-to-Analog Converter Box Program, as the program was\n substantially completed by mid-November 2009. The Strategic Goal 3 increase in FY 2010 Net Cost of Operations over FY 2009\n of $371 million or 9 percent is primarily due to an increase in gross costs of $205 million for NOAA\xe2\x80\x99s Operations, Research, and\n Facilities budget account, mainly due to increased depreciation expense for personal property and increased imputed costs from\n other federal agencies. The Strategic Goal 3 increase in Net Cost of Operations also results from increased NOAA gross costs of\n $134 million from funding under ARRA, for its Operations, Research, and Facilities functions, and its Procurement, Acquisition,\n and Construction functions.\n\n\n\n\n 6 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n T he D epartment of C ommerce P rocess for\n\n S trategic P lanning and P erformance R eporting\n\n\n\nManagement Strategic Framework, Performance Planning and Reporting at a Glance\n\n\n\n\n\xe2\x80\x8aT \xe2\x80\x8a\n he Department\xe2\x80\x99s Strategic Plan maps out the Department\xe2\x80\x99s Strategic Goals,\n Objectives, and Outcomes that constitute achievement of its Mission and\n Vision. It also provides performance measures used to gauge success\ntoward the Outcomes. The plan explains the Department\xe2\x80\x99s strategies for success\nand identifies key challenges. The Department\xe2\x80\x99s Annual Performance Plans\n(APP) provide annual targets for these performance measures, the resources\nrequired to achieve them, and a summary of how these resources will be\nused to achieve results. FY 2010 and FY 2011 APPs can be found at http://\nwww.osec.doc.gov/bmi/budget/. This Performance and Accountability\nReport (PAR) measures actual progress against the projected progress\nin the FY 2010 APP. The Department\xe2\x80\x99s current Strategic Plan covers\nFY 2007-FY 2012 and can be found at http://www.osec.doc.gov/\nbmi/budget/Strategic07-12.htm. The Department is currently\nupdating its Strategic Plan, which it expects to issue prior to\nthe FY 2012 Congressional Budget.\n\nThis PAR provides a public accounting of the Department\xe2\x80\x99s\nFY 2010 performance results and completes the\nDepartment\xe2\x80\x99s performance management process for the fiscal year. The Web address of the FY 2010 PAR is http://www.osec.\ndoc.gov/bmi/budget/FY10PAR.html. Appendix A of the FY 2010 PAR provides historical results of the Department\xe2\x80\x99s performance,\nmatching targets against actuals.\n\nDuring FY 2010, the Department began implementation of a balanced scorecard approach to support management and planning\nactivities. The scorecard incorporates the Department\xe2\x80\x99s programmatic goals as well as management goals that are critical to the\nlong-term sustainability of its programs. The scorecard supplements the most significant outcome-oriented measures from the\nStrategic Plan and APP (i.e., the Department\xe2\x80\x99s Government Performance and Results Act (GPRA) measures) with leading indicators\nthat closely linked (requisites) to these outcomes. In this manner, the Departmental and bureau scorecards serve as a meaningful\ntool supporting the Department\xe2\x80\x99s senior managers in executing their oversight and management responsibilities.\n\nSummary Description of Bureaus\n\nThe following are summary descriptions of each bureau in budget appropriation order with applicable strategic goals and objectives\nlisted at the end of each description.\n\nThe Departmental Management (DM) develops and implements policy affecting U.S. and international activities as well as\ninternal goals and operations of the Department. DM serves as the primary liaison with the executive branch and Congressional\nand private sector groups, and acts as the management and administrative control point for the Department. Executive Direction\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 7\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n develops and implements Departmental policies and coordinates bureau program activities to accomplish the Department\xe2\x80\x99s\n mission while Departmental Staff Services develops and implements the Department\xe2\x80\x99s internal policies, procedures, and other\n administrative guidelines. Management Integration Goal\n\n The Office of Inspector General (OIG) ensures that the Department\xe2\x80\x99s employees and others managing federal resources\n comply with applicable laws and regulations, and actively work to prevent fraud, waste, and abuse in program operations. The OIG\n monitors and tracks the use of taxpayer dollars in federally-funded programs with its purpose being to keep Departmental officials\n and Congress fully and currently informed about issues, problems, and deficiencies relating to the administration of programs and\n operations and the need for corrective action. Management Integration Goal\n\n The Economic Development Administration (EDA) directly supports the Department\xe2\x80\x98s goal to maximize U.S.\n competitiveness and enable economic growth for U.S industries, workers, and consumers with the objective to foster domestic\n economic development as well as export opportunities. To achieve this objective, EDA promotes a favorable business environment\n through strategic investments in public infrastructure. These investments help attract private capital investment and jobs that\n address problems of high unemployment, low per capita income, and sudden, severe economic challenges. Strategic Goal 1,\n Objective 1.1\n\n\n\n The Census Bureau is the leading source of quality data about the Nation\xe2\x80\x99s people and economy. The Census Bureau measures\n those trends and segments of the U.S. population and economy most critical to continued U.S. success and prosperity. The Census\n Bureau provides benchmark measures of the U.S. population, economy, and governments, and provides current measures of the\n U.S. population, economy, and governments. The Census Bureau\xe2\x80\x99s cyclical programs include the Economic Census and the Census\n of Governments, conducted every five years, and the Decennial Census program, conducted every 10 years. Strategic Goal 1,\n Objective 1.3\n\n\n\n The Bureau of Economic Analysis (BEA) produces some of the Nation\xe2\x80\x99s most important economic statistics, including\n GDP and the balance of payments. BEA promotes a better understanding of the U.S. economy by providing timely, relevant, and\n accurate economic accounts data in an objective and cost-effective manner. Although a relatively small agency, BEA\xe2\x80\x99s economic\n statistics are among the Nation\xe2\x80\x99s most closely watched. BEA\xe2\x80\x99s statistics influence critical decisions made by policymakers, business\n leaders, households, and individuals affecting interest and exchange rates, tax and budget projections, business investment plans,\n and the allocation of over $200 billion in federal funds. Strategic Goal 1, Objective 1.3\n\n The International Trade Administration (ITA) works to create prosperity by promoting trade and investment, ensuring\n fair trade and compliance with trade laws and agreements, and strengthening the competitiveness of U.S. industry. Within ITA,\n the Manufacturing and Services (MAS) unit analyzes the domestic and international aspects of U.S. competitiveness by working\n with U.S. industries to evaluate the needs of the MAS sectors, conducting economic and regulatory studies aimed at strengthening\n U.S. industry, obtaining input and advice from U.S. industries for trade policy setting, and participating, as appropriate, with\n ITA trade policy and negotiation advancement initiatives. The Market Access and Compliance (MAC) unit concentrates on\n the development of strategies to overcome market access obstacles faced by U.S. businesses. MAC monitors foreign country\n compliance with numerous trade-related agreements and identifies compliance problems and other market access obstacles.\n The Import Administration (IA) helps ensure fair trade by administering the U.S. antidumping and countervailing duty (AD/CVD)\n laws in a manner consistent with U.S. international obligations. IA works extensively with U.S. businesses on a regular basis to\n educate them about U.S. trade laws related to dumping and foreign government subsidies and how to act if they are injured by\n those practices. The U.S. and Foreign Commercial Service (US&FCS) broadens and deepens the base of U.S. exports by providing\n U.S. companies with reliable advice on the range of public and private assistance available, and knowledgeably supports all other\n federal trade promotion services. Strategic Goal 1, Objectives 1.1 and 1.2\n\n\n\n\n 8 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nThe Bureau of Industry and Security (BIS) advances U.S. national security, foreign policy, and economic objectives by\nensuring an effective export control and treaty compliance system and by promoting continued U.S. strategic technology leadership.\nBIS (1) regulates the export of sensitive \xe2\x80\x9cdual use\xe2\x80\x9d goods and technologies in an effective and efficient manner; (2) enforces export\ncontrol, antiboycott, and public safety laws; (3) cooperates with and assists other countries on export control and strategic trade\nissues; (4) assists U.S. industry in complying with international arms agreements; (5) monitors the viability of the U.S. defense\nindustrial base; (6) evaluates the effects on national security of foreign investments in U.S. companies; and (7) supports continued\nU.S. technology leadership in industries that are essential to national security. Strategic Goal 1, Objective 1.2\n\nThe Minority Business Development Agency (MBDA) actively promotes the ability of minority business enterprises\n(MBE) to grow and to participate in the global economy through a range of activities that include funding a network of centers\nthat provide MBEs a variety of business assistance services. MBDA (1) fosters the expansion of opportunities for minority-\nowned businesses in the global marketplace; (2) identifies sources of financial capital for minority-owned firms; (3) develops\nand upgrades electronic tools to provide access to growth markets through automated matching of MBEs to public and private\nsector opportunities; (4) provides management and technical assistance to minority-owned businesses; and (5) advocates for the\nincreased use of electronic commerce and new technologies by MBEs. Strategic Goal 1, Objective 1.1\n\nThe National Oceanic and Atmospheric Administration (NOAA) promotes environmental stewardship. NOAA\nencompasses all of Strategic Goal 3. Strategic Goal 3\n\nNOAA is divided into two primary appropriation accounts, Operations, Research, and Facilities; and Procurement, Acquisition, and\nConstruction for both of which the following six programs apply:\n\n\xe2\x97\x8f\xe2\x97\x8f The National Ocean Service (NOS) provides scientific, technical, and management expertise to promote safe navigation;\n protects and restores coastal and marine resources damaged by natural or human-induced threats; and manages and preserves\n coastal and ocean environments.\n\n\xe2\x97\x8f\xe2\x97\x8f The National Marine Fisheries Service (NMFS) manages and conserves the living marine resources within the 200-\n mile U.S. Exclusive Economic Zone. NMFS is dedicated to the stewardship of living marine resources through science-based\n conservation and management.\n\n\xe2\x97\x8f\xe2\x97\x8f The Office of Oceanic and Atmospheric Research (OAR) provides the research and technology development necessary\n to improve NOAA climate, weather, coastal, and ocean services. OAR supplies the scientific information to advise national policy\n decisions in such areas as climate change, air quality, coastal resource management, and stratospheric ozone depletion.\n\n\xe2\x97\x8f\xe2\x97\x8f The National Weather Service (NWS) provides weather, hydrologic, and climate forecasts and warnings for the United\n States, its territories, adjacent waters, and ocean areas, for the protection of life and property and the enhancement of the\n national economy.\n\n\xe2\x97\x8f\xe2\x97\x8f The National Environmental Satellite, Data and Information Service (NESDIS) operates the polar-orbiting and\n geostationary operational environmental satellites, develops the converged polar-orbiting satellite series with the Department\n of Defense (DOD) and the National Aeronautics and Space Administration (NASA), and manages NOAA\xe2\x80\x99s environmental data\n collections for use in studying long-term environmental change.\n\n\xe2\x97\x8f\xe2\x97\x8f Program Support provides overall NOAA management, planning, and administrative support for NOAA. Program Support\n promotes environmental literacy and develops and sustains a world-class workforce. Program Support provides for repair,\n restoration, and other construction efforts, along with NOAA-wide environmental compliance and safety issues. With Program\n Support, the Office of Marine and Aviation Operations operates and maintains NOAA\xe2\x80\x99s ships and aircraft and uses them to\n collect data to support NOAA\xe2\x80\x99s mission.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 9\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n The U.S. Patent and Trademark Office (USPTO) fosters innovation and competitiveness by providing high quality and\n timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy,\n and delivering IP information and education worldwide. Two distinct business lines, Patents and Trademarks, administer the\n patent and trademark laws which provide protection to inventors and businesses for their inventions and corporate and product\n identifications, and encourage innovation and scientific and technical advancement of U.S. industry through the preservation,\n classification, and dissemination of patent and trademark information. Strategic Goal 2, Objective 2.2\n\n The National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness\n by advancing measurement science, standards, and technology in ways that improve economic security and quality of life.\n NIST develops and disseminates measurement techniques, reference data, test methods, standards, and other technologies\n and services needed by U.S. industry to compete in the 21st century. The NIST laboratories provide the measurement science\n and physical standards that are essential components of the technology infrastructure underpinning U.S. innovation. NIST\xe2\x80\x99s\n Technology Innovation Program (TIP) supports innovative, high-risk, high-reward research in areas of critical national need where\n the government has a clear interest due to the magnitude of the problems and their importance to society. Through federal-\n state-local and private sector partnerships, NIST\xe2\x80\x99s Hollings Manufacturing Extension Partnership (MEP) provides technical and\n business assistance to manufacturers through a nationwide network of centers in all 50 states and Puerto Rico. The Baldrige\n National Quality Program promotes proven quality and performance management practices to strengthen U.S. companies,\n educational organizations, and health care providers. Recognized worldwide, the program furthers organizational excellence\n through education, outreach, and annual awards. All of NIST\xe2\x80\x99s programs apply to Strategic Goal 2, Objective 2.1, except\n the MEP program which applies to Strategic Goal 1, Objective 1.4\n\n\n\n The National Technical Information Service (NTIS) collects and preserves scientific, technical, engineering, and other\n business-related information from federal and international sources, and disseminates it to the U.S. business and industrial\n research community. Strategic Goal 2, Objective 2.1\n\n The National Telecommunications and Information Administration (NTIA) develops domestic and international\n telecommunications and information policy for the executive branch; ensures the efficient and effective management and use of\n the federal radio spectrum; and performs state-of-the-art telecommunications research, engineering, and planning. Strategic\n Goal 2, Objective 2.3\n\n\n\n On the following pages is a listing of the key measures of each of the bureaus in the Department. This list is not all-inclusive.\n Further information concerning these and other performance measures can be found in Appendix A. The status of a given measure\n is either exceeded (more than 125 percent of the target), met (100 to 125 percent of target), slightly below (95 to 99 percent of\n the target), or not met (below 95 percent of target).\n\n\n\n\n 10 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n Key Performance Measures\n Strategic\n Goal Performance Measure Target Actual STATUS3\n Strategic Goal 1: Private investment leveraged1 (EDA) $2,410M $2,758M Met\n Maximize U.S. Jobs created/retained1 (EDA) 72,000 66,527 Not Met\n competitiveness Commercial diplomacy success (cases) (annual) (ITA) 166 112 Not Met\n and enable\n economic growth Annual cost savings resulting from the adoption of Manufacturing $350M $647M\n for American and Services (MAS) recommendations contained in MAS studies and Exceeded\n industries, analysis (ITA)\n workers, and Percent of industry-specific trade barriers addressed that were removed 30% 35%\n Met\n consumers or prevented (ITA)\n Dollar value of contract awards obtained (MBDA) $1.00B $1.50B Exceeded\n\n Dollar value of financial awards obtained (MBDA) $0.60B $1.80B Exceeded\n\n Percentage of market access and compliance cases resolved 50% 58%\n Met\n successfully (ITA)\n Value of market access and compliance cases resolved successfully (ITA) $2.5B $21.4B Exceeded\n\n Number of actions that result in a deterrence or prevention of a violation 850 806\n Slightly Below\n and cases which result in a criminal and/or administrative charge (BIS)\n Complete key activities for cyclical census programs on time to support At least 90% of At least 90% of\n effective decision-making by policymakers, businesses, and the public key prep activities key prep activities Met\n and meet constitutional and legislative mandates (ESA/CENSUS) completed on time completed on time\n Achieve pre-determined collection rates for Census Bureau censuses At least 90% of Met\n and surveys in order to provide statistically reliable data to support key censuses and percentages\n effective decision-making of policymakers, businesses, and the public surveys meet/exceed Met\n (ESA/CENSUS) collection rates/\n levels of reliability\n Timeliness: Reliability of delivery of economic data (number of 55 61\n Met\n scheduled releases issued on time) (ESA/BEA)\n Accuracy: Percent of GDP estimates correct (ESA/BEA) > 85% 88% Met\n\n Increased sales attributed to MEP centers receiving federal $2,000M from $2,085M from\n Met\n funding (NIST) FY 2009 funding FY 2009 funding2\n Cost savings attributed to MEP centers receiving federal funding (NIST) $1,000M from $1,149M from\n Met\n FY 2009 funding FY 2009 funding2\n Strategic Goal 2: Qualitative assessment and review of technical quality and merit using Complete annual Completed\n Met\n Promote U.S. peer review (NIST) peer review\n innovation Cumulative number of TIP projects funded (NIST) 25 29 Met\n and industrial Final rejection/allowance compliance rate (USPTO) 94.5% 96.3% Met\n competitiveness\n Patent average total pendency (months) (USPTO) 34.8 35.3 Slightly Below\n\n Trademark final compliance rate (USPTO) 97.0% 96.8% Slightly Below\n\n Trademark average total pendency excluding suspended and inter partes 13.0 10.5\n Met\n proceedings (months) (USPTO)\n Support new telecom and information technology by advocating 5 dockets and 17 dockets and\n Administration views in number of FCC docket filings, and proceedings proceedings Exceeded\n Congressional and other proceedings (NTIA)\n 1\t EDA shows private investment leveraged and jobs created/retained at three, six, and nine year levels. The amounts shown here are for the nine year (long-term\n totals). Three and six year totals are available in Appendix A.\n 2\t Estimate.\n 3\t To be considered \xe2\x80\x9cExceeded,\xe2\x80\x9d an actual must have been at least 25 percent above the target. Met equaled 100-124 percent of target. Slightly Below equaled\n\n 95-99 percent of target.\n (continued)\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 11\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Key Performance Measures (continued)\n Strategic\n Goal Performance measure Target Actual STATUS3\nStrategic Goal 3: Fish stock sustainability index (FSSI) (NOAA) 580 582.5 Met\nPromote Percentage of living marine resources with adequate population 34.3% 34.7%\n Met\nenvironmental assessments and forecasts (NOAA)\nstewardship Number of habitat acres restored (annual/cumulative) (NOAA) 8,875/67,849 6,907/65,881 Not Met\n\n Annual number of coastal, marine, and Great Lakes habitat acres 2,000 2,0002\n Met\n acquired or designated for long-term protection (NOAA)\n Error in global measurement of sea surface temperature (NOAA) 0.53\xc2\xbaC 0.50\xc2\xbaC Met\n\n Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93 Lead time 12 142\n Met\n (minutes) (NOAA)\n Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93 Accuracy (%) 70% 74%2\n Met\n (NOAA)\n\n Hurricane forecast track error (48 hours) (nautical miles) (NOAA) 107 70 Exceeded\n\n Hurricane forecast intensity error (48 hours) (difference in knots) 13 18\n Not Met\n (NOAA)\n Reduce the hydrographic survey backlog within navigationally 5,160 4,395\n Not Met\n significant areas (square nautical miles surveyed per year) (NOAA)\n Percentage of U.S. counties rated as fully enabled or substantially 74.0% 79.0%\n Met\n enabled with accurate positioning capacity (NOAA)\nManagement Provide accurate and timely financial information and conform to \xe2\x80\xa2\t Eliminate any \xe2\x97\x8f\xe2\x97\x8f Significant\nIntegration Goal: federal standards, laws, and regulations governing accounting and significant deficiency not\nAchieve financial management (DM) deficiency eliminated\norganizational within 1 year of \xe2\x97\x8f\xe2\x97\x8f Completed\nand management determination\n FY 2010 A-123 Not Met\nexcellence \xe2\x80\xa2\t Complete\n assessment\n FY 2010 A-123\n of internal\n assessment of\n controls\n internal controls\n\n Improve the management of information technology (DM) \xe2\x80\xa2\t IT investments \xe2\x97\x8f\xe2\x97\x8f For the year,\n have cost/ IT investments\n schedule overruns have cost/\n and performance schedule\n shortfalls overruns and Met\n averaging less performance\n than 10% shortfalls\n averaging less\n than 10%\n Dollar value of financial benefits identified by the OIG (OIG) $38.0M $47.8M Exceeded\n2\t Estimate.\n3\t To be considered \xe2\x80\x9cExceeded,\xe2\x80\x9d an actual must have been at least 25 percent above the target. Met equaled 100-124 percent of target. Slightly Below equaled\n 95-99 percent of target.\n\n\n\n\n 12 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n M ost I mportant R esults\n\n\n\n\nMaximize U.S. competitiveness and enable economic growth for American industries, workers, and consumers\n\nPerformance Summary\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n FY 2010, the Department met or exceeded\n 78 percent of the targets it had set for the year. As a\n general rule, the Department has increased slightly\nin terms of performance from FY 2001 through FY 2010,\nhaving met/exceeded 77 percent of the targets in 2001.\n\nAccomplishments and Benefits\n\nSome of the significant accomplishments, impacts and\nbenefits that the Department had on the U.S. public\ninclude the following:\n\nThrough programs within the Economic Development\nAdministration (EDA), the Department has helped\ngenerate, by FY 2010, approximately $2.8 billion in private\ninvestment and 66,527 jobs as a result of approximately\n$411 million in investments made in FY 2001, a 7-to-1\nbenefit-to-cost ratio. EDA data indicate that investments\nmade in FY 2007, FY 2004, and FY 2001 (three, six, and nine\nyears prior to FY 2010) have helped generate $6.6 billion\nin private investment and have helped create or retain 102,000 jobs. EDA anticipates that FY 2010 investments of approximately\n$212 million will help generate $261 million, and then continue to increase to $652 million by FY 2016, and $1,303 million by\nFY 2019. EDA expects that those same investments will help create or retain 6,523 jobs by FY 2013, 16,308 jobs by FY 2016, and\n32,616 jobs by FY 2019.\n\nTo help advance President Obama\xe2\x80\x99s innovation agenda, EDA successfully led two major, multi-department funding competitions\nin FY 2010: EDA helped to lead the Energy Regional Innovation Cluster (e-RIC) initiative, a pilot initiative to spur regional\neconomic growth while developing innovative, energy-efficient building technologies; and the i6 Challenge to accelerate the\ncommercialization of university and federal research to take ideas from the lab to the marketplace, producing the small businesses\nthat are the engine of job creation in the United States.\n\nFurther, EDA led efforts to assist regional economies that have been greatly impacted by transformations in major U.S. industries\nas well as devastating man-made and natural disasters. EDA spearheaded the effort to implement President Obama\xe2\x80\x99s $100\nmillion, multi-agency initiative to assist communities affected by changes in the space industry; collaborated with the White\nHouse Council on Auto Communities and Workers to promote innovative strategies that attract national and global investment\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 13\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n to auto-impacted communities; and played a pivotal role in federal efforts to advance recovery efforts in the Gulf Coast region\n following the BP oil spill.\n\n Additionally, EDA participated in the White House Cities in Transition Initiative and led the creation of a Cities in Transition\n Challenge grant competition to support the development of economic recovery strategies for chronically distressed communities\n across the Nation.\n\n Likewise, in FY 2010, operations funded by the Minority Business Development Agency (MBDA) supported clients who obtained\n $3.3 billion in contract and financial awards.\n\n In February 2010, Secretary of Commerce Gary Locke unveiled the details of the Department\xe2\x80\x99s efforts to support President\n Obama\xe2\x80\x99s National Export Initiative (NEI) designed to reach President Obama\xe2\x80\x99s goal of doubling exports over the next five years and\n to support two million jobs in the United States. The NEI represents the first time the United States will have a government-wide\n export-promotion strategy with focused attention from the President and his Cabinet.\n\n The NEI is focused on three key areas: (1) a more robust effort by this administration to expand its trade advocacy in all its forms,\n especially for small and medium-sized enterprises (SME); (2) improving access to credit with a focus on small and medium-sized\n businesses that want to export; and (3) continuing the rigorous enforcement of international trade laws to help remove barriers\n that prevent U.S. companies from getting free and fair access to foreign markets. In addition to improving efforts in those areas,\n the NEI creates an Export Promotion Cabinet reporting to the President that will consist of top leaders from agencies that can\n contribute to this effort.\n\n Since President Obama announced the NEI, the Department\xe2\x80\x99s Advocacy Center has assisted U.S. companies competing for export\n opportunities, supporting $11.4 billion in exports and an estimated 70,000 jobs. The Department\xe2\x80\x99s Commercial Service officers\n stationed around the world have helped more than 2,000\n companies generate $3.8 billion worth of exports. To date,\n the Department has coordinated 18 trade missions with over\n 160 companies to 24 countries.\n\n The International Trade Administration (ITA) continued\n to lower trade barriers through free trade agreements\n (FTA) during FY 2010. Although countries that the United\n States has FTAs with only represent 9.4 percent of world\n gross domestic product (GDP), they represent 41 percent\n of U.S. trade. These FTAs are helping strengthen the U.S.\n manufacturing sector. ITA has also maintained a concerted\n effort to open up large developing markets like China and\n India.\n\n Often companies encounter difficult hurdles when trying\n to do business in other countries. ITA has measured itself\n by \xe2\x80\x9cexport successes\xe2\x80\x9d tied to specific export transactions\n of client companies. Overseas posts also devote time and\n resources to \xe2\x80\x9ccommercial diplomacy,\xe2\x80\x9d i.e., working behind\n the scenes to resolve problems, reduce trade barriers, and\n\n\n\n\n 14 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\ncut red tape. Commercial diplomacy benefits not only current ITA clients, but also all U.S. exporters by opening doors and creating\npaths to success for other exporters to follow.\n\nWhile the Department seeks to encourage trade, this desire is balanced by the need to control exports, specifically those dual-use\nexports which have both civilian and military applications.\n\nThe Department announced a revision to its rules regarding the export of most mass market electronic products that contain\nencryption functions and other encryption products.\n\nThis revised rule enhances U.S. national security and cuts red tape by eliminating the review of readily available encryption items,\nlike cell phones and household appliances, and allows the government to focus its resources on more sensitive encryption items.\nThis new rule ends the U.S. government\xe2\x80\x99s 30-day technical review requirement to export most mass market and other types of\nencryption products. \xe2\x80\x9cMass market\xe2\x80\x9d electronic products containing encryption include cell phones, laptops, and disk drives.\nExporters and manufacturers of the encryption products may now self-classify the products and then export them without a\nlicense if they register online with the Bureau of Industry and Security (BIS). BIS also requires that they submit an annual self-\nclassification report. This rule is expected to decrease technical reviews by approximately 70 percent and semi-annual reporting\nby up to 85 percent.\n\nThe rule also extends the scope of License Exception ENC\nauthorizations to most encryption technology exports,\nfollowing a technical review. In addition, it adds a decontrol\nnote for items that perform \xe2\x80\x9cancillary\xe2\x80\x9d cryptography, which\ncovers items such as games, robotics, business process\nautomation, and other products that contain encryption\ncapabilities but do not have communication, computing,\nnetworking, or information security as a primary function.\n\nThis rule is the first step in the President\xe2\x80\x99s effort to\nfundamentally reform U.S. encryption export controls and\nthe administration will continue to review the encryption\nrules to further enhance national security and ensure the\ncontinued competitiveness of U.S. encryption products.\n\nThrough the Census Bureau and the Bureau of Economic\nAnalysis (BEA), the Department provides vital statistical\ninformation on the economy and the demographics of\nthe Nation. Statistics affect all aspects of public and\nprivate sectors, including the distribution of funds to\nvarious geographic districts. The Economics and Statistics\nAdministration (ESA) provides timely and accurate economic\ninsight to the Secretary and his chief policy advisors through a biweekly economic briefing and during FY 2010 released three\nmajor reports this year: \xe2\x80\x9cMiddle Class in America,\xe2\x80\x9d \xe2\x80\x9cMeasuring the Green Economy,\xe2\x80\x9d and \xe2\x80\x9cCO2 Emissions and Intensities Over\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 15\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Time.\xe2\x80\x9d The findings in these reports have been used across the Administration, including by the White House Office of Public\n Engagement and the Vice President\xe2\x80\x99s Middle Class Task Force.\n\n In FY 2010, the Census Bureau conducted the 2010 Decennial Census, the largest non-military activity undertaken by the U.S.\n government. The decennial census affects the reapportionment of Congressional seats among the states and the corresponding\n redistricting within the states. It forms the basis for many political, economic, and social decisions that are made throughout\n the United States, including the distribution of more than $400 billion of federal funding among states, cities, and other local\n communities.\n\n The Census Bureau completed data collection for the 2007 Economic Census and started delivery of some 1,600 data releases\n through the Web-based American FactFinder dissemination system. The 2007 Economic Census Advance Report was released in\n November 2009, and the Geographic Area Series was released in August 2010. The flow of 2007 Economic Census data products\n will continue through FY 2011.\n\n BEA promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in\n an objective and cost-effective manner. BEA\xe2\x80\x99s national, industry, regional, and international economic accounts present valuable\n information on key issues such as U.S. economic growth, regional economic development, inter-industry relationships, and the\n Nation\xe2\x80\x99s position in the world economy.\n\n In 2010, BEA continued to produce its critical statistics, including GDP, personal income and outlays, corporate profits, GDP by\n state and by metropolitan area, balance of payments, and GDP by industry. These statistics are used by federal, state, and local\n governments for budget development and tax projections; by the Federal Reserve for monetary policy; by the business sector for\n planning and investment; and by the U.S. public to follow and understand the performance of the Nation\xe2\x80\x99s economy. BEA helps\n the world to understand these and other economic measures produced by the federal statistical system through its publication,\n The Survey of Current Business, as well as through its Web site, www.bea.gov. As businesses, governments, and households are\n provided with better, easier-to-understand economic data, their ability to make key investment decisions that move the U.S.\n economy forward are significantly improved.\n\n One of BEA\xe2\x80\x99s primary goals in 2010 was to maintain and improve the relevance and usefulness of its economic accounts. It continued\n to explore the development of new statistics such as quarterly GDP by industry, state personal consumption expenditures, and\n industry-level production accounts. It also began work to develop new estimation models for service sector statistics that will\n allow a quicker and more flexible response to current and future changes in the economy. At the same time, BEA continued its\n progress on satellite accounts, publishing an update of the account for research and development and proceeding with research\n into prices and spending measures for the health satellite account.\n\n The National Institute of Standards and Technology\xe2\x80\x99s (NIST) Hollings Manufacturing Extension Partnership (MEP) provides tools and\n services to keep manufacturers competing and thriving in today\xe2\x80\x99s global marketplace. In FY 2010, MEP\xe2\x80\x99s nationwide network of field\n staff continued to serve as trusted business advisors focused on solving manufacturers\xe2\x80\x99 challenges and identifying opportunities\n for growth. MEP provides the services that reduce manufacturers\xe2\x80\x99 bottom-line expenses and increase efficiency while offering\n tools to improve manufacturers\xe2\x80\x99 top-line growth with the development of new sales, new markets, and new products.\n\n\n\n\n 16 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nSummary of Performance Results\n\n targets met\n Strategic objective Performance outcome\n or exceeded\n Strategic Objective 1.1: Promote private investment and job creation in economically distressed\n 5 of 6\n Foster domestic economic communities (EDA)\n development as well as export Improve community capacity to achieve and sustain economic growth\n opportunities 3 of 6\n (EDA)\n Increase access to the marketplace and financing for minority-owned\n 5 of 5\n businesses (MBDA)\n Strengthen U.S. competitiveness in domestic and international markets\n 4 of 4\n (ITA)\n Broaden and deepen U.S. exporter base (ITA) 2 of 6\n Strategic Objective 1.2: Identify and resolve unfair trade practices (ITA) 5 of 5\n Advance responsible economic Maintain and strengthen an adaptable and effective U.S. export control\n growth and trade while 5 of 7\n and treaty compliance system (BIS)\n protecting American security\n Integrate non-U.S. actors to create a more effective global export control\n 0 of 1\n and treaty compliance system (BIS)\n Ensure continued U.S. technology leadership in industries that are\n 1 of 1\n essential to national security (BIS)\n Strategic Objective 1.3: Provide benchmark measures of the U.S. population, economy, and\n 2 of 3\n Advance key economic and governments (ESA/CENSUS)\n demographic data that support Provide current measures of the U.S. population, economy, and\n effective decision-making of 2 of 2\n governments (ESA/CENSUS)\n policymakers, businesses, and the\n American public Provide timely, relevant, and accurate economic statistics (ESA/BEA) 4 of 4\n Strategic Objective 1.4: Increase the productivity, profitability, and competitiveness of\n Position manufacturers to compete manufacturers (NIST) 4 of 4\n in a global economy\n\n\nFor Strategic Goal 1, in terms of performance, not only did the Department provide significant benefits to the U.S. public, it also\nmet nearly all of its targets in FY 2010. EDA met or exceeded five of six targets for increasing private investment and creation\nof jobs for programs that were funded either in 2001, 2004, or 2007 (EDA tracks progress on a three, six, and nine-year basis).\nThese programs focused on economically distressed communities. EDA met half of the targets it set for the second outcome.\nFor its outcome, \xe2\x80\x9cIncrease access to the marketplace and financing for minority-owned businesses,\xe2\x80\x9d MBDA met all of its targets.\nFurthermore, historically, the targets appear to be stable or aggressive.\n\nITA had three performance outcomes that applied to Strategic Goal 1: \xe2\x80\x9cStrengthen U.S. competitiveness in domestic and\ninternational markets,\xe2\x80\x9d \xe2\x80\x9cBroaden and deepen the U.S. exporter base,\xe2\x80\x9d and \xe2\x80\x9cIdentify and resolve unfair trade practices.\xe2\x80\x9d ITA missed\nfour of 15 targets for its three outcomes.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 17\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n For the \xe2\x80\x9cBroaden and deepen the U.S. exporter base\xe2\x80\x9d outcome, ITA missed the targets for the following four measures:\n\n \xe2\x97\x8f\xe2\x97\x8f US&FCS SME new-to-export (NTE)/total change in SME exporters (CS SME NTE effectiveness)\n\n \xe2\x97\x8f\xe2\x97\x8f Number of SME new-to-market (NTM) firms/number of SME firms exporting to two to nine foreign markets\n (NTM effectiveness)\n\n \xe2\x97\x8f\xe2\x97\x8f Commercial diplomacy successes (cases) (annual)\n\n \xe2\x97\x8f\xe2\x97\x8f Percentage of advocacy bids won\n\n ITA missed the target for the first measure because of a shift in focus from assisting NTE SMEs to NTM firms in support of the\n President\xe2\x80\x99s NEI goals of doubling U.S. exports and supporting two million jobs. While ITA missed the target for the second\n measure, the results did increase by 50 percent in quarter four over quarter three. ITA helped nearly 2,800 SMEs achieve 4,560\n export successes to a new market in FY 2010, which is over 500 more export successes than in FY 2009. While ITA did not\n achieve the target for the third measure noted, the U.S. export dollar value of commercial diplomacy successes increased by\n 79 percent from $974 million in FY 2009 to $4.56 billion in FY 2010. For the last measure noted, U.S. and Foreign Commercial\n Service (US&FCS) did not achieve this target; however, US&FCS did achieve 92 percent more advocacy wins in FY 2010 (50) than\n in FY 2009 (26) and worked on 418 advocacy cases in FY 2010 or 2 percent more than FY 2009.\n\n One of BIS\xe2\x80\x99s key tasks is to either prevent illegal exports or to charge export violators. To that end, a key performance measure for\n BIS is the \xe2\x80\x9cnumber of actions that results in a deterrence or prevention of a violation and cases which result in a criminal and/or\n administrative charge.\xe2\x80\x9d While in FY 2010, BIS was slightly below the target for this measure, BIS has consistently met its targets\n while raising the targets from year to year. BIS has also consistently maintained an effective export control system, a key to which\n is the processing of export licenses and the timely issuance of regulations regarding export activity. BIS has consistently met its\n targets in these areas.\n\n Both the Census Bureau and BEA consistently provide relevant and accurate statistical data to the U.S. public in a timely manner.\n As a measure of customer satisfaction, the Census Bureau strives to meet or exceed the aggregate federal score on the American\n Customer Satisfaction Index (ACSI). Since 1999, the Bureau has been below the aggregate score only three times (2000 and 2001,\n and 2010). Components of the ACSI score include navigation of site, content, transparency, and future participation. The Census\n Bureau did not achieve the target in FY 2010 as a result of a low score of 60 percent in the area of navigation, thus having a\n negative impact on the overall ASCI score, which is driven by a high rate of first time users. Future participation, which includes\n trust in information provided by the Census Bureau, recommended use of the Internet site to others, and reoccurring use of the\n site, realized an average score of 83 percent. The average ASCI score for the years FY 2004 \xe2\x80\x93 FY 2009 was 72.7. BEA released\n all of its 2010 statistics on schedule, and has developed the GDP statistics with over 85 percent accuracy for each of the past 10\n years. For a more detailed description of this accuracy measure see www.osec.doc.gov/bmi/budget/08CJB/esa.pdf. Each year BEA\n conducts a customer satisfaction survey with a goal of achieving greater than a 4.0 (on a five-point scale). BEA has consistently\n exceeded that goal, most recently achieving a 4.4 score.\n\n As a catalyst for strengthening U.S. manufacturing, MEP provides services to manufacturers focused on everything from process\n improvements to strategies for growth to green manufacturing. MEP also works with state and federal partners to accelerate\n manufacturing\xe2\x80\x99s ongoing transformation into a more efficient and powerful engine of innovation that drives economic growth and\n job creation. Through a framework focused on five critical areas\xe2\x80\x94technology acceleration, supplier development, sustainability,\n workforce, as well as continuous improvement\xe2\x80\x94MEP is positioning manufacturers to develop new customers, expand into new\n markets and create new products with the end goal of increasing profitability and competitiveness. MEP offers manufacturers a\n wealth of unique and effective resources. As a result, MEP clients achieve higher profits, save time and money, invest in physical\n and human capital, and create and retain thousands of jobs.\n\n\n\n 18 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nPromote U.S. innovation and industrial competitiveness\n\nPerformance Summary\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n FY 2010, the Department met or exceeded 82 percent\n of the targets it had set for the year. For this strategic\n goal, the Department has significantly improved\nits performance since FY 2001, having met or exceeded\n55 percent of its targets in 2001.\n\nAccomplishments and Benefits\n\nSome of the significant accomplishments, impacts, and\nbenefits that the Department had on the U.S. public\ninclude the following:\n\nNIST\xe2\x80\x99s programs are recognized as critical to promoting\nU.S. innovation and competitiveness. With a focus\non measurement science, standards, and technology,\nNIST\xe2\x80\x99s laboratories and programs provide the tools\nand infrastructure critical to enable the innovation,\ndevelopment, and deployment of advanced technologies.\nNIST\xe2\x80\x99s services and products are critical to every\nmanufacturing and service industry, and government\ninstitution.. Examples of NIST\xe2\x80\x99s most important results in support of U.S. innovation and competitiveness during FY 2010 cover\nStandard Reference Materials (SRM), Smart Grid standards, building codes and standards, health care information technology (IT),\nselected American Recovery and Reinvestment Act (ARRA) of 2009 grants, and the award of new high-risk innovative projects.\n\nIn January 2010, NIST issued an initial set of cyber security guidelines and other elements of a framework to support transforming\nthe Nation\xe2\x80\x99s aging electric power system into an interoperable Smart Grid. This key component of the Obama administration\xe2\x80\x99s\nenergy plan and its strategy for U.S. innovation will integrate digital computing and communication technologies and services\nwith the power-delivery infrastructure. The Smart Grid will enable two-way flows of energy and communication and control\ncapabilities, allowing advances such as real-time consumer control over energy usage and significantly increased reliance on solar\nand other sources of clean renewable energy. These new capabilities will greatly improve the reliability, flexibility, and efficiency\nof the entire grid. The NIST-led Smart Grid Interoperability Panel has more than 600 member organizations.\n\nNIST SRMs are among the most widely distributed and used products from NIST. The Agency prepares, analyzes, and distributes\nmore than 1,300 different materials that are used throughout the world to check the accuracy of instruments and test procedures\nused in manufacturing, clinical chemistry, environmental monitoring, electronics, criminal forensics, and dozens of other fields.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 19\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n NIST and the Department of Health and Human Services are working to develop a suite of software tools to support a health IT\n testing infrastructure. The tools are intended to help vendors test their health IT products and ensure basic functionality, such\n as the calculation of body mass index or proper formatting of common electronic health records. Fully incorporating modern\n IT into the health care system promises many benefits, including better quality care, less paperwork, and fewer medical errors\n while reducing unnecessary costs. To ensure that the new technology functions as expected, NIST has been working with a\n broad array of public and private stakeholders, and has released the first of four installments of a new health IT test method and\n related software.\n\n In January 2010, NIST awarded more than $123 million in ARRA grants to 11 universities and one non-profit research organization\n to provide cost-shared support for the construction of new scientific research facilities. The 12 projects will launch more than\n $250 million in new laboratory construction projects beginning in early 2010.\n\n NIST also awarded approximately $34 million in one-time ARRA grants for 27 research projects in measurement science and\n engineering to fund projects lasting up to three years at higher-education, commercial, and non-profit organizations in 18 states.\n The NIST Measurement Science and Engineering Research\n Grants Program, funded under ARRA supports research to\n advance measurement science in six areas of critical national\n importance, including energy, manufacturing, physical\n infrastructure, environment and climate change, bioscience\n and health care, and IT and cyber security. By leveraging\n the Nation\xe2\x80\x99s brightest minds in measurement science\n in important national needs, these grants will increase\n U.S. ability to innovate, compete, and solve scientific and\n technological problems.\n\n NIST\xe2\x80\x99s Technology Innovation Program (TIP) funded a total\n of 29 new high-risk, innovative projects since the program\xe2\x80\x99s\n inception in the critical national need areas of inspecting and\n repairing the Nation\xe2\x80\x99s civil infrastructure and accelerating\n advanced materials in manufacturing processes. The unique\n multi-disciplinary approaches and teaming efforts of the\n 73 recipient organizations involved in these projects will\n help to achieve a transformational impact in both areas of\n national need.\n\n People worldwide benefit from innovations, both directly on a personal level, and indirectly through economic growth fueled\n by innovation. Continual development of a vigorous, flexible, and efficient intellectual property (IP) system protects individual\n rights, encourages investment in innovation, and fosters entrepreneurial spirit. The Department promotes the IP system through\n the protection of inventions or creations via patent, trademark, trade secret, and copyright laws. Under this system of protection,\n industry in the United States has flourished, creating employment opportunities for millions of Americans.\n\n Through the U.S. Patent and Trademark Office (USPTO), the Department provides IP protection in the form of patents and trademarks\n thus plays a key role in fostering the innovation that drives job creation, investment in new technology and economic recovery,\n and in promoting and supporting the Administration\xe2\x80\x99s priorities. By issuing patents, the Department provides incentives to invent\n\n\n\n\n 20 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nand invest in new technology by allowing innovators the opportunity to benefit from their discoveries. Registration of trademarks\nassists businesses in protecting their investments and safeguards consumers against confusion and deception in the marketplace\nby providing notice of marks in use. Through dissemination of patent and trademark information, the Department promotes a\nglobal understanding of IP protection and facilitates the development and sharing of new technologies worldwide.\n\nIn FY 2010, USPTO successfully launched new and innovative projects to meet its strategic goals. USPTO identified and implemented\ntools and policies that increased patent quality and timeliness. USPTO found efficiencies by redesigning systems and procedures\nso that it could remove redundant processes. USPTO\xe2\x80\x99s improved processes created a streamlined examination process that\nimproves patent quality and timeliness. USPTO made improvements to the existing patent processes through the analysis of\nexaminer workflow while incorporating applicant needs. USPTO closely studied patent processing systems to determine where\nthe improvements would provide the greatest increase in efficiency or increase in examination capacity. A proposal for three-\ntrack application pathway gives applicants control over prioritizing their applications, and assists patents management in\nbalancing their workload. This approach is efficient for both the applicant and the patents management since it can now identify\nareas where increased examination capacity may be required.\n\nOver the last five years, the Trademark organization has met nearly all its performance targets. The examination quality of office\nactions in the Trademark organization has met and exceeded goals, ranging above 95 percent accuracy in recent years. Approximately\n97 percent of all first actions and final decisions (approvals\nand rejections) met statutory and compliance rates for\nquality of decision-making and writing. To sustain these\nhigh quality levels, the Trademark organization continues to\nemphasize and improve training, to promote electronic filing\nand processing, and to make greater use of online tools and\nenhanced processes. Trademark pendency has improved as\nelectronic processing and filing have become the primary\nmeans of conducting business within the Trademark\norganization. Increased use of electronic forms, particularly\nTrademark Electronic Application System (TEAS) Plus filings,\nwhich represent more than 33 percent of new application\nfilings and more than 31 percent of first action approvals, has\nimproved the efficiency and timeliness of examination. For\nthe fourth consecutive year, USPTO consistently maintained\ntrademark first action pendency within the optimum range of\n2.5 to 3.5 months. Average total pendency shows sustained\nimprovement as well, with disposal or registration occurring\nwithin 11 months of filing.\n\nThe Trademark organization continuously monitors and improves quality. This year, a new comprehensive excellence quality\nmeasure was implemented, which expands upon the existing first and final action standards for correct decision-making. The new\nmeasure seeks to identify the percentage of Trademark organization actions that are excellent in all respects. The new standard\nmeasures the quality of the search, evidence, writing, and decision-making, as well as the percentage of issues that are settled or\nclarified through a phone call to the applicant or its attorney. The Trademark organization has used feedback from user groups to\nensure that the standards of excellence it applies reflects users\xe2\x80\x99 perception of excellence as well.\n\nTelecommunications plays a key role in U.S. society as the economy expands into the digital age. The Department, through\nthe National Telecommunications and Information Administration (NTIA), is at the forefront of this expansion. In addition to\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 21\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n developing policy for the Administration on key issues, NTIA has important operational roles to manage the use of radio spectrum\n by the federal government, to perform cutting-edge communications research and engineering for many federal agencies, to\n privatize the Internet Domain Name System (DNS) and manage key Internet functions, and to administer grant programs to\n support the expanded deployment of communications and IT. Collectively, NTIA\xe2\x80\x99s work promotes the development of an advanced\n communication and information infrastructure that efficiently meets the needs of consumers, creates jobs, and enhances the\n Nation\xe2\x80\x99s competitiveness in the global marketplace. As such, NTIA makes an important contribution to the Department\xe2\x80\x99s overall\n mission to foster, serve, and promote the Nation\xe2\x80\x99s economic development and technological advancement.\n\n NTIA utilized approximately $4 billion of ARRA funding for the Broadband Technology Opportunities Program (BTOP), which\n provided grants to support the deployment of broadband infrastructure, enhance and expand public computer centers, and\n encourage sustainable adoption of broadband service. The 233 BTOP projects will:\n\n \xe2\x97\x8f\xe2\x97\x8f Fund the installation or upgrade of approximately 120,000 miles of broadband networks, including fiber optics, wireless,\n microwave, and other technologies. Of this amount, approximately 70,000 miles involve construction of new broadband\n facilities.\n\n \xe2\x97\x8f\xe2\x97\x8f Provide broadband access to approximately 24,000 community anchor institutions, including schools, libraries, government\n offices, health care facilities, and public safety entities.\n\n \xe2\x97\x8f\xe2\x97\x8f Deploy middle mile infrastructure in areas with nearly 40 million households and four million businesses, many of which\n will benefit from new or improved broadband service provided by last-mile providers that are able to utilize the new, open\n infrastructure to extend or upgrade their service for consumer and business customers.\n\n \xe2\x97\x8f\xe2\x97\x8f Invest in more than 3,500 new or upgraded public computer centers in libraries, schools, community centers, and other public\n locations.\n\n \xe2\x97\x8f\xe2\x97\x8f Invest in more than 35,000 new or upgraded public computer workstations.\n\n \xe2\x97\x8f\xe2\x97\x8f Make public computer center workstations and training available to more than one million new users.\n\n These anticipated benefits will be realized over the life of each project, which must be substantially complete within two years\n and fully complete within three years.\n\n One of NTIA\xe2\x80\x99s principal operational responsibilities is to manage the radio communications spectrum used by the federal\n government. Wireless technologies and services support the missions of 69 federal departments and agencies, which use over\n 40 radio services for national and homeland security, critical infrastructure protection, transportation, and law enforcement,\n among others. NTIA has been working with the Federal Communications Commission (FCC) to improve the efficient use of\n spectrum. In addition, NTIA supported the Administration\xe2\x80\x99s efforts to foster new wireless broadband technologies by making\n new spectrum available. NTIA is collaborating with the FCC to develop a plan to make available 500 MHz of spectrum suitable\n for both mobile and fixed wireless broadband use over the next 10 years. The plan focuses on making spectrum available for\n exclusive use by commercial broadband providers or technologies, or for dynamic, shared access by commercial and government\n users. For example, the joint Spectrum Sharing Innovation Test Bed is examining various technical issues involved in the sharing\n of spectrum between federal and non-federal users. This initiative is providing an important opportunity for federal agencies to\n work cooperatively with industry, researchers, and academia to objectively evaluate new technologies to manage the Nation\xe2\x80\x99s\n airwaves. NTIA recognizes the potential widespread benefits of more widely expanded wireless broadband, and it is committed to\n doing its part to help turn that potential into reality.\n\n Enhancing telecommunications services is a key to advancing technology in the Nation. The radio frequency spectrum is used in\n a variety of ways, including transportation control and law enforcement. NTIA satisfies the frequency assignment needs of the 63\n\n\n\n 22 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nfederal agencies allowing them to operate radio communications that provide the public with national and homeland security,\nlaw enforcement, transportation control, natural resource management, and other public safety services during peacetime and\nemergencies. A key to this is making the assignments available as soon as possible after an agency requests a frequency. In\nFY 2005, NTIA sought to reduce this time to 12 business days or less. By 2010, NTIA reduced this time to nine business days or\nfewer. NTIA\xe2\x80\x99s long-term goal is to improve spectrum management processes throughout the federal government so that time for\nspectrum assignments can be reduced from more than 15 days to three days or fewer, supporting long-term goals for efficiency\nand effectiveness of spectrum use. NTIA has also promoted new sources of advanced telecommunications services.\n\nSummary of Performance Results\n\n targets met\n Strategic objective Performance outcome\n or exceeded\n Strategic Objective 2.1: Promote innovation, facilitate trade, and ensure public safety and security\n Advance measurement science by strengthening the Nation\xe2\x80\x99s measurements and standards infrastructure 5 of 6\n and standards that drive (NIST)\n technological change Promote U.S. competitiveness by directing federal investment and R&D\n into areas of critical national need that support, promote, and accelerate\n 1 of 1\n high-risk, high-reward research and innovation in the United States\n (NIST)\n Increase public access to worldwide scientific and technical information\n 3 of 3\n through improved acquisition and dissemination activities (NTIS)\n Strategic Objective 2.2: Optimize patent quality and timeliness (USPTO) 2 of 5\n Protect intellectual property Optimize trademark quality and timeliness (USPTO) 4 of 5\n and improve the patent and\n trademark system Provide domestic and global leadership to improve intellectual property\n 1 of 1\n policy, protection and enforcement worldwide (USPTO)\n Strategic Objective 2.3: Ensure that the allocation of radio spectrum provides the greatest benefit\n 5 of 5\n Advance global e-commerce as to all people (NTIA)\n well as telecommunications and Promote the availability, and support new sources, of advanced\n information services 2 of 2\n telecommunications and information services (NTIA)\n\n\nFor Strategic Goal 2, the Department met 82 percent of its targets (23 of 28). However, the actuals of the measures that\nwere missed were all slightly below the target (within five percent). NIST narrowly missed one target, that being for \xe2\x80\x9cPeer-\nreviewed technical publications produced\xe2\x80\x9d (target = 1,300, actual = 1,243). NIST has consistently met this target in the past.\nAs in previous years, NIST did well in the National Research Council assessment, performing up to the past standards it has\nset. SRMs, publications, datasets, and calibrations are a few of the knowledge transfer mechanisms that provide the technical\ninfrastructure in support of the President\xe2\x80\x99s Plan for Science and Innovation. NIST met all of its targets for the measures reflecting\nthese mechanisms.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 23\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n In addition, NIST met the TIP target for funding a total of 29 projects during FY 2010 for high-risk, high-reward innovative research\n in critical national need areas of inspecting and repairing civil infrastructure and accelerating advanced materials in manufacturing\n processes. These projects involve 73 recipient organizations, including industry, universities, and public sector entities.\n\n One other area of technological innovation involves the distribution of scientific and technical information. The National\n Technical Information Service (NTIS) serves as a clearinghouse for this information to the public, private, and non-profit sectors.\n NTIS exceeded all of its 2010 targets, making more than 969,000 updated items available, and disseminating more than 50 million\n information products.\n\n One way that the Department advances technology and business is through the issuance of patents and trademarks thereby\n protecting IP that serves as a motive to innovate. In this regard, compliance rates (quality) and pendency (timeliness) play a key\n role in evaluating performance. USPTO made its targets related to patent compliance rates, however, it was slightly below the\n targets for \xe2\x80\x9cPatent average first action pendency\xe2\x80\x9d; \xe2\x80\x9cPatent average total pendency\xe2\x80\x9d; and, \xe2\x80\x9cPatent applications filed electronically.\xe2\x80\x9d\n For trademarks, USPTO met its targets for \xe2\x80\x9cPendency compliance\xe2\x80\x9d and \xe2\x80\x9cApplications processed electronically.\xe2\x80\x9d However, it was\n slightly below its target for \xe2\x80\x9cTrademark final compliance rate\xe2\x80\x9d though it did meet its target for \xe2\x80\x9cFirst action compliance rate.\xe2\x80\x9d\n Finally, for its \xe2\x80\x9cProvide domestic and global leadership to improve intellectual property policy, protection, and enforcement\n worldwide\xe2\x80\x9d goal, USPTO sought to have 50 percent of prioritized countries having implemented at least 75 percent of action steps\n in country-specific action plans. USPTO achieved a rate of 75 percent of those prioritized countries.\n\n\n\n\n 24 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nPromote environmental stewardship\n\nPerformance Summary\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n FY 2010, the Department met or exceeded\n 77 percent of the targets it had set for the year.\n For this strategic goal, the Department has remained\nstable since FY 2001, having met or exceeded 77 percent of\nits targets in 2001.\n\nAccomplishments and Benefits\n\nThrough the National Oceanic and Atmospheric Administration\n(NOAA), the Department impacts the entire Nation. From the\ndevelopment and protection of fisheries to the prediction of\nsevere storms such as hurricanes and tornadoes, all of the\nUnited States depends on NOAA programs. Some of the\nsignificant accomplishments, impacts, and benefits that\nNOAA had on the U.S. public include the following:\n\nEven before the Deepwater Horizon sank and precipitated\nthe worst environmental disaster in the Nation\xe2\x80\x99s history,\nNOAA had staff on the scene. Thus, NOAA became integrally\ninvolved in the response and will continue to play a pivotal\nrole in the months and years ahead, sorting out (assessing) the worst environmental disaster in the Nation\xe2\x80\x99s history.\n\nExpert advice from NOAA was integral to saving, assessing and rehabilitating Gulf wildlife including endangered sea turtles, and\nprotecting critical habitat through response strategies. Aerial oil mapping teams fed detailed observations to NOAA modeling experts\nfor daily publication of oil trajectories\xe2\x80\x94forecasts of oil amount and movement\xe2\x80\x94critical to responders and local communities. The\nmodeling team generated the loop current diagram which helped indicate the probability of longer term flow toward the Florida\npeninsula and/or East Coast, the long-term forecast which shows oil distribution probabilities, and 3D subsea models to help determine\nthe fate of oil dispersed in the water column. These products are vital decision making tools for the federal on-scene coordinator, small\nbusinesses, state governments, local authorities, fisheries managers, responders, and homeowners.\n\nThe National Incident Command relied on and gave special praise to NOAA\xe2\x80\x99s Environmental Response Management Application\n(ERMA) that showed response assets and information as layers on a map, becoming the primary image for the Deepwater\nHorizon response. GeoPlatform.gov, ERMA version for public use, recorded 269,637,028 hits in four months\xe2\x80\x94enabling increased\ngovernment transparency.\n\nNOAA conducted daily ramp and shore fishing counts and economic studies to ensure accurate compensation for lost use of resources.\nDeepwater Horizon was the first oil spill where Integrated Ocean Observing Systems (IOOS) and partners used underwater, unmanned\ngliders and coastal high frequency radar stations to daily track oil flows in the water column and on the surface. IOOS measured\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 25\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n surface current speed and direction in near real time in trajectory models that NOAA provided to coastal communities to prepare for\n impacts of oil coming ashore. The Office of Coast Survey produced nautical charts that displayed oil spill zone forecasts based on\n NOAA spill projections to help vessels avoid spill areas. The Center for Operational Oceanographic Products and Services (CO-OPS)\n modified existing products to display real-time data and predictions in the Gulf of Mexico. CO-OPS displayed Physical Oceanographic\n Real-Time System (PORTS\xc2\xae) data from Gulfport, Pascagoula, and Mobile Bay PORTS\xc2\xae, and used MyPORTS, a customizable PORTS\xc2\xae\n application, to show ocean current speeds and directions and weather observations in the spill region. A high-resolution northern\n Gulf of Mexico hydrodynamic model system produced three-day forecasts of water levels and 3D currents from the Florida Panhandle\n to the Rio Grande River. The Office of Coast Survey product called NowCOAST, a map-based online gateway to ocean and weather\n observations and forecasts, displayed real-time observations on interactive maps accessible from a smart phone or background maps\n like Google\xc2\xae Maps.\n\n NOAA\xe2\x80\x99s Scientific Support Teams remain on-site at incident command posts, the Unified Area Command, and the National Incident\n Command, and provide expert advice to the interagency solutions group, joint advisory group, governors, parish presidents, regional\n response teams, and the national response team. As the lead agency for the Shoreline Cleanup and Assessment Technique\xe2\x80\x94a systematic\n approach to analyzing and cleaning impacted coastline to agreed upon standards\xe2\x80\x94NOAA ensures federal oversight to this crucial\n phase. NOAA will lead the Natural Resource Damage Assessment, an ongoing legally-mandated, and legally-binding assessment of the\n damage to natural resources and \xe2\x80\x9chuman use\xe2\x80\x9d resulting from the spill.\n\n To help rebuild fisheries and sustain fishermen, communities, vibrant working waterfronts, and culturally important fishing traditions,\n NOAA also released a national catch share policy to encourage the consideration and use of catch shares. Catch share programs,\n which include limited access privilege programs and individual fishing quotas, dedicate a secure share of fish to individual fishermen,\n cooperatives or fishing communities. Catch shares are used in 14 fisheries managed by six fishery management councils from Alaska to\n Florida and are being developed in additional fisheries. Both here and in other countries, catch shares are helping eliminate overfishing\n and achieve annual catch limits, improve fishermen\xe2\x80\x99s safety and profits, and reduce the negative biological and economic effects of\n the race for fish that develops with some traditional fishery\n management.\n\n During FY 2010, NOAA rebuilt the following four fish stocks,\n important to commercial and recreational fisheries, to optimal\n population levels: North Atlantic swordfish, Georges Bank\n haddock, Atlantic coast spiny dogfish, and St. Matthews\n Island blue king crab. These stocks had been under rebuilding\n plans due to low population levels caused by overfishing and\n other factors.\n\n NOAA worked with the Gulf of Mexico and South Atlantic\n Fishery Management Councils to design difficult but necessary\n measures to end overfishing of red snapper in the Gulf of\n Mexico and South Atlantic. A recent stock assessment\n indicates the Gulf measures have successfully ended decades\n of overfishing. In response, fishery managers could increase\n the Gulf red snapper total allowable catch quota from 5.0 to\n 6.95 million pounds in 2010. Although that stock has not yet\n fully recovered, Gulf fishermen report encountering more and\n larger red snapper than they have seen in years, and catching\n\n\n\n\n 26 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nred snapper in areas where they have not been encountered\nin many years.\n\nOn July 28, 2010, NOAA\xe2\x80\x99s National Climatic Data Center issued\nthe State of the Climate in 2009 report. The report is a result\nof the contributions of more than 300 scientists from 160\nresearch groups in 48 countries and is the first comprehensive\nreport of observations from the upper atmosphere to the depths\nof the ocean. The report emphasizes that human society has\ndeveloped for thousands of years under one climatic state, and\nnow a new set of climatic conditions are taking shape. These\nconditions are consistently warmer, and some areas are likely\nto see more extreme events like severe drought, torrential\nrain, and violent storms. Based on comprehensive data from\nmultiple sources, the report defines 10 measurable planet-\nwide features used to gauge global temperature changes. The\nrelative movement of each of these 10 key climate indicators\nproves consistent with a warming world. Seven indicators are\nrising: humidity, sea level, ocean heat, sea-surface temperature,\nair temperature over land, air temperature over oceans, and\ntropospheric temperature in the \xe2\x80\x9cactive-weather\xe2\x80\x9d layer of the\natmosphere closest to the Earth\xe2\x80\x99s surface. Three indicators are\ndeclining: glaciers, arctic sea ice, and spring snow cover in the\nNorthern hemisphere. National Climatic Data Center\xe2\x80\x99s State of the Climate is published as a special supplement to the Bulletin of the\nAmerican Meteorological Society. To help keep citizens and businesses informed about climate, NOAA created the Climate Portal at\nhttp://www.climate.gov. The portal features a short video that summarizes some of the highlights of the State of the Climate report.\n\nDuring a five-day period in early February 2010, two snowstorms of historic proportions struck the Mid-Atlantic region. The first\nstorm hit February 5-6 and produced record crippling snowfalls in excess of 20 inches at two of the Washington, DC area airports\n(Baltimore-Washington International and Washington Dulles International). It was the second all-time snowfall record at Philadelphia,\nPA (Philadelphia International) airport and fourth at the Pittsburgh, PA airport (Pittsburgh International). NOAA issued accurate\noutlooks for the storms three days in advance with an unprecedented forecast of 20-30 inches before the first flakes were observed.\nNOAA forecast the average winter storm watch lead time to be 42 hours, which provided local emergency managers almost two days\nof preparation time. NOAA issued winter storm warnings an average of 30 hours ahead of the first flakes\xe2\x80\x94again, nearly double NOAA\xe2\x80\x99s\nnational goal (16 hours) for winter storms. Three days later, a second blizzard struck the same region with an additional foot and a\nhalf to three feet of snow, which brought the total snow accumulation on the ground to three to five feet in places. NOAA accurately\nforetold this second storm four days in advance, with an average winter storm watch lead time of 47 hours and an average winter\nstorm warning lead time of 32 hours. NOAA\xe2\x80\x99s Weather Forecast Office staff provided heroic service during the consecutive, extreme\nevents even as the back-to-back events brought the region to a complete stop as governments, schools, businesses, roads, and airlines\nshut down.\n\nOn March 4, 2010, NOAA successfully launched Geostationary Operational Environmental Satellite Series P (GOES-P) from Cape\nCanaveral, FL. GOES-P, renamed GOES-15 once it reached final orbit, underwent a series of tests for approximately six months\nbefore completing its \xe2\x80\x9ccheck-out\xe2\x80\x9d phase. After check-out, GOES-15 was placed into orbital storage mode and remains ready for\nactivation if one of the operational GOES fail. GOES-15 took its first infrared image of Earth on April 26, 2010. GOES-15 is the final\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 27\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n spacecraft in the latest series of NOAA geostationary satellites. It joined three other NOAA operational GOES spacecraft that help\n the Agency\xe2\x80\x99s forecasters more accurately track life-threatening weather\xe2\x80\x94from tornadoes, floods, and hurricanes to solar activity\n that can impact the satellite-based electronics and communications industry. GOES-15 will capture higher resolution images of\n weather patterns and atmospheric measurements than those provided by earlier satellites. The higher resolution imagery allows\n forecasters to pinpoint the location of severe weather with greater accuracy. GOES-15 will also provide better data for space\n and solar weather thanks to its Solar X-Ray Imager (SXI). SXI data will improve forecasts and warnings for solar disturbances,\n protecting billions of dollars of commercial and government assets in space and on the ground. This vital information will also\n reduce the effect of power surges for the satellite-based electronics and communications industry.\n\n Summary of Performance Results\n\n targets met\n Strategic objective Performance oUTCOME\n or exceeded\n Strategic Objective 3.1:\n Protect, restore, and manage the use of coastal and ocean resources Does not apply 6 of 8\n (NOAA)\n Strategic Objective 3.2:\n Does not apply 3 of 5\n Advance understanding of climate variability and change (NOAA)\n Strategic Objective 3.3:\n Does not apply 9 of 11\n Provide accurate and timely weather and water information (NOAA)\n Strategic Objective 3.4:\n Support safe, efficient, and environmentally sound commercial Does not apply 5 of 6\n navigation (NOAA)\n Mission Support:\n Does not apply N/A\n Provide critical support for NOAA\xe2\x80\x99s mission (NOAA)\n\n\n For Strategic Goal 3, based upon the key benefits the Department provides to the U.S. public, and with meeting its performance\n targets, NOAA did well. Of the 30 performance measures for this strategic goal, NOAA missed seven targets. For two of the targets\n missed\xe2\x80\x94 \xe2\x80\x9cAnnual number of coastal, marine, and Great Lakes ecological characterizations that meet management needs,\xe2\x80\x9d and\n \xe2\x80\x9cFalse alarm rate for tornadoes,\xe2\x80\x9d the actual was within five percent of the target.\n\n\n\n\n 28 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nAchieve organizational and management excellence\n\nPerformance Summary\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n FY 2010, the Department met or exceeded 57 percent\n of the targets it had set for the year. For this goal,\n performance declined from FY 2009, having met or\nexceeded 75 percent of its targets in FY 2009.\n\nAccomplishments and Benefits\n\nTwo organizations are involved in the Management\nIntegration goal: Departmental Management (DM) and the\nOffice of Inspector General (OIG). Key areas this goal addresses\ninclude financial management, contracting, competitive\nsourcing, and human resource (HR) management.\n\nDM provided proactive and timely guidance and oversight to\nthe acquisition and grants community in the Department to\nensure smooth implementation and execution of the ARRA,\nand has been recognized for the superior performance of its\noversight of recipient reporting.\n\nDM exceeded the government-wide average for positive\nresponses on 69 out of 77 eligible items on the 2010 Federal Employee Viewpoint Survey, administered by the Office of Personnel\nManagement (OPM) to gauge employee perceptions on critical work-life areas which drive employee satisfaction, commitment, and\nretention. No Department averages for positive responses were \xe2\x80\x9cnotably\xe2\x80\x9d (i.e., five percentage points or more) below the government-\nwide averages for any items.\n\nIn February 2010, the Department received a green score from the Office of Management and Budget (OMB), the highest level, for both\nprogress and status in energy and environmental management. For transportation management, the Department received a green in\nprogress and a yellow for status, a significant improvement from its prior scorecard. As a result, the Department ranked second overall\nin the federal government.\n\nDM reinstituted the Department IT Investment Review Board to ensure that Department major IT investments utilize sound project\nmanagement practices and exhibit risk-based approaches. The reinvigorated board will ensure that Department investments are well-\nmanaged and of value to the taxpayer. As part of the Department\xe2\x80\x99s transparency efforts, DM evaluated and submitted 51 business\ncases to the federal IT Dashboard, demonstrating to the public the sound management of Department IT investments. On average, DM\nachieved within five percent of its cost, schedule, and performance targets for the major IT investments undergoing development and\nenhancement. DM developed solid business cases for major IT investments with the business cases ensuring that DM managed and\nwisely invested those IT funds.\n\nFinally, the Department received an unqualified audit opinion for the 11th consecutive year.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 29\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Summary of Performance Results\n\n targets met\n Strategic objective Performance outcome\n or exceeded\n Management Integration Goal: Ensure effective resource stewardship in support of the Department\xe2\x80\x99s\n 0 of 2\n Achieve organizational and programs (DM)\n management excellence Ensure retention of highly qualified staff in mission-critical positions (DM) 1 of 1\n Acquire and manage the technology resources to support program goals (DM) 1 of 1\n Promote improvements to Department programs and operations by\n identifying and completing work that (1) promotes integrity, efficiency, and 2 of 3\n effectiveness; and (2) prevents and detects fraud, waste, and abuse (OIG)\n\n\n For the Management Integration goal, the primary goal/target was to eliminate the significant deficiency in IT controls, which\n impacted the Financial Management measure. While progress was made, the significant deficiency in IT controls remained in\n 2010. DM did complete all of its A-123 assessments, the second part of this measure. DM also did not meet the target for\n the percent of performance-based contracts. The OIG exceeded the target of $38 million for \xe2\x80\x9cDollar value of financial benefits\n identified by the OIG.\xe2\x80\x9d by having an actual of $47.8 million.\n\n\n\n\n 30 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n M anagement C ontrols\n\n\n\n\n \xe2\x80\x8aT \xe2\x80\x8a\n he Department\xe2\x80\x99s management is responsible for establishing and maintaining effective internal control and\n financial management systems that meet the objectives of the Federal Managers\xe2\x80\x99 Financial Integrity Act (FMFIA).\n The Department is able to provide an unqualified statement of assurance that its internal controls and financial\n management systems meet the objectives of FMFIA.\n\n During FY 2010, the Department assessed its internal control over the effectiveness and efficiency of operations and\n compliance with applicable laws and regulations in accordance with Office of Management and Budget (OMB) Circular\n A-123, Management\xe2\x80\x99s Responsibility for Internal Control. Based on the results, the Department determined that\n information technology (IT) security, and certification and accreditation processes and documentation for non-financial IT\n systems no longer constitute a material weakness under FMFIA. This aspect of IT security has been reported as a material\n weakness since FY 2001 and has been the subject of significant coordinated effort across the Agency to address. While the\n importance of IT security, both within the Department and across government, makes this an area that merits continuing\n focused attention and internal monitoring, it no longer represents a material weakness.\n\n Supplemental funding received under the American Recovery and Reinvestment Act (ARRA) of 2009 continued to receive\n comprehensive programmatic and administrative attention throughout the Department in order to achieve the legislative\n goals attributable to it. Funds were awarded or otherwise expended for authorized purposes, in as prompt and efficient a\n manner as possible while safeguarding against fraud, waste, and abuse. Reporting associated with this funding is being\n performed clearly, transparently, and comprehensively. Monitoring has been and will continue to be conducted to ensure\n the recipient is meeting goals as stated in its application and as incorporated into award documents, and will also focus\n on the effects funding has had and will prospectively have on economic indicators.\n\n In addition, the Department assessed the effectiveness of internal control over financial reporting, which includes\n safeguarding of assets and compliance with applicable laws and regulations, in accordance with the requirements of\n Appendix A of OMB Circular A-123. Based on the results of this evaluation, the Department can provide reasonable\n assurance that its internal control over financial reporting as of June 30, 2010, was operating effectively and no material\n weaknesses were found in the design or operation of the internal control over financial reporting. Further, no material\n weaknesses related to internal control over financial reporting were identified between July 1, 2010 and September 30,\n 2010.\n\n Based on reviews conducted by the Department, it has been able to determine that its financial systems are in conformance\n with government-wide requirements.\n\n\n\n\n Gary Locke\n Secretary of Commerce\n November 15, 2010\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 31\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n F ederal M A N A G E R S \xe2\x80\x99 F I N A N C I A L I N T E G R i T Y A C T ( F M F I A ) O F 1 9 8 2\n\n During FY 2010, the Department reviewed its management control system in accordance with the requirements of FMFIA, and\n OMB and Departmental guidelines. The objective of the Department\xe2\x80\x99s management control system is to provide reasonable\n assurance that:\n\n \xe2\x97\x8f\xe2\x97\x8f obligations and costs are in compliance with applicable laws;\n\n \xe2\x97\x8f\xe2\x97\x8f assets are safeguarded against waste, loss, and unauthorized use of appropriations;\n\n \xe2\x97\x8f\xe2\x97\x8f revenues and expenditures applicable to Agency operations are properly recorded and accounted for, permitting accurate\n accounts, reliable financial reports, and full accountability for assets; and\n\n \xe2\x97\x8f\xe2\x97\x8f programs are efficiently and effectively carried out in accordance with applicable laws and management policy.\n\n\n\n Section 2 of FMFIA \xe2\x80\x93 Internal Management Controls\n\n Section 2 of FMFIA requires that federal agencies report, on the basis of annual assessments, any material weaknesses that have\n been identified in connection with their internal and administrative controls. The efficiency of the Department\xe2\x80\x99s operations is\n continually evaluated using information obtained from reviews conducted by the Government Accountability Office (GAO) and\n the Office of Inspector General (OIG), and specifically requested studies.\n\n The diverse reviews that took place during FY 2010 relative to non-financial controls provide assurance that Department systems\n and management controls comply with standards established under FMFIA. One material weakness involving IT security issues\n and the quality of certification and accreditation (C&A) processes and documentation for non-financial IT systems, which had\n been reported from FY 2001 through FY 2009, has been appropriately addressed and is no longer applicable as of September 30,\n 2010. As discussed below, the action plan jointly developed by the Office of the Chief Information Officer (OCIO) and the OIG\n has significantly strengthened IT security throughout the Department and resolved its status as a material weakness. However, IT\n security is and will remain an important focal point for the Department.\n\n The following table reflects the number of material weaknesses reported under Section 2 of FMFIA in recent years by the\n Department. It shows one material weakness, i.e., non-financial system IT security, for the time span identified and its elimination\n as of FY 2010.\n\n\n \t NUMBER OF MATERIAL WEAKNESSES UNDER SECTION 2\n Number\n Number At\n Number Remaining At\n Beginning Of Number Added\n Corrected End Of Fiscal\n Fiscal Year\n Year\n Fy 2007 1 0 0 1\n Fy 2008 1 0 0 1\n Fy 2009 1 0 0 1\n Fy 2010 1 1 0 0\n\n\n\n\n 32 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nFocus on Information Technology (IT) Security Continues\n\nThe OCIO conducts reviews of IT investments to ensure their efficiency and effectiveness in supporting the Department\xe2\x80\x99s mission.\nThe Department, following OMB policies and guidelines and complying with Federal Information Security Management Act\n(FISMA) requirements, oversees, and manages IT resources by establishing and implementing policies and controls to mitigate\nIT risks.\n\nTo strengthen IT security throughout the Department and resolve its material weakness in IT security, the OCIO and the OIG had\ndeveloped a comprehensive strategy to improve C&A processes and documentation, which incorporated realistic milestones,\nidentified measurable steps, and established consistent and repeatable C&A practices. The most significant impact of this strategy\nwas to leverage a tracking tool for security reporting and monitoring to improve the quality of C&A processes. Some of the\nDepartment\xe2\x80\x99s efforts to address the IT material weakness also included developing a Cyber Security Strategic Plan with input\nfrom the operating units, implementing a Cyber Security Development Program, establishing a role-based, Department-wide\ntraining program, and establishing an IT Audit Working Group, which is a joint effort between the OCIO and the Office of Financial\nManagement to resolve prior year findings and design enterprise-wide solutions.\n\nWhile more work remains to be done to establish and maintain a strong IT security posture, C&A processes and documentation no\nlonger represent a material weakness. The OCIO and the OIG have agreed that additional effort is needed to enhance IT security\ncontrol deficiencies in the areas of routine monitoring, corrective action management, and contingency plan testing, which are a\nresult of a combination of management, process, and resource issues. The CIO will continue to coordinate enhancements in these\nareas, and to monitor progress made through these efforts as a reportable condition under FMFIA.\n\nFY 2010 Accomplishments\n\nTo ensure that the Department effectively manages IT security concerns, the OCIO, in collaboration with the operating units, is\ndeveloping a Cyber Security Strategic Plan to strengthen its IT security profile and operations. Additionally, the OCIO continues to\nconduct rigorous IT security compliance reviews based on FISMA requirements, OMB policy, National Institute of Standards and\nTechnology (NIST) standards and guidelines, and OIG recommendations.\n\nThe following include highlights of IT security accomplishments for FY 2010:\n\nCommerce IT Review Board (CITRB). The Department enhanced the CITRB to ensure that its major IT investments utilize sound\nproject management practices and demonstrate risk-based management. The reinvigorated CITRB works to make certain that\ninvestments are well-managed and of value to the taxpayer.\n\nIT Business Cases. For major IT investments undergoing development or enhancement, the Department achieved cost, schedule,\nand performance, on average, within five percent of target. It also developed and relied on solid business cases to support major\nIT investments, and to ensure that IT funds are managed and invested wisely.\n\nWeb Advisory Council (WAC). The WAC was established to ensure that the Department\xe2\x80\x99s Web presence reflects the appropriate\nuse of social media and Web 2.0 technologies while adequately considering risks and maintaining the privacy of its Web users.\n\nData Center Consolidation. In the support of the Department\xe2\x80\x99s enterprise architecture, a Data Center Consolidation Plan was\ndeveloped to consolidate or decommission data centers and server rooms when possible, e.g., following the completion of the\nDecennial Census. Additionally, cloud computing activities moved forward through the use of an Akamai content delivery network\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 33\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n for the Decennial Census Web site and the transfer of the Electronic Capital Planning Investment Control system to the General\n Services Administration\xe2\x80\x99s (GSA) cloud computing solution.\n\n Security Compliance Reviews. The Department conducted rigorous IT security compliance reviews based on federal standards\n and guidelines, and OIG recommendations; 90 percent of the Department\xe2\x80\x99s 280 information systems have Authority to Operate\n status.\n\n Cyber Security Assessment and Management (CSAM). The OCIO implemented monthly reviews of information systems using\n the CSAM IT security tracking and reporting tool. CSAM monitors the progress of systems in obtaining Authority to Operate\n status, the establishment of contingency plans and testing, and the performance of Privacy Threshold Analyses. CSAM is also\n being used to implement a Department-wide plan of action and milestones management (POA&M) monitoring program, which\n has improved POA&M activities undertaken by the operating units.\n\n IT Audit Working Group. During FY 2010, the OCIO worked with the Office of Financial Management to create the IT Audit\n Working Group to address and resolve financial statement audit findings relating to IT, to develop enterprise-wide solutions, and\n to prepare for future financial statement audits. The Group adopted tracking and management procedures to provide monthly\n progress reports on the resolution of audit findings. By July 2010, nearly 84 percent of the 70 IT findings that had been identified\n in FY 2009 were resolved.\n\n IT Workforce. The Department addressed OIG recommendations to strengthen its IT workforce by developing and implementing a\n Cyber Security Development Program, a role-based security training program offered to candidates throughout the Department.\n\n IT Security Policy. The OCIO updated its IT Security Program policy by developing and implementing a number of interim\n policies relating to areas such as remote access, password requirements, and peer-to-peer technology. It also provided clarifying\n guidance regarding IT security roles and responsibilities in terms of the security authorization process and IT investment security\n authorization responsibilities.\n\n Government-wide Network. The Department continued to coordinate with the Federation of Computer Incident Response Teams,\n the U.S. Computer Emergency Readiness Team at the Department of Homeland Security (DHS), and the federal intelligence\n community to receive timely security alerts, notifications, and reports of incidents. As a result, the Department detected or\n was alerted to malicious cyber attacks against its network, and developed plans to remediate and prevent potential threats and\n vulnerabilities.\n\n Trusted Internet Connections (TIC). The Department signed a memorandum of agreement with DHS to begin implementing\n TICs. The majority of the operating units have completed a statement of work for the Managed Trusted Internet Protocol Service\n (MTIPS), and MTIPS activity is expected to begin in FY 2011.\n\n IT Investment Review Process\n\n Since IT expenditures constitute such a large portion of the Department\xe2\x80\x99s annual budget\xe2\x80\x93major IT investments totaled approximately\n $2.5 billion in FY 2010\xe2\x80\x93it is imperative that special management attention be given to proposed and continuing IT investments.\n This is done through an OCIO-led capital planning and investment control process, which is being enhanced to provide broader\n and deeper analysis of proposed IT investments, projects under development, and projects that are in operation as well as of the\n overall performance of the portfolio.\n\n\n\n\n 34 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nThis process is based on OMB Circular A-11, Exhibit 300, Capital Asset Plan and Business Case Summary, and Exhibit 53, Agency IT\nInvestment Portfolio, and is linked to all IT planning processes and documents within the Department. In a cooperative effort with\nthe Office of Budget and the Office of Acquisition, the OCIO established OMB\xe2\x80\x99s Exhibit 300 as the document to use in summarizing\nthe business case for each IT project, and as the foundation for IT budget justifications, IT acquisition approvals, and major system\nreviews. This provides the Department with a consistent foundation for monitoring the selection, control, and evaluation of\nmajor IT investments, thereby helping to verify that proposed investments contribute to the Department\xe2\x80\x99s strategic vision, mission\nrequirements, and performance goals. It also helps ensure that the operating units employ sound IT investment methodologies,\ncomply with Departmental and federal architectures, and provide the highest return on the investment at acceptable project\nrisk.\n\nThe OCIO has worked closely with the Office of Budget to establish a framework and schedule for linking the IT investment\nreview of proposed initiatives with the budget process. As initiatives are developed by the operating units for submission to\nthe Department, those initiatives that have a significant IT component are reviewed by the OCIO. Major proposals are reviewed\nby the CITRB, which is co-chaired by the CIO and the Chief Financial Officer and Assistant Secretary for Administration (CFO/\nASA), and includes the Department\xe2\x80\x99s Budget Officer, Senior Procurement Executive, Director for Financial Management, and\nselected operating unit CIOs. The CITRB evaluates proposals relative to their performance measures, IT security and privacy\nmanagement, funding, risk management, acquisition strategy, viability and appropriateness, conformance to Departmental\nand federal architectures, overall project management, and contribution to the Department\xe2\x80\x99s mission and goals. Guidance for\nimproving project proposals is provided by the CITRB and the OCIO, as appropriate. As a result of this extensive Departmental\nreview of IT investment proposals, all IT-intensive budget initiatives forwarded to OMB have the best possible IT management\nplan associated with them.\n\nThe CITRB continues to place emphasis on the link between proposed IT investments and top level program performance measures,\nIT security and privacy, and the qualifications of IT project managers and Contracting Officers who manage IT programs. The CITRB\nensures that high quality C&A packages, which are critical to the confidentiality, integrity, and availability of IT investments, are\nin place. By ensuring that qualified managers are available for these programs, the risk associated with large-scale IT investments\nis significantly reduced. The OCIO leads a continuing training process for IT project managers, working together with the Office\nof Human Resources Management, to ensure that the Department has a pool of well-qualified IT project managers for new and\nongoing projects.\n\nIn conducting reviews for proposed investments as well as those that are under development, the CITRB is supported by detailed\nanalyses from the OCIO, the Office of Budget, the Office of Acquisition Management, and others who provide independent\nassessments of projects. Further, to provide even more rigorous cost, schedule, and performance analyses, the Department\nsystematically uses Earned Value Management (EVM) data for its IT investments with a development, modernization, or\nenhancement component. This provides regular monitoring and early warning for projects that may not be meeting cost, schedule,\nor performance goals, allowing mid-course corrections as needed to bring development efforts back on track. This approach has\nbeen supported by focused training sessions on EVM techniques. Additionally, operating unit CIOs are required to conduct\noperational analyses to certify that steady-state investments meet cost, schedule, and performance goals. Operating unit reviews\nare supplemented with formal evaluations or post-implementation reviews by the CITRB, which helps all project managers to\nbenefit from lessons learned through other implementation efforts.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 35\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Privacy Impact Assessments (PIA)\n\n The Department is committed to ensuring that all information, relating to either individuals or businesses, that it collects and\n maintains is afforded proper privacy safeguards as defined in the Privacy Act of 1974, the E-Government Act of 2002, and OMB\n guidance. It has developed an IT privacy policy to ensure that personally identifiable information (PII) in its IT systems is effectively\n protected and secured; and provided guidance to the operating units on the preparation of Web privacy policies, conducted PIAs,\n and posted privacy policies and PIAs on its Web sites that are visited by the public. The Department conducts PIAs to ensure\n that it does not collect, process, or disseminate any identifiable information from or about members of the general public that is\n not needed or authorized. This level of privacy protection is also provided to business entities. The OIG has provided a favorable\n review of the Department\xe2\x80\x99s PIA program and its validation of Web privacy policy implementation.\n\n As another step to ensure that personal and other sensitive information is protected, all of the Department\xe2\x80\x99s PIAs now include data\n extract log and verification procedures. This requirement, which was incorporated in the IT Security Program Policy and Minimum\n Implementation Standards, requires that operating units log all computer-readable data extracts from databases holding sensitive\n information, and verify that each extract including sensitive data has been erased within 90 days or determine that its use is still\n required. In FY 2010, the OCIO, in concert with the Office of Public Affairs, drafted a new policy regarding the use of social media\n to, in part, inform employees of how to use social media and alert them to privacy concerns.\n\n Additionally, the Department has established the position of Director for Privacy and Open Government in the Office of the CFO/\n ASA. As of October 2010, this individual began serving as Chief Privacy Officer and Senior Agency Official for Privacy, and is\n working closely with the Privacy Act Officer and the OCIO to ensure that all privileged-access personal and business information\n provided to the Department is appropriately protected.\n\n Future Efforts\n\n The Department is actively pressing forward with future plans to respond to the ever changing IT security environment. It has\n developed a Strategic IT Plan and has mapped out a path toward achieving its goals in implementing TICs, increasing operational\n security with the continued development of the Security Operations Center, conducting additional assessments of technical\n controls as part of the OCIO\xe2\x80\x99s annual reviews of operating units, and deploying additional role-based training under its Cyber\n Security Development Program in FY 2011. These measures will continue to strengthen the Department\xe2\x80\x99s overall IT security\n posture and protection of its IT systems and information.\n\n Section 4 of FMFIA \xe2\x80\x93 Internal Controls over Financial Management Systems\n\n As reflected in the following table, the Department has reported no material weaknesses under FMFIA Section 4 in recent years.\n\n\n Number Of Material Weaknesses Under Section 4\n Number\n Number At\n Number Remaining At\n Beginning Of Number Added\n Corrected End Of Fiscal\n Fiscal Year\n Year\n Fy 2007 0 0 0 0\n Fy 2008 0 0 0 0\n Fy 2009 0 0 0 0\n Fy 2010 0 0 0 0\n\n\n\n\n 36 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\nBased on reviews conducted by the Department and its operating units for FY 2010, the financial systems in the Department are\ncompliant with GAO principles and standards, the requirements of the CFO Act, and OMB requirements\n\n\nNo material weaknesses relative to financial controls were identified for the period July 1, 2009 through June 30, 2010, the\nreporting period established by OMB Circular A-123. Further, with limited review and inquiries, no material weaknesses related\nto internal control over financial reporting were identified between July 1, 2010 and September 30, 2010.\n\n\nOther Internal Control Enhancement Activities Continue\n\nThe Department\xe2\x80\x99s comprehensive effort to enhance management of internal controls under OMB Circular A-123 continued during\nFY 2010. Progress made in implementing Appendix A to the circular, which relates to financial internal controls, included the\nfollowing:\n\n\xe2\x97\x8f\xe2\x97\x8f The Department continued the OMB A-123, Appendix A process utilizing a three-year rotational testing plan to incorporate\n a risk-based approach based on assessments of the key processes and results of previous audits. Under this approach, high-\n risk cycles are selected for annual testing, and low to moderate-risk cycles are tested every three years with selected test\n procedures performed at specific locations or on specific sub-processes as often as needed based on specifically identified risks.\n A limited controls review assessment survey is utilized for cycles that are not tested in any given year.\n\n\xe2\x97\x8f\xe2\x97\x8f Department-wide testing templates were updated for selected key processes and sub-processes, and the Departmental sampling\n plan was modified to include three separate test phases, which included testing requirements for the American Recovery and\n Reinvestment Act (ARRA) of 2009. This work was carried out in coordination with the Department\xe2\x80\x99s Senior Advisor for ARRA\n implementation, who was appointed by the Secretary to oversee the expenditure of funds received by the Department and\n operating units under ARRA. The Senior Advisor has worked collaboratively with operating unit and Departmental managers\n to ensure the timely and effective implementation of the Department\xe2\x80\x99s ARRA responsibilities\n\n\xe2\x97\x8f\xe2\x97\x8f The Senior Management Council continued to oversee, direct, and implement the assessment process; and the Senior\n Assessment Team continued to develop planning documentation, administer internal control test plans, and monitor and\n review test work.\n\n\xe2\x97\x8f\xe2\x97\x8f Each operating unit completed an entity-level controls assessment as required by OMB Circular A-123, Appendix A.\n\n\xe2\x97\x8f\xe2\x97\x8f The Departmental A-123 Workpapers Guide was enhanced to include more in-depth guidance and instruction to the operating\n units in such areas as obtaining populations, sampling, and documenting workpapers. In addition, the guide provides sample\n templates to ensure consistency in workpaper standards and presentation throughout the Department.\n\n\xe2\x97\x8f\xe2\x97\x8f The overall effort was analyzed to assess and document the adequacy of the Department\xe2\x80\x99s internal controls in order to develop\n the annual statement of assurance that appears above.\n\nAlso, as of FY 2011, the Department has established an Office of Program Evaluation and Risk Management (PERM), which is\nestablishing an enterprise risk management program that will help to strengthen internal management controls. This endeavor,\nwhich goes beyond IT-specific activities and affects programs and functions across the Agency, will provide a formal and visible\nframework to ensure that programs\xe2\x80\x93particularly those programs involving significant potential risks\xe2\x80\x93operate as they should.\nThrough a structured effort to conduct periodic program reviews across the Department, PERM will also work with the operating\nunits to identify opportunities to increase effectiveness and efficiency.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 37\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n F ederal F I N A N C I A L M A N A G E M E N T I M P R O V E M E N T A C T ( F F M I A ) O F 1 9 9 6\n\n\n\n\n \xe2\x80\x8aU \xe2\x80\x8a\n nder FFMIA, the Department is required to have financial management systems that comply with federal financial\n management system requirements, federal accounting standards, and the U.S. Government Standard General\n Ledger (USSGL) at the transaction level. In FY 2010, the Department remained in compliance with FFMIA.\n\n\n R E P O RT O N AU D I T F O L L OW- U P\n\n\n\n\n \xe2\x80\x8aT \xe2\x80\x8a\n he Inspector General Act, as amended, requires that the Secretary report to Congress on the final action taken for\n Inspector General audits. This report covers Commerce Department audit follow-up activities for the period June 1, 2009,\n through May 31, 2010.\n\n\n Summary of Activity on Audit Reports\n june 1, 2009 through May 31, 2010\n Funds to be Put to Nonmonetary\n Disallowed Costs1 Better Use2 Reports3 Total\n Number of Number of Number of\n Reports Dollars Reports Dollars Reports Reports\n Beginning Balance 21 $\t 7,907,994 12 $\t 39,681,774 11 44\n New Reports 10 2,052,886 3 3,901,348 20 33\n Total Reports 31 9,960,880 15 43,583,122 31 77\n Reports Closed (10) (2,715,446) (5) (1,405,560) (13) (28)\n Ending Balance 21 $\t 7,245,434 10 $\t 42,177,562 18 49\n 1.\t Disallowed costs are questioned costs that management has sustained or agreed should not be charged to the government.\n 2. \t\xe2\x80\x9cFunds to be put to better use\xe2\x80\x9d refers to any management action to implement recommendations where funds should be applied to a more efficient use.\n 3.\t Includes management, contract, grant, loan, and financial statement audits with nonmonetary recommendations.\n\n\n\n BIENNIAL REVIEW OF FEES\n\n\n\n\n \xe2\x80\x8aO \xe2\x80\x8a\n MB Circular A-25, User Charges, requires the biennial review of agency programs to determine whether fees should be\n charged for government goods or services, and to ascertain that existing charges are adjusted to reflect unanticipated\n changes in costs or market values.\n\n The Department conducts a review of its programs biennially, with some bureaus conducting annual reviews. In the current\n review, it was noted that the Department is in compliance with the requirement to adjust its fees to meet the Circular A-25\n requirement of full-cost recovery for user charges.\n\n\n\n\n 38 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n A merican R ecov er y and R ein v estment Act ( A R R A ) O F 2 0 0 9 P rograms\n\n\n\n\nI\xe2\x80\x8a\n n FY 2009, Congress passed ARRA, providing funds for several agencies including the following within the Department: OIG,\n EDA, Census Bureau, NOAA, NIST, and NTIA. The following section provides tables for each of the agencies that received funds\n that were used in FY 2010 with results appearing in FY 2010 and beyond. The tables include: program name, funding amount,\nbrief description of what the funds are provided for, performance measures/results, and comments if provided by the agencies.\n\n\n\n Bureau Office of Inspector General (OIG)\n Program Office of Inspector General\n\n Amount $6.0M\n\n These funds are for general oversight of the Department\xe2\x80\x99s ARRA activity. Early OIG uses include emphasis\n on training of grants and contract officers to alert them to the signs of potentially fraudulent or wasteful\n Description\n activity by grantees or contractors. Other activities include review of various grant pre-award operations,\n and an audit of the bureaus\xe2\x80\x99 review of grant and contract recipient reporting.\n Measures FY 2010 Actual\n Complaints - received TBD1\n\n Whistleblower reprisal allegations:\n \xe2\x97\x8f\xe2\x97\x8f Received TBD1\n \xe2\x97\x8f\xe2\x97\x8f Accepted TBD1\n\n Investigations:\n \xe2\x97\x8f\xe2\x97\x8f Closed without action TBD1\n \xe2\x97\x8f\xe2\x97\x8f Accepted for prosecution TBD1\n \xe2\x97\x8f\xe2\x97\x8f Prosecution denied TBD1\n Performance \xe2\x97\x8f\xe2\x97\x8f Referred for alternative resolution TBD1\n Measures/\n Results Audits/Inspections/Evaluations/Reviews:\n \xe2\x97\x8f\xe2\x97\x8f Final published work products TBD1\n \xe2\x97\x8f\xe2\x97\x8f Interim published work products TBD1\n \xe2\x97\x8f\xe2\x97\x8f Unpublished work products TBD1\n\n Training/Outreach:\n \xe2\x97\x8f\xe2\x97\x8f Training sessions provided TBD1\n \xe2\x97\x8f\xe2\x97\x8f Individuals trained TBD1\n \xe2\x97\x8f\xe2\x97\x8f Hours of training provided TBD1\n \xe2\x97\x8f\xe2\x97\x8f Outreach sessions conducted TBD1\n 1\t Final actuals should be available by January 1, 2011.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 39\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau Economic Development Administration (EDA)\n Program Economic Development Assistance Programs (EDAP)\n\n Amount $150.0M\n\n EDA directed funding through its existing program structures. Of the $147 million allocated to EDAP ($3\n million was allocated to salaries and expenses [S&E]), EDA funded $141.3 million in \xe2\x80\x9cbrick and mortar\xe2\x80\x9d\n infrastructure investments. EDA gave preference to projects that have the potential to quickly stimulate\n job creation and promote regional economic development, such as investments that support science and\n Description\n technology parks, industrial parks, business incubators, and other investments that spur entrepreneurship\n and innovation. Since ARRA called on EDA to \xe2\x80\x9cgive priority consideration to areas of the Nation that have\n experienced sudden and severe economic dislocation and job loss due to corporate restructuring,\xe2\x80\x9d EDA\n allocated funding to the regional offices using a hybrid of its traditional allocation formula.\n Name Explanation FY Target Actual\n Short-term jobs Number of direct project related jobs 2010 592.62 TBD1\n created/retained created and/or retained from ARRA\n 2011 761.94 TBD2\n investment\n 2012 338.64 TBD2\n\n Percentage of ARRA A proxy measure for ensuring a high 2010 90% TBD2\n construction grants percentage of projects selected are \xe2\x80\x9cshovel\n for which construction ready\xe2\x80\x9d\n commences within\n 120 days of award\n\n Percentage of File must demonstrate ALL of the following 2010 90% TBD2\n ARRA award files for compliance: (1) recipient submitted\n audited meeting all ARRA-required jobs report on time OR\n compliance criteria the regional office notified recipient of a\n Performance late report within 30 days; (2) recipient\n Measures/ submitted all performance and financial\n Results\n reports on time OR the regional office\n notified recipient of a late report within\n 30 days; (3) all terms and conditions of the\n grant were fulfilled and documented OR\n the regional office took appropriate action;\n (4) all appropriate terms and conditions\n were included in the grant documents;\n and (5) the award file demonstrates that\n the regional office reviewed all recipient\n audits, as required by A-133, for findings\n and took appropriate action.\n\n 1\t Final actuals should be available by January 1, 2011.\n 2\t When this measure was developed, OMB directed grantees to report cumulatively. However, recent OMB guidance directs\n grantees to provide FTE values on a quarterly basis, rather than cumulatively, and has directed agencies not to aggregate these\n values. Quarterly data is available at Recovery.gov.\n\n EDA is working closely with ARRA grantees to ensure full compliance with the requirements of the act. EDA\n Comments has held face-to-face meetings, conference calls, and Webinars as well as developed lessons-learned reports\n to educate ARRA grantees on recipient reporting requirements and deadlines.\n\n\n\n 40 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau Census Bureau\n Program Periodic Censuses and Programs\n\n Amount $1,000.0M\n\n To ensure a successful 2010 Decennial Census, the Census Bureau received $1 billion to hire new personnel\n for partnership and outreach efforts to minority communities and hard-to-reach populations, increase\n targeted media purchases, and ensure proper management of other operational and programmatic risks.\n\n The following four areas received the $1 billion in funds: Early Operations ($745.1 million), Partnership\n ($117.4 million), Advertising ($107.5 million), and Coverage Follow-Up ($30 million).\n\n Early Operations activities included: Group Quarters Enumeration (college dormitories, military quarters,\n nursing homes, etc.), Update/Enumerate (an enumerator updates residential addresses and conducts an\n interview of the resident(s) using a paper questionnaire), Update/Leave (geographic areas where the type of\n address does not indicate the location of the housing unit or the delivery point for receiving mail does not\n Description\n ensure the mail gets to the correct unit, e.g., mail left at a central location because of broken mail banks),\n and Local Census Office Staffing Operation. Partnership staff provided information and training about the\n 2010 Census to community-based organizations, religious leaders, local businesses, and media outlets in\n designated hard-to-count areas. Advertising activities involved numerous paid media sources such as TV,\n radio, online, magazines, newspapers, and outdoor and commuter media. The Coverage Follow-up Operation\n involved hiring and training approximately 1,250 additional temporary telephone interviewers to re-contact\n households to verify the information on the census form, make corrections as warranted, and obtain any\n missing demographic information\xe2\x80\x94based on specific criteria, to name a few.\n\n For more detailed information about the Census Bureau\xe2\x80\x99s ARRA program plans, visit the following Web sites:\n www.census.gov/recovery or www.recovery.gov.\n\n The following measures applied to the respective activities:\n\n Early Operations \xe2\x80\x93 No specific measures were for ARRA funds though the following measure applies to base\n funding: At least 90% of key activities completed on schedule. These activities included the following:\n \xe2\x97\x8f\xe2\x97\x8f Complete Group Quarters validation and advanced visit operations\n \xe2\x97\x8f\xe2\x97\x8f Conduct the 2010 Census\n \xe2\x97\x8f\xe2\x97\x8f Conduct Census Operations in Puerto Rico and the Island areas\n \xe2\x97\x8f\xe2\x97\x8f Conduct Nonresponse Follow-up operations\n \xe2\x97\x8f\xe2\x97\x8f Begin Coverage Measurement field operations\n Performance \xe2\x97\x8f\xe2\x97\x8f Conduct Coverage Follow-up field operations\n Measures/\n Results/ Partnership \xe2\x80\x93 ARRA and base fund targets for 2010 included the following (results shown in italics):\n Milestones\n \xe2\x97\x8f\xe2\x97\x8f Maintain a diverse partnership staff of 2,707 with 100 languages spoken to reach hard to count populations in an\n effort to positively affect response rates. More than 3,000 Partnership staff on board speaking 146 languages.\n \xe2\x97\x8f\xe2\x97\x8f Partnership staff continue to establish partnerships and work with approximately 120,000 active partner\n organizations in support of the 2010 Census. 230,750 partnerships were established.\n \xe2\x97\x8f\xe2\x97\x8f 30,000 joint Questionnaire Assistance Centers (QAC) and Be Counted (BC) sites and 10,000 stand-alone BC\n sites ready to assist citizens in hard-to-count areas. More than 50,000 potential joint BC/QAC sites and 20,000\n potential stand-alone BC sites were identified among partner organizations. From these sites, the Census\n Bureau selected 26,637 joint sites and 11,704 stand-alone BC sites that met its needs based on location, access\n to the public, and who the organization served. Additional sites were held in reserve, if needed.\n (continued)\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 41\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau Census Bureau (continued)\n Program Periodic Censuses and Programs (continued)\n\n \xe2\x97\x8f\xe2\x97\x8f 10,000 Complete Count Committees educate community on the importance of the 2010 Census and motivate\n residents to complete questionnaire. 10,251 Complete Count Committees formed and trained.\n \xe2\x97\x8f\xe2\x97\x8f Partnership staff thank community organizations and other partners for their help with the 2010 Census.\n Advertising\n Measure: Complete key activities for the combined 2010 Census Communications Campaign \xe2\x80\x93 2010\n targets using ARRA funding (results shown in italics):\n \xe2\x97\x8f\xe2\x97\x8f For the Awareness Phase, reach 95 percent of the population at least five more times above base target\n through the paid advertising. The launch of the Awareness Phase of the campaign began on January 17,\n 2010. The actual reach and frequency figures will be determined following a post-media buy analysis that\n will be completed in the fall of 2010.\n Performance \xe2\x97\x8f\xe2\x97\x8f For the Motivation Phase, reach 95 percent of the population at least 11 more times above base target\n Measures/\n Results\n through the paid advertising. Ongoing. The Motivation Phase began on March 1, 2010. The actual reach\n (continued) and frequency figures will be determined following a post-media buy analysis that will be completed in the\n fall of 2010.\n \xe2\x97\x8f\xe2\x97\x8f For the Support Nonresponse Follow-up Phase, the plan is to reach lowest responding population at least\n two more times through paid advertising. The actual reach figures will be determined following a post-\n media buy analysis that will be completed in the fall of 2010.\n Coverage Follow-up\n Measure: Complete 67% of Coverage Follow-up cases by the end of production \xe2\x80\x93 2010 targets using ARRA\n funding:\n \xe2\x97\x8f\xe2\x97\x8f Complete 67 percent Coverage Follow-up Cases for approximately 1.1 million cases.\n \xe2\x97\x8f\xe2\x97\x8f Provide approximately 1,250 Coverage Follow-up workers to support approximately 1.1 million coverage\n follow-up cases.\n\n For Early Operations, as of June 2010, the mailout of the initial questionnaires is complete. The key activities\n have either been already conducted, began on time, or are scheduled to begin as planned.\n\n It is difficult to know how each component of the Partnership program influenced people to take part in the\n 2010 Census, and a detailed assessment will be done later. However, the Census Bureau strongly believes\n Comments that the integrated communications campaign contributed much to the U.S. public\xe2\x80\x99s better than expected\n \xe2\x80\x9cparticipation\xe2\x80\x9d in the census. Seventy-two percent of U.S. households that received a census form in the\n mail returned the completed questionnaire. This matched the Census 2000 participation rate despite a more\n challenging census environment in 2010. The public\xe2\x80\x99s participation in all types of surveys has declined sharply\n since 2000. The United States is a larger, more diverse population, with more types of housing arrangements,\n and were subject to extensive household dislocations due to the severe economic downturn.\n\n\n\n\n 42 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA)\n Program Operations, Research, and Facilities\n\n Amount $230.0M\n\n Hydrographic Survey Backlog \xe2\x80\x93 $40 million to reduce the critical hydrographic survey backlog by\n approximately 1,700 square nautical miles. The critical areas to be addressed have high commercial traffic\n or hazardous material transport, compelling requests from navigation services users, or seafloor areas that\n have not been surveyed to modern standards.\n\n Marine and Coastal Habitat Restoration \xe2\x80\x93 $167 million to support mid and large-scale restoration projects\n addressing coral reef conservation, restoration of fish habitats that benefit commercial and recreational\n fisheries, recovery of endangered species such as salmon and sea turtles, and improvement of coastal\n Description\n resiliency in response to sea level rise and natural hazards.\n\n Environmental Reviews and Consultations \xe2\x80\x93 $3 million to address the current backlog of Endangered Species\n Act (ESA) Section 7 consultations and, if required, environmental reviews and consultations associated with\n projects funded by ARRA.\n\n Vessel Maintenance and Repair \xe2\x80\x93 $20 million to address critical repairs and replacements to NOAA\xe2\x80\x99s fleet\n of research and exploration vessels.\n Target/Actual\n Measure 2010 2011 2012\n Fish passage and wetland restoration: percentage of projects 40 100\n with presence of target species (fish or plant)\n\n Shell fish: percentage of projects with successful recruitment 60 100\n of oysters\n\n Coral: percentage of projects experiencing reduction in land- 33 100\n based sources of sediment\n Performance Reduce the hydrographic survey backlog within 3,000/377 3,000 300\n Measures/\n navigationally significant areas (square nautical miles\n Results\n surveyed per year)\n\n Percentage of ARRA related consultations conducted on time 100%/86.3%\n\n Number of received ARRA-related requests for consultations *\n versus the number of ARRA-related consultations completed\n\n Percentage of planned milestones met for vessel maintenance 80/51\n and repairs\n\n Shoreline compilation completed 3,757/456 3,876\n *Not yet available\n\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 43\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA) (continued)\n Program Operations, Research, and Facilities (continued)\n\n Habitat Restoration \xe2\x80\x93 NOAA is using GPRA, Corporate, and ARRA-specific measures to track program\n performance. Those are Acres restored (GPRA), Stream miles opened (Corporate), and the Number of jobs\n created/sustained (ARRA-specific). Since project selection, NOAA developed outcome-based ecological\n metrics by project type to measure the impact of groups of projects on coastal ecosystems.\n\n Hydrographic Survey Backlog \xe2\x80\x93 NOAA conducts hydrographic surveys to determine the depths and\n configurations of the bottoms of water bodies, primarily for U.S. waters significant for navigation. This\n activity includes the detection, location, and identification of wrecks and obstructions with side scan and\n multi-beam sonar technology and the global positioning system (GPS). NOAA uses the data to produce\n traditional paper, raster, and electronic navigational charts for safe and efficient navigation, and in addition\n to the commercial shipping industry, other user communities that benefit include recreational boaters, the\n commercial fishing industry, port authorities, coastal zone managers, and emergency response planners.\n Comments\n Environmental Reviews and Consultations \xe2\x80\x93 NOAA focuses on the number of ARRA-related projects that\n NOAA has timely reviewed for environmental impacts so that action agencies may minimize and mitigate the\n impacts of these projects on the environment. Based on historical trend rates and available resources, NOAA\n expects to complete 70 percent of them on time. External federal agencies require consultations from the\n National Marine Fisheries Service on Endangered Species Act and essential fish habitat per the Endangered\n Species Act and Magnuson-Stevens Act.\n\n Vessel Maintenance and Repair \xe2\x80\x93 There has been an 89 percent increase in the number of significant\n mechanical/electronic failures on NOAA\xe2\x80\x99s ships and a 62 percent increase in lost days-at-sea for NOAA\n programs\xe2\x80\x94from 184 days-at-sea in FY 2005 to 299 days-at-sea in FY 2008. It is critical to maintain NOAA\xe2\x80\x99s\n aging ships, while meeting increasingly restrictive maritime standards. There are a total of 45 milestones for\n all of the ships projects.\n\n\n\n\n 44 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA)\n Program Procurement, Acquisition, and Construction\n\n Amount $600.0M\n\n NOAA Climate Computing and Modeling \xe2\x80\x93 $170 million to accelerate and enhance NOAA\xe2\x80\x99s High Performance\n Computing (HPC) capabilities.\n\n NEXRAD Dual Polarization Modification Acceleration \xe2\x80\x93 $7.4 million to accelerate the NEXRAD Dual\n Polarization effort.\n\n Weather Forecast Office (WFO) Construction \xe2\x80\x93 $9 million to accelerate WFO upgrade and modernization\n projects in Barrow and Nome, AK, as well as upgrades to the HVAC systems of other WFOs.\n\n Accelerate Satellite Development \xe2\x80\x93 $74 million to accelerate funding for the National Polar-orbiting\n Operational Environmental Satellite System (NPOESS) and climate sensors on NOAA\xe2\x80\x99s critical polar-orbiting\n satellites.\n\n Pacific Regional Center \xe2\x80\x93 $154 million to complete the construction of the entire Pacific Regional Center\n Description on Ford Island in Honolulu, HI.\n\n Southwest Fisheries Science Center (SWFSC) \xe2\x80\x93 $81.2 million to complete the design, construction, and\n occupancy of the replacement SWFSC facility in La Jolla, CA.\n\n Fairbanks Satellite Facility Construction \xe2\x80\x93 $9 million to continue the replacement of the at-risk Fairbanks\n Operations Building in Fairbanks, AK.\n\n Facility Maintenance and Repair \xe2\x80\x93 $15.6 million to fund facility maintenance and repair issues. NOAA\n will use this funding to address critical facility repair issues in order to ensure the health and safety of our\n employees.\n\n Fishery Survey Vessel Construction \xe2\x80\x93 $79.8 million to complete the construction of a fisheries survey\n vessel (FSV6), an OSCAR DYSON class vessel, will replace the San Diego-based DAVID STARR JORDAN and is\n intended to serve the SWFSC.\n\n NOAA Procurement, Acquisition, and Construction obligations for ARRA were $580.6 million or 97 percent\n of the Congressional approved spend of $600 million. Of the remaining funds ($17.7 million), approximately\n $16.7 million is classified as \xe2\x80\x9clapsed obligations.\xe2\x80\x9d The lapsed obligations are from funds transferred to the\n Performance U.S. Army Corps of Engineers for repair to NOAA\xe2\x80\x99s Norfolk facility seawall, and the Department of Navy\xe2\x80\x99s\n Measures/ Naval Facilities Engineering Command for construction-related services required to construct the new\n Results Pacific Regional Center at Ford Island Hawaii that resulted in contract awards less than the money provided.\n The $16.7 million to be returned as lapsed obligations resulted from acquisitions accomplished between\n September 1 and 24, 2010, too late for NOAA to reprogram to other ARRA projects. The following are the\n performance measures and outcomes:\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 45\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA) (continued)\n Program Procurement, Acquisition, and Construction (continued)\n\n Target/Actual\n Measure 2010 2011 2012 2013\n Severe weather warnings for tornados \xe2\x80\x93 Lead time 12 12 13\n\n Severe weather warnings for tornados \xe2\x80\x93 Accuracy 70 70 72\n\n Severe weather warnings for tornados \xe2\x80\x93 False alarm 72 72 70\n rate\n\n Severe weather warnings for flash floods \xe2\x80\x93 Lead 38 38 38\n time\n\n Severe weather warnings for flash floods \xe2\x80\x93 Accuracy 72 72 72\n\n Percentage of safety and conditions indices TBD\n improvements for NOAA\xe2\x80\x99s facility maintenance and\n Performance repair projects\n Measures/\n Results Percentage of planned milestones met for NPOESS 6/6 TBD\n (continued) program\n\n Percentage of planned milestones met for climate 32/32 37 31\n instruments\n\n Amount of megawatts saved from HVAC systems 120 200 200\n renovations\n\n Increase number of fish stocks with fishery- 174 184\n independent data needed to support adequate\n assessments\n\n Increase the number of high priority protected 13\n species with fishery-independent data to support\n adequate population assessments\n\n Increase number of program mission days-at-sea 220 days\n available to the Southwest Fisheries Science Center\n\n NEXRAD Radar Systems and Dual Polarization \xe2\x80\x93 These funds will accelerate the dual polarization effort of\n the next generation (NEXRAD) Doppler weather radar system that will allow signals to be transmitted and\n received in two dimensions, resulting in a significant improvement in precipitation estimation; improved\n ability to discriminate rain, snow, and hail; and a general improvement in data quality. The new system will\n Comments\n improve flash flood warnings, improve precipitation estimates and severe weather detection, including snow\n storms and icing conditions for air and ground transportation. These funds will not impact this target until\n at least FY 2013. This is because forecasters need at least one full year of data before they can verify and\n adjust outyear targets; and, the kits will not be installed until early FY 2011.\n (continued)\n\n\n\n\n 46 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA) (continued)\n Program Procurement, Acquisition, and Construction (continued)\n\n Percentage Safety and Conditions Indices Improvement at NOAA\xe2\x80\x99s Pacific Regional Center \xe2\x80\x93 NOAA will\n improve the safety and condition indices at NOAA\xe2\x80\x99s facilities through the collocation of NOAA employees\n on the island of Oahu at the Pacific Regional Center. This collocation will also support improved efficiency\n and effectiveness for employees in operations and mission performance by creating greater opportunity for\n program collaboration and synergy.\n\n Percentage Safety and Conditions Indices Improvement at NOAA\xe2\x80\x99s Fairbanks Satellite Operations Facility\n \xe2\x80\x93 NOAA will improve the safety and condition indices at NOAA\xe2\x80\x99s facilities through improving the health and\n safety of employees at the Fairbanks Satellite Operations Facility by providing a new building that mitigates\n the hazards of working within a seismic zone.\n\n Percentage Safety and Conditions Indices Improvement at NOAA\xe2\x80\x99s Regional Facilities \xe2\x80\x93 NOAA will improve\n the safety and condition indices at NOAA\xe2\x80\x99s facilities through mitigating the risks from facility deficiencies\n and health hazards, such as asbestos, the Galveston Laboratory, Geophysical Fluid Dynamics Laboratory,\n Marine Operations Center\xe2\x80\x93Atlantic, Milford Laboratory, Panama City Laboratory, and SWFSC\xe2\x80\x93Pacific Grove.\n\n Percentage Safety and Conditions Indices Improvement at NOAA\xe2\x80\x99s Southwest Fisheries Science Center\n \xe2\x80\x93 NOAA will improve the safety and condition indices at NOAA\xe2\x80\x99s facilities through replacing the SWFSC in\n La Jolla, CA, with a new, modern facility that will expand NOAA\xe2\x80\x99s ability to develop and apply advanced\n technologies for surveys of fisheries resources and their associated ecosystems and foster collaboration on\n fisheries management issues through the construction of a large sea and fresh-water test tank.\n Comments\n (continued) Vessel Construction \xe2\x80\x93 The construction of a FSV6 vessel improves NOAA\xe2\x80\x99s ability to more accurately manage\n fisheries stocks. FSV6 will be designed and constructed with state-of-the-art technologies and specialized\n survey equipment, which will produce significantly higher quality at-sea data, improved quality-of-life\n outfitting and mission productivity. The enhanced FSV6 capabilities will deliver more precise and accurate\n NOAA stock assessments for more effective management of living marine resources.\n\n Cumulative Number of New Decadal Prototype Forecasts and Predictions Made with High-resolution\n Coupled Climate Model \xe2\x80\x93 Decadal prediction was initially targeted to be attacked with an intergovernmental\n panel on climate change\xe2\x80\x94 fourth assessment report class model with relatively low resolution. The ARRA\n computing has allowed the use of a coupled climate model with approximately four times the resolution.\n Research into decadal predictability will inform prototype forecasts incorporating new data assimilation\n schemes using this high-resolution model This will provide, for the first time, scientifically credible, regional\n scale climate information, with estimates of uncertainty, to decisionmakers for improved management of\n water resources, the coasts, transportation infrastructure, agriculture, and other sectors impacted by climate,\n and to provide the Nation with early warnings of climate \xe2\x80\x9csurprises\xe2\x80\x9d resulting from climate variations on\n decadal timescales.\n\n Percentage of Planned Milestones for Climate Instruments \xe2\x80\x93 NOAA will accelerate the development of\n two climate sensors, TSIS and CERES. These climate sensors will improve the Nation\xe2\x80\x99s ability to collect\n and distribute higher-resolution data and products to improve forecasts and climate monitoring. Corporate\n performance measures will be evaluated by monitoring the percent of planned contract milestones\n accomplished within 60 days of target. Nineteen major milestones are associated with these activities.\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 47\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Oceanic and Atmospheric Administration (NOAA) (continued)\n Program Procurement, Acquisition, and Construction (continued)\n\n Number of Regional Scale Projections for Assessments and Decision Support \xe2\x80\x93 Enhanced computing will\n enable regional scale projections and will contribute to international assessments (e.g., IPCC AR5, scheduled\n for 2013), national assessments under the U.S. Global Climate Research Program, and other assessments as\n requested. The number of meaningful regional projections possible will increase as NOAA\xe2\x80\x99s earth system\n model increases in realism and complexity. Examples of regional scale projections include: regional sea level\n rise projections that require explicit representation of the global eddy field in the ocean models; projections\n of parameters essential to ocean and coastal ecosystem forecasting; assessment of regional carbon\n budgets; and projections of climate change in the Arctic region that require improved sea ice models. Better\n information in these areas will improve decisions in transportation, fisheries and other marine ecosystems,\n and emergency managers responsible for safety and infrastructure along the coasts.\n\n Percentage Uncertainty in Possible 21st Century Sea Level Rise (0-1m = 100% uncertainty) \xe2\x80\x93 This metric\n is calculated using the IPCC 4th Assessment Report estimates for the range of 21st century global-mean\n sea level rise. Completion of the proposed effort will reduce the uncertainties by almost half as a result of\n modeling that better captures the more accurate measurements of ice-sheet discharge, thermal expansion,\n and regional anomalies due to ocean circulation and heat storage. These model improvements are a direct\n result of ARRA-funded computing. Reducing the uncertainty in sea level rise will allow government and\n industry to have better information on projected sea level rise and therefore tailor their planning and actions\n to address the impacts.\n\n Cumulative Number of New Functionalities Incorporated into Earth System Model to Improve Realism\n Comments\n of Climate Simulation \xe2\x80\x93 Improve the realism of the NOAA earth system models by closing the nitrogen\n (continued)\n and phosphorus cycles and improving the simulation of impacts of quality air on plant growth. Enhanced\n computing permits the implementation of mechanistic models of biospheric processes in a comprehensive\n earth system model which will reduce the uncertainty of future climate projections and provide more\n scientifically-credible information to managers of land and marine ecosystems and better estimates of\n carbon sources and sinks.\n\n Cumulative Number of Assessments of Carbon, Trace Gas and Aerosol Budgets and Feedbacks \xe2\x80\x93\n Assessments are one of the principal means by which credible scientific information is communicated to\n policymakers and other stakeholders. Enhanced computing permits additional biogeochemical cycles to be\n included in NOAA earth system models and so assessments of impacts of these additional processes improve\n the scope and credibility of this information.\n\n Improved Treatment of Key Physical Processes in Climate Models Aimed at Improving: Model Performance,\n Understanding of Uncertainties, and Confidence in Climate Change Projection and Predictions \xe2\x80\x93 This\n performance measure will reflect more confident projections of key climate change impacts. Better scientific\n understanding of the key processes of clouds, aerosols, and water vapor in the earth system will lead to\n research advances built into climate models that will then produce better predictions and projections to\n address climate change impacts.\n\n Percentage of Planned Milestones Met for NPOESS program \xe2\x80\x93 NPOESS will conduct electrical payload\n critical path reduction in calendar year 2009 and calendar year 2010.\n\n\n\n\n 48 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Institute of Standards and Technology (NIST)\n Program Scientific and Technical Research and Services (STRS)\n\n Amount $220.0M\n\n The ARRA includes $220 million in STRS funding for \xe2\x80\x9cresearch, competitive grants, additional research\n fellowships and advanced research and measurement equipment and supplies,\xe2\x80\x9d as stipulated in the\n conference report to PL 111-5. The ARRA also provides for NIST $20 million from the Department of Health\n and Human Services (HHS) for health information technology (IT), and $10 million from the Department of\n Energy (DOE) for Smart Grid.\n\n The following is a summary of the NIST planned activities funded in the STRS appropriation by the ARRA:\n Advanced Scientific Equipment ($108 million) to procure advanced research and measurement equipment\n to strengthen its measurement, standards, and technology programs; Measurement Science and Engineering\n (MS&E) Grants ($35 million1) to conduct a competitive grants program which funded 27 projects at higher-\n education, commercial, and non-profit organizations in 18 states for measurement science in NIST\xe2\x80\x99s six priority\n investment areas of critical national importance: Energy, Environment, Manufacturing, Health Care, Physical\n Infrastructure, and Information Technology; Postdoctoral Research Fellowships ($22 million1) to expand the\n NIST Postdoctoral Fellowship program to create approximately 80 postdoctoral fellowships for recent Ph.D.s\n and retain approximately 40 NIST National Research Council (NRC) postdoctoral fellows through the end\n of FY 2010 following the end of their tenure; MS&E Fellowship Program ($20 million1) to award grants to\n the University of Maryland and the University of Colorado for developing and implementing a program to\n Description provide fellowships for students, post-doctoral, and professional scientists and engineers to work at NIST;\n Research Contracts ($15 million) to award competitive research contracts to small businesses under the\n Small Business Innovation Research (SBIR) program2, and to award competitive research contracts1 to assist\n NIST in activities associated with Smart Grid devices and systems and competitive research contracts1 for\n research on specific areas of cybersecurity; IT Infrastructure Contracts ($9 million) to competitively procure\n critical new information systems and components to improve NIST\xe2\x80\x99s IT infrastructure; and Management\n and Oversight ($11 million) to support critical staff such as contracts specialists, grants specialists, internal\n control specialists, and an ARRA Project Management Office to ensure that transparency, monitoring and\n evaluation, and accountability responsibilities under ARRA are implemented and followed.\n\n The $30 million in ARRA funding from other federal agencies includes: $20 million from HHS Office of the\n National Coordinator to help accelerate development and deployment of electronic health records and a\n nationwide health care information infrastructure and $10 million from DOE to develop a framework and a\n public-private partnership needed to harmonize standards and implement a nationwide electricity Smart Grid.\n\n 1\t Actual amount of awards will be slightly less due to a 2.5 percent SBIR assessment to appropriate activities mandated by statute.\n 2\t Approximately $1. 5 million were added to this activity from the mandated 2.5 percent SBIR assessments on the ARRA MS&E\n Grants and Fellowships, Postdoctoral Research Fellowships, and Research Contracts amounts.\n\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 49\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Institute of Standards and Technology (NIST) (continued)\n Program Scientific and Technical Research and Services (STRS) (continued)\n\n Use of NIST ARRA funding is targeted to have maximum impact on meeting the goals of the ARRA, including:\n creating jobs; promoting economic recovery; providing investments needed to increase economic efficiency\n by spurring technological advances in science; and making investments in areas of research that will provide\n long-term economic benefits.\n\n Advanced scientific equipment purchases from the STRS ARRA funding will have immediate and specific\n impacts on NIST\xe2\x80\x99s technological capabilities and abilities to work in new areas and address more complex\n scientific challenges. To document these impacts, NIST is providing a series of examples in its ARRA reporting\n that illustrate the overall impact and outcomes of the NIST STRS ARRA equipment purchases. Illustrative\n impacts from these equipment purchases include:\n\n Clinical PET-CT Scanner: Positron emission tomography - computed tomography (PET-CT) is a medical\n imaging technique that sequentially acquires PET and x-ray computed tomography images to render\n a spatial distribution of metabolic or biochemical activity in the human body precisely aligned with its\n anatomic structure. The acquisition of a PET-CT scanner under ARRA funding will enable NIST to develop\n Performance\n standards and measurement infrastructure in support of PET and PET-CT technology. Since this instrument\n Measures/\n Results will be the only PET-CT scanner in the United States that will be continuously calibrated against national\n standards, it will function as a reference instrument for clinical comparison studies, clinical trials, testing of\n clinical measurement protocols, and a testbed for development of techniques associated with PET-CT. The\n improvements in the quantitative data obtained from the NIST PET-CT scanner will impact the nearly two\n million PET-CT scans in the United States every year by enabling more accurate and timely diagnoses.\n\n Large Area NEXAFS Microscope for National Synchrotron Light Source: NEXAFS has become a funda-\n mental measurement for organic photovoltaic (OPV) materials, but has been limited to large area samples.\n The imaging capabilities of this microscope will allow spatially resolved identification of defects and\n variations. The ARRA funds greatly accelerated the availability of a unique instrument at least five years\n faster than without ARRA funds.\n\n The table below reflects performance measures that were reported in Recovery.gov on May 15, 2009 for\n NIST\xe2\x80\x99s STRS ARRA appropriations. NIST has been collecting ARRA performance data on a quarterly basis.\n Data is included in the table for each measure for FY 2009 Target and Actuals, as well as FY 2010 Target and\n Actuals.\n (continued)\n\n\n\n\n 50 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Institute of Standards and Technology (NIST) (continued)\n Program Scientific and Technical Research and Services (STRS) (continued)\n\n FY 2009 FY 2009 FY 2010 FY 2010\n Measures\n Target Actual Target Actual\n Advanced Scientific Equipment:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $20,000K $22,458K* $88,000K $88,161K*\n \xe2\x97\x8f\xe2\x97\x8f Number of equipment purchased 15 17 45 45\n\n Measurement Science and Engineering\n Grants program:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $0K $0 K $34,125K $34,449K\n \xe2\x97\x8f\xe2\x97\x8f Number of awards 0 0 20 27\n \xe2\x97\x8f\xe2\x97\x8f Number of patent applications 0 0 0 0\n (lagging/outyear measure)\n \xe2\x97\x8f\xe2\x97\x8f Number of peer-reviewed technical 0 0 0 0\n publications (lagging/outyear measure)\n \xe2\x97\x8f\xe2\x97\x8f Number of licenses (lagging/outyear 0 0 0 0\n measure)\n\n Postdoctoral Fellowships:\n Performance \xe2\x97\x8f\xe2\x97\x8f Number of Postdoctoral Fellows 48 52 35 38\n Measures/\n \xe2\x97\x8f\xe2\x97\x8f Number of Postdoctoral Fellows 23 19 18 46\n Results\n (continued) retained after completion of tenure\n\n Measurement Science and Engineering\n Fellowship program:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $0K $0K $19,500K $19,500K\n\n Research Contracts:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $10,500K $9,826K** $4,500K $18,669K**\n \xe2\x97\x8f\xe2\x97\x8f Number of contracts awarded (SBIR, 34 33 1 9\n Smart Grid, Cyber Security)\n\n Information Technology Research Contracts:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $9,000K $7,588K $0K $1,193K\n *\t Actual obligations were approximately $2.6 million above cumulative planned Target levels as a result of lower expenses from\n management and oversight funds that were redirected toward more funding for equipment.\n **\t Approximately $13.5 million was spent above cumulative Target levels as a result of additional funding provided to this activity\n from the mandated SBIR assessments on the ARRA MS&E Grants and Fellowships, Postdoctoral Research Fellowships, and\n Research Contracts amounts\xe2\x80\x94and $12 million in reimbursable funding received from the Department of Energy for Smart Grid.\n\n Further results are available on the NIST ARRA Web site at http://www.nist.gov/recovery/.\n\n The measurements, standards, and technologies that are the essence of the work done by NIST\xe2\x80\x99s laboratories\n help U.S. industry and science to invent and manufacture superior products and to provide services\n reliably. NIST\xe2\x80\x99s programs are driven by six investment priority areas that address national priorities: Energy,\n Comments Environment, Manufacturing, Health Care, Physical Infrastructure, and Information Technology. Funds\n provided by the ARRA will enhance NIST\xe2\x80\x99s efforts on the six investment priority areas by providing the\n \xe2\x80\x9ctools\xe2\x80\x9d and knowledge base needed to make progress. Focus will be on the eight activities noted in the\n earlier description section.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 51\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Institute of Standards and Technology (NIST) (continued)\n Program Construction of Research Facilities\n\n Amount $360.0M\n\n The following is a summary of the NIST planned activities funded in the Construction of Research Facilities\n appropriation by the ARRA.\n\n NIST Construction Projects ($180.0 million): includes complete the funding of the Precision Measurement\n Laboratory formerly known as the NIST Boulder Building 1 Extension ($43.5 million); enhance the performance\n of the Precision Measurement Laboratory ($25.0 million); carry out energy-efficient Safety, Capacity,\n Maintenance, and Major Repairs Program projects ($31.0 million); high-efficiency cooling system, associated\n support infrastructure for the cooling system, and other support infrastructure for the NIST Center for\n Neutron Research ($16.0 million); fund the design and construction of a National Structural Fire Resistance\n Laboratory ($16.0 million); relocation and consolidation of advanced robotics and logistics operations from\n a decommissioned NIKE missile site to the NIST Gaithersburg site ($9.0 million); fund the construction of\n a Liquid Helium Recovery System for the NIST Gaithersburg site ($5.0 million); fund the construction of a\n Description\n Liquid Helium Recovery System for the NIST Boulder site ($2.5 million); design and construct an Emergency\n Services Consolidated Facility in Gaithersburg ($7.0 million); a Net-Zero-Energy Residential Test Facility at\n NIST Gaithersburg ($2.0 million); and in-house oversight and construction management support of NIST\n construction projects ($8.0 million). The original plan also included $15 million to fund the design and\n construction of a new time-code radio broadcast station; but despite best efforts, NIST has been unsuccessful\n in finding a site or solution to realistically award this project by the end of FY 2010, which is the expiration\n date of NIST\xe2\x80\x99s ARRA funding.\n\n Competitive Construction Grants Program ($180.0 million): provides competitively awarded grants to U.S.\n universities, colleges, and not-for-profit research organizations for research science buildings through the\n construction of new buildings or expansion of existing buildings ($179.0 million), and program management\n support and oversight of the construction grants program ($1.0 million).\n\n Use of NIST ARRA funding was targeted to have maximal impact on meeting the goals of ARRA, including\n creating jobs, promoting economic recovery, providing investments needed to increase economic efficiency\n by spurring technological advances in science, and making investments in areas of research that will provide\n Performance long-term economic benefits.\n Measures/\n Results The table below reflects performance measures that were reported in Recovery.gov on May 15, 2009 for\n NIST\xe2\x80\x99s Construction of Research Facilities ARRA appropriations. NIST has been collecting ARRA performance\n data on a quarterly basis. Data is included in the table for each measure for FY 2009 Target and Actuals, as\n well as FY 2010 Target and Actuals.\n (continued)\n\n\n\n\n 52 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Bureau National Institute of Standards and Technology (NIST) (continued)\n Program Construction of Research Facilities (continued)\n\n FY 2009 FY 2009 FY 2010 FY 2010\n Measures\n Target Actual Target Actual\n NIST construction projects:\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $26,300K $10,956.1K $153,700K $164,362.1K\n \xe2\x97\x8f\xe2\x97\x8f Number of facilities renovated 0 0 0 0\n \xe2\x97\x8f\xe2\x97\x8f Number of facilities constructed 0 0 0 0\n\n Construction Grants (up to $60M):\n Performance \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $60,000K $55,537.0K $0.00K $0.00K\n Measures/ \xe2\x97\x8f\xe2\x97\x8f Number of grants awarded 5 4 0 0\n Results \xe2\x97\x8f\xe2\x97\x8f Number of research science facilities 0 0 0 0\n (continued) completed\n\n Construction Grants (approximately $120M):\n \xe2\x97\x8f\xe2\x97\x8f Dollars obligated $0.00K $0.00K $120,000K $123,517.2K*\n \xe2\x97\x8f\xe2\x97\x8f Number of grants awarded 0 0 10 12\n \xe2\x97\x8f\xe2\x97\x8f Number of research science facilities 0 0 0 0\n completed\n *\t FY 2010 Actual obligations are approximately $3.5 million above the cumulative Target levels as a result of redirecting excess\n funding from the first round Construction Grants competition ($60 M) into the second round competition ($120M).\n\n The measurements, standards, and technologies that are the essence of the work done by NIST\xe2\x80\x99s laboratories\n help U.S. industry and science to invent and manufacture superior products and to provide services reliably.\n NIST manages some of the world\xe2\x80\x99s most specialized measurement facilities where cutting-edge research\n is done in areas such as new and improved materials, advanced fuel cells, and biotechnology. Critically\n Comments needed research facilities will help keep the Nation at the forefront of cutting-edge research and ensure\n that U.S. industry has the tools it needs to continually improve products and services. The investment now in\n these advanced research facilities will be recouped many times over in increased U.S. innovation, a critical\n ingredient for improved productivity and job creation. The construction projects will use green technologies\n where possible, and will improve energy efficiency and environmental performance of NIST facilities.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 53\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n National Telecommunications and Information Administration\n Bureau\n (NTIA)\n Program Broadband Technology Opportunities Program (BTOP)\n\n Amount $4,700.0M\n\n In FY 2010, NTIA utilized approximately $4 billion of ARRA funding for BTOP, which awarded grants to 233\n projects to support deployment of broadband infrastructure, enhance and expand public computer centers,\n and encourage sustainable adoption of broadband service. The BTOP projects will:\n\n \xe2\x97\x8f\xe2\x97\x8f Fund the installation or upgrade of approximately 120,000 miles of broadband networks, including fiber\n optics, wireless, microwave, and other technologies. Of this amount, approximately 70,000 miles involve\n construction of new broadband facilities.\n \xe2\x97\x8f\xe2\x97\x8f Provide broadband access to approximately 24,000 community anchor institutions, including schools,\n libraries, government offices, health care facilities, and public safety entities.\n \xe2\x97\x8f\xe2\x97\x8f Deploy middle-mile infrastructure in areas with nearly 40 million households and four million businesses,\n many of which will benefit from new or improved broadband service provided by last-mile providers\n that are able to utilize the new, open infrastructure to extend or upgrade their service for consumer and\n business customers.\n Description\n \xe2\x97\x8f\xe2\x97\x8f Invest in more than 3,500 new or upgraded public computer centers in libraries, schools, community\n centers, and other public locations.\n \xe2\x97\x8f\xe2\x97\x8f Invest in more than 35,000 new or upgraded public computer workstations.\n \xe2\x97\x8f\xe2\x97\x8f Make public computer center workstations and training available to more than one million new users.\n These anticipated benefits will be realized over the life of each project, which must be substantially complete\n within two years and fully complete within three years.\n\n NTIA\xe2\x80\x99s State Broadband Data and Development grant program implements the joint purposes of the ARRA\n and the Broadband Data Improvement Act (BDIA), which envisioned a comprehensive program to integrate\n broadband and information technology into state and local economies. ARRA provided up to $350 million for\n implementation of the BDIA and to develop and maintain the national broadband map. NTIA has awarded a\n total of $293 million in grants among all 56 eligible entities.\n (continued)\n\n\n\n\n 54 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n National Telecommunications and Information Administration\n Bureau\n (NTIA) (continued)\n Program Broadband Technology Opportunities Program (BTOP) (continued)\n\n Current and planned performance measures include:\n FY 2010 FY 2011 FY 2012 FY 2013\n Actual Target Target Target\n New broadband network miles deployed N/A 10,000 30,000 50,000\n Community anchor institutions with\n Performance new or improved access to broadband N/A 3,000 10,000 15,000\n Measures/ services\n Results\n New public computer center\n workstations installed and available to N/A 10,000 20,000 25,000\n the public\n New sustainable broadband adoption\n subscribers (households, businesses, and/ N/A 100,000 250,000 350,000\n or institutions)\n BTOP provides grants to support the deployment of broadband infrastructure in unserved and underserved\n areas, to enhance broadband capacity at public computer centers, and to encourage sustainable adoption of\n Comments\n broadband service. Through this support, BTOP will also advance the ARRA\xe2\x80\x99s objectives to spur job creation\n and stimulate long-term economic growth and opportunity.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 55\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n H igh R is k I ssue / 2 0 1 0 D E C E N N I A L C ensus\n\n\n\n\n \xe2\x80\x8aA \xe2\x80\x8a\n utomation problems and uncertain costs and plans may jeopardize the success of the 2010 Decennial Census, and\n warrant immediate attention. The decennial census is a Constitutionally-mandated activity that produces critical data\n used to apportion Congressional seats and to allocate over $400 billion in federal assistance each year.\n\n Goal\n\n Strengthen management and oversight, and reduce risks for the 2010 Decennial Census.\n\n Challenges/Actions\n\n \xe2\x97\x8f\xe2\x97\x8f Develop an integrated and comprehensive plan to control costs and manage operations\n\n \xe2\x97\x86\xe2\x97\x86 Improved management practices and communications by conducting regularly scheduled meetings with internal and\n external management/stakeholders.\n\n \xe2\x97\x86\xe2\x97\x86 Managed the schedule with weekly analysis of the activities and milestones contained in the integrated project schedule.\n\n \xe2\x97\x8f\xe2\x97\x8f Strengthen risk management activities and systems testing\n\n \xe2\x97\x86\xe2\x97\x86 Developed mitigation and contingency plans to accompany the risk management plan.\n\n \xe2\x97\x86\xe2\x97\x86 Reviewed and updated the risk register and ensure ongoing involvement of senior management in risk review.\n\n \xe2\x97\x86\xe2\x97\x86 Developed detailed testing plans, including gap analysis.\n\n \xe2\x97\x86\xe2\x97\x86 Conducted and monitored system testing across the 2010 Decennial Census program.\n\n \xe2\x97\x8f\xe2\x97\x8f Improve management of the Field Data Collection Automation (FDCA) effort\n\n \xe2\x97\x86\xe2\x97\x86 Conducted and monitored extensive testing, including coding and unit testing, field testing, production integration\n testing, and operational readiness testing (by the Census Bureau and contractors).\n\n \xe2\x97\x86\xe2\x97\x86 Successfully completed Address Canvassing ahead of schedule, using automated handheld computers supplied\n by the FDCA contractor.\n\n \xe2\x97\x86\xe2\x97\x86 Oversaw successful deployment, by the FDCA contractor, of equipment and systems to the local census offices.\n\n\n\n\n 56 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n H igh P riorit y P erformance G oals\n\n\n\n\nH\xe2\x80\x8a\n igh priority performance goals (HPPG) are a clear statement of the specific, measurable, ambitious near-term priority\n targets chosen by the senior leaders of major federal agencies. The HPPGs communicate the performance improvements\n each agency is trying to accomplish relative to its priorities using existing legislative authority, previously appropriated\nfunds, and funding at levels proposed in the President\xe2\x80\x99s FY 2011 Budget. The HPPGs constitute the priority operational targets the\nagency will work to accomplish within 18 to 24 months of setting the targets. This distinguishes the HPPGs from the longer-term\ntargets agencies include in their strategic plans, and the full set of performance goals and measures agencies include in the annual\nplans and reports required by the Government Performance and Results Act (GPRA).\n\n\n Goal 2010 Decennial Census: Effectively execute the 2010 Census, and provide the states with\n accurate and timely redistricting data. (Timely completion of milestones to conduct the 2010\n Census and provide redistricting data as mandated by law.)\n Bureau Census Bureau\n Performance Achieve an accuracy level of an overall net coverage error at the national level of less than one-half of one\n Measures percent.\n Description The overall net coverage error is determined by an independent follow-up survey which measures the\n accuracy of the census results. The survey estimates both the number of households missed and those either\n mistakenly counted or counted multiple times. The undercount and overcount percentages are derived by\n subtracting the number of people counted in the census from the number of people measured in the survey\n and then dividing by the estimate of the total population according to the survey. A net overcount occurs if the\n resulting percentage is negative, while a positive percentage indicates a net undercount.\n Results Fiscal\n Year Target Actual\n 1991 1.61%\n 2003 -0.49%\n 2012 +/-0.5%\n Milestones Deliver 2010 Census Questionnaires: Completed by April 9, 2010. Delivered 2010 Census\n questionnaires which consisted of the mailing of advance letters, initial questionnaires, reminder postcards,\n and replacement mailings.\n\n Update Leave and Update Enumerate: Completed by June 1, 2010. Conducted update leave and\n update enumerate operations in which enumerators deliver census questionnaires or conduct interviews in\n communities that may not have a house number and street name address.\n\n Group Quarters Enumeration: Conduct enumeration of group quarters. The operation consists of the\n field enumeration of individuals in group quarters, such as college dormitories, correctional facilities, military\n vessels, and nursing facilities.\n\n Nonresponse Follow-up: Completed by July 10, 2010. Conducted nonresponse follow-up operation\n which includes follow-up visits and phone calls to all housing units that did not respond to the mailout\n questionnaires.\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 57\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal 2010 Decennial Census: Effectively execute the 2010 Census, and provide the states with\n accurate and timely redistricting data. (continued)\n Bureau Census Bureau (continued)\n Milestones Coverage Follow-up: Conduct coverage follow-up operation which resolves erroneous information in\n (continued) initial census operations.\n Vacant Delete Check: Conduct vacant delete check operation by confirming vacant or nonexistent\n housing unit statuses identified during nonresponse follow-up.\n Census Coverage Measurement: Operations for census coverage measurement. These are independent\n of the other census operations. They are designed to provide estimates of net coverage error and erroneous\n enumerations for persons in housing units and for the housing units themselves.\n\n\n Goal Intellectual Property (IP) Protection: Reduce patent pendency for first action and for\n final actions from the end of 2009 levels of 25.8 and 34.6 months respectively by the end of\n 2011, as well as the patent backlog.\n Bureau U.S. Patent and Trademark Office (USPTO)\n Performance First Action Patent Pendency Final Action Patent Pendency Patent Backlog\n Measures\n Description This measure tracks the timeliness of first This measure identifies the This measure tracks the\n office actions on patent applications, timeliness related to issuance number of patent applications\n measuring the time in months from the of the patent or abandonment awaiting first action review\n application filing date to the date of of the application, measuring by an examiner.\n mailing the first office actions. the average time in months\n from the application filing\n date to the date of issue or\n abandonment.\n Results Fiscal\n Year Target Actual Target Actual Target Actual\n 2003 18.4 18.3 27.7 26.7 484,700 457,274\n 2004 20.2 20.2 29.8 27.6 524,000 508,878\n 2005 21.3 21.1 31 29.1 594,800 586,580\n 2006 22 22.6 31.3 31.1 680,700 674,333\n 2007 23.7 25.3 33 31.9 801,000 737,288\n 2008 26.9 25.6 34.7 32.2 801,300 750,596\n 2009 27.5 25.8 37.9 34.6 741,400 718,835\n 2010 25.4 25.7 34.8 35.3 698,000 TBD1\n 2011 25.7 34.1 635,700\n 2012 19.3 34.7 556,800\n 2013 14.9 28.3 477,800\n 2014 10.9 23.9 410,300\n 2015 10.2 19.9 377,000\n 1\t Final actuals should be available by January 1, 2011.\n (continued)\n\n\n\n\n 58 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Intellectual Property (IP) Protection: Reduce patent pendency for first action and\n for final actions from the end of 2009 levels of 25.8 and 34.6 months respectively by the end\n of 2011, as well as the patent backlog. (continued)\n Bureau U.S. Patent and Trademark Office (USPTO) (continued)\n Milestones Re-engineer the Examiner Count System: Completed by March 30, 2010. USPTO adopted significant\n revisions to the patent examiner production (count) system. The new count system is expected to set the\n foundation for long-term pendency improvements by encouraging early identification of patentable subject\n matter, helping examiners resolve issues more quickly and rebalancing incentives both internally and\n externally to decrease re-work. It is also expected to see quality gains as a result of giving examiners more\n time to do a thorough search and examination.\n Project Exchange: The Project Exchange pilot will allow advancement of an application in exchange for\n express withdrawal of another application, and will enable applicants to focus USPTO resources on what is\n important, rather than having examiners review applications that are no longer important to their owners.\n Institutionalize Compact Prosecution of Applications: Encourage the practice of finding the core issues with\n patent applications and resolving them\xe2\x80\x94conducting a complete initial search, issuing a complete first office\n action, and identifying allowable subject matter so as to expedite prosecution. This will be accomplished\n through specific training programs.\n Measurement and Tracking of Patent Quality: Along with its Patent Public Advisory Committee,,\n USPTO has engaged its stakeholders in roundtable discussions on the best way to address patent process\n inefficiencies, while also improving patent quality and reducing overall application pendency. USPTO has\n sought specific public input on improving the process for obtaining the best prior art, preparation of the\n initial application, and examination and prosecution of the application, along with identifying appropriate\n indicia of quality, and establishing metrics for the measurement of the indicia.\n Improve and Provide More Effective Training: Provide Leadership Development Program and\n additional training for examiners and supervisory patent examiners. Patent managers and supervisors are\n participating in a newly developed, state-of-the-art leadership development program. This program is\n designed to foster the development of all employees and to help managers and supervisors hone their skills\n so they can enable all employees to reach their full potential. USPTO is giving all of its patent examiners\n detailed training in efficient interview techniques, compact prosecution, and negotiations. This training\n is all targeted to streamline the examination process by working with applicants to identify and correctly\n resolve issues early in the process, thereby reducing patent application backlog and pendency. The Office of\n Patent Training has developed a catalog of refresher training courses for patent examiners to enhance the\n quality of examination. In FY 2010, over 1,600 requests for refresher training have been registered in the\n Commerce Learning Center. The Office of Patent Training will continue to enhance and expand the courses\n being offered. The ISO 9001 certified New Examiner Training program continues to evolve in order to meet\n the changing needs of USPTO. The former New Examiner Training Program has been re-engineered to serve\n two different groups of new hires. The Experienced IP Program is a four-week, accelerated training program\n that is being successfully piloted with examiners who have prior IP experience. The former eight-month new\n examiner program has be redesigned into a one-year program that consists of a four-month curriculum in\n the Patent Training Academy followed by an eight-month, on the job training program in the Technology\n Centers.\n Ombudsman Pilot Program: The USPTO Ombudsman program is intended to provide patent applicants,\n attorneys, and agents assistance with application-specific issues including concerns related to prosecution\n advancement. The objective is to quickly resolve issues, and thereby to decrease pendency.\n (continued)\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 59\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Intellectual Property (IP) Protection: Reduce patent pendency for first action and\n for final actions from the end of 2009 levels of 25.8 and 34.6 months respectively by the end\n of 2011, as well as the patent backlog. (continued)\n Bureau U.S. Patent and Trademark Office (USPTO) (continued)\n Milestones Develop and Implement the Patent End-to-End Processing System: USPTO legacy patent\n (continued) systems are based on obsolete technologies that are difficult to maintain, leaving USPTO highly vulnerable\n to disruptions in patent operations. Patents databases are among the world\xe2\x80\x99s largest, and continue to grow\n at multiple terabytes per year, further raising the possibility of failure. Automation of many manual business\n functions has been deferred because of the limitations of legacy systems. A new generation of patent\n systems is needed, built upon modern data formats to provide end-to-end electronic processing. A first\n deliverable will be the delivery prototype core patent processing infrastructure.\n Prioritize Work \xe2\x80\x93 Green Technology Acceleration: Green technology acceleration allows inventors\n to accelerate applications in certain technologies. Pending patent applications in green technologies are\n eligible to be accorded special status and given expedited examination; the Green Technology Pilot Program\n will accelerate the development and deployment of green technology, create green jobs, and promote U.S.\n competitiveness in this vital sector. Patent applications are normally taken up for examination in the order\n that they are filed. Under the pilot program, for the first 3,000 applications related to green technologies\n in which a proper petition is filed, the Agency will examine the applications on an accelerated basis. Upon\n receipt of more than 3,000 petitions, USPTO may reevaluate the workload and resources needed to extend\n the pilot program.\n Hire Patent Examiners: Hire 1,000 patent examiners in FY 2011.\n Target Overtime to High Backlog Areas: Strategically target overtime to Technology Center units\n with highest backlogs and permit other examiners to work overtime in the targeted areas. Overtime is a\n critical element of USPTO\xe2\x80\x99s plan to reduce the backlog of pending patent applications and to achieve its\n pendency goals. Over the years, overtime has proven to be more efficient on a per hour basis than equivalent\n regular time hour, since each overtime hour worked is directly tied to production output. Overtime also\n allows USPTO to manage its workload without adding additional new hires. Its inherent flexibility allows\n the Agency to further expand its production capacity while maintaining optimal staffing levels. Based on\n funding availability, USPTO plans to prioritize the use of overtime and target areas with highest backlogs\n first, then other areas as resources permit.\n Institute a \xe2\x80\x9cNationwide Workforce\xe2\x80\x9d: USPTO will develop a nationwide workforce using telework\n which will allow it to hire experienced IP professionals interested in joining USPTO, but who do not want to\n relocate to the Washington, D.C. region. It is expected that this different hiring demographic will provide\n a more productive and balanced workforce, lower attrition, and faster transition to productivity for new\n hires. This pilot program is targeted to begin in FY 2011 third quarter and USPTO is forecasting to hire\n 25 examiners per quarter.\n Reformulate Performance Appraisal Plans: Senior executive service performance appraisal plans\n will continually be revised to ensure that they are more aligned with the strategic plan goals and objectives,\n and flexible enough to adapt to changing conditions.\n\n\n\n\n 60 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Coastal and Ocean Resource Management: Ensure environmentally and\n economically resilient oceans, coasts, and Great Lakes communities, with healthy\n and productive ecosystems.\n Bureau National Oceanic and Atmospheric Administration (NOAA)\n Performance Ensure that all 46 federal fishery man- Reduce the number of stocks Improve the Fish Stock\n Measures agement plans have required catch limits subject to overfishing to zero Sustainability Index (FSSI)\n to end overfishing in place by the end by the end of 2011. to 586 by the end of 2011.\n of 2011.\n Description This measure tracks the number of federal This is the number of non- The FSSI is a measure of stock\n fishery management plans in place that exempt overfishing stocks not assessments and overfishing.\n require annual catch limits and account- being fished under an annual The target represents a four\n ability measures to end overfishing by the catch limit. Assessments in percent increase above the\n end of 2011. NOAA staff track the status future years will confirm that FSSI score at the end of 2009.\n of annual catch limits implementation overfishing has ended. (Because the FSSI does not\n using information from the eight regional score a stock as \xe2\x80\x9cnot subject\n Fishery Management Councils and to overfishing\xe2\x80\x9d until such\n NOAA Fisheries regional offices. Fishery status has been confirmed\n management processes were established through subsequent survey\n by Congress, which has established the and analysis, the improve-\n role of the Fishery Management Councils ments sought in overfishing\n in developing fishery management plans. will not be fully reflected in\n the 2011 FSSI level.)\n Results Fiscal\n Year Target Actual Target Actual Target Actual\n 2003 NA 34 NA\n 2004 NA 36 NA\n 2005 NA 36 481.5\n 2006 NA 39 507 501\n 2007 0 35 505 516\n 2008 0 31 530.5 535\n 2009 1 24 548.5 565.5\n 2010 5 5 15 14 580 582.5\n 2011 23 0 586\n Milestones Ensure all 46 Federal Fishery Management Plans Have Required Catch Limits to End\n Overfishing: As of March 31, 2010, two fishery management plans had annual catch limits in place.\n One for the Arctic and one for the Gulf of Mexico Reef Fish.\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 61\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Coastal and Ocean Resource Management: Ensure environmentally and\n economically resilient oceans, coasts, and Great Lakes communities, with healthy\n and productive ecosystems. (continued)\n Bureau National Oceanic and Atmospheric Administration (NOAA) (continued)\n Milestones Reduce the Number of Stocks Subject to Overfishing to Zero by the End of 2011: As of\n (continued) March 31, 2010, 41 stocks were subject to overfishing. Four of these stocks, in New England, were declared\n subject to overfishing in March 2010. However, on May 1, 2010, the New England Fishery Management\n Council placed annual catch limits on these four stocks as well as seven others currently subject to\n overfishing. Twenty-eight of the stocks currently subject to overfishing will be managed under annual catch\n limits by the end of 2010. Eight of these stocks are subject to overfishing due to international fishing efforts,\n and are exempt from the requirement for annual catch limits because U.S. fishing management measures\n cannot independently end overfishing on these stocks.\n Increase the FSSI to 586 by the End of 2011: The index is a measure of fish stock status that\n includes fishing rates and population levels. As of March 31, 2010, the index was at 571.5 out of a possible\n 920, up from 565.5 in 2009 and 481.5 in 2005. The National Marine Fisheries Service is targeting the index\n to increase to 580 by the end of FY 2010, and to 586 by the end of FY 2011. Progress in NOAA\'s effort to end\n overfishing continues to increase the FSSI score. As of June 30, 2010, overfishing on black grouper in the\n South Atlantic was found to have ended, and red grouper in the South Atlantic and black grouper in the Gulf\n of Mexico (which were newly assessed) were found not to be subject to overfishing. In the Northeast region,\n the spiny dogfish stock is now rebuilt. These improvements in stock status increased the FSSI by nine points,\n advancing the Agency further toward its goal of reaching a score of 586 by the end of 2011.\n Provide Updated Fishery Stock Assessment Reports to Regional and International\n Management Agencies: The National Marine Fisheries Service Fisheries Science Centers annually\n collect, analyze, and interpret information on the status of managed fish stocks to meet requirements of\n the Magnuson-Stevens Act and international agreements. Approximately 80 individual assessments are\n conducted and peer-reviewed through region-specific processes and priorities based on national guidelines.\n Assessment results are used to implement updates to fishery quotas and other management measures,\n determine the status of fish stocks with respect to overfishing criteria, and track rebuilding of previously\n overfished stocks. These assessments also provide information for calculating the FSSI and the scientific\n basis for implementing annual catch limits. The centers produced 11 reports.\n\n\n\n\n 62 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Broadband Access: Efficiently and effectively implement the Broadband Technology\n Opportunities Program (BTOP), to expand service to communities in a cost-effective manner\n that maximizes impacts on economic growth, education, health care, and public safety.\n Bureau National Telecommunications and Information Administration (NTIA)\n Performance Miles of broadband networks Community anchor New and upgraded New household and\n Measures deployed (Infrastructure Projects) institutions connected public computer business subscribers\n (Infrastructure workstations (Public to broadband\n Projects) Computer Centers (Sustainable\n Projects) Broadband Adoption\n Projects)\n Description BTOP funds will be used to sup- The American Recovery NTIA must award at NTIA must award at\n port projects that provide broad- and Reinvestment Act least $200 million least $250 million in\n band service in unserved areas (ARRA) places a high in grants by the end grants by the end of\n and enhance broadband service in priority on deploy- of FY 2010 to ex- FY 2010 for innovative\n underserved areas of the United ing and enhancing pand public com- programs to encourage\n States. NTIA will fund infrastruc- broadband capabilities puter center capac- sustainable adoption\n ture projects that deploy a variety for community anchor ity. This performance of broadband service.\n of technologies and approaches to institutions such as measure contains the This performance\n enhance the Nation\xe2\x80\x99s broadband libraries, hospitals, number of new and measure contains\n capabilities. This performance schools, and pub- improved computer the number of new\n measure contains the number lic safety entities. workstations funded household and busi-\n of miles of network (e.g., fiber, This performance through the BTOP Pub- ness subscribers to\n microwave) deployed using BTOP measure contains the lic Computer Centers broadband generated\n funding. number of anchor category of funding. by projects funded\n institutions (as defined through the BTOP\n in the program\xe2\x80\x99s Sustainable Broadband\n Notice of Funds Avail- Adoption category of\n ability) connected funding, as reported by\n with new or improved awardees.\n broadband capabilities.\n Results Fiscal\n Year Target Actual Target Actual Target Actual Target Actual\n 2010\n 2011 10,000 3,000 10,000 100,000\n Milestones Manage Demand: Activities. More clearly articulate Notice of Funds Availability to manage demand in\n (completed the second round\xe2\x80\x94examples include focusing on funding priorities (e.g., the Comprehensive Community\n in FY 2010)\n Infrastructure) and setting investment floors and ceilings. Desired Impact. Lower application volume and\n higher quality applications.\n Improve End-to-End Review Process: Activities. Study the end-to-end review process; identify areas\n of time savings, reduce duplication of effort, and streamline reviews. Desired Impact. Reduce inefficient\n or potentially duplicative activities during review.\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 63\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Broadband Access: Efficiently and effectively implement the Broadband Technology\n Opportunities Program (BTOP), to expand service to communities in a cost-effective manner that\n maximizes impacts on economic growth, education, health care, and public safety. (continued)\n Bureau National Telecommunications and Information Administration (NTIA) (continued)\n Milestones Incorporate Portfolio Analysis for "Smart Review": Activities. Use decision analytics to prioritize\n (completed applications for review such that those that best fit program priorities and round out the investment\n in FY 2010)\n (continued) portfolio to meet statutory objectives are reviewed first. Desired Impact. Increase award yield from due\n diligence, limiting time working cases that do not get awarded.\n Establish Interim Gates to Govern Allocation: Activities. Insert check points in the process to\n ensure cases fill gaps in the portfolio and are appropriately resourced to their complexity and size. Desired\n Impact. Better allocate time to review specific cases and identify more non-refundable cases before\n expending effort to review.\n Reduce Average Due Diligence Time: Activities. Collapse key review steps during due diligence to\n focus analyses on only the factors that affect decisions. Desired Impact. Cut hours spent in due diligence\n by 50 percent.\n Streamline Decision Process: Activities. Streamline efforts to develop and gain approval on\n recommendation decisions (to include less back and forth with grantees, overbuild evaluation, and more\n focused engagement of public relations). Desired Impact. Reduce group time spent in decision meetings\n and responding to ad hoc inquiries during decision process.\n\n\n Goal Export Opportunities: Increase the annual number of small and medium-sized\n enterprises (SME) the Commercial Service successfully assists in exporting to a second\n or additional country by 40 percent from 2009 to 2011.\n Bureau International Trade Administration (ITA)\n Performance Increase the annual number of small and medium-sized enterprises (SME) the Commercial Service\n Measures successfully assists in exporting to a second or additional country by 40 percent from 2009 to 2011.\n Description This metric demonstrates ITA\xe2\x80\x99s effectiveness at helping companies, particularly SMEs, export to a country\n for the first time. It counts the number of SMEs, which are defined as U.S. companies with less than\n 500 employees, that achieve an export to a country they have not exported to in 12 months due in part\n to Commercial Service assistance. This assistance includes but is not limited to in-depth market entry\n counseling, business-to-business matchmaking, market research and intelligence, trade show support, and\n due diligence on foreign buyers and partners. Although data was collected for this metric starting in FY\n 2001, it was not formally adopted as a performance measure until FY 2009 following an analysis of historical\n data that showed declining results starting in FY 2006. In response to this trend, the Commercial Service\n adopted this performance measure in FY 2009 with aggressive targets for FY 2009 and FY 2010 set to exceed\n historical performance. Since that time, the Commercial Service has reupped its commitment to helping\n companies enter new markets by setting an even more ambitious target for FY 2011.\n (continued)\n\n\n\n\n 64 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Export Opportunities: Increase the annual number of small and medium-sized\n enterprises (SME) the Commercial Service successfully assists in exporting to a second\n or additional country by 40 percent from 2009 to 2011. (continued)\n Bureau International Trade Administration (ITA) (continued)\n Results Fiscal\n Year Target Actual\n 2003\n 2004 2,828\n 2005 2,943\n 2006 2,569\n 2007 2,453\n 2008 2,197\n 2009 3,130 2,876\n 2010 3,513 2,813\n 2011 4,026\n Milestones National Export Marketing Campaign Plan: Completed by March 19, 2010. Drafted a new\n national data-mining, lead-generation, and marketing plan that leverages the Commercial Service strategic\n partnerships to help U.S. companies expand exports from one to multiple markets.\n National Export Marketing Campaign Phase 1: Refine contact lists of SME exporters provided by\n strategic partners to just high potential leads. Design marketing materials and create online content. Train\n the Commercial Service and strategic partner staff on the program.\n National Export Marketing Campaign Phase 2: Initial marketing push to a subset of the contact\n list. Track results and adjust process as needed.\n National Export Marketing Campaign Phase 3: Roll out marketing campaign and track results.\n International Buyer Program Expansion Plan: Completed by March 19, 2010. Drafted a plan to\n increase the dollar value of exports resulting from foreign buyer attendance at U.S. trade shows.\n International Buyer Program Expansion Phase 1: Conduct targeted outreach to trade show\n organizers, industry associations, and the international business community.\n International Buyer Program Expansion Phase 2: Work with trade show organizers to develop\n customized programs to fit the needs and interests of companies in the industry. Coordinate with domestic\n and international Commercial Service field staff and other U.S. government agencies to provide hands-on\n assistance including export counseling, marketing analysis, and matchmaking services on-site at U.S. trade\n shows.\n MDCP Plan: Completed by March 19, 2010. Developed a plan to increase the Market Development\n Cooperator Program (MDCP)-related exports and expedite the timeline to award MDCP recipients in FY 2010.\n MDCP Phase 1: Completed by April 19, 2010. Expedited application deadline for FY 2010 (ITA received 50\n MDCP applications).\n MDCP Phase 2: Announce MDCP award recipients in mid-July and develop export action plans.\n Services Industry Export Expansion Plan: Completed by March 19, 2010. Developed services export\n expansion plan to identify and focus on key growth industries in targeted markets, including travel and\n tourism. Also, leveraged financial services and supply chain/infrastructure services to facilitate goods exports.\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 65\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Export Opportunities: Increase the annual number of small and medium-sized\n enterprises (SME) the Commercial Service successfully assists in exporting to a second\n or additional country by 40 percent from 2009 to 2011. (continued)\n Bureau International Trade Administration (ITA) (continued)\n Milestones Services Industry Export Expansion \xe2\x80\x93 Supply chain/Infrastructure\n (continued) Outreach: Expanded supply chain/infrastructure outreach focus groups in Atlanta, Chicago,\n New Orleans (subject to oil spill resource limitations locally), and Seattle.\n Services Industry Export Expansion \xe2\x80\x93 Services Trade Data: Expanded the Services Trade Data\n conference to bring together the results of the preceding focus groups and define larger objectives for data\n issues going forward.\n Services Industry Export Expansion \xe2\x80\x93 Trade Finance Seminars: Expanded trade finance\n seminars in Miami, FL, Cleveland, OH, Philadelphia, PA, Pittsburgh, PA, and Southern California to bring\n together exporters with regional and community lenders to facilitate financing of U.S. exports. Engage\n tourism policy counterparts to expand high growth export markets.\n Services Industry Export Expansion \xe2\x80\x93Tourism: Secretary Locke chaired the first meeting of\n the interagency Tourism Policy Council (TPC) on April 27. The working group on implementing the Travel\n Promotion Act met on May 13 and participants discussed progress on the fee that will fund the Corporation\n for Travel Promotion. The second TPC Working Group Meeting on was held on June 29. Subsequent TPC\n meetings are being scheduled.\n Green Exporter Outreach Plan: Completed by March 19, 2010. Developed a plan to identify and target\n U.S. companies with green technology solutions, and improve coordination and delivery of U.S. government\n services to the clean energy sector.\n Green Exporter Outreach Phase 1: Conducted targeted trade promotion and policy events. Develop\n a Competitive Assessment to (1) establish a baseline of U.S. green technology exports; and (2) articulate a\n common U.S. government understanding of the current competitiveness of the U.S. clean energy industry.\n Green Exporter Outreach Phase 2: Launched the Renewable Energy and Energy Efficiency (REEE)\n Export Strategy to double U.S. REEE exports in five years.\n\n\n\n\n 66 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c M A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Sustainable Manufacturing and Building Practices: Raise the number of firms\n adopting sustainable manufacturing processes through the NIST Manufacturing Extension\n Partnership (MEP) by 250 by the end of 2011. Raise the percentage of construction projects\n involving buildings or structures funded by Economic Development Assistance Programs that\n are certified by the U.S. Green Building Council\xe2\x80\x99s Leadership in Energy and Environmental\n Design (LEED) or a comparable third-party certification program to 12 percent.\n Bureau National Institute of Standards and Technology (NIST) and Economic\n Development Administration (EDA)\n Performance Raise the percentage of construction projects Raise the number of firms adopting sustain-\n Measures involving buildings or structures funded by Economic able manufacturing processes through the NIST\n Development Assistance Programs that are certified Manufacturing Extension Partnership by 250 by\n by the U.S. Green Building Council\xe2\x80\x99s Leadership the end of 2011.\n in Energy and Environmental Design (LEED) or a\n comparable third-party certification program to\n 12 percent.\n Description FY 2011 targets are based on FY 2011 Global Climate This measure tracks the number of firms adopting\n Change Mitigation Incentive Fund (GCCMIF) funding economically and environmentally sustainable\n being similar to that of FY 2010. Data and targets practices and products through the NIST Hollings\n are cumulative toward the end of FY 2010 fourth MEP program.\n quarter and resets in FY 2011 first quarter to be\n cumulative toward FY 2011 fourth quarter. EDA may\n be modifying its grant application process, including\n the establishment of quarterly deadlines for the\n submittal and review of applications. As such, there\n may be an opportunity to set more \xe2\x80\x9clevel\xe2\x80\x9d targets\n for the HPPG in FY 2011. However, as the largest\n program contributor to the HPPG, the GCCMIF\xe2\x80\x94and\n its associated late-fiscal year Congressional approv-\n als/requirements\xe2\x80\x94will prevent a complete leveling\n of targets.\n Results Fiscal\n Year Target Actual Target Actual\n 2008 7%\n 2009 9% 46\n 2010 12% 12% 173 266\n 2011 12% 296\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 67\n\x0cM A N AG E M E N T \xe2\x80\x99 s D I S C U S S I O N A N D A N A LY S I S\n\n\n\n\n Goal Sustainable Manufacturing and Building Practices: Raise the number of firms\n adopting sustainable manufacturing processes through the NIST Manufacturing Extension\n Partnership (MEP) by 250 by the end of 2011.Raise the percentage of construction projects\n involving buildings or structures funded by Economic Development Assistance Programs that\n are certified by the U.S. Green Building Council\xe2\x80\x99s Leadership in Energy and Environmental\n Design (LEED) or a comparable third-party certification program to 12 percent. (continued)\n Bureau National Institute of Standards and Technology (NIST) and Economic\n Development Administration (EDA) (continued)\n Milestones Manufacturing Extension Partnership (MEP): To raise the number of firms adopting sustainable\n manufacturing processes through the NIST MEP by 250 by the end of 2011, MEP is working to expand the\n capacity of the existing and partner resources to support additional Economy, Energy and Environment\n (E3) Initiative (www.e3.gov) community activities and the Green Suppliers Network (GSN) program (www.\n greensuppliers.gov). In FY 2010, MEP has carried out the following activities in support of this goal:\n (1) completed 94 of 100 E3/GSN projects with reported impact; (2) developed two additional regions and\n began development of two new regions adopting E3 activities; (3) identified 11 new program champions;\n (4) developed four new strategic partnerships; and, (5) completed three industry panels to present and\n communicate initiatives. The key challenge for meeting this sustainable manufacturing goal is to achieve a\n partner-supported and other federal agency matched funding model which sustains operations on a multi-\n year basis. This will allow the agency(s) to expand the capacity of the E3 and GSN programs to additional\n communities while bolstering the pilot activities that have already been initiated.\n Leadership in Energy and Environmental Design (LEED) Construction Projects: EDA will\n monitor progress on a quarterly basis by tracking the number of projects that are LEED certified and aim to\n meet the 12 percent threshold by the end of the fiscal year. EDA has already implemented Environmentally\n Sustainable Development as one of its six core funding priorities. Accordingly, EDA will give priority to\n projects that build the green economy in its evaluation of all project proposals (not just GCCMIF). EDA also\n contemplates including a measure related to this in its balanced scorecard metrics.\n\n\n\n\n 68 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP e r fo r m a n ce\nS ec t i o n\n\x0c Introduction to the Performance Section\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n fiscal year (FY) 2010, the Department accomplished its mission through three strategic goals and an overarching\n management integration goal that articulate long-term goals, as well as performance outcomes and objectives that\n represent shorter-term outcomes and priorities. Performance outcomes include specific targets designed to achieve\nspecific performance results within a given fiscal year.\n\nThe Performance Section of the report comprises subsections for each of the strategic goals and is organized in the following\nmanner:\n\n\n Subsection Purpose\n Strategic Goal Overall summary of the strategic goal.\n\n Strategic Objective Overall summary of outcomes, program obligations, and performance outcomes that\n fall under each objective. The information contained in the objective provides the\n performance outcomes and the activities associated with them.\n\n Performance Outcome Performance Outcome Description, Achievements, and selected Program Evaluations.\n The information contained in each performance outcome is designed to provide the\n reader with the overall achievements of the performance outcome.\n\n\nWithin each strategic goal section there are summary charts that provide the historical trend data for financial obligations\nand full-time equivalents (FTE) resources, and overall performance results. At the beginning of each strategic goal section and\neach objective section is a table summarizing the performance outcomes. In the description of each performance outcome is a\nperformance table (with shaded status cells) that shows the status of the performance measures associated with that outcome:\nexceeded (more than 125 percent of target), met (100-124 percent), slightly below target (95-99 percent) and not met (below\n95 percent of target). Status cells for exceeded measures are shaded blue; met, green; slightly below, yellow; and not met, red. In\naddition, a new category, \xe2\x80\x9cimproved, but not met,\xe2\x80\x9d was added in FY 2008. Status cells for this category are shaded orange, with\nthis category applying to any year in which the actuals for the given year are better than the previous year, but the target still\nwas not met. All dollar amounts shown are in millions, unless otherwise indicated.\n\nHistorical details on each performance result are located in Appendix A, which provides individual measurement results.\n\nNote that the FY 2010 targets were developed prior to having the FY 2009 actuals. Often the FY 2010 targets were made based\non prior year trends. Therefore, in some cases it may be that the FY 2009 actuals exceed the FY 2010 targets, especially if they\nexceeded the original FY 2009 targets.\n\n\xe2\x80\x9cStrategies, Plans, and Challenges for the Future\xe2\x80\x9d are no longer included in the Performance Section since they are more forward\nin nature as opposed to this Performance and Accountability Report (PAR) which reports on FY 2010 performance. Strategies,\nPlans, and Challenges for the Future are included in the Annual Performance Plans of the bureaus (part of the Budget Submission)\nand the Departmental Strategic Plan.\n\x0cP e r f o r m a n c e S e c t i o n\n\n\n\n\n S t r at eg i c\n G oa l 1\n\x0c targets met\n P ERFORMANCE o u t c o m e or exceeded\nPromote private investment and job creation in economically distressed communities\n 5 of 6\n(EDA)\nImprove community capacity to achieve and sustain economic growth (EDA) 3 of 6\nIncrease access to the marketplace and financing for minority-owned businesses (MBDA) 5 of 5\nStrengthen U.S. competitiveness in domestic and international markets (ITA) 4 of 4\nBroaden and deepen U.S. exporter base (ITA) 2 of 6\nIdentify and resolve unfair trade practices (ITA) 5 of 5\nMaintain and strengthen an adaptable and effective U.S. export control and treaty\n 5 of 7\ncompliance system (BIS)\nIntegrate non-U.S. actors to create a more effective global export control and treaty\n 0 of 1\ncompliance system (BIS)\nEnsure continued U.S. technology leadership in industries that are essential to national\n 1 of 1\nsecurity (BIS)\nProvide benchmark measures of the U.S. population, economy, and governments\n 2 of 3\n(ESA/CENSUS)\nProvide current measures of the U.S. population, economy, and governments\n 2 of 2\n(ESA/CENSUS)\nProvide timely, relevant, and accurate economic statistics (ESA/BEA) 4 of 4\nIncrease the productivity, profitability, and competitiveness of manufacturers (NIST) 4 of 4\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n S TRATEG I C GOA L 1\n\nMaximize U.S. competitiveness and enable economic growth for American industries, workers, and\nconsumers\n\n\n\n\n P u b li c B e n e f i t s a n d\n Summary of Performance\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x8a\n he Department is committed to opening and expanding\n foreign markets for U.S. goods and services and improving\n the Nation\xe2\x80\x99s export performance. The International\nTrade Administration (ITA) promotes U.S. export growth through the\nimplementation of the Trade Promotion Coordinating Committee\xe2\x80\x99s\n(TPCC) National Export Strategy, ensuring that policies and\npriorities are consistent with national security and U.S. foreign\npolicy objectives. The Department enhances cooperation with its\npartnership organizations so that U.S. businesses can benefit from\nglobal business through free market trade negotiations and through\nidentified priority markets. The Department continues to focus on\nfostering a level playing field for U.S. firms through development of\ntrade policy positions, advancement of negotiating positions, and\nthrough effective execution of U.S. trade laws intended to curb and\ncombat predatory trading practices.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 73\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nThe Bureau of Industry and Security (BIS) ensures that export controls do not unduly disadvantage U.S. firms in world markets by\neliminating outdated controls and streamlining the process for obtaining export licenses for products that remain under export controls.\nThese continual improvements are being made while being mindful of the dual-use nature of some commercial technologies and the\nnational security implications of those technologies.\n\nThe Economics and Statistics Administration (ESA), composed of the Census Bureau and the Bureau of Economic Analysis (BEA), provides\ndecisionmakers with timely, relevant, and accurate economic and statistical information related to the U.S. economy and population with\nthe Department at the forefront of national efforts to continually improve these statistics.\n\nIn support of disadvantaged individuals and communities, the Economic Development Administration (EDA) promotes private enterprise\nand job creation in economically distressed communities and regions by investing in projects that produce jobs and generate private\ncapital investment. Likewise, the Minority Business Development Agency (MBDA) promotes private enterprise and investment within\nminority communities.\n\nIn support of manufacturing against a backdrop of coping with accelerating technological change and global competition, the National\nInstitute of Standards and Technology (NIST), through the Hollings Manufacturing Extension Partnership (MEP) program\xe2\x80\x99s nationwide\nnetwork of manufacturing centers, helps firms adopt new and advanced manufacturing and management technologies and innovative\nbusiness practices to position them to compete in the global economy.\n\nOverall performance within this goal has been fairly strong, meeting or exceeding targets on average 84 percent of the time from FY 2001\nto FY 2010. Performance slightly improved from FY 2001 to FY 2010 with 77 percent of targets met or exceeded in FY 2001 to 78 percent\nmet or exceeded in FY 2010.\n\n\n\n\n 74 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Strategic Objective 1.1\n\nFoster domestic economic development as well as export opportunities\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x8a\n his objective focuses on increasing private enterprise,\n job creation, and financial opportunities, and increasing\n trade opportunities for U.S. companies.\n\nIn support of disadvantaged individuals and communities, the\nEconomic Development Administration (EDA) promotes private\nenterprise and job creation in economically distressed communities\nand regions by investing in projects that produce jobs and generate\nprivate capital investment.\n\nThrough partnerships with local development officials: economic\ndevelopment districts (EDD); University Centers; faith-based and\ncommunity-based organizations; and local, state, and federal\nagencies, EDA can assist distressed communities with strategic\nplanning and investment activities. This process helps communities\nset priorities, determine the viability of projects, and leverage\noutside resources to improve the local economy to sustain long-\nterm economic growth.\n\nThe Minority Business Development Agency (MBDA) promotes the ability of minority business enterprises (MBE) to grow and to participate\nin the global economy through a range of activities that include funding a network of centers that provide MBEs a variety of business\nassistance services. MBDA, through its direct federal client services and its network of funded centers (1) fosters the expansion of\nopportunities for minority-owned business in the global marketplace, (2) identifies sources of financial capital for minority owned firms,\n(3) develops and upgrades electronic tools to provide access to growth markets through automated matching of MBEs to public and\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 75\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nprivate sector opportunities, (4) provides management and technical assistance to minority-owned businesses, and (5) advocates for the\nincreased use of electronic commerce and new technologies by MBEs.\n\nThe International Trade Administration\xe2\x80\x99s (ITA) Manufacturing and Services (MAS) program provides the Administration, Congress, and\nU.S. businesses the data and analysis needed to make informed decisions on issues impinging on U.S. competitiveness and employment.\nThe data program is especially valuable to policymakers who require trade information at sub-national (state and metropolitan) and small\nand medium exporter levels. In addition, to be competitive in today\xe2\x80\x99s global economy, U.S. companies need to be able to move products\nand services securely, quickly, and efficiently within U.S. borders and beyond. MAS launched a national dialogue to explore supply chain\ninfrastructure issues that cut across the broad range of national priorities. MAS is framing the issues and prioritizing what needs to\nbe done to improve U.S. competitiveness, especially through developing a national intermodal/freight policy. The goal is to achieve a\nfaster, safer, more environmentally sound, more efficient national intermodal network that will meet the needs of the Nation in the 21st\ncentury.\n\nThe health of the U.S. economy depends on small and medium-sized enterprises (SME) since they account for 97 percent of all U.S.\nexporters. Many of these firms have also been successful in doing business in countries that have recently negotiated free trade\nagreements (FTA) with the United States. The Commercial Service program seeks to create a supporting environment in which all U.S.\nfirms, including SMEs, can flourish by seeking to increase export opportunity awareness among U.S. companies through identifying\npotential exporters who need assistance; leveraging electronic and traditional media; enhancing relationships with customers; and\ndeveloping alliances and partnerships with state, local, and private partners to deliver export assistance. The Commercial Service helps\nU.S. companies take advantage of world market conditions to find new buyers around the world. A growing list of FTAs provides price and\nmarket access benefits. ITA offers four ways to help U.S. firms grow their international sales by (1) providing world-class market research,\n(2) organizing trade events that promote products or services to qualified overseas buyers, (3) arranging introductions to qualified buyers\nand distributors, and (4) offering counseling through every step of the export process.\n\n\n\nAchievements\n\nEDA tracks the amount of private investment generated and jobs created or retained as a result of EDA investments at three, six, and\nnine-year intervals. Preliminary data collected through the Government Performance and Results Act (GPRA) process for investments\nmade in FY 2001, FY 2004, and FY 2007 indicate that these EDA investments have helped generate nearly $6.6 billion in private sector\ninvestment and create and retain 102,381 jobs.\n\nAs a part of its Energy Regional Innovation Cluster (e-RIC) initiative, EDA partnered with a number of federal agencies to invest in a new\nEnergy Innovation Hub located at Pennsylvania State University. This hub will bring together leading researchers from academia, two U.S.\nNational Laboratories, and the private sector in an ambitious effort to develop energy-efficient building designs that will save energy, cut\npollution, and position the United States as a leader in this industry. EDA expects that investments in such regional innovation clusters\nwill provide for more robust job growth and allow communities to better strengthen their regional economies in the future.\n\nIn addition, EDA created the i6 Challenge to accelerate the commercialization of university and federal research to take ideas from the\nlab to the marketplace, producing the small businesses that are the engine of job creation in the United States. This competition seeks\nto identify and support the Nation\xe2\x80\x99s best ideas for technology commercialization and entrepreneurship in six different regions of the\ncountry. This year\xe2\x80\x99s winning projects, which will each receive $1 million from EDA, include diverse efforts to drive innovative technologies\nin the medical and bioscience industries to market more quickly by bringing experts in science and academia together with public and\nprivate sector businesses and entrepreneurs.\n\n\n\n\n 76 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nFurther, in FY 2010, EDA led efforts to assist regional economies that have been greatly impacted by transformations in major U.S. industries.\nEDA spearheaded the effort to implement President Obama\xe2\x80\x99s $100 million, multi-agency initiative to better position communities across\nthe United States to respond to changes in the National Aeronautics and Space Administration\xe2\x80\x99s (NASA) programs. As part of this effort,\nEDA led the development of a detailed economic diversification plan for the Task Force on Space Industry Workforce and Economic\nDevelopment. EDA also collaborated with the White House Council on Auto Communities and Workers to promote innovative strategies\nthat attract national and global investment to auto-impacted communities. Additionally, EDA participated in the White House Cities in\nTransition Initiative and led the creation of a Cities in Transition Challenge grant competition to support the development of economic\nrecovery strategies for chronically distressed communities across the Nation.\n\nMoreover, EDA has continued in its role in assisting communities develop sound economic strategies to revitalize their economies in the\nwake of devastating man-made and natural disasters. In the Gulf Coast region, EDA has played a pivotal role in federal efforts to advance\nrecovery efforts following the BP oil spill, providing grant funding under its economic adjustment assistance program. These grants\nfrom EDA are part of the Obama administration\xe2\x80\x99s overall commitment to the Gulf Coast to help the region regain its economic footing.\nEDA officials have met with people in impacted communities throughout the region to discuss long-term economic and environmental\nrestoration ideas and develop a framework to address those issues as a part of the President\xe2\x80\x99s Economic Solutions Team. This team is\nfocused on the transition from \xe2\x80\x9cresponse\xe2\x80\x9d to \xe2\x80\x9ceconomic recovery\xe2\x80\x9d as a result of the BP Deepwater Horizon spill in order to strengthen the\ncoastal economy and help restore a healthy ecosystem.\n\nMBDA\xe2\x80\x99s year-end results exceeded its performance goals, achieving over $1.5 billion in contract awards and over $1.6 billion in financial\nawards. Through its direct federal client services and network of funded centers, MBDA\xe2\x80\x99s programs and services helped create over 4,900\nnew jobs despite the economic downturn and overall decline in the national job market. The cumulative impact of MBDA programs has\nbeen $22.7 billion.\n\nThroughout FY 2010, MBDA continued to assist MBEs in gaining access to American Recovery and Reinvestment Act (ARRA) of 2009\nfunding opportunities. MBDA continued to focus its resources to assist firms of size, scale, and capacity through its Strategic Growth\nInitiative (firms with $500,000 or more in annual sales or with rapid growth potential). Based upon MBDA\xe2\x80\x99s Strategic Growth Initiative,\nmany high growth minority firms have successfully competed for larger prime contracts and financial awards, and have had a significant\neconomic impact within the minority community and overall economy.\n\nTo expand the number of contract and financial awards and to create new job opportunities, MBDA initiated several new programs in\nFY 2010. MBDA initiated a series of Business-to-Business Forums to encourage MBEs to partner with other firms, form joint ventures,\nand sign Mentor-Prot\xc3\xa9g\xc3\xa9 Agreements. These forums encouraged enterprises with increased capacity and competitiveness to sustain\ndevelopment within the minority community. MBDA created a National Advisory Council on Minority Business Enterprise in FY 2010, which\nwill advise the Secretary of Commerce on key issues pertaining to the growth and competitiveness of the Nation\xe2\x80\x99s MBEs. The advisory\ncommittee will provide advice and recommendations on a broad range of policy issues that affect minority businesses and their ability\nto successfully access the domestic and global marketplace.\n\nIn July 2010, MBDA and the National Urban League joined forces to expand opportunities for minority entrepreneurs. MBDA and the\nNational Urban League will pool their collective resources to support the growth of minority-owned firms located in Atlanta, Chicago,\nCleveland, Cincinnati, Jacksonville, Kansas City, Los Angeles, New Orleans, and Philadelphia. \xe2\x80\x9cMBDA looks forward to working with the\nNational Urban League to increase our reach to minority entrepreneurs and help them grow to size and capacity,\xe2\x80\x9d said MBDA National\nDirector David A. Hinson. \xe2\x80\x9cOur 46 centers around the Nation are working diligently to provide avenues for minority businesses to grow\nand compete. The league\xe2\x80\x99s Entrepreneurship Center Program will help us reach minority-owned firms in areas where we currently don\xe2\x80\x99t\nhave a presence and service more minority entrepreneurs in communities where we do.\xe2\x80\x9d\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 77\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nIn August 2010, former Department of Commerce Deputy Secretary Dennis Hightower, MBDA, ITA, the Tutor Perini Corporation, and\nthe University of Southern California\xe2\x80\x99s School of Policy, Planning and Development announced the Nation\xe2\x80\x99s first program, the Global\nConstruction Program, created to globalize the U.S. minority-owned construction industry by providing education, mentoring, and\nprocurement opportunities to minority-owned firms. The Global Construction Program will include a training program for 150 minority-\nowned construction firms and will also offer MBEs the opportunity to participate in an Overseas Private Investment Corporation Enterprise\nDevelopment Network. Firms that complete the program will have the opportunity to compete for a minimum of $1 billion in Tutor Perini\ncontracts, primarily international contracts, over a four-year period.\n\nThe MAS program expanded its key initiative on sustainable manufacturing to include sustainable supply chains. Sustainable manufacturing\npractices and supply chains, including energy sources, transportation, and components, have become increasingly important as companies\nlook for ways to reduce operational costs while limiting greenhouse gas emissions and changing behaviors that negatively impact\nthe environment. As the trend toward sustainable practices grows, so does its implications for U.S. global competitiveness and firm\nprofitability. In order to provide effective support to U.S. companies in their sustainable manufacturing and supply chain efforts,\nMAS expanded a Sustainable Manufacturing Initiative and Public-Private Dialogue that coordinates public and private sector efforts\nto address these challenges and provides tools for U.S. companies to identify and adopt sustainable and competitive practices. MAS is\nfocused on identifying domestic and export opportunities in the clean energy technology sector (smart grid, renewable, nuclear, clean\ncoal). New, more sustainable, and efficient technologies will have a significant impact on the 100-year-old system by which energy is\nproduced, transmitted, and consumed in the United States. Also, there will be increasing export opportunities for U.S. technologies as\nother countries shift to greater reliance on clean energy. MAS is also examining the impact of various climate change policy options on\nenergy-intensive, export-exposed industries. MAS has created the Sustainable Business Clearinghouse to provide U.S. companies with\na central portal for information on programs and resources that can assist them in enhancing their competitiveness and profitability in\nenvironmentally sustainable ways. The portal includes information on federal and state-level government programs and resources in a\nsearchable clearinghouse. MAS is uniquely positioned to act as a clearinghouse for U.S. industry input into climate change policy and\ninternational negotiations.\n\nThe U.S. and Foreign Commercial Service (US&FCS) continued to help U.S businesses maximize their export potential, enabling them to\ndiversify their customer base, remain globally competitive, and maintain jobs for Americans. In 2010, US&FCS assisted over 18,000 U.S.\ncompanies by providing in-depth export counseling, market entry plans, business-to-business matchmaking services, market research and\ndue diligence reports, and other customized export development and market entry services. US&FCS also led trade missions around the\nglobe, brought foreign buyer delegations to U.S. trade shows, represented U.S. companies at international trade events, and organized\nproduct launches and technical seminars overseas. In addition, US&FCS continued to provide front-line diplomatic support to U.S.\ncompanies for commercial issues overseas and advocated for U.S. companies bidding on foreign government procurements. As a result\nof these efforts, US&FCS facilitated more than $30 billion in exports for nearly 5,500 U.S. companies in 2010. Over 85 percent of these\ncompanies were small and medium-sized enterprises that exported for the first time, entered a new market, or increased their market\nshare in an existing market.\n\nIn February 2010, Secretary of Commerce Gary Locke unveiled the details of how the Department will support President Obama\xe2\x80\x99s National\nExport Initiative (NEI) designed to reach the President\xe2\x80\x99s goal of doubling exports over the next five years to support two million jobs in the\nUnited States. The NEI represents the first time the United States will have a government-wide export promotion strategy with focused\nattention from the President and his Cabinet.\n\nThe NEI is focused on three key areas: (1) a more robust effort by this administration to expand its trade advocacy in all its forms,\nespecially for SMEs, (2) improving access to credit with a focus on small and medium-sized businesses that want to export, and\n(3) continuing the rigorous enforcement of international trade laws to help remove barriers that prevent U.S. companies from getting\nfree and fair access to foreign markets.\n\n\n\n\n 78 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nIn addition to improving efforts in those areas, the NEI creates an Export Promotion Cabinet reporting to the President that will consist of\ntop leaders from agencies that can contribute to this effort. The President increased the ITA FY 2011 budget by 20 percent to help meet\nthe goals of the NEI. Those new resources will allow ITA to:\n\n\xe2\x97\x8f\xe2\x97\x8f Assist more than 23,000 clients to begin or grow their export sales in 2011;\n\n\xe2\x97\x8f\xe2\x97\x8f Increase their presence in emerging high-growth markets like China, India, and Brazil; and\n\n\xe2\x97\x8f\xe2\x97\x8f Develop a comprehensive strategy to identify market opportunities in fast-growing sectors like environmental goods and\n services, renewable energy, healthcare, and biotechnology.\n\nIn July 2010, Secretary Locke visited the UPS Global Operations Center in Louisville, KY, to highlight opportunities for local Kentucky\nbusinesses to sell their goods and services abroad and support job creation in their community. Locke discussed with local business owners\nhow the Department can help them grow their businesses and create jobs. Since the President announced the NEI, the Department\xe2\x80\x99s\nAdvocacy Center has assisted U.S. companies competing for export opportunities, supporting $11.4 billion in exports and an estimated\n70,000 jobs. With offices and staff around the globe and throughout the United States, the Department\xe2\x80\x99s Commercial Services has helped\nmore than 5,000 companies generate $9.8 billion worth of exports. To date, the Department has coordinated 18 trade missions with over\n160 companies to 24 countries.\n\nAlso in July 2010, Secretary Locke and U.S. Postmaster General John Potter announced the launch of a new initiative between the\nDepartment and the U.S. Postal Service that will help boost U.S. exports. The New Market Exporter Initiative will identify current U.S.\nPostal Service customers who are exporting their goods and services abroad, and help expand their reach to additional international\nmarkets. The announcement expands a strategic partnership formed in 2008 between the two entities. The combined strength of\ncustomized consulting from the Department\xe2\x80\x99s Commercial Service officers and the value-based logistics expertise and business solutions\nfrom the U.S. Postal Service provide a simplified roadmap for companies to successfully enter new markets. Through its network of\n32,000 post offices and partner posts in 191 countries, the U.S. Postal Service will identify small and medium-sized businesses that\nalready export; and alert these customers to government sources that can help them find new overseas markets. The Department, with\nits network of trade specialists posted in 109 U.S. cities and U.S. embassies and consulates in 77 countries, will serve as a resource to the\ncompanies, connecting them with potential international buyers. The Department and U.S. Postal Service will work with these businesses\nto identify key markets, build market entry strategies, and provide the guidance needed to take high-quality products and services from\nthe United States to markets worldwide\xe2\x80\x94building their businesses, increasing U.S. exports, and supporting new jobs at home.\n\nSmall and medium-sized companies interested in expanding into new markets will have access to the free resources and tools available\nthrough a nationwide network of international trade experts and global shipping specialists. Activities to build awareness will include\noutreach at trade shows, direct mail campaigns, and online registration for resource support.\n\nIn May 2010, Secretary Locke and China\xe2\x80\x99s National Development and Reform Commission Chairman Zhang Ping explored avenues to\nexpand U.S.-China Clean Energy Ties. Locke and Zhang discussed ways to continue to build a constructive and cooperative relationship\nthat increases economic growth, trade, and jobs in the United States and China, and explored avenues to expand U.S.-China ties in clean\nenergy development. After their meeting, the two leaders were joined by a business delegation of 24 U.S. clean energy companies for a\ndiscussion about ways to improve U.S.-China collaboration in areas such as energy efficiency and electric energy storage, transmission,\nand distribution. Locke also introduced the business delegation to Vice Chairman Zhang Guobao, the National Energy Administration\nAdministrator, Vice Minister Ma Xiuhong of the Ministry of Commerce, and Vice Premier Li Keqiang. In his meetings with the Chinese\nleaders, the Secretary of Commerce advocated on behalf of U.S. companies that have pending commercial clean energy deals that would\nsupport U.S. exports. One project already underway in Shanghai with the help of a U.S. company is the 128-story, glass-and-steel \xe2\x80\x9cgreen\xe2\x80\x9d\nShanghai Tower. Designed by Gensler, a San Francisco architecture firm that specializes in green buildings, the Tower is on course to be\nregistered for a high level of building certification from the U.S. Green Building Council and the China Green Building Committee.\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 79\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n\n1.\t Promote private investment and job creation in economically distressed communities (EDA)\n\n2.\t Improve community capacity to achieve and sustain economic growth (EDA)\n\n3.\t Increase access to the marketplace and financing for minority-owned businesses (MBDA)\n\n4.\t Strengthen U.S. competitiveness in domestic and international markets (ITA)\n\n5.\t Broaden and deepen U.S. exporter base (ITA)\n\n Outcome Performance Measure Target Actual Status\n 1 Private investment leveraged \xe2\x80\x93 9 year totals (in millions) $2,410 $2,758 Met\n\n 1 Private investment leveraged \xe2\x80\x93 6 year totals (in millions) $818 $2,281 Exceeded\n\n 1 Private investment leveraged \xe2\x80\x93 3 year totals (in millions) $259 $1,544 Exceeded\n\n 1 Jobs created/retained \xe2\x80\x93 9 year totals 72,000 66,527 Not Met\n\n 1 Jobs created/retained \xe2\x80\x93 6 year totals 22,427 26,695 Met\n\n 1 Jobs created/retained \xe2\x80\x93 3 year totals 6,628 9,159 Exceeded\n\n 2 Percentage of economic development districts (EDD)\n and Indian tribes implementing economic development\n 95% 89% Not Met\n projects from the comprehensive economic development\n strategy (CEDS) that lead to private investment and jobs\n 2 Percentage of sub-state jurisdiction members actively\n participating in the economic development district (EDD) 89-93% 87% Slightly Below\n program\n 2 Percentage of University Center clients taking action as a\n 75% 76% Met\n result of the assistance facilitated by the University Center\n 2 Percentage of those actions taken by University Center\n 80% 90% Met\n clients that achieved the expected results\n 2 Percentage of Trade Adjustment Assistance Center\n (TAAC) clients taking action as a result of the assistance 90% 82% Not Met\n facilitated by the TAACs\n 2 Percentage of those actions taken by Trade Adjustment\n 95% 100% Met\n Assistance Center clients that achieved the expected results\n 3 Dollar value of contract awards obtained (billions) $1.00 $1.50 Exceeded\n\n 3 Dollar value of financial awards obtained (billions) $0.60 $1.80 Exceeded\n\n 3 Number of new job opportunities created 4,000 5,845 Exceeded\n\n 3 Percent increase in client gross receipts 6.0% 6.0% Met\n\n 3 Satisfaction rating for the American Customer Satisfaction\n N/A N/A1 N/A\n Index (ACSI)\n (continued)\n\n\n\n\n 80 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 3 Cumulative economic impact $16B $22.7B Exceeded\n\n 4 Annual cost savings resulting from the adoption of\n Manufacturing and Services (MAS) recommendations $350M $647M Exceeded\n contained in MAS studies and analysis\n 4 Percent of industry-specific trade barriers addressed that\n 30% 35% Met\n were removed or prevented\n 4 Percent of industry-specific trade barrier milestones\n 55% 75% Exceeded\n completed\n 4 Percent of agreement milestones completed 100% 100% Met\n\n 5 Export success firms/active clients (CS overall effectiveness) 11.0% 29.1% Exceeded\n\n 5 US&FCS small and medium-sized enterprises (SME) new-\n to-export (NTE)/total change in SME exporters (CS SME 12.74% 2.28% Not Met\n NTE effectiveness)\n 5 Number of SME new-to-market (NTM) firms/number of SME\n 3.92% 3.11% Not Met\n firms exporting to two to nine markets (NTM effectiveness)\n 5 Commercial diplomacy success (cases) (annual) 166 112 Not Met\n\n 5 Increase in the percent of small and medium-sized firms\n 2.80% 6.42% Exceeded\n that export\n 5 Percentage of advocacy bids won 17% 9% Not Met\n 1 The ACSI only occurs in odd years, so data does not appear in FY 2010.\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nEDA met eight of 12 targets in FY 2010. EDA did not meet targets for the following four measures:\n\n\xe2\x97\x8f\xe2\x97\x8f Jobs created/retained \xe2\x80\x93 9 year totals\n\n\xe2\x97\x8f\xe2\x97\x8f Percentage of economic development districts (EDD) and Indian tribes implementing economic development projects from the\n comprehensive economic development strategy (CEDS) that lead to private investment and jobs\n\n\xe2\x97\x8f\xe2\x97\x8f Percentage of sub-state jurisdiction members actively participating in the economic development district (EDD) program\n\n\xe2\x97\x8f\xe2\x97\x8f Percentage of Trade Adjustment Assistance Center (TAAC) clients taking action as a result of the assistance facilitated by the\n TAACs\n\nMBDA met all five of its targets\xe2\x80\x94exceeding three.\n\nITA met or exceeded the targets for six of 10 measures within this objective. ITA did not meet the targets for the following four measures:\n\n\xe2\x97\x8f\xe2\x97\x8f US&FCS SME new-to-export (NTE)/total change in SME exporters (CS SME NTE effectiveness)\n\n\xe2\x97\x8f\xe2\x97\x8f Number of SME new-to-market (NTM) firms/number of SME firms exporting to two to nine markets (NTM effectiveness)\n\n\xe2\x97\x8f\xe2\x97\x8f Commercial diplomacy success (cases) (annual)\n\n\xe2\x97\x8f\xe2\x97\x8f Percentage of advocacy bids won\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 81\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Jobs created/retained \xe2\x80\x93 9 year totals (EDA)\n The low jobs created/retained figure appears to be an anomaly for this year. EDA met the 3-year and 6-year\n Explanation targets for investments in addition to meeting this year\xe2\x80\x99s private investment target thus indicating that this\n may be outside EDA\xe2\x80\x99s control.\n EDA will conduct a review of investments and apply any lessons learned to its review and approval of\n Action\n future investments.\n Measure Percentage of economic development districts (EDD) and Indian tribes implementing economic\n development projects from the comprehensive economic development strategy (CEDS) that leads to\n private investment and jobs (EDA)\n This year\'s results were significantly impacted by six EDDs, each with more than 100 eligible sub-state\n Explanation\n jurisdictions, that reported unusually low numbers of participants this year.\n Action EDA will work with these EDDs to ensure that they are actively recruiting regional support in future years.\n Measure Percentage of Trade Adjustment Assistance Center (TAAC) clients taking action as a result of the\n assistance facilitated by the TAACs (EDA)\n This measure reports GPRA data from TAAC awards granted in FY 2008. The data reported is based on a\n two-year look back (e.g., FY 2010 results are based on FY 2008 funding expenditures). The FY 2010 actual\n Explanation may have been impacted by higher levels of requests for assistance this year, reducing the TAAC\'s ability\n to assist all clients; however, EDA is very pleased with their ability to satisfactorily complete those projects\n that were initiated.\n Action No additional action taken.\n Measure Percentage of sub-state jurisdiction members actively participating in the economic development\n district (EDD) program (EDA)\n The performance goal was set at an approximate target level, and the deviation from that level is slight.\n Explanation\n There was no effect on overall program or activity performance.\n Action No further action taken.\n Measure US&FCS SME new-to-export (NTE)/total change in SME exporters (CS SME NTE effectiveness) (ITA)\n US&FCS did not achieve the target for this measure due to a shift in focus from assisting NTE SMEs to\n Explanation new-to-market firms in support of the President\'s NEI goals of doubling U.S. exports and supporting two\n million jobs.\n New exporters remain a priority of the U.S. government and US&FCS has been referring these clients to\n Action the Small Business Administration and other partners so US&FCS can focus its efforts where it can best\n contribute to the NEI goals.\n (continued)\n\n\n\n\n 82 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Measure Number of SME new-to-market (NTM) firms/number of SME firms exporting to two to nine markets (NTM\n effectiveness) (ITA)\n US&FCS did not achieve the target for this measure; however, US&FCS did increase results for the numerator\n (US&FCS SME NTM Firms) by over five percent from 2009 to 2010. This reflects US&FCS\'s shift in focus\n Explanation in early 2010 to support the NEI by helping SME exporters increase their exports and enter new markets.\n In addition, it should also be noted that the denominator in this metric (Total SME firms exporting to two to\n nine markets) is from 2007 unrevised census data and is not an accurate comparison to US&FCS results.\n US&FCS will continue to focus in 2011 on helping more SME exporters increase their exports and enter new\n markets. The President\xe2\x80\x99s 2011 budget request calls for increased staffing and resources so that US&FCS can\n Action help more companies, particularly SMEs, find customers in new markets around the globe to support and\n create U.S. jobs. This effort is ongoing and results are expected to steadily increase as US&FCS supports\n the NEI.\n Measure Commercial diplomacy success (cases) (annual) (ITA)\n US&FCS did not achieve the target for this metric; however, the U.S. export dollar value of commercial\n diplomacy successes increased by 79 percent from $974 million in FY 2009 to $4.56 billion in FY 2010.\n Explanation It should also be noted that ITA cannot control the number of cases companies bring to them and must\n persuade a sovereign foreign government to take an action that benefits a U.S. company or the U.S. national\n interest in order to declare a success.\n To support the NEI goals of doubling exports and supporting two million jobs, US&FCS will continue to\n Action vigorously promote and protect U.S. business interests abroad. The President\xe2\x80\x99s 2011 budget requests calls\n for increased staffing and resources so that US&FCS can increase its diplomatic presence overseas.\n Measure Percentage of advocacy bids won (ITA)\n Since the President\xe2\x80\x99s announcement of the NEI, the Advocacy Center has shifted its focus to increasing the\n U.S. export dollar value of advocacy bids won. As a result, the dollar value has increased by 208 percent\n from $6.4 billion in FY 2009 to $19.7 billion in FY 2010. It should also be noted that this metric does not\n adequately measure the Advocacy Center\xe2\x80\x99s performance since it is beneficial for the Advocacy Center to\n Explanation\n not only increase the number of bids won (numerator), but also the number of advocacy cases it handles\n for companies seeking assistance (denominator). In fact, US&FCS achieved 92 percent more advocacy bids\n won in FY 2010 (50) than in FY 2009 (26) and worked on 418 advocacy cases in FY 2010 or two percent\n more than FY 2009.\n Continue to focus on increasing the dollar value of advocacy bids won in order to contribute to the\n President\xe2\x80\x99s NEI. US&FCS will increase its advocacy outreach, leveraging programs and units across ITA\n Action\n (e.g., Trade Missions, domestic and international offices) and systematically targeting sectors that currently\n under-utilize the Advocacy Center\xe2\x80\x99s services.\n\n\n\nHis t o r i c a l T r e n d s\n\nEDA has consistently met or exceeded its targets for jobs created/retained and private investment generated over a nine year\nperiod. As a general rule they have also consistently met their targets for their improve community capacity goal. Likewise, MBDA\nhas consistently met their targets over the past 10 years with their targets being stable or rising slightly over the past 10 years.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 83\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Strategic Objective 1.2\n\nAdvance responsible economic growth and trade while protecting American security\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aS\xe2\x80\x8a\n upported by ITA and the Bureau of Industry and Security\n (BIS), this objective focuses on ensuring fair competition\n in international trade, preventing illegal exports, and\nadvancing U.S. national security and economic interests by\nenhancing the efficiency of the export control system.\n\nU.S. industries are entitled to the benefits of trade agreements\nnegotiated by the United States. They are also entitled to the\naggressive investigation of unfair trade practices that undercut\nthose agreements. Two program units in ITA, Market Access and\nCompliance (MAC) and Import Administration (IA), work to ensure\nthat U.S. firms receive those benefits and obtain prompt relief\nfrom unfair trade practices. Trade compliance with negotiated\ntrade agreements and access to foreign markets are existing\nproblems faced by U.S. businesses that choose to sell their products\noverseas.\n\nIA is committed to the vigorous enforcement of U.S. trade laws. IA promotes free and fair trade by administering the U.S. antidumping\n(AD) and countervailing duty (CVD) laws in a transparent and impartial manner and by ensuring compliance by foreign governments and\nexporters with U.S. statutes and trade agreements dealing with trade remedies and unfair trade practices. AD/CVD laws provide domestic\nindustries the opportunity to obtain relief from injury caused by imports of foreign products that are sold at less than fair value or that\nbenefit from foreign government subsidies, giving U.S. businesses and workers the opportunity to compete on a level playing field.\n\nMAC seeks to obtain market access for U.S. firms and workers and to achieve full compliance by foreign nations with trade agreements\nthey sign with the United States. MAC ensures market access for U.S. businesses; advances the rule of law internationally; and creates a\nfair, open, and predictable trading environment. MAC also conducts critical trade policy analysis and negotiation support for the Office\n\n\n\n 84 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nof the U.S. Trade Representative and represents the Department in trade-related dealings with other U.S. government agencies. Based on\ncustomer needs, MAC has a sizable caseload from U.S. firms that have encountered a trade barrier.\n\nPresident Obama\xe2\x80\x99s NEI directs the government to continue its efforts to remove barriers that prevent U.S. companies from getting open\nand fair access to foreign markets\xe2\x80\x94including combating unfair tariff and non-tariff barriers and addressing practices that blatantly harm\nU.S. companies. Trade starts with the understanding that it only works in a system of rules where all parties live up to their obligations.\nThe United States is committed to a rules-based trading system where the American people\xe2\x80\x94and the Congress\xe2\x80\x94can feel confident\nthat when the Department signs an agreement that gives foreign countries the privilege of free and fair access to the U.S. domestic\nmarket, U.S. businesses are going to be treated the same in their country. The Trade Promotion Coordinating Committee (TPCC) leads\nthe administration\xe2\x80\x99s trade promotion efforts and will help operationalize the NEI. This interagency group is chaired by the Secretary\nof Commerce to establish trade promotion priorities to expand trade and create jobs for Americans. The TPCC provides a platform for\nthe Secretary of Commerce to advance a government-wide agenda on trade promotion and to directly engage the heads of other TPCC\nagencies. The Export Promotion Cabinet will coordinate with the TPCC. ITA helps U.S. companies export their products and services\naround the world, utilizing some 1,500 U.S. Commercial Service staff stationed in 77 countries across the globe.\n\nTo prevent illegal exports, the Department administers and enforces controls on exports of dual-use goods and technologies to counter\nproliferation of weapons of mass destruction (WMD), combat terrorism, and pursue other national security policy goals. The Department\nprocesses export license applications for controlled commodities of U.S. companies engaged in international trade in accordance with\nExport Administration Regulations (EAR). The Department engages in activities to prevent violations before they occur and to investigate\nand prosecute violators to dismantle illicit proliferation networks. Preventive activities include screening license applications for\nenforcement concerns; conducting end-use checks abroad to confirm the bona fides of parties to export transactions, confirm compliance\nwith license conditions, and uncover diversions to unauthorized end-users/uses; and reviewing Shippers Export Declarations and foreign\nvisitors\xe2\x80\x99 visa applications to identify potential export control issues. Outreach activities include educating U.S. businesses on export\ncontrol requirements and identifying suspicious transactions leading to successful preventative and investigative actions. Investigation\nand prosecution activities involve Department Special Agents conducting cases focused on significant proliferation, terrorism, and military\nend-use export violations, and the vigorous pursuit of criminal and administrative sanctions.\n\nThe Department also works to strengthen the export control systems of other countries, assess the viability of key sectors of the\ndefense industrial base, and assure the timely availability of industrial resources to meet national defense and emergency preparedness\nrequirements. Further information on these tasks is available on www.bis.doc.gov/news/index.htm#annual. Finally, the Department also\nserves as the lead agency for ensuring U.S. industry compliance with Chemical Weapons Convention (CWC).\n\n\n\nAchievements\n\nMAC continued to work toward the prevention and elimination of non-tariff barriers in foreign markets. The long-term goal for the MAC unit\nis to \xe2\x80\x9censure fair competition in international trade.\xe2\x80\x9d This goal is reflected in the ITA strategic plan and supports the Department\xe2\x80\x99s objective\nto \xe2\x80\x9cadvance responsible economic growth and trade while protecting American security.\xe2\x80\x9d In order to gauge the impact of these strategic\ngoals, MAC utilizes two primary performance measures, market access and trade compliance cases initiated and cases resolved. In FY 2009,\nMAC surpassed both targets which resulted in overcoming billions of dollars of trade barriers for U.S. firms and workers. U.S. firms from\nevery industry and service sector face myriad barriers to trade and investment such as discriminatory regulatory treatment, unfair customs\nor tax treatment, rigged or nontransparent procurement procedures, and violations of trade agreements signed by other countries.\n\nIn addition to casework, MAC works to create a global economic environment for U.S. firms to compete. For example, through MAC\xe2\x80\x99s\nefforts in the 20th U.S.-China Joint Commission on Commerce and Trade, China agreed to reopen its market to U.S. pork and live\nswine, remove local content requirements for foreign participation in China\xe2\x80\x99s wind farm market, and clamp down on Internet piracy.\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 85\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nThe U.S. and Chinese governments signed nine agreements, including a Memorandum of Understanding establishing the U.S.-China\nEnergy Cooperation Program, and witnessed two commercial signings. The two governments also agreed to cooperate on initiatives in\nthe areas of the environment, transparency, global distribution services, and standards.\n\nMAC played an important role in the achievement of deliverables for Prime Minister Singh\xe2\x80\x99s state visit in November 2009. In particular,\nMAC facilitated technical exchanges in the biotechnology/life sciences sector under the High Technology Cooperation Group and led the\ndiscussions with the Indian government and private sector to sign a Memorandum of Intent to facilitate investment in the two countries.\nFinally, MAC initiated the recruitment and vetting process for U.S. members of the public-private CEO Forum.\n\nMAC hosted the U.S.-Iraq Business and Investment Conference in partnership with the Departments of Defense and State, and the Iraq\nEmbassy. With over 1,100 participants, the conference was recognized as a significant deliverable for the U.S.-Iraq Strategic Framework\nAgreement, and Deputy Secretary Hightower spoke at it. Over 215 business-to-business meetings occurred, with 295 participants\nattending government-to-business sessions during the conference. The event evaluations indicated that 78 percent of respondents (an\neven mix of U.S. and Iraqi/other firms) expected at least one business deal to take place as a result of the conference.\n\nEnforcement efforts in FY 2010 include the initiation of seven CVD and 10 AD investigations covering a variety of products, including\naluminum extrusions, polyvinyl alcohol, seamless pipe, copper pipe, drill pipe, and coated paper. Among these 17 cases were six CVD\nand seven AD investigations involving China. In FY 2010, IA issued 290 preliminary or final AD and CVD determinations in both initial\ninvestigations as well as administrative reviews of existing AD and CVD orders, including the very first CVD determination involving\nVietnam. Partnering with the U.S. Customs and Border Protection (CBP), IA deployed the AD/CVD module within CBP\xe2\x80\x99s Automated\nCommercial Environment (ACE). This was a major step toward more efficient and effective AD/CVD duty collection. With the goal of\nautomating the collection of AD/CVD duties, ACE serves as a repository for AD/CVD case information, provides a platform to better\ncommunicate and implement IA case decisions, and enables stronger enforcement of the AD/CVD programs by CBP. IA\xe2\x80\x99s AD and CVD\nEnforcement Teams remained diligent in identifying efforts by foreign companies to provide misleading information or evade the payment\nof duties. For example, in several recent trade investigations, documents submitted to IA by foreign exporters proved to be inconsistent\nwith documents purported to be the same that had been provided to CBP. As a result, IA employed its statutory authority to assign AD\nand CVD rates based on adverse inferences. Finally, IA continues to work with other U.S. government agencies including CBP, Immigration\nand Customs Enforcement, and the Department of Justice to ensure compliance with, and advance the enforcement of, the U.S. trade\nremedy laws.\n\n IA actively assisted U.S. companies facing potential unfair trade problems arising from other countries\xe2\x80\x99 use of trade remedies and\nunfair trade practices. IA\xe2\x80\x99s Petition Counseling and Analysis Unit provides U.S. companies detailed information regarding the legal\nrequirements for seeking relief under the U.S. trade remedy laws. For example, in FY 2010, the Petition Counseling unit has conducted 31\nnew counseling sessions with U.S. companies. In addition, IA staff assists U.S. companies whose exports are involved in foreign AD and\nCVD investigations. IA staff have worked closely with U.S. companies involved in AD and CVD investigations on U.S. exports of certain\nsteel products, chicken, and autos during this fiscal year. Submission of the Canadian Softwood Lumber Agreement Report to Congress\nhighlighted Canadian lumber industries\xe2\x80\x99 subsidies. IA also coordinated the Department\xe2\x80\x99s efforts in the Interagency Working Group on\nImport Safety and worked closely with the U.S. Food and Drug Administration and CBP on risk assessment and trade trend analysis to\nrespond to melamine-tainted dairy products from China.\n\nIA was successful in resolving 100 percent of market access and trade compliance issues experienced by U.S. textile and apparel exporters in\nFY 2010. IA continues to administer the highly praised Steel Import Monitoring and Analysis program, providing the industry, government,\nand public with early and accurate data on steel imports in this trade-sensitive sector and allowing U.S. steel industry participants the\nability to make proactive and timely decisions. This program is one of the most heavily trafficked Web sites within ITA, receiving, on average,\n100,000 hits per week. Foreign-Trade Zones Board staff processed 54 applications. The U.S. Foreign-Trade Zones Program provides certain\ncustoms benefits, which can help improve U.S. facilities\xe2\x80\x99 international competitiveness.\n\n\n\n 86 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nIn FY 2010, the Department successfully promulgated regulations that adapted export controls to the evolving national security and\neconomic situation. Noteworthy is a revision to its rules regarding the export of most mass market electronic products that contain\nencryption functions and other encryption products.\n\nThis revised rule enhances U.S. national security and cuts red tape by eliminating the review of readily available encryption items, like cell\nphones and household appliances, and allows the government to focus its resources on more sensitive encryption items. This new rule\nends the U.S. government\xe2\x80\x99s 30-day technical review requirement to export most \xe2\x80\x9cmass market\xe2\x80\x9d and other types of encryption products.\nMass market electronic products containing encryption include cell phones, laptops, and disk drives. Exporters and manufacturers of the\nencryption products may now self-classify the products and then export them without a license if they register online with BIS. BIS also\nrequires that they submit an annual self-classification report. This rule is expected to decrease technical reviews by approximately 70\npercent and semi-annual reporting by up to 85 percent.\n\nThe rule also extends the scope of License Exception Encryption authorizations to most encryption technology exports, following a\ntechnical review. In addition, it adds a decontrol note for items that perform \xe2\x80\x9cancillary\xe2\x80\x9d cryptography, which covers items such as\ngames, robotics, business process automation, and other products that contain encryption capabilities but do not have communication,\ncomputing, networking, or information security as a primary function.\n\nThis rule is the first step in the President\xe2\x80\x99s effort to fundamentally reform U.S. encryption export controls and the Administration will\ncontinue to review the encryption rules to further enhance national security and ensure the continued competitiveness of U.S. encryption\nproducts.\n\nThe Department works with other countries to encourage and support their development of effective export control systems consistent\nwith obligations under United Nations Security Council Resolution 1540. The Department assists in implementing its international\nactivities by coordinating and managing BIS participation in the U.S. government\xe2\x80\x99s Export Control and Related Border Security Assistance\n(EXBS) program, which provides technical assistance to strengthen the export and transit control systems of nations lacking effective\nexport control systems. The effectiveness of U.S. export controls is enhanced by strong controls in other nations that export or transship\nsensitive goods and technologies. BIS works to improve the participation and compliance of existing members of the multilateral export\ncontrol regimes and cooperates with other countries to help them establish effective export control programs.\n\nThe Department helps improve the effectiveness of the multilateral export control regimes (Australia Group for chemical and biological\nweapons items; Missile Control Regime, Nuclear Suppliers Group, and Wassenaar Arrangement for dual-use technologies and conventional\nweapons) by participating in U.S. efforts to update and adapt their control lists to the threats facing the United States.\n\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n1.\t Identify and resolve unfair trade practices (ITA)\n2.\t Maintain and strengthen an adaptable and effective U.S. export control and treaty compliance system (BIS)\n3.\t Integrate non-U.S. actors to create a more effective global export control and treaty compliance system (BIS)\n4.\t Ensure continued U.S. technology leadership in industries that are essential to national security (BIS)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 87\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 1 Percent reduction in trade distorting foreign subsidy\n >1.5% 1.7% Met\n programs\n 1 Percent of AD/CVD determinations issued within\n 90% 94% Met\n statutory and/or regulatory deadlines\n 1 Percent of ministerial errors in IA\xe2\x80\x99s dumping and subsidy\n < 10% 7.9% Exceeded\n calculations\n 1 Percentage of market access and compliance cases\n 50% 58% Met\n resolved successfully\n 1 Value of market access and compliance cases resolved\n $2.5B $21.4B Exceeded\n successfully\n 2 Percent of licenses requiring interagency referral referred\n 95% 90% Slightly Below\n within 9 days\n 2 Median processing time for new regime regulations\n 3.0 3.0 Met\n (months)\n 2 Percent of attendees rating seminars highly 85% 94% Met\n\n 2 Percent of declarations received from U.S. industry\n in accordance with CWC regulations (time lines) that\n are processed, certified, and submitted to the State 100% 100% Met\n Department in time so the United States can meet its\n treaty obligations\n 2 Number of actions that result in a deterrence or\n prevention of a violation and cases which result in a 850 806 Slightly Below\n criminal and/or administrative charge\n 2 Percent of shipped transactions in compliance with the\n licensing requirements of the Export Administration 95% 98% Met\n Regulations (EAR)\n 2 Percentage of post-shipment verifications completed and 260 PSVs/ 256 PSVs/\n Met\n categorized above the \xe2\x80\x9cunfavorable\xe2\x80\x9d classification 85% 93%\n 3 Number of end-use checks completed 850 708 Not Met\n\n 4 Percent of industry assessments resulting in BIS\n determination, within three months of completion, on 100% 100% Met\n whether to revise export controls\n\n\n\nFY 2 0 1 0 S t a t u s\n\nITA met all of its targets for this objective. BIS met six of nine targets for FY 2010. For two of the targets that BIS missed, the actual\nwas only slightly below the original target.\n\n\n\n\n 88 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Number of end-use checks completed (BIS)\n Explanation The FY 2010 target was not met due to personnel shortages due to the previous hiring freeze.\n Action BIS is now hiring analysts and export control officers.\n Measure Number of actions that result in a deterrence or prevention of a violation and cases which result in a\n criminal and/or administrative charge (BIS)\n The target for FY 2010 was not met due to the continued increase in the number of complex international\n investigations. These investigations require full-time dedicated manpower and resources. Additionally,\n during two quarters of the fiscal year, 50 percent of the Office of Export Enforcement field offices were\n Explanation\n understaffed. For the Office of Antiboycott Compliance, the lower volume of exports to the Middle East\n generated fewer boycott-related requests to U.S. businesses. As a result, there was a reduced possibility for\n violations during the quarter.\n Action No additional action taken at this time.\n Measure Percent of licenses requiring interagency referral referred within 9 days (BIS)\n The performance goal was set at an approximate target level, and the deviation from that level is slight.\n Explanation\n There was no effect on overall program or activity performance.\n Action No additional action taken at this time.\n\n\n\nHis t o r i c a l T r e n d s\n\nBIS has historically met or exceeded nearly all of its targets every year. Targets have remained stable over the 10 year period with\nthe exception of that for the \xe2\x80\x9cNumber of actions that result in a deterrence or prevention of a violation and cases which result in\na criminal and/or administrative charge,\xe2\x80\x9d the target for which has risen each year since FY 2001.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 89\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Strategic Objective 1.3\n\nAdvance key economic and demographic data to support effective decision-making of policymakers,\nbusinesses, and the American public\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\nT\n \xe2\x80\x8ahe Economics and Statistics Administration (ESA),\n composed of the Census Bureau and the Bureau of\n\xe2\x80\x8a Economic Analysis (BEA), provides decisionmakers with\ntimely, relevant, and accurate economic and statistical information\nrelated to the U.S. economy and population.\n\nCurrent and benchmark measures of the U.S. population, economy,\nand governments play a vital role in the Nation\xe2\x80\x99s economic well\nbeing. The Census Bureau uses the decennial census to provide the\nofficial population counts for determining the allocation to states of\nseats in the U.S. House of Representatives and for determining how\nthe districts are defined for those seats. The Census Bureau provides\nto each state the data necessary to determine Congressional, state,\nand local legislative boundaries. The decennial census provides\ncomprehensive and useful demographic information about all\npeople living in the United States, Puerto Rico, and the associated\nIsland Areas. The program also provides data for small geographic\nareas and population groups that federal agencies need to implement legally mandated programs. Approximately $400 billion a year is\ndistributed to state and local governments using formulas that are based on data such as state population and personal income.\n\nThe Economic Census provides comprehensive, detailed, and authoritative facts about the structure of the U.S. economy ranging from\nthe national to the local level. The Economic Census covers nearly 29 million business locations and 84 percent of the Nation\xe2\x80\x99s economic\nactivity. The Census of Governments is the only source of comprehensive and uniformly classified data on the economic activities of state\nand local governments. The Census of Governments covers about 90,000 local governments, 12 percent of the gross domestic product\n\n\n\n\n 90 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n(GDP) and nearly 14 percent of the U.S. workforce. The Demographic Surveys Sample Redesign (DSSR) program designs and selects\nsamples for the major national household surveys. The Intercensal Demographic Estimates program provides updated estimates of the\nU.S. population for the country, states, counties, cities, and townships.\n\nBEA invests in the improvement of the accuracy and relevance of GDP, international trade in goods and services, industry economic\nmeasures, and regional and metropolitan statistics, thereby supplying the economic statistics essential to sound business forecasting\nand monetary policy. In these ways, the Department seeks to understand the strength and direction of the economy as well as the\ndeterminants of growth as the Nation shifts to more knowledge-based and skill-based industries.\n\n\n\nAchievements\n\nIn FY 2010, the Census Bureau completed activities related to updates to street features in the Topologically Integrated Geographic\nEncoding and Referencing System (TIGER) database for eligible counties in the United States, Puerto Rico, and the Island Areas.\n\nThe 2010 Census program completed the following:\n\n\xe2\x97\x8f\xe2\x97\x8f Completed the opening of the remaining local census offices;\n\n\xe2\x97\x8f\xe2\x97\x8f Successfully completed the Group Quarters Validation and Group Quarters Advanced Visit operations;\n\n\xe2\x97\x8f\xe2\x97\x8f Conducted the 2010 Census (including the Mailout/Mailback, Update Enumerate, Update Leave, Group Quarters Enumeration,\n Military Enumeration, Remote Alaska, Service Based Enumeration, and Enumeration at Transitory Locations operations);\n\n\xe2\x97\x8f\xe2\x97\x8f Conducted follow-up operations such as Nonresponse Follow-up, Coverage Follow-up, Vacant Delete Check, and Field\n Verification;\n\n\xe2\x97\x8f\xe2\x97\x8f Conducted census operations in Puerto Rico and the Island Areas;\n\n\xe2\x97\x8f\xe2\x97\x8f Completed data capture of the previously mentioned operations; and\n\n\xe2\x97\x8f\xe2\x97\x8f Began Coverage Measurement field operations.\n\nKey accomplishments of the economic census during FY 2010 included the continued delivery of some 1,600 data releases through the\nWeb-based American FactFinder dissemination system. The 2007 Economic Census Industry Series was released in November 2009, and\nthe 2007 Economic Census Geographic Area Series was released in August 2010. The flow of 2007 Economic Census data products will\ncontinue through FY 2011.\n\nDuring FY 2010, principal activities of the Census of Governments program included the release of the final census of governments\ncomponent on local government finance; conducting a comprehensive evaluation of program components and content with data users\nand providers; preparing a detailed project plan for all phases of the 2012 Census of Governments; and continuing modernization and re-\nengineering efforts of the business processes and corresponding software processing systems used for data entry, collection, processing,\nreview, and analysis.\n\nThe DSSR program released documentation on the results of the final evaluation of the full National Evaluation Sample. Additionally,\ndocumentation on the final recommendation and decision on the acceptability of the Master Address File as the sampling frame was\ncompleted by the end of the fiscal year. This is one of the most crucial decisions for sample redesign as it will move the Census Bureau\nto a new universe and away from the four-part universe used since the 1960s.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 91\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nThe DSSR program continued to make progress on moving toward using the Master Address File as the sampling frame for the surveys\nby devising a frame improvement strategy. This strategy, to continue address listing in limited situations, will meet the survey\xe2\x80\x99s diverse\nrequirements related to coverage, cost, and flexibility.\n\nThe Intercensal Demographic Estimates program met the schedule for the release of the official set of July 2009 population estimates\nfor the Nation, states, counties, cities, and townships. Also in FY 2010, work continued on improving the estimates of net international\nmigration. This work was included in the production of the July 2009 estimates series. The Census Bureau continues to work on the plans\nfor evaluating the postcensal estimates relative to the 2010 Census results. To that end, the Census Bureau has awarded eight contracts\nto external experts for work on this evaluation.\n\nIn FY 2010, the Census Bureau released nearly 400 economic reports, including 118 principal economic indicators. Responses to censuses\nand surveys provide information on retail and wholesale trade and selected service industries, construction activity, quantity and value\nof industrial output, capital expenditure, e-commerce sales, foreign trade, and state and local government activities. All targeted current\nsurveys programs achieved their response rate targets for FY 2010.\n\nDuring FY 2010, the Census Bureau began the process of expanding the annual and quarterly surveys of service industries. Prior to the\n2009 services expansion, the Service Annual Survey (SAS) coverage accounted for 30 percent of GDP and the Quarterly Services Survey\n(QSS) coverage comprised 17 percent of GDP. The SAS and the QSS, as fully expanded, will each achieve matching coverage with the\nservices portion of the economic census (55 percent of GDP) by FY 2011. In FY 2010, the Census Bureau increased the quarterly services\ncoverage of GDP from 17 percent to 36 percent while, at the same time, the Census Bureau will completely eliminate the annual data\ncoverage gap with this year\xe2\x80\x99s collection and next year\xe2\x80\x99s publication of the 2009 SAS.\n\nAlso in FY 2010, the Quarterly Financial Report program expanded coverage to include the information and professional, scientific, and\ntechnical services (excluding legal services) sector. This is the first expansion to the program in nearly 25 years.\n\nIn January 2010, the Census Bureau began releasing the U.S. State Import Data Series. These data will provide states and businesses an\nopportunity to track and analyze specific commodities and industries by ultimate destination. With this additional information, better\neconomic forecasting and improved monitoring of goods imported into the United States will be possible.\n\nFor the Survey of Income and Program Participation (SIPP), the Census Bureau achieved a 75 percent response rate, which met the target\nlevel. The Current Population Survey (CPS) also met its target level response rate of at least 90 percent in FY 2010. The CPS also met all\nof its data release targets, disseminating 12 data products and five supplement data products during the fiscal year.\n\nThe Census Bureau met its targets to achieve at least 90 percent of the planned response rates and dissemination targets for Census\nBureau surveys. Response rates are a measure of the quality of survey data. Dissemination targets are a measure of timeliness of the data.\nBy meeting these targets, the Census Bureau is providing its users with the high quality and timely data they need to make important\npolicy decisions that help improve the Nation\xe2\x80\x99s social and economic conditions.\n\nThe American Community Survey (ACS), which collects and tabulates long-form data every year throughout the decade, achieved a 97.5\npercent weighted response rate, using three modes of data collection (mailout, telephone, and personal interview), exceeding its target\nof 92 percent. Core ACS tables were released in the fourth quarter of the fiscal year, thus achieving the target release date of September\n30, 2010. In addition, in the first quarter 2010, ACS data were also released for all places with a population of 20,000 and larger.\n\nThe Boundary and Annexation Survey (BAS) program achieved a 51 percent response rate. The BAS is used to update information about\nthe legal boundaries and names of all governmental units in the United States.\n\n\n\n\n 92 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nDuring FY 2010, BEA embarked upon a number of important data improvement and availability projects, including:\n\n\xe2\x97\x8f\xe2\x97\x8f Continued improvement of satellite accounts for health care and for innovation, including continued research into the accuracy\n of price indexes for medical care and the price indexes underlying the innovation accounts;\n\n\xe2\x97\x8f\xe2\x97\x8f Work to develop new statistics for quarterly GDP by industry, state, personal consumption expenditures, and industry-level\n production accounts;\n\n\xe2\x97\x8f\xe2\x97\x8f Work to restore and improve important county-level statistics that had been previously discontinued in response to resource\n constraints;\n\n\xe2\x97\x8f\xe2\x97\x8f Work to develop new estimation models for critical service sector statistics that will allow a quicker and more adaptable\n response to current and future changes in the economy;\n\n\xe2\x97\x8f\xe2\x97\x8f Continued focus on IT reliability and security and the continued modernization of BEA\xe2\x80\x99s processing systems to build in efficiencies\n that will save time that can be used for increased statistical analysis;\n\n\xe2\x97\x8f\xe2\x97\x8f Developed new Congressional, media, and research Web pages to make BEA\xe2\x80\x99s data products more accessible and easier to\n understand; and\n\n\xe2\x97\x8f\xe2\x97\x8f Significantly improved the Frequently Asked Questions section of the Web site, providing a better look and feel and more\n powerful search capabilities.\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n\n1.\t Provide benchmark measures of the U.S. population, economy, and governments (ESA/CENSUS)\n\n2.\t Provide current measures of the U.S. population, economy, and governments (ESA/CENSUS)\n\n3.\t Provide timely, relevant, and accurate economic statistics (ESA/BEA)\n\n Outcome Performance Measure Target Actual Status\n 1 Correct street features in the TIGER (geographic) Increase Increased\n database (number of counties completed) to more TIGER update TIGER update\n effectively support Census Bureau censuses and submissions submissions\n surveys, facilitate the geographic partnerships electronically by electronically by Exceeded\n between federal, state, local and tribal governments, 10% 51%\n and support the E-Government initiative in the\n President\xe2\x80\x99s Management Agenda\n 1 Complete key activities for cyclical census programs At least 90% At least 90%\n on time to support effective decision-making by of key prep of key prep\n policymakers, businesses, and the public and meet activities activities Met\n constitutional and legislative mandates completed on completed on\n time time\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 93\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 1 Meet or exceed the overall federal score of customer Meet or exceed Score was lower\n satisfaction on the E-Government American Customer overall federal in 2 of 4 quarters\n Satisfaction Index (ACSI) (This measure applies to score Not Met\n the second performance outcome in this objective as\n well)\n 2 Achieve pre-determined collection rates for Census At least 90% of Met percentages\n Bureau censuses and surveys in order to provide key censuses\n statistically reliable data to support effective decision- and surveys\n making of policymakers, businesses, and the public meet/exceed Met\n collection\n rates/levels of\n reliability\n 2 Release data products for key Census Bureau 1) 100% of 1) 100% of\n programs on time to support effective decision-making Economic Economic\n of policymakers, businesses, and the public Indicators Indicators\n released on time released on time\n 2) At least 90% 2) At least 90% Met\n of other key of other key\n census and census and\n survey data survey data\n released on time released on time\n 3 Timeliness: Reliability of delivery of economic data 55 61\n Met\n (number of scheduled releases issued on time)\n 3 Relevance: Customer satisfaction with quality of > 4.0 4.4\n Met\n products and services (mean rating on a 5-point scale)\n 3 Accuracy: Percent of GDP estimates correct > 85% 88% Met\n\n 3 Improving GDP and the economic accounts Completion of All strategic\n strategic plan plan milestones Met\n milestones completed\n\n\n\nFY 2 0 1 0 S t a t u s\n\nThe Census Bureau met or exceeded four of its five targets in FY 2010. It did not meet the target for \xe2\x80\x9cMeet or exceed the overall federal\nscore of customer satisfaction on the E-Government American Customer Satisfaction Index (ACSI).\xe2\x80\x9d BEA met all the targets for its\nfour measures.\n\n\n\n\n 94 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Meet or exceed the overall federal score of customer satisfaction on the E-Government American Cus-\n tomer Satisfaction Index (ACSI) (CENSUS)\n Components of the ACSI score includes navigation of site, content, transparency, and future participation.\n The low score from navigation of 60 percent is having a negative impact on the overall ASCI score, which is\n Explanation driven by a high rate of first time users. Future participation, which includes trust in information provided\n by the Census Bureau, recommended use of the Internet site to others, and reoccurring use of the site,\n realized an average score of 83 percent.\n Action Efforts are underway to improve the navigation and functionality components of the system.\n\n\n\nHis t o r i c a l T r e n d s\n\nWith the exception of meeting the ACSI score, the Census Bureau has consistently met its targets over the past 10 years. Likewise,\nwith the exception of one occurrence in FY 2009 when BEA was slightly below the target for a measure, BEA met all of its targets\nfor its four measures since FY 2001 (a total of 36 targets).\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 95\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Strategic Objective 1.4\n\nPosition manufacturers to compete in a global economy\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x8a\n he Nation\xe2\x80\x99s approximately 330,000 manufacturers\n employ more than 11 million people in high-paying jobs.\n U.S. manufacturers represent roughly two-thirds of total\nU.S. research and development (R&D) expenditures and account\nfor almost 60 percent of all U.S. exports. A strong manufacturing\nbase is critical to the economic strength and stability of the United\nStates. Increased manufacturing productivity and competitiveness\nare essential for the survival of this crucial industrial base.\nManufacturers must focus on improving efficiency, lowering costs,\nand implementing a culture of innovation that leads to new product\nideas and opportunities.\n\nManufacturers, particularly small and mid-sized firms, are facing\nnew and significant challenges. While efficient shop floor\noperations are necessary to survive in today\xe2\x80\x99s economy, this alone is\nnot enough to succeed in the global marketplace. Technology and\nglobalization have fundamentally changed many manufacturing\ncompanies and products. The changes have resulted in an era of increased cost pressures, shortened product life cycles, rapidly diffusing\ntechnology, and production chains that involve a network of suppliers.\n\nSuccess in today\xe2\x80\x99s manufacturing environment requires not only an efficient production system but also developing business strategies\nthat highlight the unique capabilities of a firm. Manufacturers must master innovative product design, understand the benefits of\nadopting environmentally sustainable processes, invest in human and physical capital, leverage a range of financing options, realize\ninternational trade opportunities, and forecast future customer demands.\n\n\n\n\n 96 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nThrough the National Institute of Standards and Technology (NIST) Hollings Manufacturing Extension Partnership (MEP) program,\nmanufacturers have access to a nationwide network of manufacturing experts available to assist in the adoption of new technologies,\ndeveloping innovative products, and implementing process innovations to improve their productivity, profitability, and competitiveness.\nMEP, in collaboration with partners in all levels of the government, university, community college, and the private sector, is working to\naccelerate manufacturing\xe2\x80\x99s ongoing transformation into a more efficient and powerful engine of innovation that drives economic growth\nand job creation.\n\nEach year MEP transforms thousands of U. S. manufacturers by working one-on-one to implement the best combination of process\nimprovements and growth services for each individual company. MEP is focused on providing the services that reduce manufacturer\xe2\x80\x99s\nbottom-line expenses, increase efficiencies, and build capacity. While process and quality improvements offer reduced expenses, growth\nservices provide the tools to improve top-line sales by adopting new technologies and creating new sales, new markets, and new products.\nMEP centers serve as trusted advisors to their manufacturing clients offering a suite of services to keep manufacturers competing and\nthriving in today\xe2\x80\x99s global marketplace.\n\nThrough an annual client survey, the program obtains quantifiable impacts of MEP services on its clients\xe2\x80\x99 bottom line. MEP demonstrates\nthe impact of its services on increased sales, increased capital investment, and cost savings attributed to MEP assistance.\n\n\n\nAchievements\n\nGrowing Sustainability Companies and Communities. MEP is partnering in the Economy, Energy, and Environment (E3) Initiative,\na collaborative effort among federal agencies, local utilities, governments, and small and medium-sized manufacturers to support\nsustainability and competitiveness in local and regional economies while spurring job growth and innovation. Successful E3 pilot projects\nwere recently completed in Columbus, OH, and San Antonio, TX, with additional E3 pilot projects underway in Alabama, Michigan, and\nWest Virginia. Leveraging the resources of MEP, the Small Business Administration, Department of Labor, Department of Energy, and\nEnvironmental Protection Agency, the E3 Initiative provides direct customized assistance to strengthen manufacturers. The process begins\nwith a comprehensive assessment of a process or facility, focusing on lean manufacturing, energy use, and environmental practices to\nidentify opportunities for improvement and reduction. With a focus on continuous improvement, the team then works with the company\nto identify resources, available financing options, training, and capacity building to support the implementation strategy. A number of\nthe companies that have participated in the project have implemented 50 percent of the energy saving recommendations and 10 percent\nof the recommendations intended to make their operations more efficient and sustainable.\n\nNew Product Development. Cookshack, Inc., an Oklahoma manufacturer of commercial and residential smoker ovens, was experiencing\ninternational competition and began looking for avenues for cutting costs and increasing profits. Efforts in lean manufacturing streamlined\nits plant, but the company struggled with taking new product ideas to fruition. The company contacted their local MEP, the Oklahoma\nManufacturing Alliance (the Alliance), for assistance. The Alliance worked with Cookshack on an ideation process designed to generate\nnew, marketable ideas. From the session, 50 new ideas were generated and four emerged worthy of further research. The first idea was a\nmobile kitchen. Whereas the company\xe2\x80\x99s traditional products were permanently installed, the mobile kitchen would give cooks a portable\nsmoker. After seven quick months of production, it was launched and Cookshack anticipates a 20 percent increase in revenue and a\n30 percent increase in profits. The company is working on implementation of several other ideas generated from their work with their\nlocal MEP.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 97\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Summary of Performance\n\n\nThe following outcome applies to this objective with the measures below it providing an indication of how well the Department is\ndoing in achieving that outcome.\n\n1.\t Increase the productivity, profitability, and competitiveness of manufacturers (NIST)\n\n Outcome Performance Measure Target Actual Status\n 1 Number of clients served by MEP centers receiving federal 25,500 from 32,926 from\n funding FY 2009 FY 2009 Exceeded\n funding funding\n 1 Increased sales attributed to MEP centers receiving federal $2,000M $2,085M\n funding from FY 2009 from FY 2009 Met\n funding funding1\n 1 Capital investment attributed to MEP centers receiving $1,000M $1,565M\n federal funding from FY 2009 from FY 2009 Exceeded\n funding funding1\n 1 Cost savings attributed to MEP centers receiving federal $1,000M $1,149M\n funding from FY 2009 from FY 2009 Met\n funding funding1\n NOTE: Performance actuals for this outcome lagged at least six months. Therefore, beginning with the FY 2005 PAR, NIST shifted to a format in which NIST reports actuals\n one year later. This date lag, coupled with the time line for producing the PAR, precludes the reporting of actual FY 2010 data. With the exception of the number of clients,\n the data reported in the current year PAR are an estimate based on three-quarters of actual client reported impacts and one-quarter estimated client impacts.\n 1 Estimate.\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNIST met or exceeded all of its targets for this objective.\n\n\n\nHis t o r i c a l T r e n d s\n\nMEP has consistently exceeded its targets. Performance projections are based in part on past programmatic results but also on\nthe current operating realities of the MEP centers and their manufacturing clients. The projections reflect a realization that any\nsort of forecast must be based on current economic and market conditions and also other contributing factors such as state\nfunding uncertainties. Simply projecting past results into the future in a linear fashion does not take into account these other\nconsiderations. Data from the Federal Reserve Board, the Institute for Supply Management, BLS, and BEA are monitored and\nassessed on a regular basis to inform MEP\xe2\x80\x99s performance targets.\n\n\n\n\n 98 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\n Strategic Goal 1 Program Evaluations\n\nThe following program evaluations were conducted on programs related to this strategic goal in FY 2010.\n\n Bureau Reviewer Name Date Web site\n\n EDA OIG Trade Task Group: Trade Adjustment Assistance 8/18/2010 http://www.oig.doc.gov/oig/\n for Firms (TAAF) Cooperative Agreement reports/2010/STL-19882.pdf\n CENSUS OIG Review of Leases of Maryland Local Census 7/27/2010 http://www.oig.doc.gov/oig/reports/\n Offices correspondence/2010.07.27_IG_to_\n MD_Delegation.pdf\n CENSUS OIG Early Observations Indicate that Some 6/11/2010 http://www.oig.doc.gov/oig/\n Nonresponse Follow-up Procedures are Not reports/2010/OAE-19893-01.pdf\n Being Followed and Others are Lacking\n CENSUS OIG FY 2009 FISMA Assessment of the Field Data 11/20/2009 http://www.oig.doc.gov/oig/\n Collection Automation System reports/2009/OAE-19728.pdf\n CENSUS GAO Census Bureau Continues to Make Progress in 10/21/2009 http://gao.gov/products/GAO-10-140T\n Mitigating Risks to a Successful Enumeration,\n but Still Faces Various Challenges\n CENSUS GAO Poverty Determination in U.S. Insular Areas 11/10/2009 http://gao.gov/products/GAO-10-240R\n\n CENSUS GAO Census Bureau has Made Progress on Schedule 11/13/2009 http://gao.gov/products/GAO-10-59\n and Operational Control Tools, but Needs to\n Prioritize Remaining System Requirements\n CENSUS GAO Operational Changes Made for 2010 Position 2/22/2010 http://gao.gov/products/GAO-10-452T\n the U.S. Census Bureau to More Accurately\n Classify and Identify Group Quarters\n CENSUS GAO Key Enumeration Activities are Moving Forward, 2/23/2010 http://gao.gov/products/GAO-10-430T\n but Information Technology Systems Remain a\n Concern\n CENSUS GAO Data Collection is Under Way, but Reliability of 3/25/2010 http://gao.gov/products/GAO-10-567T\n Key Information Technology Systems Remains\n a Risk\n CENSUS GAO Plans for Census Coverage Measurement are 4/2010 http://gao.gov/products/GAO-10-324\n on Track, but Additional Steps will Improve Its\n Usefulness\n CENSUS GAO Cooperation with Enumerators is Critical to a 4/30/2010 http://gao.gov/products/GAO-10-665T\n Successful Headcount\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 99\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 1\n\n\n\n\nIn addition, NIST conducted a study of the MEP program, a summary of the results of which follows.\n\n\n Bureau National Institute of Standards and Technology (NIST)\n\n Program Hollings Manufacturing Extension Partnership (MEP)\n\n Strategic Objective Position manufacturers to compete in a global economy\n\n Name MEP Non-Experimental Net Impact Evaluation\n In the fall of 2008, NIST MEP undertook a study to examine the impact of manufacturing extension services\n on business establishment productivity. It built on earlier evaluations that matched the Census Bureau data\n with MEP client datasets to generate treatment and comparison groups for analysis. Underlying differences\n Findings between clients and non-clients make it difficult to estimate the impact of MEP on client performance.\n Different methods of correcting for this selection bias produce a different estimate of the impact of MEP\n on client labor productivity. The statistically significant estimates of the impact of MEP services range from\n negative six percent to two percent.\n The results in this report point to the need to conduct further analyses that could provide better estimates\n of the impact of MEP services. First, examining selected subgroups in more detail could reduce the bias of\n estimates of MEP impact. Second, this report looked only at the impact of MEP services on labor productivity\n Actions as a Result (and sales and employment but those are secondary outcomes). Examining the impact of MEP services on\n of Evaluation\n other measures of productivity and on the establishment survival will improve how and in what ways MEP\n services make a difference. MEP plans to conduct another study based on these preliminary findings and to\n use more recent data.\n\n\n\n\n 100 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP e r f o r m a n c e S e c t i o n\n\n\n\n\n S t r at eg i c\n G oa l 2\n\x0c targets met\n P ERFORMANCE o u t c o m e or exceeded\nPromote innovation, facilitate trade, and ensure public safety and security by strengthening\n 5 of 6\nthe Nation\xe2\x80\x99s measurements and standards infrastructure (NIST)\nPromote U.S. competitiveness by directing federal investment and R&D into areas of\ncritical national need that support, promote, and accelerate high-risk, high-reward research 1 of 1\nand innovation in the United States (NIST)\nIncrease public access to worldwide scientific and technical information through improved\n 3 of 3\nacquisition and dissemination activities (NTIS)\nOptimize patent quality and timeliness (USPTO) 2 of 5\nOptimize trademark quality and timeliness (USPTO) 4 of 5\nProvide domestic and global leadership to improve intellectual property policy, protection,\n 1 of 1\nand enforcement worldwide (USPTO)\nEnsure that the allocation of radio spectrum provides the greatest benefit to all people\n 5 of 5\n(NTIA)\nPromote the availability, and support new sources, of advanced telecommunications and\n 2 of 2\ninformation services (NTIA)\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n S TRATEG I C GOA L 2\n\nPromote U.S. innovation and industrial competitiveness\n\n\n\n\n P u b li c B e n e f i t s a n d\n Summary of Performance\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x8a\n he Department seeks to promote U.S. innovation and\n industrial competitiveness through three primary\n areas: (1) the continued development of advanced\nmeasurement science and encouragement of high-risk, high-\nreward research; (2) the further advancement of intellectual\nproperty through the issuance of patents and trademarks; and (3)\nthe continued advancement of telecommunications standards and\ntechnology.\n\nThrough the measurement science research at the National Institute\nof Standards and Technology (NIST), the Department provides the\ninfrastructure that supports a modern technology-based economy,\nfrom the automotive to the biotechnology sector, and from basic\nmaterials and manufacturing to information technology. NIST\nprovides the critical tools for these efforts through the sale of\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 103\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n more than 30,000 units of Standard Reference Materials (SRM) and 6,000 units of Standard Reference Databases annually, as well\n as the conduct of over 15,000 calibration tests each year.\n\n Intellectual property (IP) is a potent force in, and a fundamental component of, the global economy. The Department strives to\n preserve the Nation\xe2\x80\x99s competitive edge by protecting IP and encouraging technological innovation. In market-driven economic\n systems, innovation provides a catalyst for economic prosperity through the accumulation of scientific knowledge; introduction\n of new products and services; and improvements in the productivity levels of land, labor, and capital resources.\n\n The Department through the National Telecommunications and Information Administration (NTIA): (1) serves as the principal\n adviser to the President on domestic and international communications and information policy-making; (2) promotes access to\n telecommunications services for all Americans and competition in domestic and international markets; (3) manages all federal\n use of the electromagnetic spectrum and generally promotes efficient use of spectrum; and (4) conducts telecommunications\n technology research, including standards-setting in partnership with business and other federal agencies. Overall performance\n within this goal has been fairly strong, meeting or exceeding targets on average 87 percent of the time from FY 2001 to FY 2010.\n Performance improved from FY 2001 to FY 2010 with 55 percent of targets met or exceeded in FY 2001 to 82 percent met or\n exceeded in FY 2010.\n\n\n\n\n 104 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Strategic Objective 2.1\n\nAdvance measurement science and standards that drive technological change\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aT \xe2\x80\x8a\n he Nation\xe2\x80\x99s ability to innovate and compete in a global\n economy depends on a robust scientific and technical\n infrastructure, including research, measurement\ntools, standards, data, and models. The National Institute of\nStandards and Technology (NIST) works with U.S. industry and\nother stakeholders to promote U.S. innovation and industrial\ncompetitiveness by advancing measurement science, standards,\nand technology in ways that enhance economic security and\nimprove quality of life. NIST leadership in measurement science\nresearch ensures that U.S. industry and universities will have the\ntools they need to remain at the leading edge of innovation and\nto secure \xe2\x80\x9cfirst-mover advantage\xe2\x80\x9d in bringing new technologies to\nmarket. NIST laboratories develop and disseminate measurement\ntechniques, reference data, test methods, standards, and other\ninfrastructural technologies and services required by U.S. industry\nto compete in the 21st century.\n\nOver 400 NIST staff members participate in more than 105 standards development organizations each year to facilitate the development\nand adoption of documentary standards which promote efficient transactions in the domestic and global marketplace. In particular,\nNIST is leading the effort to develop standards for the Smart Grid and for the development of the Healthcare Information Technology\ninfrastructure. Through the measurement science research at NIST, the Department provides the infrastructure that supports a modern\ntechnology-based economy, from the automotive to the biotechnology sector, and from basic materials and manufacturing to information\ntechnology (IT). NIST provides the critical tools for these efforts through the sale of more than 30,000 units of Standard Reference\nMaterials (SRM) and 6,000 units of Standard Reference Databases annually, as well as the conduct of over 15,000 calibration tests\neach year.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 105\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nNIST also invests in high-risk, innovative projects with the potential to produce transformational results in areas of critical national need.\nAs established by the America COMPETES Act of 2007, the Technology Innovation Program (TIP) supports, promotes, and accelerates\ninnovation in the United States by making cost-shared awards for high-risk, high-reward research in areas of critical national need.\nThese areas need government attention because the magnitude of the problem is large and societal challenges are not being sufficiently\naddressed. TIP complements and leverages\xe2\x80\x94but does not duplicate\xe2\x80\x94existing research and development (R&D) efforts by making\ntargeted investments that are within NIST\xe2\x80\x99s areas of technical competence, but that are not possible by other government agencies or\nprograms. TIP supports rich teaming through making awards to individual small or medium-sized companies or to joint ventures that\nmay additionally include universities, non-profit research organizations, national laboratories (other than NIST), or other organizations\nthat are engaged in high-risk, high-reward R&D. TIP funds projects that have strong potential for advancing the state of the art and\ncontributing significantly to the U.S. science and technology knowledge base, and that may result in the creation of intellectual property\n(IP) vested in a U.S. entity. Awards of up to $3 million total to individual small or medium-sized companies may be made over three years\nor less, and awards of up to $9 million total to joint ventures over five years or less.\n\nThe long-term nature of TIP-funded projects will result in a three to five-year lag from initial project funding to the generation of four\nadditional measureable outputs and outcomes. These additional measures will cover the number of publications, patent applications,\nprojects generating continued R&D, and projects with technologies under adoption. These measures, along with other programmatic\naccomplishments, will be used to evaluate TIP\xe2\x80\x99s progress toward its long-term goal of supporting, promoting, and accelerating innovation\nin the United States in areas of critical national need.\n\nLikewise, the National Technical Information Service (NTIS) seeks to advance measurement science by bringing scientific and technical\ninformation to U.S. business and industry. NTIS promotes innovation and economic growth for U.S. business by (1) collecting, classifying,\ncoordinating, integrating, recording, and cataloging scientific and technical information from a variety of sources, foreign and domestic;\n(2) disseminating this information to the public; and (3) providing information management services to other federal agencies that\nhelp them interact with and better serve the information needs of their own constituents, and to accomplish this without appropriated\nfunds.\n\n\n\nAchievements\n\nNIST Releases Successor to Venerable Handbook of Math Functions\n\nNIST released the Web-based Digital Library of Mathematical Functions and its printed companion, the NIST Handbook of\nMathematical Functions, the much-anticipated successors to the Agency\xe2\x80\x99s most widely cited publication of all time. The two\nworks comprise a complete update and expansion of the 1964 Handbook of Mathematical Functions. NIST created them in\nresponse to advances in mathematics and to take advantage of new capabilities made possible by the Internet. NIST designed\nthe new 36-chapter tome to be the definitive reference work on \xe2\x80\x9cspecial functions,\xe2\x80\x9d which are the most important and widely\nemployed tools in applied mathematics. Special functions appear whenever natural phenomena are studied, engineering problems\nare formulated, and computer simulations are performed. With more than 8,000 equations and nearly 500 figures, the Digital\nLibrary of Mathematical Functions has about twice the amount of technical material as the 1964 publication.\n\nJoint Quantum Institute Researchers Create Entangled Photons from Quantum Dots\n\nPhysicists at the Joint Quantum Institute, a collaborative organization of NIST and the University of Maryland, developed a\npromising new source of entangled photons. Entanglement is the distance-defying link that can form between objects such as\natoms even when they are completely shielded from one another\xe2\x80\x94and is key to exploiting the quantum world to the fullest.\n\n\n\n\n 106 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nThe entangled photons come from nanometer-scale bits of semiconductor, called quantum dots, that have been tweaked with\na laser. The institute\xe2\x80\x99s technique may someday enable more compact and convenient sources of entangled photon pairs than\npresently available for quantum information applications, such as the distribution of \xe2\x80\x9cquantum keys\xe2\x80\x9d for encrypting sensitive\nmessages. Quantum dots could offer advantages as entanglement sources over their conventional crystal counterparts as they are\nless bulky and can conveniently produce one pair of entangled photons at a time, instead of in bunches.\n\nNew NIST Database on Gas Hydrates to Aid Energy and Climate Research\n\nNIST developed a free, online collection of data on the properties of gas hydrates, naturally occurring crystalline materials that are\na potential energy resource and also may affect Earth\xe2\x80\x99s climate. Vast stores of hydrates exist in subsurface sediments of permafrost\nand deep oceans and are considered a major potential energy resource. The U.S. Geological Survey estimates that the total amount\nof carbon captured in methane hydrate, worldwide, is at least twice the total amount held in fossil fuels. The flux of hydrates in\nthe environment may play a role in the global carbon cycle and long-term climate patterns. The new database is meant for use by\nclimate modelers, researchers studying the potential recovery of hydrates for practical applications and the petroleum industry,\nwhich has long been interested in preventing unprocessed hydrates from infiltrating natural gas pipelines. NIST developed the\ndatabase in association with CODATA (the international Committee on Data for Science and Technology). Funding was provided by\nthe National Energy Technology Laboratory of the U.S. Department of Energy.\n\nNIST Demonstrates Universal Programmable Quantum Processor\n\nPhysicists at NIST have demonstrated the first universal programmable quantum information processor able to run any program\nallowed by quantum mechanics\xe2\x80\x94the rules governing the submicroscopic world\xe2\x80\x94using two quantum bits (qubits) of information.\nThe processor could be a module in a future quantum computer, which, if they can be built, have many possible applications such\nas breaking today\xe2\x80\x99s most widely used encryption codes, including those that protect electronic financial transactions. The NIST\ndemonstration marks the first time any research group has moved beyond demonstrating individual tasks for a quantum processor\xe2\x80\x94\nas done previously at NIST and elsewhere\xe2\x80\x94to perform programmable processing, combining enough inputs and continuous steps to\nrun any possible two-qubit program. The Defense Advanced Research Projects Agency, National Security Agency, and Intelligence\nAdvanced Research Projects Activity, in part, supported the research.\n\nPerformance Indicators for Measurement Services and Publications\n\nNIST measurement services, including calibration services, are critical for ensuring product performance and quality, improving\nproduction processes, making marketplace transactions fair and efficient, and leveling the playing field for international trade.\nNIST offers more than 500 different types of physical calibrations in areas as diverse as radiance temperature, surface finish\ncharacterization, and electrical impedance. SRMs are the definitive source of measurement traceability in the United States\nand are certified in the NIST laboratories for their specific chemical and material properties. Customers use SRMs to achieve\nmeasurement quality and conformance to process requirements that address both national and international needs for commerce\nand trade and public safety and health. NIST\xe2\x80\x99s technical publications serve as a major knowledge and technology mechanism\nto transfer the results of its research to support the Nation\xe2\x80\x99s technical infrastructure and provide measurements and standards\nto those in industry, academia, and other government agencies. Each year, NIST\xe2\x80\x99s technical staff produces an average of 2,000\npublications with approximately 50 to 60 percent appearing in prestigious scientific peer-reviewed journals. Citation impact of\nNIST-authored publications demonstrates that NIST consistently produces relevant scientific and technical publications. Citation\nanalysis provides an independent and objective validation of peer review findings as research has shown that high citation\nrates\xe2\x80\x94the cumulative number of citations per publication\xe2\x80\x94correlate with peer review judgment in terms of scientific quality and\nrelevance. NIST also provides online access to over 80 critically evaluated scientific and technical databases to academia, industry,\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 107\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nother government agencies, and the general public. An additional hundreds of millions of annual downloads are associated with\nNIST Web-based, time-related services.\n\nInfrastructure Monitoring/Repair and Advanced Materials in Manufacturing\n\nIn December 2009, NIST announced TIP\xe2\x80\x99s 20 new projects selected for cost-shared awards in the critical national need areas of\ncivil infrastructure and manufacturing. Twelve of these awards addressed accelerating advanced materials into manufacturing\nprocesses, and eight of the awards fund efforts to develop advanced sensing technologies to improve the monitoring and repair of\nthe Nation\xe2\x80\x99s infrastructure. If successful, these 20 awards will generate $146 million in new research during the active life of the\nprojects (three to five years), $71 million of which would be funded by TIP.\n\nAwarded projects from this competition continue to demonstrate TIP\xe2\x80\x99s commitment to multi-disciplinary approaches and to\nencouraging broad teaming arrangements. Thirty-eight recipient organizations are involved in the 20 projects, ranging from\nunmanned, hovering aircraft for inspecting bridges to a high-speed sorting system for recycling aerospace metals to nanomaterials\nfor advanced batteries. These collaborative efforts help the projects toward achieving a transformational impact for infrastructure\nmonitoring and inspection and advanced manufacturing. Additional details on all TIP competitions are available at http://www.\nnist.gov/tip/prev_competitions.cfm.\n\nLandmark Study Shows How Size of Fire Crew Influences Saving Lives and Property\n\nA study coordinated by NIST is the first to quantify the effects of crew sizes and arrival times on lifesaving and firefighting\noperations for residential fires, which account for the vast majority of fatal fires. NIST researchers and collaborators from the\nscientific, firefighting and public-safety communities conducted more than 60 controlled fire experiments to determine the\nrelative effects of crew size, the arrival time of the first fire crews, and the \xe2\x80\x9cstagger,\xe2\x80\x9d or spacing, between the arrivals of successive\nwaves of fire-fighting apparatus. The research team found that four-person firefighting crews were able to complete 22 essential\nfirefighting and rescue tasks in a typical residential structure 30 percent faster than two-person crews and 25 percent faster than\nthree-person crews. The report was funded by the Department of Homeland Security Federal Emergency Management Agency\xe2\x80\x99s\nAssistance to Firefighters Grant Program.\n\nNIST Releases Report on Windstorm Damage to Dallas Cowboys Practice Facility\n\nNIST released its final report on the May 2, 2009, collapse during a severe thunderstorm of the fabric-covered, steel frame practice\nfacility owned by the National Football League\xe2\x80\x99s Dallas Cowboys. The study team found that assumptions and approaches used in\nthe design of the building resulted in significant differences between the original calculated wind load demands and structural\ncapacities compared to those derived by NIST. Maximum wind speed gusts at the time of collapse were estimated to be in the\nrange of 55 to 65 miles per hour\xe2\x80\x94well below the design wind speed of 90 miles per hour as specified in the national standard for\nwind loads. NIST recommends that other fabric-covered frame structures be evaluated to ensure adequate performance under\ndesign wind loads. NIST worked with the National Oceanic and Atmospheric Administration\xe2\x80\x99s (NOAA) National Severe Storms\nLaboratory to estimate the wind conditions at the time of collapse. NIST is working with various public and private groups toward\nimplementing changes to practice, standards, and building codes based on the findings from this study.\n\nPromote Increased Access to Federal Science, Technology, and Engineering Information (STEI)\n\nNTIS deployed the National Technical Reports Library (NTRL) in April 2009, a subscription product with direct access to full metadata\nand full text documents that can be viewed, printed, and downloaded. In FY 2010, NTRL substantially increased perpetual access\n\n\n\n\n 108 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nto federally funded STEI by increasing access to full text documents three-fold due to increased subscriber usage. In FY 2011, NTIS\nplans to launch an improved open access version of NTRL that will substantially increase discovery of prior research, yet maintain\nthe subscription requirement to the full text documents in order to sustain the NTRL service.\n\nIn FY 2010, support of preservation and archival practices for NTRL is currently being improved with a new initiative with the\nNational Archives and Records Administration (NARA). NTIS and NARA formally agreed to perpetually archive and preserve\nelectronic STEI content found in NTIS content. For the first time, this agreement established a process that links NTIS technical\ndocument acquisitions to document submissions for NARA, therefore eliminating duplicate processing for Agency customers.\n\nNTIS plans to implement user-driven customer improvements in NTRL release 2.0 during FY 2011. NTIS recently deployed its\nnext generation 2.0 Web site and is experimenting with the use of social media technology as part of its outreach and education\nactivities to further the dissemination of STEI. NTIS programs will increase worldwide access to STEI through continuing efforts\nto acquire and capture scientific content. NTIS recently initiated new public-private partnerships in order to explore innovative\nSTEI products and services that will enhance new media offerings. The new public-private partnerships will position NTIS as a\nsignificant participant in federal STEI development.\n\nFacilitate the Dissemination of Federal Science and Information\n\nNTIS facilitates the dissemination of federal science and information by providing information management services to other\nfederal agencies to help them disseminate federal information to their constituents. In FY 2010, NTIS continued its long association\nwith the U.S. Department of Agriculture (USDA) team nutrition and supplemental nutrition assistance programs by distributing\nover 10 million free brochures, pamphlets, and kits in both English and Spanish to citizens and state agencies. In FY 2010, NTIS\nalso initiated new information dissemination projects with the Department of Education and the Social Security Administration\n(SSA).\n\nIn August 2009, senior leadership at the Department of Education turned to NTIS to improve and enhance its education publications\ndissemination program through the effective implementation of cost-effective technologies that would enable broader outreach to\nconstituent groups without cost increases, and preferably with cost savings. NTIS fulfilled these requirements and since November\n2009, provided contact center, Web hosting, and publication fulfillment and distribution services for the Department of Education\npublications and federal student assistance programs. In FY 2010, NTIS processed over 77,000 orders and shipped 21.1 million\nitems in support of these programs.\n\nIn November, 2009, SSA requested that NTIS support a new initiative to provide alternative modes of communication in its special\nnotices and other communications to the blind and visually impaired. Prior to working with NTIS, visually impaired claimants\ncould only receive printed SSA notices by mail with the option to call SSA to have the document read to the claimant. Desiring to\ndistribute the notices on compact disk (CD) media for computer screen reading and in Braille print for the visually impaired, SSA,\nNTIS, and two joint business partners developed the Special Notice Option program. Since April 2010, NTIS shipped nearly 10,000\nCDs and Braille documents to sight impaired SSA recipients. In FY 2011, SSA and NTIS will develop new media formats for the\ndelivery of audio and large print.\n\nSince 2004, NTIS and its e-Learning partners have been working with federal agencies to assist them in implementing and\nmaintaining their learning management and knowledge management systems and applications. NTIS supports the following\ndepartments: Commerce, Agriculture, Education, Health and Human Services, Justice, Interior, Treasury, and the U.S. Air Force.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 109\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nProvide Web Services Support for Federal Agencies\n\nNTIS continued to host two major Web sites and applications in support of the American Recovery and Reinvestment Act (ARRA)\nof 2009. NTIS provided hosting services for the Department\xe2\x80\x99s recovery.commerce.gov Web site that provides public visibility to\nthe ARRA projects supported by Department ARRA funding. Further, NTIS developed and deployed with a joint venture partner\nthe Broadband USA round I and II grants application Web site and applications platform at www.broadbandusa.gov. Through\nthe NTIS grants application platform, USDA\xe2\x80\x99s Rural Utilities Service (RUS) and the National Telecommunications and Information\nAdministration (NTIA) received and processed applications that resulted in the issuance of $7.2 billion in grants to expand broadband\naccess to unserved and underserved communities across the United States, increase jobs, spur investments in technology and\ninfrastructure, and provide long-term economic growth.\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n\n1.\t Promote innovation, facilitate trade, and ensure public safety and security by strengthening the Nation\xe2\x80\x99s measurements and\n standards infrastructure (NIST)\n\n2.\t Promote U.S. competitiveness by directing federal investment and R&D into areas of critical national need that support,\n promote, and accelerate high-risk, high-reward research and innovation in the United States (NIST)\n\n3.\t Increase public access to worldwide scientific and technical information through improved acquisition and dissemination\n activities (NTIS)\n\n Outcome Performance Measure Target Actual Status\n 1 Qualitative assessment and review of technical Complete annual\n Completed Met\n quality and merit using peer review peer review\n 1 Citation impact of NIST-authored publications >1.1 >1.11 Met\n\n 1 Peer-reviewed technical publications produced 1,300 1,243 Slightly Below\n\n 1 Standard Reference Materials (SRM) sold 31,000 31,667 Met\n\n 1 NIST-maintained datasets downloaded 24,500,000 24,956,000 Met\n\n 1 Number of calibration tests performed 15,000 17,697 Met\n\n 2 Cumulative number of TIP projects funded 25 29 Met\n\n 3 Number of updated items available (annual) 765,000 969,473 Exceeded\n\n 3 Number of information products disseminated\n 33,000,000 50,333,206 Exceeded\n (annual)\n 3 Customer satisfaction 95-98% 98% Met\n 1\t Actual for this measure lags nine months. The actual shown here is based on FY 2009 data.\n\n\n\n\n 110 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNIST met all but one of its targets in FY 2010, the lone exception being, \xe2\x80\x9cPeer-reviewed technical publications produced.\xe2\x80\x9d For that\nmeasure, the actual was only slightly below the target, with the program\xe2\x80\x99s performance not being affected by this result. NTIS met or\nexceeded all three of its targets.\n\n\n\nHis t o r i c a l T r e n d s\n\nBoth NIST and NTIS have consistently met their targets for this objective.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 111\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Strategic Objective 2.2\n\nProtect intellectual property and improve the patent and trademark system\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n P contributes to a strong global economy by encouraging\n investment in innovation and fostering entrepreneurial\n spirit. People worldwide benefit from innovations, both\ndirectly on a personal level, and indirectly through economic\ngrowth fueled by innovation. Continual development of a vigorous,\nflexible, and efficient IP system thereby achieving this objective\nprotects individual rights, encourages investment in innovation,\nand fosters entrepreneurial spirit.\n\nThe Department promotes the IP system through the protection of\ninventions or creations via patent, trademark, trade secret, and\ncopyright laws. Under this system of protection, industry in the United\nStates has flourished, creating employment opportunities for millions\nof Americans.\n\nThe issuance of patents provides incentives to invent and invest in new\ntechnology by allowing innovators the opportunity to benefit from\ntheir discoveries. Registration of trademarks assists businesses in protecting their investments and safeguards consumers against confusion\nand deception in the marketplace by providing notice of marks in use. Through dissemination of patent and trademark information, the\nDepartment promotes a global understanding of IP protection and facilitates the development and sharing of new technologies worldwide.\n\nIt is a legal requirement for patentability to determine whether an invention is new, useful, and non-obvious to someone knowledgeable in\nthat subject matter. To that end, not only is it important that a patent or trademark be issued in a timely manner, but that it is of high quality.\nPatent examinations are subjected to both end-product allowance and in-process reviews that evaluate the quality of the substantive basis for\nexaminer decisions, applicability of publications found by the examiner, or the quality reviewer; evidence; and clarity of communications with\n\n\n\n\n 112 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\napplicants.. Findings produced by these reviews are shared individually with examiners, are collected in a database for ongoing analysis, serve\nas the basis for the development of training programs, and are used to strengthen the review process.\n\nIn an era of a global economy it is also important that the property rights of inventors be protected not only in the United States, but\ninternationally as well. The U.S. Patent and Trademark Office (USPTO) plays a leadership role in promoting effective domestic and international\nprotection and enforcement of intellectual property rights (IPR) by advocating U.S. government IPR policy, working to develop unified standards\nfor international IPR, providing policy guidance on domestic IPR issues, and fostering innovation. USPTO advises the President and federal\nagencies on national and international IPR policy matters and trade-related aspects of IPR, and conducts technical assistance and capacity-\nbuilding programs for foreign governments seeking to develop or improve their IPR regulatory and enforcement mechanisms.\n\n\n\nAchievements\n\nDespite the continued affects of the economic downturn, the Patent organization successfully launched new and innovative projects to\nmeet its strategic goals. Many routine programs, such as replacing attritions and funding workload-related contracts, were suspended due\nto funding constraints. Yet the Patent organization\xe2\x80\x99s commitment to performance excellence continued by focusing on ways to become\nmore efficient and effective in its processes, human capital management, policy, and workload balancing.\n\nThe Patent organization identified and implemented procedures and policies that supported patent quality and timeliness. Improvements were\nmade by redesigning systems and procedures so that redundant processes were removed. It has created a streamlined examination process\nthat improves patent quality and timeliness. It made significant progress toward reducing the backlog and patent pendency, despite continued\nfunding and hiring challenges. The improvements are reflected in its performance metrics.\n\nPatent quality translates into more certainty and economic value for patent holders. It also means less risk from infringement and claims\nchallenges. The Patent organization\xe2\x80\x99s goal to improve the quality of patents includes defining quality and the quality metrics. A joint\nQuality Task Force between USPTO and the Patent Public Advisory Committee was initiated to enhance the overall patent quality. Two\nroundtables were held in May 2010, to gather input on how to improve patent quality and how to define metrics to measure progress. That\npatent quality improvements focus, inter alia, on improving the process for examination of the application, including uncovering the best\nprior art.\n\nUSPTO tracks its quality with two measures; final rejection/allowance compliance rate and the non-final in-process compliance rate.\nThe patent final rejection/allowance compliance rate gives the percentage of utility, plant, reissue, and design (UPRD) allowances and\nfinal rejections reviewed that were found to be compliant, without error, with applicable rules and laws regarding final patentability\ndetermination. They are based on a random sample of allowances and final rejections reviewed during the reporting period. An error is\ndefined as at least one claim within a randomly selected allowed application that would be held invalid in a court of law if the application\nwere to issue without the required correction. An error in an allowance is defined as at least one claim allowed that would be held invalid\nby a court of law if the application were to issue without the required correction. An error in a final rejection is defined as the unreasonable\nrejection of at least one claim. In FY 2010, efforts to improve quality resulted in an allowance compliance rate of 94.9 percent, slightly better\nthan the target of 94.5 percent. The non-final in-process examination compliance rate is the percentage of UPRD office actions (prior to\nallowance or final rejection) that were found to be free of any unreasonable rejections, objections, or requirements. They are based on a\nsample of actions reviewed during the reporting period. At 96.3 percent non-final in-process examination compliance, USPTO met its goal\nof 94.0 percent.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 113\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nThe pendency time to process a patent application, is measured in two ways: (1) first action pendency\xe2\x80\x94the average time in months from\nfiling until an examiner\xe2\x80\x99s initial determination is made of the patentability of an invention, and (2) total pendency\xe2\x80\x94the average time in\nmonths from filing until the application issues as a patent, or is abandoned by the applicant. Patents ended the year at 25.7 months for first\naction pendency and 35.3 months for total pendency.\n\nOver the last five years, the Trademark organization has met nearly all its performance targets as it continues to reap the benefits of its\nsignificant investments in human capital and in automation and process re-engineering. The examination quality of office actions in the\nTrademark organization has met and exceeded goals, ranging above 95 percent accuracy in recent years. About 97 percent of all first\nactions and final decisions (approvals and rejections) met statutory and compliance rates for quality of decision-making and writing. To\nsustain these high quality levels, the Trademark organization continues to emphasize and improve training, promote electronic filing and\nprocessing, and make greater use of online tools and enhanced processes.\n\nTrademark pendency has improved as electronic processing and filing have become the primary means of conducting business within the\nTrademark organization. Increased use of electronic forms, particularly Trademark Electronic Application System (TEAS) Plus filings, which\nrepresent more than 33 percent of new application filings and more than 31 percent of first action approvals, has improved the efficiency\nand timeliness of examination.\n\nThe two primary measures used to determine trademark application processing time are: (1) first action pendency, which measures the\naverage time, in months, from the filing date to when the examiner\xe2\x80\x99s first action is taken; and (2) average total pendency, which is based\non the average time, in months, from the filing date until the notice of abandonment, notice of allowance, or registration for applications\nbased on use excluding cases that were previously suspended or were involved in inter partes proceedings at the Trademark Trial and Appeal\nBoard. USPTO met its FY 2010 target of 2.5-3.5 by achieving a first action pendency of 3.0 months. Trademark average total pendency\nresults were 10.5 months. USPTO met its FY 2010 target of 13.0 months.\n\nTo maintain first action pendency at 2.5 to 3.5 months and final pendency at 13 months, the Trademark organization managed to dynamically\nalign examination capacity with incoming workloads by maintaining appropriate staffing levels, sustaining high productivity, and judiciously\nadjusting production incentives and overtime usage to boost production when needed.\n\nBy law, the USPTO Director serves as policy advisor to the President (via the Secretary of Commerce) on IP matters. Given the demonstrated\nimportance of high-quality IP to innovation and competitiveness, USPTO is a key component of the Administration\xe2\x80\x99s strategy to encourage\nU.S. innovation and global competitiveness.\n\nThe Administration\xe2\x80\x99s \xe2\x80\x9cStrategy for American Innovation\xe2\x80\x9d whitepaper, published in September 2009, demonstrated a strong commitment\nto retaining U.S. innovation leadership. This whitepaper noted that the importance of high-quality, timely patents to innovation created\nan urgent need for full funding of USPTO. The paper did not, however, elaborate fully on the critical role of IP in fostering innovation.\nAs this strategy for U.S. innovation continues to evolve, USPTO will lead in ensuring that the Administration\xe2\x80\x99s innovation strategy (and\nrelated projects) encompasses a comprehensive national IP strategy. The national IP strategy will ensure that policy developments and\nimplementation take place in a coordinated manner within a national framework in order to allow all national stakeholders to work together\nto create, own, and exploit research results, innovations, new technologies, and works of creativity.\n\nTo effectively develop this strategy, USPTO established the Office of the Chief Economist in March 2010. The Chief Economist is responsible\nfor advising the Under Secretary and the Administrator for External Affairs on the economic implications of policies and programs affecting\nthe U.S. IP system. He initiates and oversees groundbreaking economic analysis in the field on the topics of IP protection and enforcement.\nThe Chief Economist will lead the development of the national IP strategy, which will reflect the growing body of research demonstrating\nthe importance of high-quality IP to innovation.\n\n\n\n\n 114 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nThroughout FY 2010, USPTO continued to seek enhanced cooperation and improved protection for IP multilaterally in several fora including\nthe World Intellectual Property Organization (WIPO), the World Trade Organization (WTO) and several additional intergovernmental\norganizations\n\nUSPTO consistently promoted the adoption of improvements to the WIPO filing and registration systems in 2010 for patents (Patent\nCooperation Treaty system), trademarks (Madrid system), and designs (Hague system), which continue to provide critical benefits and services\nto U.S. businesses that rely on the international protection of their IP. In addition, the United States supported continued implementation\nof WIPO\xe2\x80\x99s \xe2\x80\x9cdevelopment agenda,\xe2\x80\x9d a set of recommendations and concrete projects aimed at enhancing WIPO\xe2\x80\x99s focus on development goals.\nIn the trilateral context, USPTO played a leadership role in promoting adoption of mechanisms for reducing inefficiency in global search and\nexamination, such as the Common Citation Document and the Common Application Format.\n\nUSPTO also actively participated with the Office of the U.S. Trade Representative (USTR) in ongoing IP discussions in the WTO, with the\nobjective of maintaining the integrity of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). USPTO worked\nclosely with USTR during the WTO accession process of several countries during FY 2010.\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n\n1.\t Optimize patent quality and timeliness (USPTO)\n\n2.\t Optimize trademark quality and timeliness (USPTO)\n\n3.\t Provide domestic and global leadership to improve intellectual property policy, protection, and enforcement worldwide (USPTO)\n\n Outcome Performance Measure Target Actual Status\n 1 Final rejection/allowance compliance rate 94.5% 96.3% Met\n\n 1 Non-final in-process examination compliance rate 94.0% 94.9% Met\n\n 1 Patent average first action pendency (months) 25.4 25.7 Slightly Below\n\n 1 Patent average total pendency (months) 34.8 35.3 Slightly Below\n\n 1 Patent applications filed electronically 90.0% 89.5% Slightly Below\n\n 2 Trademark first action compliance rate 95.5% 96.6% Met\n\n 2 Trademark final compliance rate 97.0% 96.8% Slightly Below\n\n 2 Trademark first action pendency (months) 2.5-3.5 3.0 Met\n\n 2 Trademark average total pendency excluding\n 13.0 10.5 Met\n suspended and inter partes proceedings (months)\n 2 Trademark applications processed electronically 65.0% 68.1% Met\n (continued)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 115\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 3 Percentage of prioritized countries that have\n implemented at least 75% of action steps in the\n country-specific action plans toward progress along\n following dimensions:\n 1. Institutional improvements of IP office\n administration for advancing IPR 50% 75% Exceeded\n 2. Institutional improvements of IP enforcement\n entities\n 3. Improvements in IP laws and regulations\n 4. Establishment of government-to-government\n cooperative mechanisms\n\n\n\nFY 2 0 1 0 S t a t u s\n\nUSPTO met seven of its 11 targets in FY 2010. USPTO was slightly below the targets for the following three patent measures and one\ntrademark measure, though the performance goal was set at an approximate target level, and the deviation from that level is slight. There\nwas no effect on overall program or activity performance. USPTO continues to work to improve patent and trademark pendency.\n\n\xe2\x97\x8f\xe2\x97\x8f Patent average first action pendency\n\n\xe2\x97\x8f\xe2\x97\x8f Patent average total pendency\n\n\xe2\x97\x8f\xe2\x97\x8f Patent applications filed electronically\n\n\xe2\x97\x8f\xe2\x97\x8f Trademark final compliance rate\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measures \xe2\x80\xa2 Patent average first action pendency\n \xe2\x80\xa2 Patent average total pendency\n \xe2\x80\xa2 Patent applications filed electronically\n The performance goal was set at an approximate target level, and the deviation from that level is slight.\n Explanation\n There was no effect on overall program or activity performance.\n Action No additional action taken at this time.\n Measure Trademark final compliance rate\n First Action quality was 96.6 percent meeting the target of 95.5 percent. The quality of final decisions\n (approvals and rejections) was 96.8 percent as measured by statutory and compliance rates for quality\n Explanation\n of decision-making and writing, within the target range of 97 percent considering the margin of error\n (+/- 0.6%).\n To sustain these high quality levels, the trademark organization continues to emphasize and improve\n Action training, to promote electronic filing and processing, and to make greater use of online tools and enhanced\n processes.\n\n\n\n\n 116 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Strategic Objective 2.3\n\nAdvance global e-commerce as well as telecommunications and information services\n S T R AT E G I C O B J E C T I V E 2 . 3 TOTA L R E S O U R C E S\n S T R AT E G I C O B J E C T I V E 2 . 3 TOTA L R E S O U R C E S\n Fiscal Dollars FTE1 Resources\n Fiscal\n (DollarsDollars\n in Millions) FTE1 Resources\n (Dollars in Millions)\n $4,421.8 298\n $4,421.8 269 259 268 262 298\n 244 251 248 243\n 219 269 259 268 262\n 244 251 248 243\n 219\n $1,148.2 $1,161.2\n $1,148.2 $1,161.2\n $96.2 $84.4 $70.9 $1,012.4\n $96.2 $84.4 $70.9 $1,012.4\n $117.5 $97.6 $69.9\n $117.5 $97.6 $69.9\n 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1\n 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n 2001 2002 2003 2004 2005 2006 20071 2008 2009 2010 2001 2002 2003 2004 2005\n Fiscal Year Fiscal2006\n Year 2007 2008 2009 2010\n Fiscal Year Fiscal Year\n 1\n Funding increased dramatically in FY 2007 due to the digital television program and the 1\n FTE\xe2\x80\x94Full-Time Equivalent\n 1 Broadband\n Funding program\n increased in FY 2010.\n dramatically in FY 2007 due to the digital television program and the 1\n FTE\xe2\x80\x94Full-Time Equivalent\n Broadband program in FY 2010.\n\n\n\n\n P u b li c B e n e f i t s S T R AT E G I C O B J E C T I V E 2 . 3\n S TPREAT\n R FEOGRIM\n C AONBCJ EE CRTEISVUELT2 S. 3\n P E R F O R M A N C E R E S U LT S\n\n\n\xe2\x80\x8aI \xe2\x80\x8a\n n this era of technological expansion two areas where the\n Department provides significant benefits to the American\n Results\n\n\n\n\n public involve the radio frequency spectrum and broad-\n Results\n\n\n\n\nband technology. The National Telecommunications and Informa-\n Number ofof\n\n\n\n\ntion Administration (NTIA) plays a major role in radio frequency\n Number\n Reported\n\n\n\n\nspectrum management and telecommunications standards, and\n Reported\n\n\n\n\nas an advisor to the President on communications policy matters;\nInternet domain names, wireless telecommunications standards,\nand technology; and high-speed Internet services. NTIA continues\n 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\nto further the technological advances for wireless communication, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n Exceeded 1 2 1 2 3 2 2 6\nInternet services, domain name management issues, and other Exceeded 1 2 1 2 3 2 2 6\n Met 1 1 8 7 4 4 4 5 5 1\nadvances in technology, particularly through the following areas: Met 1 1 8 7 4 4 4 5 5 1\n Slightly Below\n Slightly Below\n Improved\n\xe2\x97\x8f\xe2\x97\x8f Serving as the principal adviser to the President on domestic Improved\n Not Met 1 1 2\n and international communications and information policy- Not Met 1 1 2\n\n making; See Appendix A: Performance and Resource Tables for individual reported results.\n See Appendix A: Performance and Resource Tables for individual reported results.\n\n\n\xe2\x97\x8f\xe2\x97\x8f Promoting access to telecommunications services for all Americans and competition in domestic and international markets;\n\n\xe2\x97\x8f\xe2\x97\x8f Managing all federal use of the electromagnetic spectrum and generally promoting efficient use of spectrum; and\n\n\xe2\x97\x8f\xe2\x97\x8f Conducting telecommunications technology research, including standards-setting in partnership with business and\n other federal agencies.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 117\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nThe Agency\xe2\x80\x99s expertise encompasses every aspect of telecommunications, including domestic policy, international policy, spectrum\nmanagement, and technical telecommunications research and engineering.\n\nNTIA\xe2\x80\x99s responsibilities have increased considerably in this expansion of technology with the enactment of the American Recovery and\nReinvestment Act (ARRA) of 2009. NTIA and the U.S. Department of Agriculture\xe2\x80\x99s (USDA) Rural Utilities Service (RUS) are administering a\n$7 billion initiative to expand broadband access and adoption. Specifically, NTIA is utilizing approximately $4 billion of that funding for\ngrants through the Broadband Technology Opportunities Program (BTOP). BTOP projects will extend broadband access to unserved and\nunderserved areas of the country and to vulnerable populations, including minorities, low income residents, the aged, the unemployed,\nand people with disabilities.\n\nSpecifically, these projects will deploy broadband infrastructure, enhance capacity at public computing centers, and support projects to\nencourage non-users to subscribe to broadband services. The objectives of BTOP include:\n\n\xe2\x97\x8f\xe2\x97\x8f Broadband access in unserved and underserved areas;\n\n\xe2\x97\x8f\xe2\x97\x8f Broadband education, awareness, training, access, equipment, and support;\n\n\xe2\x97\x8f\xe2\x97\x8f Broadband access and use by public safety agencies; and\n\n\xe2\x97\x8f\xe2\x97\x8f Stimulate broadband demand, economic growth, and job creation.\n\nNTIA also leads Department activities in the areas of next-generation Internet Protocols, ultrawideband technology, wireless broadband\napplications, wireless sensor technologies, and Internet technical functions. Congress also directed NTIA to use ARRA funding to develop\na national broadband map. This unprecedented national broadband map will be available to the public no later than February 2011. It\nwill educate consumers and businesses about broadband availability, enable broadband providers and investors to make better-informed\ndecisions regarding the use of their private capital, and allow federal, state, and local policymakers to make more data-driven decisions\non behalf of their constituents.\n\n\n\nAchievements\n\nNTIA utilized approximately $4 billion of ARRA funding for BTOP, which provides grants to support the deployment of broadband\ninfrastructure, enhance and expand public computer centers, and encourage sustainable adoption of broadband service. The 233\nBTOP projects will:\n\n\xe2\x97\x8f\xe2\x97\x8f Fund the installation or upgrade of approximately 120,000 miles of broadband networks, including fiber optics, wireless,\n microwave, and other technologies. Of this amount, approximately 70,000 miles involve construction of new broadband\n facilities.\n\xe2\x97\x8f\xe2\x97\x8f Provide broadband access to approximately 24,000 community anchor institutions, including schools, libraries, government\n offices, health care facilities, and public safety entities.\n\xe2\x97\x8f\xe2\x97\x8f Deploy middle mile infrastructure in areas with nearly 40 million households and four million businesses, many of which\n will benefit from new or improved broadband service provided by last-mile providers that are able to utilize the new, open\n infrastructure to extend or upgrade their service for consumer and business customers.\n\xe2\x97\x8f\xe2\x97\x8f Invest in more than 3,500 new or upgraded public computer centers in libraries, schools, community centers, and other public\n locations.\n\n\n\n\n 118 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n\xe2\x97\x8f\xe2\x97\x8f Invest in more than 35,000 new or upgraded public computer workstations.\n\n\xe2\x97\x8f\xe2\x97\x8f Make public computer center workstations and training available to more than one million new users.\n\nThese anticipated benefits will be realized over the life of each project, which must be substantially complete within two years and\nfully complete within three years.\n\nNTIA\xe2\x80\x99s State Broadband Data and Development grant program implements the joint purposes of ARRA and the Broadband Data\nImprovement Act (BDIA), which envisioned a comprehensive program to integrate broadband and information technology into state\nand local economies. ARRA provided up to $350 million for implementation of the BDIA and to develop and maintain the national\nbroadband map. NTIA has awarded a total of $293 million in grants among all 56 eligible entities.\n\nAs part of BTOP-related initiatives, NTIA and USDA\xe2\x80\x99s RUS launched BroadbandMatch, a new online tool to facilitate partnerships\namong prospective applicants to the agencies\xe2\x80\x99 broadband grant and loan programs. BroadbandMatch allows potential applicants to\nfind partners for broadband projects, helping them to combine expertise and create stronger proposals.\n\nA primary focus of NTIA\xe2\x80\x99s activities is on spectrum reform. Specifically, NTIA examined spectrum sharing approaches to identify the\ntechniques that can provide the most efficient and effective sharing of the radio spectrum through the use of intelligent radios.\nThis research will aid NTIA, the Federal Communications Commission (FCC), the telecommunications industry, and other government\nagencies in the design of dynamic spectrum access schemes for cognitive radio under different communication requirements.\nIn addition, NTIA supported the Administration\xe2\x80\x99s efforts to foster new wireless broadband technologies by making new spectrum\navailable. NTIA is collaborating with FCC to develop a plan to make available 500 MHz of spectrum suitable for both mobile and\nfixed wireless broadband use over the next 10 years. The plan focuses on making spectrum available for exclusive use by commercial\nbroadband providers or technologies, or for dynamic, shared access by commercial and government users.\n\nNTIA oversees federal departments and agencies in their work to relocate systems from the 1710-1755 MHz band under the\nmechanism established through the Commercial Spectrum Enhancement Act. This mechanism provides a means to accommodate the\nnext generation of wireless services. NTIA has facilitated the transition through promoting dialog between the federal agencies and\nthe commercial license winners. The relocation effort is moving forward rapidly and commercial users have been able to enter many\nmarkets earlier than expected. NTIA will continue to explore opportunities for efficiencies and sharing that will enable spectrum to\nmeet future demand. NTIA will also continue to pursue foreign policies that allow U.S. companies to supply broadband services and\nequipment in competitive markets around the world. Finally, NTIA will continue to partner with industry in cooperative research and\ndevelopment agreements and other fora to combine talents for the advancement of new technologies.\n\nNTIA also coordinated the activities of the Department\xe2\x80\x99s Spectrum Management Advisory Committee, which met three times in\nFY 2010. This committee is comprised of a broad range of stakeholders, including representatives from state, regional, and local\nsectors; industry; academia; and consumer groups.\n\nNTIA hosted the 11th annual International Symposium on Advanced Radio Technologies from July 27-30, 2010 in Boulder, CO.\nThe focus of this year\xe2\x80\x99s conference was spectrum sharing technologies, including state-of-the-art technology developments and a\ndialogue on the policy implications of spectrum sharing. The conference is presented by the Institute for Telecommunication Sciences\n(ITS), the research and engineering laboratory of NTIA. ITS also released a collection of online training and educational videos for\npublic viewing. These videos cover telecommunications topics ranging from an easily understandable review of the fundamentals\nof radio spectrum (e.g., defining decibels using common logarithms) to in-depth explanations of complex engineering issues like\nresolving signal-interference problems.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 119\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nThe FCC Chairman and NTIA Administrator met to discuss their agencies\xe2\x80\x99 complementary roles with respect to commercial and\nfederal spectrum. Federal law directs the agency heads to meet biannually to conduct joint spectrum planning.\n\nSecretary Locke announced the formation of an Internet policy task force to identify leading public policy and operational challenges\nin the Internet environment. NTIA is actively involved in the task force, along with participants from the Secretary\xe2\x80\x99s office and other\nDepartmental bureaus, including the International Trade Administration (ITA), the National Institute of Standards and Technology\n(NIST), the U.S. Patent and Trademark Office (USPTO), and the Bureau of Industry and Security (BIS). The task force is conducting a\ncomprehensive review of the nexus between privacy policy, copyright, global free flow of information, cybersecurity, and innovation\nin the Internet economy. The task force held three public symposiums and has published four Notices of Inquiry seeking public\ncomment on these various aspects of Internet policy.\n\nNTIA and NIST announced completion of an initiative with the Internet Corporation for Assigned Names and Numbers (ICANN) and\nVeriSign to fully deploy Domain Name System Security Extensions (DNSSEC) at the Internet\xe2\x80\x99s authoritative root zone, which will help\nprotect Internet users against cache poisoning and other related cyber attacks.\n\nNTIA also conducted an Internet Protocol Version Six (IPv6) workshop on the impact of the adoption and deployment of IPv6\naddresses for industry, the U.S. government, and the Internet economy.\n\nNTIA released a new report, \xe2\x80\x9cDIGITAL NATION: 21st Century America\xe2\x80\x99s Progress Towards Universal Broadband Internet Access,\xe2\x80\x9d\ntaking a first look at data collected through the Internet Usage Survey of more than 50,000 households, commissioned by NTIA\nand conducted by the Census Bureau in October 2009. Since 2007, the data show that while virtually all demographic groups have\nexperienced rising broadband Internet access adoption at home, historic disparities among particular demographic groups overall\ncontinue to persist.\n\nNTIA coordinated the activities of the Online Safety and Technology Working Group (OSTWG) pursuant to Section 214 of the Protecting\nChildren in the 21st Century Act. OSTWG was composed of representatives of relevant sectors of the business community, public\ninterest groups, and other appropriate groups and federal agencies. The members were selected for their expertise and experience in\nonline safety issues, as well as their ability to represent the views of the various industry stakeholders. OSTWG published its report,\n\xe2\x80\x9cYouth Safety on a Living Internet\xe2\x80\x9d after a series of public meetings.\n\nNTIA awarded $20.45 million in funding via 126 grants from the Public Telecommunications Facilities Program to assist public\nradio, public television and nonbroadcast (distance learning) projects across the country. NTIA awarded $10 million (of the $20.45\nmillion) to 72 grantees to replace urgently needed equipment at public radio and television stations. Thirty-one projects will provide\nfirst public radio service to over 500,000 people and provide additional service to almost 1.7 million people. NTIA also awarded\n$4.1 million to assist in the digital conversion of 16 public television and three public radio stations. Among the 126 awards, NTIA\ngave one grant to the University of Hawaii for $499,916 for the PEACESAT (Pan-Pacific Educational and Cultural Experiments by\nSatellite) Program.\n\nNTIA has improved the timeliness of processing frequency assignment requests from a target of 12 business days to nine days or\nfewer. This has been accomplished through business process re-engineering and IT improvements. These frequency assignments\nsatisfy the near-term and future spectrum requirements of the 63 federal agencies to operate radiocommunications that provide the\npublic with national and homeland security, law enforcement, transportation control, natural resource management, and other public\nsafety services during peacetime and emergencies.\n\n\n\n\n 120 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Summary of Performance\n\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department\nis doing in achieving those outcomes.\n\n1.\t Ensure that the allocation of radio spectrum provides the greatest benefit to all people (NTIA)\n\n2.\t Promote the availability, and support new sources, of advanced telecommunications and information services (NTIA)\n\n Outcome Performance Measure Target Actual Status\n 1 Frequency assignment processing time (days) 9 or fewer 9 Met\n\n 1 Certification request processing time (months) 2 or fewer .9 Exceeded\n\n 1 Space system coordination request processing 90% in 14 days\n 100% Exceeded\n time or fewer\n 1 Spectrum plans and policies processing time Comments in 15\n 11.6 days Exceeded\n days or fewer\n 1 Milestones completed from the implementation\n 11 milestones 16 milestones Exceeded\n plan of the President\xe2\x80\x99s Spectrum Policy Initiative\n 2 Support new telecom and information technology\n by advocating Administration views in number of 5 dockets and 17 dockets and\n Exceeded\n FCC docket filings, and Congressional and other proceedings proceedings\n proceedings\n 2 Number of Web site views for research\n 240,000/quarter 928,000/quarter Exceeded\n publications\n\n\n\nFY 2 0 1 0 S t a t u s\n\nIn FY 2010, NTIA exceeded six of its seven targets and met the remaining target. NTIA has consistently met or exceeded its targets dating\nback to FY 2006 (for several measures, data was unavailable prior to FY 2006).\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 121\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n Strategic Goal 2 Program Evaluations\n\n\nThe following program evaluations were conducted on programs related to this strategic goal in FY 2010.\n\n Bureau Reviewer Name Date Web site\n\n NTIA GAO Current Broadband Measures have Limitations, 10/9/2009 http://gao.gov/products/GAO-10-49\n and New Measures are Promising but Need\n Improvement\n NTIA GAO Preliminary Observations on the 10/27/2009 http://gao.gov/products/GAO-10-192T\n Implementation of Broadband Programs\n NTIA GAO Agencies are Addressing Broadband Program 11/16/2009 http://gao.gov/products/GAO-10-80\n Challenges, but Actions are Needed to Improve\n Implementation\n NTIA GAO Further Opportunities Exist to Strengthen 8/4/2010 http://gao.gov/products/GAO-10-423\n Oversight of Broadband Stimulus Programs\n NTIA OIG NTIA Must Continue to Improve its Program 4/2010 http://www.oig.doc.gov/oig/\n Management and Pre-Award Process for its reports/2010/ARR-19842-1.pdf\n Broadband Grants Program: ARR-19842-1\n\n\n\n\n 122 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\nIn addition, in FY 2010, the National Research Council (NRC) conducted its annual assessments of selected NIST laboratories, a\nsummary of the results of which follows.\n\n Bureau National Institute of Standards and Technology (NIST)\n\n Program National Measurement and Standards Laboratories\n\n Strategic Objective Advance measurement science and standards that drive technological change\n\n Name National Research Council (NRC) FY 2010 Assessments\n Overall, the 2010 NRC assessments continue to attest to NIST\xe2\x80\x99s high quality programs, relevance of work to the\n measurement and standards needs, and impressive technical merit, as illustrated by the following quotes:\n\n \xe2\x97\x8f\xe2\x97\x8f Building and Fire Research Laboratory (BFRL) \xe2\x80\x93 \xe2\x80\x9cOverall, the technical merit of the programs within the BFRL\n is excellent and at the state of the art, although progress is sometimes hampered by factors beyond NIST\n control \xe2\x80\xa6 The BFRL is conducting groundbreaking research in critical areas.\xe2\x80\x9d\n\n \xe2\x97\x8f\xe2\x97\x8f Manufacturing Engineering Laboratory (MEL) \xe2\x80\x93 \xe2\x80\x9cMEL continues to excel in measurement science, measurement\n services, and technical contributions to standards. \xe2\x80\xa6 Research by MEL staff is on the forefront of measurement\n sciences, enabling industry to develop and deliver products of ever-higher quality and complexity to world\n markets and enabling future innovative manufacturing industries and processes.\xe2\x80\x9d\n\n \xe2\x97\x8f\xe2\x97\x8f Materials Science and Engineering Laboratory (MSEL) \xe2\x80\x93 \xe2\x80\x9c\xe2\x80\xa6 for the selected portion of the MSEL programs\n reviewed, the projects are outstanding. They are clearly focused on the mission of the MSEL and have\n produced results that have garnered recognition through awards and frequent citations in the literature\n Findings as well as from strong support by industry and the worldwide research community for standard reference\n materials (SRMs) and standard reference data.\xe2\x80\x9d\n\n \xe2\x97\x8f\xe2\x97\x8f NIST Center for Neutron Research (NCNR) \xe2\x80\x93 \xe2\x80\x9cThrough its suite of instruments\xe2\x80\x94among the best in the\n world\xe2\x80\x94for neutron scattering and fundamental neutron science, coupled with a strong staff of scientists\n and technicians who lead their own research programs and support those of hundreds of users both within\n and outside of NIST each year, the NCNR has a firm place in advancing the NIST mission. \xe2\x80\xa6 On the national\n neutron landscape of today and in the near future, the NCNR is the leading U.S. facility.\xe2\x80\x9d\n\n \xe2\x97\x8f\xe2\x97\x8f Physics Laboratory (PL) \xe2\x80\x93 \xe2\x80\x9cThe Physics Laboratory has had two decades or more of outstanding research\n accomplishments because of a group of dedicated, exceptional scientists and technical staff responding\n to the needs of NIST, the Nation, and the world, along with an administration that fostered a collegial and\n intellectual climate conducive to such productivity. During this same period, the laboratory has maintained\n its exceptional leadership role in metrology and standards, in part because of the dedication of its staff in\n these areas and because of the staff\xe2\x80\x99s groundbreaking research.\xe2\x80\x9d\n\n The FY 2010 NRC Assessment Reports are available at http://www.nist.gov/director/nrc/.\n\n Actions as a Result The findings and comments by the NRC assessment panels are critical components of the NIST performance\n of Evaluation evaluation system. NIST values this input and works to assure that any identified issues are addressed.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 123\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 2\n\n\n\n\n 124 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP e r f o r m a n c e S e c t i o n\n\n\n\n\n S t r at eg i c\n G oa l 3\n\x0c targets met\n Strategic Objective or exceeded\nProtect, restore, and manage the use of coastal and ocean resources (NOAA) 6 of 8\n\nAdvance understanding of climate variability and change (NOAA) 3 of 5\n\nProvide accurate and timely weather and water information (NOAA) 9 of 11\n\nSupport safe, efficient, and environmentally sound commercial navigation (NOAA) 5 of 6\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n S TRATEG I C GOA L 3\n\nPromote environmental stewardship\n\n\n\n\n P u b li c B e n e f i t s a n d\n Summary of Performance\n\n\n\n\n\xe2\x80\x8aT \xe2\x80\x8a\n he Department has responsibilities for the environment,\n ecosystems, safety, and commerce of the Nation that\n span oceanic, coastal, and atmospheric domains.\nUnderstanding the oceans and atmosphere is essential to sustaining\nU.S. environmental and economic health. The Department provides\nproducts and services that are a critical component of the daily\ndecisions made across the United States. From hurricane tracking\nto El Ni\xc3\xb1o and harmful algal bloom predictions, navigational charts\nto fish stock assessments, severe weather forecasts to coastal zone\nmanagement\xe2\x80\x94the Department\xe2\x80\x99s future-oriented science, service, and\nstewardship missions touch the life of every citizen in the United\nStates and in much of the world every day.\n\nTogether the Department and its partners provide weather and\nclimate services; conduct atmospheric, climate, and ecosystems\nresearch; manage and protect fisheries and sensitive marine\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 127\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\necosystems; promote efficient and environmentally safe commerce and transportation; and provide emergency response and vital information\nin support of homeland security. The breadth and scope of these services require the Department to be responsive to both short and long-term\nsocietal needs.\n\nStrategic Goal 3 encompasses only one bureau\xe2\x80\x94the National Oceanic and Atmospheric Administration (NOAA). Within this strategic goal there\nare four programmatic objectives and one mission support objective. The following table shows each objective, its primary focus, its primary\nline office, secondary line offices (in order of percentage of the objective), the approximate objective percentage of the NOAA budget, and the\nobjective percentage of the NOAA budget excluding the Mission Support Objective.\n\n\n Strategic goal 3 summary by objective\n % of Total Budget\n Other Line Offices % of Total (excluding\n Objective Focus Primary Line Office (in order of percentage) Budget mission support)\n 3.1 Ecosystems NMFS NOS, OAR, NESDIS \t 31% \t 49%\n 3.2 Climate OAR NESDIS, NWS, NMFS \t 6% \t 10%\n 3.3 Weather/Water NWS OAR, NOS, NESDIS \t 21% \t 34%\n 3.4 Transportation NOS NWS, NESDIS \t 4% \t 7%\n Mission Support N/A NESDIS PS, OMAO, NWS, OAR, NOS, NMFS \t 38% \t N/A\n\nOverall performance within this goal has been fairly strong, meeting or exceeding targets on average 81 percent per year from FY 2001 to\nFY 2010. Performance remained fairly level from FY 2001 to FY 2010 having met 77 percent of targets in FY 2001 and in FY 2010, with a high\nof 97 percent of targets in FY 2007 and a low of 74 percent of targets in FY 2003 and FY 2004.\n\n\n\n\n 128 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n S TRATEG I C OBJECT I VE 3 . 1\n\nProtect, restore, and manage the use of coastal and ocean resources\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aC \xe2\x80\x8a\n oastal areas are among the most developed in the\n Nation, with over half the population living on less\n than one-fifth of the land in the contiguous United\nStates. At over 230 persons per square mile, the population density\nof the near shore is three times that of the Nation as a whole.\nThat portion of the U.S. economy that depends directly on the\nocean is also large, with 2.2 million people employed and over\n$197 billion in value added to the national economy in 2000.\nApproximately 89 million people vacation and recreate along U.S.\ncoasts every year. The amount added annually to the national\neconomy by the commercial and recreational fishing industry\nalone is over $43 billion with an additional $1 billion of marine and\nfreshwater aquaculture sales. With its Exclusive Economic Zone of\n3.4 million square miles, the United States manages the largest\nmarine territory of any nation in the world. Within this context,\nthe National Oceanic and Atmospheric Administration (NOAA)\nworks with its partners to achieve a balance between the use and\nprotection of these resources to ensure their sustainability, health, and vitality for the benefit of this and future generations and their\noptimal contribution to the Nation\xe2\x80\x99s economy and society.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 129\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nAchievements\n\nImplemented a Catch Share Program in the New England Groundfish Fishery\n\nTo help rebuild fisheries and sustain fishermen, communities, vibrant working waterfronts, and culturally important fishing traditions,\nNOAA also released a national catch share policy to encourage the consideration and use of catch shares. Catch share programs,\nwhich include limited access privilege programs and individual fishing quotas, dedicate a secure share of fish to individual fishermen,\ncooperatives or fishing communities. Catch shares are used in 14 fisheries managed by six fishery management councils from Alaska to\nFlorida and are being developed in additional fisheries. Both here and in other countries, catch shares are helping eliminate overfishing\nand achieve annual catch limits, improve fishermen\xe2\x80\x99s safety and profits, and reduce the negative biological and economic effects of the\nrace for fish that develops with some traditional fishery management.\n\nRebuilt Four Fish Stocks to Optimal Levels\n\nDuring FY 2010, NOAA rebuilt the following four fish stocks, important to commercial and recreational fisheries, to optimal population\nlevels: North Atlantic swordfish, Georges Bank haddock, Atlantic coast spiny dogfish, and St. Matthews Island blue king crab. These stocks\nhad been under rebuilding plans due to low population levels caused by overfishing and other factors. This accomplishment ties the\nrecord set in FY 2009 for the greatest number of fish stocks rebuilt in a single year.\n\nEnded Overfishing of Red Snapper from Coast to Coast\n\nNOAA worked with the Gulf of Mexico and South Atlantic Fishery Management Councils to design difficult but necessary measures to\nend overfishing of red snapper in the Gulf of Mexico and South Atlantic. While the South Atlantic measures are undergoing final review\nand approval, a recent stock assessment indicates the Gulf measures have successfully ended decades of overfishing. In response, fishery\nmanagers could increase the Gulf red snapper total allowable catch quota from 5.0 to 6.95 million pounds in 2010. Although that stock\nhas not yet fully recovered, Gulf fishermen report encountering more and larger red snapper than they have seen in years, and catching\nred snapper in areas where they have not been encountered in many years.\n\nProtected Marine Mammals and Sea Turtles from the Deepwater Horizon Oil Spill\nin the Gulf of Mexico\n\nFollowing the Deepwater Horizon oil spill, NOAA staffed the Wildlife Operations Branch which was established to minimize the effects\nof the spill on marine mammals and sea turtles. NOAA conducted tracking and recovery of stranded sea turtles and marine mammals,\nincluding sea turtle rescue flights to locate sea turtles for rescue by personnel on surface vessels, conducted aerial surveys of sea turtles\nand marine mammal populations, coordinated stranding networks; mounted rescue operations, and ensured that spill clean-up activities\nare performed in such a way as to minimize impacts to protected species.\n\nProtected the Public and Ensured Consumer Confidence in the Safety of Seafood in the\nGulf of Mexico following the Deepwater Horizon Oil Spill\n\nNOAA took an active role in the response to the Deepwater Horizon oil spill to ensure continued safe supply of seafood, consumer\nconfidence, and economic opportunity for the fisherman and seafood industry. NOAA provided service on a number of fronts including:\nmonitoring of oil plumes, seafood sampling, effect on fish and shellfish, pre-emptive fishery closure and reopening, and outreach to the\npublic. Seafood inspection program inspectors played an integral part of the comprehensive, coordinated, multi-agency program to\nensure the safety of seafood from the Gulf of Mexico. This helped consumers know their food is safe to eat, and fishermen and seafood\n\n\n\n\n 130 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nprocessors who needed to be able to sell their products with confidence. Within a week of the spill, NOAA vessels were collecting seafood\nsamples in the Gulf of Mexico. With a long history of responding to oil spills, NOAA sent staff to Pascagoula, MS to assist in seafood\nsample processing, and rapidly equipped chemistry labs to analyze samples for polycyclic aromatic hydrocarbons, the main human health\nconcern with oil-contaminated seafood.\n\nUnder the Magnuson-Stevens Act, NOAA closed federal waters impacted by oil, developed a protocol for reopening the waters to\nfishing, and implemented a comprehensive testing protocol (chemical and sensory) to ensure fish and shellfish were not contaminated\nbefore reopening closed areas to fishing activity. The federal fishery closure, at its peak, covered 88,522 square miles (37 percent of\nGulf federal waters) and served as the primary tool to ensure that contaminated seafood did not reach consumers. The chemistry labs\nanalyzed hundreds of Gulf seafood samples for seafood safety. This work helped provide the science to inform the Agency\xe2\x80\x99s decisions to\nreopen federal waters for fishing as soon as they were safe. On July 22, using the NOAA protocol, NOAA reopened 26,388 square miles\nto fishing.\n\nNOAA Fleet Assists the Deepwater Horizon Oil Spill Response\n\nAs NOAA responds to the Deepwater Horizon oil spill, the Office of Marine and Aviation Operations continues to provide operational\nexpertise. Between May and September of FY 2010, seven NOAA aircraft have provided aerial support for incident response. The Twin\nOtter N56 conducted surveys of whales, dolphins, endangered sea turtles and other marine life in the spill; the Twin Otters N46 and\nN48 measured oil spill thickness and density; and, the Twin Otter N57 conducted marine surveys. The King Air N68 conducted coastal\nsurveys in the region with its state-of-the-art mapping sensors. The WP-3D Orion N2 collected data on the Gulf of Mexico Loop Current\nwhile the WP-3D Orion N3 provided air quality surveys to collect samples through the marine boundary level, along the shore and\ncoast. NOAA ships actively participated in the Deepwater Horizon oil spill response between May and August of FY 2010. The THOMAS\nJEFFERSON completed three legs of operations taking water samples and testing advanced methods for detecting submerged oil while\ngathering oceanographic data in the area\xe2\x80\x99s coastal waters. During an oil detection mission in the vicinity of the BP Deepwater Horizon well\nhead, the GORDON GUNTER collected water samples, conducted plankton tows, and employed echo sounders, autonomous underwater\nvehicles, and other technologies to collect subsurface data. The PISCES performed a cruise to assess impacts of oil on Gulf of Mexico\nreef fish population. The PISCES used echo-sounders to monitor for oil and gas releases in the immediate vicinity of the well head.\nThe DELAWARE II performed Pelagic Longline survey and water sampling around the periphery of the closure area and collected plankton\nsamples at the surface and at discrete depths. The OREGON II assessed the impacts of the oil spill on summer shrimp/groundfish while\nthe NANCY FOSTER assessed the impact of oil spill on corals in the vicinity of the well head and characterized the impact of persist oil\nspill to provide early warnings of oil entrainment. Finally, the BIGELOW performed well head monitoring and oil detection.\n\nNOAA Stimulates the Economy and Restores Habitat through the Implementation of the\nAmerican Recovery and Reinvestment Act Habitat Restoration Projects\n\nIn FY 2010, NOAA implemented all 50 of its habitat restoration American Recovery and Reinvestment Act (ARRA) of 2009 projects.\nThese ARRA projects have, so far, supported 694 full-time equivalents (FTE)/quarter in the first half of FY 2010, with the potential for\nsupporting thousands more by the end for 2010. These projects have restored 1824 acres of habitat and removed obsolete and unsafe\ndams that opened 329 stream miles where fish migrate and spawn. Nearly all of these projects directly benefit a wide variety of\nthreatened and endangered fish and wildlife species, including salmon, migratory birds, and turtles.\n\nNOAA Advances Coral Reef Protection in FY 2010 with Science, Service, and Stewardship\n\nIn FY 2010, the NOAA Coral Reef Conservation Program (CRCP) delivered the Implementation of the National Coral Reef Action Strategy:\nReport on NOAA Coral Reef Conservation Program Activities from 2007 to 2009 to Congress. CRCP\xe2\x80\x99s recent reorganization focused its\nefforts to understand and address the three major threats to reefs: fishing, impacts from climate change, and land-based sources of\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 131\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\npollution. To advance this realignment process, in FY 2010, CRCP worked with coral reef resource managers in each of the seven U.S.\ncoral reef jurisdictions to articulate strategic reef management priorities in each place. Looking forward, CRCP will direct its efforts and\nresources on these priority needs.\n\nNOAA, other U.S. government agencies, and a consortium of nongovernmental organizations implemented the U.S. Coral Triangle Initiative\nSupport Program\xe2\x80\x94a $40 million, five-year U.S. Agency for International Development (USAID)-funded program launched in 2010 to\nprotect the region. A global center of marine biological diversity, the Coral Triangle is a vast ocean and coastal area in Southeast Asia and\nthe Western Pacific. As part of this program, in FY 2010, NOAA teams led several trainings and supported the development of a manual\nfor climate change vulnerability assessments which will assist the six nations of the Coral Triangle in early action planning to address this\nglobal threat to reefs. The Coral Triangle Initiative projects include technical support and capacity building in marine-protected areas,\nclimate change adaptation, and ecosystem approaches to fisheries management.\n\nMarine Debris Progress Advances Detection of Derelict Fishing Gear and\n\xe2\x80\x9cFishing for Energy\xe2\x80\x9d Awarded\n\nIn conjunction with several NOAA line offices, other federal agencies, the state and University of Hawaii, and the private sector, the\nNOAA Marine Debris Program, increased the capacity to detect derelict fishing gear in the open ocean. NOAA Hawaii offices worked with\nthe National Aeronautics and Space Administration (NASA), NOAA\xe2\x80\x99s Unmanned Aerial Systems Program, the Coastal Storms Program,\nand the Office of Marine and Aviation Operations to develop and test sensor-and-platform systems to detect and ultimately remove\nderelict fishing gear before it enters sensitive nearshore environments. In FY 2010, the Fishing for Energy partnership was awarded the\nCoastal America Partnership Award that cited innovative efforts to provide fishermen with a no-cost disposal option for old or derelict\nfishing gear to reduce its likelihood of entering the marine environment, and to convert it into clean, renewable energy. The partnership\ncollected over 350 tons of old fishing gear between February 2008 and May 2010, and included ports in Maine, Massachusetts, New York,\nRhode Island, New Jersey, Virginia and Oregon (with three ports added to the partnership in FY 2010 and more expected). In 2010, the\npartnership expanded to include grant programs that directly support efforts to remove derelict fishing gear from U.S. coastal waters,\nand it will continue to partner with new ports to promote the collection of retired or derelict fishing gear through community education\nand outreach. For more information on the partnership visit www.nfwf.org/fishingforenergy.\n\nNOAA Expands Digital Coast Datasets and Users\n\nThe Digital Coast Web site now includes access to 24 national-level datasets, 35 geospatial tools, 12 training courses, and over 50 case\nstudies. Over the past year more than 69,000 users accessed the Digital Coast site, an increase of almost 300 percent over the previous\nyear. Over the next 10 years, NOAA expects the use of the Digital Coast to result in $26.5 million of benefits to over 450,000 users.\nDigital Coast now has a Coastal Inundation Toolkit with resources from inundation and risk assessment basics to detailed technical\nguidance on inundation mapping methods, as well as Coastal County Snapshots which provide easy-to-understand hazard information\nand social science data for local officials.\n\nNOAA Launches State of the Coast Web site\n\nThe National Ocean Service launched NOAA\xe2\x80\x99s State of the Coast Web site in June 2010. It is a source for quick facts and more detailed\nstatistics offered through interactive indicator visualizations that provide highlights of information about coastal communities, coastal\necosystems, the coastal economy, and how climate change might impact the coast, together in one simple Web destination. The State of\nthe Coast Web site launched with 15 national level topics, telling a broad suite of stories ranging from the gross domestic product (GDP)\ngenerated in coastal counties, the population in the 100-year coastal flood zone, and the overall health of the Nation\xe2\x80\x99s coastal waters.\n\n\n\n\n 132 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nHarmful Algal Bloom Forecasts in North Atlantic and Gulf of Mexico Help Communities Prevent\nShellfish Poisonings\n\nThe Gulf of Maine Toxicity project issued an advisory for an unusually large bloom of toxic alga Alexandrium to recreational shellfish\nharvesters via NOAA weather radio warnings. These toxins can cause paralytic shellfish poisoning in people. In 2008, bed closures from\nMaine to Martha\xe2\x80\x99s Vineyard caused an estimated $50 million in losses to the Massachusetts shellfish industry alone. Effective monitoring\nby state agencies succeeded in no illnesses from legally harvested shellfish in recent years. In the Western Gulf of Mexico, bloom of\nDinophysis (a toxic algal species) caused the Texas Department of State Health Services to temporarily close areas to shellfish harvesting\nto prevent severe gastric distress in people who eat affected shellfish based on the National Centers for Coastal Ocean Science harmful\nalgal bloom forecast. The harmful algal bloom forecast also provides advance warnings for Karenia brevis, a more common toxic species\nin the Gulf known for its distinctive red blooms that have plagued Texas for many years.\n\n\n Summary of Performance\n\n\nThe measures below provide an indication of how well the Department is doing in achieving this NOAA objective.\n\n\n Performance Measure (NOAA) Target Actual Status\n Fish stock sustainability index (FSSI) 580 582.5 Met\n\n Percentage of living marine resources with adequate population\n 34.3% 34.7% Met\n assessments and forecasts\n Number of protected species designated as threatened,\n endangered, or depleted with stable or increasing population 25 29 Met\n levels\n Number of habitat acres restored (annual/cumulative) 8,875/67,849 6,907/65,881 Not Met\n\n Annual number of coastal, marine, and Great Lakes ecological\n 50 48 Slightly Below\n characterizations that meet management needs\n Cumulative number of coastal, marine, and Great Lakes\n issue-based forecasting capabilities developed and used for 42 42 Met\n management\n Percentage of tools, technologies, and information services that\n are used by NOAA partners/customers to improve ecosystem- 86% 88% Met\n based management\n Annual number of coastal, marine, and Great Lakes habitat acres\n 2,000 2,0001 Met\n acquired or designated for long-term protection\n 1\t Estimate.\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNOAA met six of its eight targets in FY 2010. It did not meet the target for the \xe2\x80\x9cNumber of habitat acres restored,\xe2\x80\x9d and was slightly below\nthe target for \xe2\x80\x9cAnnual number of coastal, marine, and Great Lakes ecological characterizations that meet management needs.\xe2\x80\x9d\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 133\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Number of habitat acres restored\n The acres break down as follows: 5,083 from the base program and 1,824 with ARRA funds. The targets\n Explanation\n were 7,000 from the base program and 1,875 with ARRA funds, so both targets were missed.\n Action No additional action taken.\n Measure Annual number of coastal, marine, and Great Lakes ecological characterizations that meet\n management needs\n Due to shipboard problems (replacement of Z-drive on NOAA Ship RONALD H. BROWN), NOAA\n Explanation\n moved the Gulf of Mexico Lophelia project to the first quarter of FY 2011.\n Action NOAA anticipates that it will complete the characterizations not done in FY 2010 in FY 2011.\n\n\n\nHis t o r i c a l T r e n d s\n\nNOAA has consistently met the targets for the measures within this objective. The results for \xe2\x80\x9cNumber of habitat acres restored\xe2\x80\x9d is\nunusual in that for the seven years prior to FY 2010, NOAA has met or exceeded its targets.\n\n\n\n\n 134 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n S TRATEG I C OBJECT I VE 3 . 2\n\nAdvance understanding of climate variability and change\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aS \xe2\x80\x8a\n ociety exists in a highly variable climate system, with con-\n ditions changing over the span of seasons, years, decades,\n and centuries. Given such stresses as population growth,\ndrought, and increasing demand for freshwater, it is essential for\nNOAA to provide reliable observations, forecasts, and assessments\nof climate, water, and ecosystems to enhance decisionmakers\xe2\x80\x99 abil-\nity to minimize climate risks. This information supports decisions\nregarding community planning, business management, and natural\nresource and water planning.\n\nIn FY 2010, NOAA continued its efforts to obtain the best science\nthrough the U.S. Global Change Research Program (USGCRP,\nformerly the Climate Change Science Program) and NOAA Climate\nProgram. NOAA accomplished this through its continuing role as\nlead agency of the interagency USGCRP. In addition, NOAA increased\nthe production of climate information and services for decisions,\nincluding completion of the USGCRP Synthesis and Assessment\nReports, and implementation of the National Integrated Drought\nInformation System (NIDIS).\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 135\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nAchievements\n\nThe 2009 State of the Climate Report\n\nOn July 28, 2010, NOAA\xe2\x80\x99s National Climatic Data Center issued the State of the Climate in 2009 report. The report is a result of the\ncontributions of more than 300 scientists from 160 research groups in 48 countries. This climate report is unique in that it is the first\ncomprehensive report of observations from the upper atmosphere to the depths of the ocean. Data was collected from diverse sources,\nincluding satellites, weather balloons, weather stations, ships, buoys, and field surveys. The report emphasizes that human society has\ndeveloped for thousands of years under one climatic state, and now a new set of climatic conditions are taking shape. These conditions are\nconsistently warmer, and some areas are likely to see more extreme events like severe drought, torrential rain, and violent storms. Based on\ncomprehensive data from multiple sources, the report defines 10 measurable planet-wide features used to gauge global temperature\nchanges. The relative movement of each of these 10 key climate indicators proves consistent with a warming world. Seven indicators are\nrising: humidity, sea level, ocean heat, sea-surface temperature, air temperature over land, air temperature over oceans, and tropospheric\ntemperature in the \xe2\x80\x9cactive-weather\xe2\x80\x9d layer of the atmosphere closest to Earth\xe2\x80\x99s surface. Three indicators are declining: glaciers, arctic\nsea ice, and spring snow cover in the Northern hemisphere. National Climatic Data Center\xe2\x80\x99s State of the Climate is published as a special\nsupplement to the Bulletin of the American Meteorological Society. To help keep citizens and businesses informed about climate, NOAA\ncreated the Climate Portal at http://www.climate.gov. The portal features a short video that summarizes some of the highlights of the State\nof the Climate report.\n\nAmerica\xe2\x80\x99s Climate Choices\n\nNOAA supported a major national study by the National Academy of Science called \xe2\x80\x9cAmerica\xe2\x80\x99s Climate Choices,\xe2\x80\x9d the most comprehensive\nstudy by the Academy of climate change to date. As part of this study, the National Research Council issued three reports in May 2010, and\nthen a fourth report in July. The reports found that climate change is occurring, is caused largely by human activities, and poses significant\nrisks for a broad range of human and natural systems. The reports also emphasize why the United States should develop a national strategy\nto adapt to the impacts of climate change. A final overarching report, which will be released later this year, will build on each of the previous\nreports to offer a scientific framework for shaping the policy choices underlying the Nation\xe2\x80\x99s efforts to confront climate change.\n\nNOAA Study Finds Warming Upper Ocean\n\nOn May 20, 2010, scientists from NOAA\xe2\x80\x99s Pacific Marine Environmental Laboratory, the Joint Institute for Marine and Atmospheric Research\nat the University of Hawaii, NASA, and international partners published a study in Nature on upper ocean heat content. The study found\nthat there has been significant warming of the upper layer of the ocean over the past 15 years and that the ocean is now storing more heat\nthan it is giving off. Warming oceans are a direct cause of global sea level rise, since seawater expands as it gets warmer. The scientists say\nthat this expansion accounts for about one-third to one-half of global sea level rise.\n\nNOAA Study Suggests Increase in Category 4 and 5 Hurricanes this Century\n\nOn January 22, 2010, Science published the results of a new hurricane study from NOAA\xe2\x80\x99s Geophysical Fluid Dynamics Laboratory. The team\nof scientists used a unique downscaling approach to model hurricane activity through the end of this century, and their results produced\nnearly a doubling of the frequency of category 4 and 5 storms. Most climate models are incapable of reproducing storms of category\n3 or higher, so the scientists used a two-step approach to modeling hurricane activity, employing an ensemble of 18 climate models, then\ndownscaling those results using the laboratory\xe2\x80\x99s operational hurricane model.\n\n\n\n\n 136 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nNOAA Releases Expanded World Ocean Database\n\nIn November 2009, NOAA released the World Ocean Database 2009, the largest, most comprehensive collection of scientific information\nabout the oceans with records dating as far back as 1800. The 2009 database, an updated version of the 2005 edition, provides approximately\n9.1 million temperature profiles and 3.5 million salinity reports. It also captures 29 categories of scientific information from the oceans,\nincluding oxygen levels and chemical tracers. It also includes information on gases and isotopes that can be used to trace the movement\nof ocean currents. Climate scientists use the World Ocean Database to track changing conditions, which adds to the international\nscience community\xe2\x80\x99s understanding of global climate change. Forecast centers, such as NOAA\xe2\x80\x99s Ocean Prediction Center, also use the\ninformation for quality control of real-time oceanographic information. The database is a crucial part of the Integrated Ocean Observing\nSystem (IOOS) and the Global Earth Observation System of Systems (GEOSS) in that it provides a reliable source of oceanic information.\nThe information was compiled by scientists at National Oceanographic Data Center\xe2\x80\x99s Ocean Climate Laboratory, part of the NOAA Satellite\nand Information Service.\n\nCommerce Secretary Gary Locke and NOAA Administrator Jane Lubchenco Unveil\nLandmark Climate.gov Portal\n\nOn February 8, 2010, NOAA unveiled a new Web site, www.climate.gov, which serves as a single point of entry for NOAA\xe2\x80\x99s climate information,\ndata, products, and services. The site is in response to growing user demand for useful climate information and will continue to develop\nbased on user demand, comments, and feedback as it expands into a fully operational resource over the course of this year. One feature is the\nnew Web-based climate science magazine, ClimateWatch, featuring videos, images, and articles of scientists in their own words, discussing\ntheir recent work in the field. Known as the NOAA Climate Services Portal, the site addresses the needs of four key audiences: educators,\ndecisionmakers and policy leaders, scientists and applications-oriented data users, and business users and the public.\n\nCalNex 2010 Campaign on Emissions and Climate Processes\n\nNOAA led a three-month joint field study with the California Air Resources Board and the California Energy Commission and other partners\nto investigate atmospheric emissions and processes over California and the eastern Pacific coastal region. The study answered questions\nabout emissions, chemical transformations, climate processes, transport, and meteorology. Participants included NOAA\xe2\x80\x99s Earth System\nResearch Laboratory\xe2\x80\x99s Chemical Sciences Division, Pacific Marine Environmental Laboratory, Air Resources Laboratory, Climate Program\nOffice, and the Cooperative Institute for Research in Environmental Sciences. The goal of this study was to provide scientific information\nregarding the synergies and trade-offs faced by decisionmakers when addressing the interrelated issues of air quality and climate change.\nIn addition, the P3 aircraft science team interrupted the California study for a week to provide much needed information about air chemistry\nin the Gulf of Mexico to examine the effects of the Deepwater Horizon oil spill.\n\nRegionally Integrated Science and Assessment Teams Expand\n\nNOAA\xe2\x80\x99s Climate Program Office has nearly doubled funding for Regionally Integrated Science and Assessment (RISA) teams and expanded\nthe network by nearly 20 percent since 2009. RISAs are expected to play a critical role in both climate science and service development by\nproviding integrated assessment in 11 different regions of the United States and the National Climate Assessment identifying vulnerabilities,\nneeds, and capabilities of users. RISAs are regional \xe2\x80\x9ccenters of excellence\xe2\x80\x9d that work with users (policymakers, resource managers, communities,\netc) to co-develop climate science and services. Aside from being user-driven, other critical elements of the RISAs over the past 15 years are\nsustained regionally-based interactions, interdisciplinary assessment and science (not just climate science), ongoing climate literacy efforts,\na focus on both climate variability and climate change, and interagency partnerships that leverage different capabilities and resources.\nIn future years, the sustained regional capacity of RISAs can help NOAA address the Nation\xe2\x80\x99s priorities for climate service and adaptation.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 137\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nNOAA Scientists Support National Geographic\xe2\x80\x99s The JASON Project\n\nNOAA scientists are working on National Geographic\xe2\x80\x99s The JASON Project on a new climate mission for teachers and students focused on\nobserving the ocean to understand climate. Two NOAA scientists served as NOAA host researchers and worked side by side with JASON\nstudents. NOAA will develop an entire climate curriculum to focus solely on climate which will be available for teachers around the world\nto use. This program will challenge students and the public to apply their knowledge to the real-world scenarios scientists face every day\nso that they can make wise choices that will benefit society. For more information, visit www.jason.org. The JASON Project Climate Mission\nin the Channel Islands allowed student and teacher \xe2\x80\x9cArgonauts\xe2\x80\x9d to deploy drifting buoys and an autonomous underwater vehicle to study\nocean temperature and circulation.\n\n\n Summary of Performance\n\n\nThe measures below provide an indication of how well the Department is doing in achieving this NOAA objective.\n\n\n Performance Measure (NOAA) Target Actual Status\n U.S. temperature forecasts (cumulative skill score computed\n 24 18 Not Met\n over the regions where predictions are made)\n Uncertainty in the magnitude of the North American carbon\n 0.40 GtC/year 0.45 GtC/year 1 Not Met\n uptake\n Uncertainty in model simulations of the influence of\n 15% improvement 18% improvement Met\n aerosols on climate\n Error in global measurement of sea surface temperature 0.53\xc2\xbaC 0.50\xc2\xbaC Met\n\n Regionally focused climate impacts and adaptation studies 41 assessments/ 41 assessments/\n Met\n communicated to decisionmakers evaluations evaluations\n 1\t Estimate.\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNOAA met three of its five targets in FY 2010. It did not meet the target for the \xe2\x80\x9cU.S. temperature forecasts\xe2\x80\x9d and \xe2\x80\x9cUncertainty in the\nmagnitude of the North American carbon uptake.\xe2\x80\x9d\n\n\n\n\n 138 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure U.S. temperature forecasts\n Four years ago, the Climate Prediction Center scores were excellent because that year was one where\n the observed temperatures matched the long-term trends quite well\xe2\x80\x94those scores are now dropping out\n of the 48-month running mean (MRM). FY 2006 averaged 47 (well above the targets) as strong trends\n Explanation played a role in very high scores. In contrast, FY 2010 averaged around an 8, as NOAA experienced\n record-breaking negative values of the Arctic Oscillation during the first half of the year, which resulted in\n much colder temperatures over the United States than NOAA forecasted. This has resulted in the 48 MRM\n decreasing from around 27 at the beginning of the fiscal year to about 18.\n In FY 2008, the planned upgrade to the Coupled Forecast System (CFS) was expected to improve\n forecasts. But implementation was delayed because of delays in completing a re-analysis and re-forecast.\n Action The implementation of the upgraded CFS will now take place in FY 2011. As anticipated, scores have\n slipped recently, as the delay in implementing the next version of the CFS has resulted in the Climate\n Prediction Center not having access to a more skillful forecast model.\n Measure Uncertainty in the magnitude of the North American carbon uptake.\n The target was missed by only 2.5 percent in a purely statistic evaluation. Results for this measure are\n calculated on an annual basis. Improvement of the Carbon Observation and Analysis System has been\n stalled over the past few years due to a delay in the installation of additional tall towers and aircraft sites\n that monitor CO2 that would reduce the uncertainty. These improvements are started in the FY 2011\n President\xe2\x80\x99s Budget. With respect to the calculations of scientific uncertainty, to be off by 50 million tons\n Explanation\n (2.5 percent of the total flux of carbon) between two uncertainty values (400 versus 450) when viewed\n from the big picture is small with both values yielding success in improving the model and providing\n the necessary information to society and decisionmakers. With the uncertainties at play, the 50 million\n difference is difficult to validate as statistically significant when compared to the total flux of 1,210 million\n of carbon.\n Going forward, NOAA will report all uncertainties to two digits which can be done using planned\n model improvements and expanded observational datasets that will be provided as the network is built\n out. As these improvements are added, the accuracy of measuring the North American carbon sink and\n Action evaluation and quantification of the uncertainty value will improve.\n\n Despite these challenges, the program has successfully reduced uncertainty over the longer term through\n the continuation of base monitoring and minor enhancements of climate models. The program projects\n further improvements in confidence in the future as anticipated resources increase.\n\n\n\nHis t o r i c a l T r e n d s\n\nNOAA has consistently met the targets for three of the measures in this objective since FY 2006, the year they were introduced. For\nthe last four years, NOAA has exceeded the target for U.S. temperature forecasts, the reason as noted above. For the North American\ncarbon uptake measure has consistently missed the target though in each year has been quite close to the target as noted in the\nexplanation above.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 139\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n S TRATEG I C OBJECT I VE 3 . 3\n\nProvide accurate and timely weather and water information\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aW \xe2\x80\x8a\n eather affects all facets of society, impacting\n the economy in ways ranging from agricultural\n preparation to transportation planning to disaster\nresponse. In certain situations, weather forecasting can affect\nthe number of lives saved or lost as well as mitigate the extent\nof property damage as a result of weather events. Weather also\naffects how power companies plan for daily, weekly, and seasonal\nvariances. Because of this, Americans benefit from sound weather\nforecasting both in their daily lives and planning, and in preparation\nfor major storm events.\n\nThe Department\xe2\x80\x99s role in understanding, observing, forecasting,\nand warning of weather events is expanding. The Department is\nconducting sound, scientific research and providing integrated\nobservations, predictions, and advice for decisionmakers who\nmanage environmental resources, ranging from fresh water supplies\nto coastal ecosystems to air quality.\n\nRealizing that the Department\xe2\x80\x99s information and services bridge both weather and climate timescales, the Department will continue to\ncollect and analyze environmental data and issue forecasts and warnings that help protect life and property and enhance the U.S. economy.\nThe Department is committed to excellent customer service and depends on its partners in the private sector, academia, and government to\nadd value and help disseminate critical weather and climate information. The Department will expand services to support evolving national\nneeds, including those associated with space weather, freshwater and coastal ecosystems, and air quality prediction.\n\n\n\n\n 140 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nAchievements\n\nNOAA\xe2\x80\x99s National Weather Service Provides Early Warnings for Historic 2010 Mid-Atlantic\n\xe2\x80\x9cSnowmageddon\xe2\x80\x9d Snowstorms\n\nDuring a five-day period in early February 2010, two snowstorms of historic proportions struck the Mid-Atlantic region. The first\nstorm hit February 5-6 and produced record crippling snowfalls in excess of 20 inches at two of the Washington, DC area airports\n(Baltimore-Washington International and Washington Dulles International). It was the second all time snowfall record at Philadelphia,\nPA (Philadelphia International) airport and fourth at the Pittsburgh, PA airport (Pittsburgh International). NOAA\xe2\x80\x99s National Weather\nService (NWS) issued accurate outlooks for the storms three days in advance with an unprecedented forecast of 20 to 30 inches before\nthe first flakes were observed. NOAA forecast the average winter storm watch lead time to be 42 hours, which provided local emergency\nmanagers almost two days of preparation time. NOAA issued winter storm warnings an average of 30 hours ahead of the first flakes\xe2\x80\x94\nagain, nearly double its national goal (16 hours) for winter storms. Three days later, a second blizzard struck the same region with an\nadditional foot and a half to three feet of snow, which brought the total snow accumulation on the ground to three to five feet in places.\nNOAA accurately foretold this second storm four days in advance, with an average winter storm watch lead time of 47 hours and an\naverage winter storm warning lead time of 32 hours. NOAA\xe2\x80\x99s Weather Forecast Office (WFO) staff provided heroic service during the\nconsecutive, extreme events even as the back-to-back events brought the region to a complete stop as governments, schools, businesses,\nroads, and airlines shut down.\n\nNWS Prepares Public and Partners for El Ni\xc3\xb1o\n\nIn 2009 and 2010, NWS launched an aggressive geographically targeted public information campaign to prepare the public and\ncommunities to deal with the wintertime effects expected from a developing El Ni\xc3\xb1o. El Ni\xc3\xb1o impacts the weather and climate and, in\nturn, affects local precipitation amounts (too much and too little), increases number of tornadoes, and can affect such areas as agriculture\nand recreation. NWS held about 40 public outreach activities dubbed \xe2\x80\x9cEl Ni\xc3\xb1o Road Show\xe2\x80\x9d for the media and NWS partners in Texas,\nCalifornia, Washington, District of Columbia, North Carolina, Florida, Arizona, Hawaii, Guam, and other Pacific islands. Experts from the\nClimate Prediction Center and Pacific ENSO (El Ni\xc3\xb1o-Southern Oscillation) Application Climate Center joined local NWS WFO staff in\nproviding in-person briefings and media interviews with state partners. News media, representatives from the governors\xe2\x80\x99 offices, and\nemergency management officials were invited to the briefings. Media coverage was strong with dozens of news clips resulting. Each road\nshow event focused on the specific impact on the visited region. For example, in Florida, NOAA focused the presentation on how El Ni\xc3\xb1o\nwould impact the area noting that the state\xe2\x80\x99s manufactured home parks and campgrounds were at higher risk due to high density and\nhigh winter occupation rates. The briefings included assistance in making family tornado plans. In the Northeast, ski lodge owners could\nprepare for the possibility of less natural snow for skiing and NOAA made retail businesses aware that fewer winter consumer goods, such\nas heavy clothing and plows, might be needed. This customization helped people prepare productively for the winter El Ni\xc3\xb1o. Although\nnot all losses could be avoided, outreach allowed individuals, industries, and public officials to take timely actions based on the forecast\nto mitigate and reduce losses or to capitalize on the information to improve economic outcomes.\n\nNOAA\xe2\x80\x99s Provides Decision Support for the Deepwater Horizon Oil Spill\n\nWithin hours of the explosion of the Deepwater Horizon the NWS Southern Region Operations Center (ROC) began coordinating decision\nsupport services for emergency response entities and personnel responding to conduct containment and recovery operations. The Southern\nRegion ROC and 10 Southern Region WFOs along the Gulf Coast provided Deepwater Horizon decision support. By early July, a total\nof 13 NWS meteorologists were deployed to the Deepwater Horizon area of operations. Southern Region Headquarters personnel have\nscheduled approximately 60 meteorologists from 32 different WFOs to deploy to the Deepwater Horizon theater, with the anticipation\nthat an additional 40 will need to be identified to fulfill Deepwater Horizon operational requirements adequately through November\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 141\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n2010. Onsite, NWS emergency response meteorologists provided 24x7 decision support to the U.S. Coast Guard, BP command, and\nresponse staffs at the Houma, LA and Mobile, AL, Incident Command Centers. NWS also provided record spot, wind, and wave; special\naviation; long range; and hurricane forecasts. NOAA provided additional dedicated decision support shifts at WFOs in New Orleans and\nMobile. One NWS incident meteorologist remains deployed to the BP Forward Operating Base in Venice, LA to provide detailed decision\nsupport to company response teams. WFOs elsewhere along the Gulf Coast are providing regular briefings to local, state, and federal\ndecisionmakers in their areas, participating in oil spill response planning efforts, and maintaining strong situational awareness of spill\ntrajectories and impacts. The Lower Mississippi and West Gulf River Forecast Centers (RFC) continue to provide guidance to the oil spill\ntrajectory models.\n\nNWS Deploys New River Forecasting System Community Hydrologic Prediction System to NWS RFCs\n\nIn February 2010, NWS deployed the Community Hydrologic Prediction System (CHPS) to the nine remaining of the 13 risk-reduction\nRFCs in preparation for pre-operational use at all locations by December 2010. CHPS replaces the aging NWS river forecast modeling\nsoftware system with a new system based on modern software architecture principles, which will provide RFCs with the necessary tools\nto expand and enhance existing water forecasting services. The project plan calls for all 13 RFCs to be operational on CHPS by end of\nFY 2011.\n\nOperational forecasting benefits of CHPS were demonstrated by the Northeast RFC for the March 29-31, 2010, flooding in Rhode Island.\nCHPS graphical displays allowed forecasters to generate one, two, five and 30-day precipitation forecast totals across the service area.\nThis information provided forecasters with added confidence to provide the record river-level forecast watches and warnings before the\nevent. Furthermore, the graphics were used in pre and post-event coordination briefings.\n\nNWS Provides Key Integrated Decision Support Services for Spring 2010 Red River Flooding\n\nA year after record flooding swamped many locations in the basin of the Red River of the North, conditions once again became favorable\nfor another round of potential record flooding. In early November 2009, according to the U.S. Geological Survey, the flow of the Red River\nat Fargo was at its highest level ever recorded for the month of November. Key decisionmakers became concerned about the potential for\na repeat of flooding in 2010 similar to that of 2009 since conditions \xe2\x80\x9cproduced an imminent risk of major flooding along the Red River of\nthe North.\xe2\x80\x9d NWS offices in the Central Region responded to this evolving threat as early as December 2009, with a closely coordinated\neffort using a multi-tier approach to provide Integrated Decision Support Services to a multitude of customers. ROC focused on providing\nvideo teleconference and telephone briefings to personnel at Federal Emergency Management Agency (FEMA) Regions V, VII, and VIII.\nROC also coordinated the overall decision support mission for the state and local levels. Two RFCs (North Central and Missouri Basin)\ncollaborated closely with the U.S. Coast Guard and the U.S Army Corps of Engineers with respect to their modeling efforts. Five local\nWFOs provided staffing to the state Emergency Operations Centers in North Dakota, South Dakota, and Minnesota, and the local WFO\nin Grand Forks provided personnel to the cities of Fargo and Moorhead to address decision support needs specifically at this high impact\nlocation. Senators from both North Dakota and Minnesota visited the Fargo/Moorhead area and had the opportunity for face-to-face\nbriefings from WFO Grand Forks Meteorologist-In-Charge Mark Frazier. Focused Integrated Decision Support Services yielded many\npositive results within the Red River Valley, including FEMA approval of a disaster declaration for North Dakota prior to the actual onset\nof flooding along the Red River.\n\nNWS Upgrades Global Forecast System Modeling\n\nOn July 28, 2010, NWS implemented sweeping changes that will improve the National Centers for Environmental Prediction (NCEP)\nGlobal Forecast System (GFS). These new improvements are the culmination of three years of development, evaluation and testing by\nNCEP\xe2\x80\x99s Environmental Modeling Center\xe2\x80\x99s Global Modeling Branch and Physics Team. NOAA expects the changes to improve accuracy\n\n\n\n\n 142 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nof a wide range of weather forecasts, including hurricane intensity forecasts. The Gridpoint Statistical Interpolation analysis changes\ninclude assimilating tropical storm pseudo sea-level pressure observations for improved hurricane forecasts, adding NOAA-19 HIRS/4 and\nAMSU-A brightness temperature observations and European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT-9)\natmospheric motion vectors, and improving the assimilation of global positioning system (GPS) radio occultation data. The new version\nsignificantly enhances GFS forecasts of hurricane track and intensity. In the eastern Pacific, when NOAA reran the 2008 and 2009\nhurricane seasons, NOAA observed an improvement of 50 percent in both track and intensity in GFS forecasts at day 5. In the Atlantic,\nNOAA observed a 10 percent improvement in the five-day track forecast and a 30 percent improvement in intensity at day 5 in GFS\nforecasts over the same time period. NOAA also made improvements to the model\xe2\x80\x99s ability to represent physical atmospheric processes.\nThese improvements include an upgraded radiation and cloud package, upgraded specification of gravity wave drag, a higher resolution\ngrid for hurricane relocation, an upgraded boundary layer scheme, the use of a higher resolution snow analysis, a new mass flux shallow\nconvection scheme, and an updated deep convection scheme. Changes to the convection and radiation improve the realism of cloud\nprocesses in the new system. Another major change is an increase in the model\xe2\x80\x99s horizontal resolution from approximately 35 km to 27\nkm. The result of this set of changes is improvement in the overall accuracy of the model\xe2\x80\x99s forecasts.\n\nNWS Developed 4-D Weather Data Cube for Next Generation Air Transportation System\n\nThe FY 2010 Capability Evaluation for the NOAA next generation 4-D Weather Data Cube (Cube) represents a major move forward in\ndeveloping improved weather capabilities for a safer, more efficient and effective air transportation system. NOAA has scheduled the\nevaluation for the end of September 2010 and will conduct it in conjunction with the Federal Aviation Administration\xe2\x80\x99s (FAA) William J.\nHughes Technical Center in Atlantic City, NJ. To date, the telecommunications hardware is installed and under testing. The evaluation\nwill build on the previous years\xe2\x80\x99 successes; providing lessons learned before NWS goes into acquisition to build the Cube capabilities.\n\nFor this demonstration, NWS provided Web-enabled data from a suite of products through a single point of reference to the FAA next\ngeneration Network Enabled Weather processor. Using Web-enabled capabilities will allow the data to reach FAA in a timelier manner\nand will allow for a single point of access rather than scattered sources and eventually facilitate verification of the integrity of delivery.\nThis event will also show how the Cube will function, allowing the users to maximize the proposed system\xe2\x80\x99s potential. The evaluators\nwill see the progress made toward achieving an Initial Operating Capability of the Cube at the end of FY 2013. Evaluators will use and\nevaluate the architecture that more closely resembles the proposed architecture intended to be acquired next fiscal year. They will gain\nexperience as to the system behavior and characteristics, allowing for lessons learned in the stand-up of operational processes and best\nmethods for security implementations.\n\nNWS Implements New National Architecture for Level II Radar Distribution\n\nOn July 7, 2010, the NWS Telecommunication Gateway (NWSTG) and the Radar Operations Center completed the transition of all radars\nfrom the previous four regional data collection and distribution concept, to a national central collection and distribution concept at the\nNWSTG. The former regional communications architecture for collection and dissemination of the NEXRAD Level II data did not meet the\nneeds of customers due to occasional extended regional outages. The new architecture allows centralized 24/7 monitoring and support\nneeded to eliminate the regional single points of failure. To address even larger outages to the user community, the NWSTG server was\nupgraded to include on-site backup, as well as a geographically separate secondary system to ensure continuity of operations.\n\nReliable Level II data is essential for commercial weather providers that use Level II data as a key dataset for building value-added\nproducts for commercial and public dissemination. These products include most of the radar graphics used for television broadcasts\nwarning the public to take protective actions during severe weather. NWS has several severe weather warning goals. These warning\noperations are supported by the numerical model outputs. The Level II data are used as input into the models; therefore, reliable\ncollection and dissemination of Level II data may indirectly contribute to improving model performance.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 143\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n Summary of Performance\n\n\nThe measures below provide an indication of how well the Department is doing in achieving this NOAA objective.\n\n\n Performance Measure (NOAA) Target Actual Status\n Percentage of U.S. coastal states and territories demonstrating\n 20% or more annual improvement in resilience capacity to 29% 29% Met\n weather and climate hazards (%/year)\n Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93\n 12 141 Met\n Lead time (minutes)\n Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93\n 70% 74%1 Met\n Accuracy (%)\n Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93\n 72% 74%1 Slightly Below\n False alarm rate (%)\n Severe weather warnings for flash floods (storm-based) \xe2\x80\x93 Lead\n 38 76 Exceeded\n time (minutes)\n Severe weather warnings for flash floods (storm-based) \xe2\x80\x93\n 72% 82% Met\n Accuracy (%)\n Hurricane forecast track error (48 hours) (nautical miles) 107 702 Exceeded\n\n Hurricane forecast intensity error (48 hours) (difference in knots) 13 182 Not Met\n Accuracy (%) (threat score) of day 1 precipitation forecasts 30% 35% Met\n\n Winter storm warnings \xe2\x80\x93 Lead time (hours) 15 21 Exceeded\n\n Winter storm warnings \xe2\x80\x93 Accuracy (%) 90% 90% Met\n 1\t Estimate.\n 2\t Reflects FY 2009 target and actual results. FY 2010 results not available until February 2011.\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNOAA met nine of its 11 targets in FY 2010. It was slightly below the target for \xe2\x80\x9cFalse alarm rate for tornados,\xe2\x80\x9d and did not meet the\ntarget for the \xe2\x80\x9cHurricane forecast intensity error.\xe2\x80\x9d\n\n\n\n\n 144 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure False alarm rate for tornados\n Tornado false alarm rate (FAR) missed the target by 2 percent. Storm-based tornado measures have a 75-day\n lag time. The 2010 convective season produced a near-average number of tornadoes, with more frequent\n Explanation\n tornado outbreaks than observed during the 2009 season. The FAR is typical of performance observed over\n the past decade. Forecasters tend to overwarn throughout the fiscal year for public safety.\n The performance goal was set at an approximate target level, and the deviation from that level is slight.\n Action\n There was no effect on overall program or activity performance. No additional action taken at this time.\n Measure Hurricane forecast intensity error\n The 48 hour Atlantic hurricane intensity error was 18 knots for the 2009 hurricane season, missing the 2009\n goal of 13 knots by 5 kts. Failure to reach the 2009 GPRA goal can be attributed in part to a higher level\n of difficulty in forecasting intensity in 2009 (as measured by a climatology and persistence skill baseline).\n Explanation\n In addition, the GPRA goals were set in 2008 assuming that modeling advances would immediately lead\n to intensity forecast improvements, even though hurricane intensity forecasts have shown essentially no\n improvement over the past 20 years.\n NOAA\xe2\x80\x99s Hurricane Forecast Improvement Program (HFIP), one of whose main goals is to reduce hurricane\n intensity errors significantly over the next 10 years, was first funded in 2009. It will take several years for\n Action HFIP research and development to be conducted successfully and then additional time for results of the HFIP\n research to be fully integrated into operations. Until then, annual official intensity errors will tend to rise and\n fall with forecast difficulty.\n\n\n\nHis t o r i c a l T r e n d s\n\nRegarding this objective, NOAA has consistently met their forecast targets with the exception of the FAR for tornados. However, as noted\nabove, forecasters tend to overwarn in the occurrence of tornados in the interest of public safety.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 145\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n S TRATEG I C OBJECT I VE 3 . 4\n\nSupport safe, efficient, and environmentally sound commercial navigation\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aU \xe2\x80\x8a\n .S. transportation systems are economic lifelines\n for the Nation. For both air transportation safety\n and efficiency, it is essential to have accurate wind\nforecasts. Likewise, the shipping industry depends on accurate\nnautical charts when transporting goods in and out of U.S. ports.\nAs U.S. dependence on surface and air transportation grows over\nthe next 20 years, and as maritime trade doubles, better navigation\nand weather information provided by NOAA will be critical to\nprotect lives, cargo, and the environment. For example, better\naviation weather information could significantly reduce the $4\nbillion lost through economic inefficiencies as a result of weather-\nrelated air traffic delays. Improved surface forecasts and specific\nuser warnings would likely reduce the 7,000 weather-related\nfatalities and 800,000 injuries annually from vehicle crashes.\n\n\n\nAchievements\n\nNOAA\xe2\x80\x99s Expertise and Experience Proved Indispensable for Response to the BP\nDeepwater Horizon Oil Spill Disaster and Mitigation of Impacts\n\nAs the leading U.S. scientific resource for oil spills, NOAA\xe2\x80\x99s Office of Response and Restoration (OR&R) responded within hours of the Gulf\nof Mexico BP Deepwater Horizon oil spill to support U.S. Coast Guard and Unified Command with 24-hour risk and trajectory assessments,\nreports of chemical changes from the oil, recommended cleanup methods using over-flights to verify model trajectories, and accurate models\nof past spills. NOAA\xe2\x80\x99s Shoreline Cleanup and Assessment Technique (SCAT) planners, aerial observers, and 15 field teams worked with BP\n\n\n\n 146 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nand state teams. NOAA-wide Damage Assessment, Remediation, and Restoration Program experts worked with partners to protect and\nrestore threatened coastlines, assessing injuries to natural resources and damages, as well as trying to minimize harm to natural resources to\naccelerate recovery of coastal communities (potentially vulnerable fish, shellfish, bottom dwelling biota, birds, marine mammals and turtles in\nwetlands, submerged aquatic vegetation, beaches, mudflats, and deep and shallow corals). For more than three months, 40 teams conducted\ndaily ramp and shore fishing counts and economic studies to ensure accurate compensation for lost use of resources. A Web-based situation\nawareness tool called ERMA (Environmental Response Management Application), with a public version called GeoPlatform.gov/gulfresponse,\nprovided integrated data management for response and natural resource damage assessment across multiple states on NOAA\xe2\x80\x99s response\n(fishery closures, wildlife data, oiled shoreline, and deployed research ships). Deepwater Horizon was the first oil spill where Integrated Ocean\nObserving System (IOOS) and partners used underwater, unmanned gliders and coastal high frequency radar stations to daily track oil flows\nin the water column and on the surface. At relatively low cost and no risk to human life, IOOS measured surface current speed and direction\nin near real time in trajectory models that OR&R provided to coastal communities to prepare for impacts of oil coming ashore. The Office\nof Coast Survey produced nautical charts that displayed oil spill zone forecasts based on OR&R spill projections to help vessels avoid spill\nareas. The Center for Operational Oceanographic Products and Services (CO-OPS) modified existing products to display real-time data and\npredictions in the Gulf of Mexico including hurricane-based, NOAA Storm QuickLook, to include an OR&R spill graphic and detailed view\nof CO-OPS water levels and meteorological data in potentially affected areas. CO-OPS displayed Physical Oceanographic Real-Time System\n(PORTS\xc2\xae) data from Gulfport, Pascagoula, and Mobile Bay PORTS\xc2\xae and used MyPORTS, a customizable PORTS\xc2\xae application, to show ocean\ncurrent speeds and directions and weather observations in the spill region. A high-resolution northern Gulf of Mexico hydrodynamic model\nsystem produced three-day forecasts of water levels and three-dimensional currents from the Florida Panhandle to the Rio Grande River.\nNOAA\xe2\x80\x99s Office of Coast Survey product called NowCOAST, a map-based online gateway to ocean and weather observations and forecasts,\ndisplayed real-time observations on interactive maps accessible from a smart phone or background maps like Google\xc2\xae Maps. NowCOAST use\nspiked from two million hits a month in January to more than eight million during response to the BP Deepwater Horizon oil spill.\n\nNOAA addressed other major spills and improved disaster preparedness for the Gulf and the Arctic regions. At least 424,000 gallons of crude\noil spilled from an 807-foot tank ship near Port Arthur, TX, where OR&R assessed oil movement and impacts, provided weather forecasts\nand cleanup plans, and aided assessment of natural resource damages, economic impacts, and restoration. CO-OPS provided real-time data\nfrom a new Sabine-Neches PORTS\xc2\xae station to OR&R for tide prediction to enable limited opening of the waterway to prevent roughly $5\nmillion in economic losses from restricted entry by barges and deep draft vessels. For future disaster preparedness, response, and recovery\nfrom Brownsville, TX to Key West, FL, NOAA started construction of the Gulf of Mexico Disaster Response Center in Mobile, AL, a facillity that\ncan withstand a major hurricane. The Office of Coast Survey conducted hydrographic surveys off the coasts of Alabama and Mississippi for\nbathymetry data for a new northern Gulf of Mexico circulation model. The Office of Coast Survey, CO-OPS, and the National Geodetic Survey\nimproved predictive capabilities in oil and hazardous material spills. These will aid forecasts for harmful algal blooms in the northern Gulf\nof Mexico and contribute to more accurate models for inundation from storm surge, tsunamis, and sea-level rise. NOAA and the Oil Spill\nRecovery Institute worked to assess data gaps to predict how increases in ship traffic and oil exploration would impact the Arctic and affect\nArctic natural resource damage assessments planning, coordination, and outreach.\n\nHydrographic Surveys Address Backlog in Continental United States, Alaska, and Arctic\n\nThe Office of Coast Survey continued addressing the survey backlog with updated hydrographic surveys of critical areas of the United States\nas NOAA ships THOMAS JEFFERSON, FAIRWEATHER, and RAINIER alongside contractors surveyed more than 3,100 square nautical miles of\nU.S. waters. In addition to reducing critical survey backlogs and surveying fairways for maritime safety, the ships mapped habitat in three\nnational marine sanctuaries and responded to numerous requests for surveys. Without the surveys, NOAA will not locate, identify, and place on\nnautical charts ocean bottom conditions that are hazardous to navigation to help mariners navigate safely and avoid accidents, spills, loss of\nlife and cargo, and damage to the environment. At the request of the U.S. Navy, U.S. Coast Guard, Alaska Maritime Pilots, and the commercial\nshipping industry, The Office of Coast Survey sent the NOAA ship FAIRWEATHER to survey 350 square nautical miles of Arctic waters around\nthe Bering Straits. Since 1960, NOAA has not mapped most of the shoreline along Alaska\xe2\x80\x99s northern and western coasts and confidence in\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 147\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nthe region\xe2\x80\x99s nautical charts is extremely low. NOAA ship FAIRWEATHER, whose homeport is Ketchikan, AK, spent July and August examining\nseafloor features, measuring ocean depths, and supplying data for updating NOAA\xe2\x80\x99s nautical charts. These data also support scientific\nresearch on essential fish habitat and establishes new tidal datums in the region. The Office of Coast Survey conducted extensive surveys in\nU.S. waters off the coast of northern Maine in response to requests for assistance from fishing communities to discover why several fishing\nvessels have gone down recently in Maine\xe2\x80\x99s Cobscook Bay. Fishing communities in the area have lost 16 men in vessel sinkings over the past\nfive years. Last year, NOAA located the wrecks of two vessels and identified other potential dangers to navigation using hydrographic data to\nupdate nautical charts. Using side-scan imaging, a NOAA Navigation Response Team searched for the wreckage of a 34-foot urchin dragger\nthat sank in late October with three fishermen on board. In a continuing effort to prevent vessel collisions with North Atlantic right whales,\nthe Office of Coast Survey conducted a hydrographic survey to help mariners avoid whale calving areas in and around Brunswick, GA, during\nthe winter months. NOAA will incorporate the survey data into nautical charts used for both commercial shipping and recreational boating.\nThe survey will cover a proposed new route for vessel traffic that will bypass the areas of highest North Atlantic right whale density during\nthe winter calving months. NOAA ultimately seeks to reduce conflicts between maritime trade and wildlife protection.\n\nNOAA Implements New and Improved Hydrodynamic Model, Creates Innovative PORTS\xc2\xae\nTechnology, and Gets a High Customer Satisfaction in CO-OPS Survey\n\nCO-OPS improved operational coastal models in the Great Lakes with new hydrodynamic models for mariners, port managers, and emergency\nresponse teams with present and future conditions of water levels, currents, temperature and salinity. The hydrodynamic \xe2\x80\x9cnowcast\xe2\x80\x9d\n(for present conditions) and \xe2\x80\x9cforecast\xe2\x80\x9d (for future conditions) products are generated by a three-dimensional hydrodynamic model that uses\nreal-time PORTS\xc2\xae data and NWS forecast products to predict this information at locations throughout the United States. Port managers\nand shippers can better determine maximum tonnage and passage times without compromising safety. On this and other products, CO-OPS\nsurveyed customer satisfaction with current products and services and gained insight for future areas of focus. CO-OPS scored 82, which was\nsignificantly higher than other federal agencies who conducted the American Customer Satisfaction Index (ACSI), scoring 68.9. Accuracy and\ntimeliness were repeatedly the highest scoring attributes of CO-OPS products and services. CO-OPS will use this data to improve how NOAA\nturns oceanographic data into meaningful information to protect life, property, and the environment.\n\n\n Summary of Performance\n\n\nThe measures below provide an indication of how well the Department is doing in achieving this NOAA objective.\n\n\n Performance Measure (NOAA) Target Actual Status\n Reduce the hydrographic survey backlog within navigationally significant areas\n 5,160 4,395 Not Met\n (square nautical miles surveyed per year)\n Percentage of U.S. counties rated as fully enabled or substantially enabled with\n 74.0% 79.0% Met\n accurate positioning capacity\n Marine wind speed accuracy (%) 69% 74% Met\n\n Marine wave height accuracy (%) 74% 75% Met\n\n Aviation forecast accuracy of ceiling/visibility (3 mile/1,000 feet or less) (%) 65% 66% Met\n\n Aviation forecast FAR for ceiling/visibility (3 mile/1,000 feet or less) (%) 42% 36% Met\n 1\t Estimate.\n\n\n\n\n 148 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nFY 2 0 1 0 S t a t u s\n\nNOAA met five of its six targets in FY 2010. It did not meet the target for \xe2\x80\x9cReduce the hydrographic survey backlog within navigationally\nsignificant areas.\xe2\x80\x9d\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Reduce the hydrographic survey backlog within navigationally significant areas (square nautical miles\n (snm) surveyed per year)\n The 4,395 snm reflects a combined total estimate for both GPRA (2,515 snm) and ARRA performance for\n FY 2009 and FY 2010 (1,880 snm). Based on best information available at the time, NOAA\xe2\x80\x99s Office of\n Coast Survey set the FY 2010 Annual Performance Plan target at 3,260 snm in January 2009 to address\n hydrographic survey backlog, and included the ARRA FY 2009-FY 2010 target of 1,940 snm for a total target\n of 5,200. However, at onset of FY 2010, NOAA requested a revised target of 2,600 snm because RANIER\n went into an unplanned but welcome major repair period upon receiving ARRA funding. Consequently,\n Explanation projects for the RANIER were deferred to the outyears. Also since the setting of FY 2010 targets, the program\n has been impacted by a reduction in FY 2010 NOAA ship time to support hydrographic survey operations.\n Furthermore, the program anticipated FERDINAND HASSLER operations in 2010, but this vessel\xe2\x80\x99s delivery\n has been delayed. Higher costs for Alaska survey work reduced total planned contract areas in FY 2010. The\n THOMAS JEFFERSON was also redirected to provide Gulf support during the BP Deepwater Horizon spill\n response. The total target for ARRA funds was 1,940 snm over FY 2009 and FY 2010; the program actually\n acquired roughly 1,190 snm of ARRA acquisition in FY 2009, and 690 snm in FY 2010.\n Action NOAA\xe2\x80\x99s National Ocean Service will continue to track this metric closely in FY 2011.\n\n\n\nHis t o r i c a l T r e n d s\n\nWithin this objective, NOAA has consistently met the targets for some of the measures including accurate positioning capability, marine\nwind speed, marine wave height, and aviation forecast FAR. The status of aviation forecast accuracy has varied, however, it should be\nnoted that the targets for this measure have risen every year from FY 2002 onward, and the actuals have correspondingly improved\nas well.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 149\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n M I S S I ON S U P P ORT OBJECT I VE\n\nProvide critical support for NOAA\xe2\x80\x99s mission\n\n\n\n\n\xe2\x80\x8aT \xe2\x80\x8a\n here are no Government Performance Results Act (GPRA) measures for the Mission Support objective since the activities\n of this objective support the outcomes of the mission objectives. NOAA is developing new and improving existing internal\n management performance measures for the Mission Support objective.\n\n\n\nAchievements\n\nNewest NOAA Geostationary Satellite Reaches Orbit\n\nOn March 4, 2010, NOAA successfully launched Geostationary Operational Environmental Satellite Series P (GOES-P) from Cape Canaveral,\nFL. GOES-P, renamed GOES-15 once it reached final orbit, underwent a series of tests for approximately six months before completing\nits \xe2\x80\x9ccheck-out\xe2\x80\x9d phase. After check-out, GOES-15 was placed into orbital storage mode and remains ready for activation if one of the\noperational GOES fail. GOES-15 took its first infrared image of Earth on April 26, 2010. GOES-15 is the final spacecraft in the latest series of\nNOAA geostationary satellites. It joined three other NOAA operational GOES spacecraft that help the Agency\xe2\x80\x99s forecasters more accurately\ntrack life-threatening weather\xe2\x80\x94from tornadoes, floods, and hurricanes to solar activity that can impact the satellite-based electronics and\ncommunications industry. GOES-15 will capture higher resolution images of weather patterns and atmospheric measurements than those\nprovided by earlier satellites. The higher resolution imagery allows forecasters to pinpoint the location of severe weather with greater\naccuracy. GOES-15 will also provide better data for space and solar weather thanks to its Solar X-Ray Imager (SXI). SXI data will improve\nforecasts and warnings for solar disturbances, protecting billions of dollars of commercial and government assets in space and on the\nground. This vital information will also reduce the effect of power surges for the satellite-based electronics and communications industry.\n\nNOAA Selects Harris Corporation to Develop GOES-R Antenna System\n\nNOAA selected Harris Corporation in Melbourne, FL, in July 2010, to develop the antenna system that will support NOAA\xe2\x80\x99s GOES-R. This new\nseries of spacecraft, set to begin launching in 2015, is expected to double the clarity of today\xe2\x80\x99s satellite imagery and provide at least 20\ntimes more atmospheric observations. Harris will develop and NOAA will operate the GOES-R antenna system at NOAA\xe2\x80\x99s Wallops Command\n\n\n\n\n 150 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nand Data Acquisition Station in Wallops, VA, and at NOAA\xe2\x80\x99s GOES R Remote Backup facility in Fairmont, WV. The antenna system will be\ndesigned to ensure continuity of operations during severe weather and other threat scenarios, including storms as severe as a Category\n2 hurricane with winds ranging from 96\xe2\x80\x93110 mph. Four existing receive-only antennas located at the NOAA Satellite Operations Facility\nin Suitland, MD, will also have their feed systems upgraded. The antenna system will include six new, large-aperture antennas capable of\nreceiving and transmitting radio signals in multiple frequencies. Harris Corporation will upgrade four existing antennas and integrate the\nentire antenna system into the overall GOES-R ground system. NOAA will fund, manage, and operate the GOES-R satellites.\n\nNOAA Deactivates GOES-10 and GOES-12 Begins Coverage of South America\n\nIn December 2009, NOAA deactivated GOES-10 after 12 years of service. Launched in April 1997, GOES-10 surpassed its original five-year\nmission by providing coverage as NOAA\xe2\x80\x99s primary GOES satellite in the West until 2006. In 2006, in an effort to enhance international\ncooperation and improve hurricane forecasting efforts in South America, NOAA repositioned GOES-10 to cover South America. NOAA\ndeactivated GOES-10 from service on December 1, 2009. To replace GOES-10, NOAA repositioned GOES-12 over South America in May\n2010. The repositioning of GOES satellites over South America is pivotal because these satellites supply forecasters in South America\nwith more imagery and data to track dangerous storms\xe2\x80\x94including tropical cyclones\xe2\x80\x94and the storms that can trigger potentially deadly\nmudslides. Moving GOES-12 is a significant contribution to the emerging GEOSS. This global, public infrastructure allows managers and\ndecisionmakers to respond more effectively to the many environmental challenges facing society. GEOSS links individual observing systems\ninto a sustained, comprehensive global system.\n\nNOAA Satellites Help Rescue 277 People in 2010\n\nNOAA\xe2\x80\x99s fleet of satellites played a vital role in the rescues of 277 people during life-threatening situations throughout the United States and\nits surrounding waters in 2010. In each incident, NOAA satellites pinpointed these downed pilots, shipwrecked mariners, or stranded hikers\nby detecting a distress signal from an emergency beacon and relaying the information to first responders on the ground. NOAA\xe2\x80\x99s polar-\norbiting and geostationary satellites, along with Russia\xe2\x80\x99s Cospas spacecraft, are part of the international Search and Rescue Satellite-Aided\nTracking system (COSPAS-SARSAT). This system uses a network of satellites to quickly detect and locate distress signals from emergency\nbeacons onboard aircraft and boats, and from smaller, handheld personal locator beacons. When a NOAA satellite finds the location of a\ndistress signal within the United States or its surrounding waters, the information is relayed to the COSPAS-SARSAT Mission Control Center\nbased at NOAA\xe2\x80\x99s Satellite Operations Facility in Suitland, MD. From there, it is sent to a Rescue Coordination Center operated by either\nthe U.S. Air Force for land rescues or the U.S. Coast Guard for water rescues. Now in its 29th year, COSPAS-SARSAT has been credited with\nsupporting more than 28,000 rescues worldwide, including over 6,400 in the United States and its surrounding waters.\n\nNOAA Responds to the Devastating Earthquake in Haiti\n\nRight after the quake, the Office of Marine and Aviation Operations began preparations to support the response effort. After receiving a\nrequest for aerial imagery, the NOAA Aircraft Operations Center and National Geodetic Survey dispatched the NOAA Cessna Citation II\naircraft to conduct surveys of quake-ravaged areas to give responders the data they need to assess damage and plan recovery efforts.\n\nNOAA Aircraft, Ship Provide Survey Support Following Nor\xe2\x80\x99easter\n\nNOAA\xe2\x80\x99s Cessna Citation (N52) acquired remote sensing imagery along the Hampton Roads, VA shoreline following a major storm that\nimpacted the Mid-Atlantic region November 12-14, 2009. The aircraft documented changes in shoreline due to flooding at Whalehead\nBeach and a grounded barge in Virginia Beach. Meanwhile, NOAA ship THOMAS JEFFERSON conducted hydrographic surveys in Cape Henry\nand the Elizabeth River to locate submerged debris, shoals, and other potential hazards to navigation caused by the nor\xe2\x80\x99easter. The surveys\nprovided critical aerial and underwater imagery to the port community, local officials, and residents impacted by the storm and resulting\nflooding in Hampton Roads.\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 151\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\nNOAA Aircraft Gather Observations in Flooded Red River Region\n\nNOAA Shrike Commander and NOAA Jet Prop Commander aircraft stationed in Minneapolis, MN helped the North Central RFC improve its\nflood forecasts with real-time observations. The Red River, along the Minnesota-North Dakota border, approached record flood levels. The\naircraft took video and photographic footage of the river in flood stage. They were able to observe ice jams, standing water in farm fields,\nand other conditions in the watershed. The hydrologists can use this data to refine their models.\n\nNOAA G-IV Aircraft Dispatched to Gather Winter Storm Data\n\nNOAA\xe2\x80\x99s Gulfstream IV-SP aircraft conducted flights over the North Pacific Ocean to help fill gaps in atmospheric observations. During that\nperiod NOAA crew flew 310.8 hours, covering 134,000 nautical miles. 634 GPS dropwindsondes were launched, of which 97.2 percent\nprovided good, detailed data on 12 intensifying winter storms. Flying out of Yokota Air Force Base in Japan, the Office of Marine and Aviation\nOperations-operated plane collected wind speed and direction, pressure, temperature, and humidity information from data-sparse regions.\nThe data was sent via satellite to global operational weather forecasting centers and fed into sophisticated computer forecast models.\n\nNOAA Commissioned the NOAA Ship BELL M. SHIMADA\n\nNOAA commissioned the BELL M. SHIMADA, the fourth of a new class of fisheries survey vessels on August 25. The ship\xe2\x80\x99s primary mission\nwill be to study, monitor, and collect data on a wide range of sea life and ocean conditions, primarily off the West Coast. The 208-foot\nvessel will also observe environmental conditions; conduct habitat assessments; and survey marine mammal, sea turtle, and marine bird\npopulations. The ship\xe2\x80\x99s state-of-the-art design allows for quieter operation and movement of the vessel through the water, giving scientists\nthe ability to study fish and marine mammals without significantly altering their behavior.\n\nNOAA Awards Contract for New Fisheries Research Vessel\n\nNOAA has awarded a $73.6 million American Recovery and Reinvestment Act (ARRA) of 2009 contract to Marinette Marine Corporation\nlocated in Marinette, WI. This is for the construction of a new fisheries survey vessel, FSV 6, which will dramatically improve NOAA\xe2\x80\x99s ability\nto conduct surveys for fish, marine mammals, and turtles off the West Coast and in the eastern tropical Pacific Ocean. FSV 6 will be the\nfifth state-of-the-art OSCAR DYSON-class ship built for the Agency.\n\n50th Anniversary of the Satellite that \xe2\x80\x9cForever Changed Weather Forecasting\xe2\x80\x9d\n\nThe Television Infrared Observation Satellite (TIROS-1) celebrated its 50th anniversary on April 1, 2010. The first image from TIROS-1, the\nworld\xe2\x80\x99s first weather satellite, was a fuzzy picture of thick bands and clusters of clouds over the United States. TIROS-1, a polar-orbiting\nsatellite, weighed 270 pounds and carried two cameras and two video recorders. An image captured a few days after its lift-off from Cape\nCanaveral, FL, revealed a typhoon about 1,000 miles east of Australia. Though the satellite only lasted 78 days, its impact is still visible\ntoday. Throughout the 1960s, each TIROS spacecraft carried increasingly advanced instruments and technology. By 1965, meteorologists\ncombined 450 TIROS images into the first global view of the world\xe2\x80\x99s weather. When the more advanced TIROS-N satellite series were\nlaunched between 1978 and 1981, the name of the spacecraft changed to Polar-orbiting Operational Environmental Satellite (POES). POES\norbits the Earth at an altitude of about 500 miles and circle the poles once every 102 minutes.\n\n\n\n\n 152 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n Strategic Goal 3 Program Evaluations\n\nThe following program evaluations were conducted on programs related to this strategic goal in FY 2010.\n\n Bureau Reviewer Name Date Web site\n\n NOAA GAO NOAA has Expanded its Tsunami Programs, but 4/2010 http://gao.gov/products/GAO-10-490\n Improved Planning Could Enhance Effectiveness\n NOAA GAO Agencies Must Act Quickly to Address Risks 5/2010 http://gao.gov/products/GAO-10-558\n that Jeopardize the Continuity of Weather and\n Climate Data\n NOAA GAO Planning Required to Mitigate Near-term Risks 6/29/2010 http://gao.gov/products/GAO-10-858T\n and Ensure Long-term Continuity\n NOAA OIG FY 2009 FISMA Assessment of the http://www.oig.doc.gov/oig/\n Environmental Satellite Processing Center reports/2010/OAE-19730.pdf\n (ESPC)\n NOAA OIG Review of NOAA Fisheries Enforcement 1/2010 http://www.oig.doc.gov/oig/\n Programs and Operations reports/2010/OIG-19887.pdf\n NOAA OIG Review of NOAA\xe2\x80\x99s Marine Operations Center- 6/28/2010 http://www.oig.doc.gov/oig/reports/\n Pacific Lease Decision marine_operations_centerpacific/\n index.html\n NOAA OIG Review of NOAA Fisheries Enforcement Asset 7/1/2010 http://www.oig.doc.gov/oig/reports/\n Forfeiture Fund correspondence/2010.07.01_IG_to_\n NOAA.pdf\n NOAA OIG Review of NOAA\xe2\x80\x99s Efforts to Modernize U.S. 7/29/2010 http://www.oig.doc.gov/oig/reports/\n Historical Climatology Network: STL-19846 correspondence/2010.07.01_IG_to_\n NOAA.pdf\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 153\n\x0cP e r f o r m a n c e S e c t i o n * s t r at e g i c g oa l 3\n\n\n\n\n 154 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP e r f o r m a n c e S e c t i o n\n\n\n\n\n M a n ag e m e n t\n I n t eg r at i o n\n G oa l\n\x0c targets met\n P ERFORMANCE o u t c o m e or exceeded\nEnsure effective resource stewardship in support of the Department\xe2\x80\x99s programs (DM) 0 of 2\n\nEnsure retention of highly qualified staff in mission-critical positions (DM) 1 of 1\n\nAcquire and manage the technology resources to support program goals (DM) 1 of 1\n\nPromote improvements to Department programs and operations by identifying and\ncompleting work that (1) promotes integrity, efficiency, and effectiveness; and (2) prevents 2 of 3\nand detects fraud, waste, and abuse (OIG)\n\x0c P e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\n MANAGEMENT I NTEGRAT I ON GOA L\n\nAchieve organizational and management excellence\n\n\n\n\n P u b li c B e n e f i t s\n\n\n\n\n\xe2\x80\x8aA \xe2\x80\x8a\n chieving organizational and management excellence\n is a goal that requires extensive interaction and\n coordination among entities throughout the\nDepartment. Departmental Management (DM)\xe2\x80\x94consisting of the\nOffices of the Secretary, Deputy Secretary, Chief Financial Officer\n(CFO) and Assistant Secretary for Administration (ASA), Chief\nInformation Officer (CIO), and General Counsel\xe2\x80\x94provides the policies\nand guidelines that support the management infrastructure the\nDepartment needs to carry out its mission. In addition, the Office\nof Inspector General (OIG) audit and inspection programs help\npromote consistency and integrity throughout the Department.\nMost of DM\xe2\x80\x99s and the OIG\xe2\x80\x99s work can be characterized as \xe2\x80\x9cbehind-\nthe-scenes,\xe2\x80\x9d contributing to the efficiency with which operating\nunits throughout the Department administer their programs.\n\nThe Department must have the capacity to do business with the\npublic and its partner agencies, both as a more than $8 billion\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 157\n\x0cP e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\nworldwide enterprise, and as an integrated set of individual programs. This requires that it identify, adopt, and maintain business\npractices essential to successful operations; use its resources wisely; and effectively implement the laws that affect it. In order to\nensure the accomplishment of its mission, the Department has developed and put into place policies and programs designed to enable\nthe successful operation of its units, the effective and efficient use of both material and human resources (HR), and the implementation\nof laws and regulations that govern the use of those resources. This performance outcome represents the Department\xe2\x80\x99s commitment to\nensuring the wise stewardship of its resources. Because this goal encompasses a wide range of administrative and operational tasks, the\nmeasures used to assess progress are highly diverse.\n\nThe Department continues to refine and develop programs to help train and retain a highly qualified workforce and avoid disruption in\nthe services it provides. Leadership priorities for improvement are based on employee feedback to surveys, various skills assessments, and\ncomprehensive workforce analyses. While performance management systems are effective in rewarding high performers, more targeted\napproaches are necessary to close skill gaps in the entire workforce. Training and development programs are based on competency\nassessments for mission-critical occupations such as meteorologist, statistician, acquisition, engineer, and chemist.\n\nAs U.S. society becomes increasingly oriented toward using electronic means of communication and information dissemination, federal\nagencies must ensure that they continue to be as responsive as possible to the needs of the public, the private sector, other levels of\ngovernment, and other federal agencies. DM must promote leading-edge technologies, collaboration, and technology transformation\nacross the Department, ensuring alignment with mission requirements, goals, and objectives in order to deploy and maintain systems\nable to perform at the highest levels.\n\nThe OIG\xe2\x80\x99s criminal, civil, and administrative investigations continue to disclose instances of misconduct by employees, contractors, and\ngrantees that threaten the integrity of the Department\xe2\x80\x99s programs and operations. In addition, auditors or inspectors frequently identify\ninvestigative issues, such as fraud and conflicts of interest, and refer such matters to the OIG\xe2\x80\x99s investigators.\n\n\n\nAchievements\n\nAcquisitions and Grants\n\nDM provided proactive and timely guidance and oversight to the acquisition and grants community in the Department to ensure smooth\nimplementation and execution of the American Recovery and Reinvestment Act (ARRA) of 2009, and has been recognized for the superior\nperformance of its oversight of recipient reporting.\n\nDM developed, through a cross-agency working group, agency-specific implementation guidance for effective management of the multi-\nsector workforce, including development of guidance, an assessment template, and the institution of annual multi-sector workforce\nplanning tied to operating unit advance acquisition plans.\n\nDM developed, with commitment from all operating units, an acquisition savings plan with a target goal of saving 3.5 percent of planned\nacquisition spending through better acquisition practices.\n\nDM updated Department acquisition policy, including publication of an updated Commerce Acquisition Regulation and developing formal\nacquisition planning, use and management of incentive contracting provisions, and minimizing use of high-risk acquisition authorities policy.\n\nDM instituted a formal acquisition and grant management review policy and conducted its first set of reviews (National Institute of\nStandards and Technology (NIST) acquisition and grants) under this oversight program.\n\n\n\n\n 158 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\nHuman Resources\n\nDM exceeded the government-wide average for positive responses on 69 out of 77 eligible items on the 2010 Federal Employee Viewpoint\nSurvey, administered by the Office of Personnel Management (OPM) to gauge employee perceptions on critical work-life areas which drive\nemployee satisfaction, commitment, and retention. No Department averages for positive responses were \xe2\x80\x9cnotably\xe2\x80\x9d (i.e., five percentage\npoints or more) below the government-wide averages for any items.\n\nDM instituted an aggressive Return-To-Work Pilot Program to reduce Workers\xe2\x80\x99 Compensation costs, resulting in $4.4 million in savings\nfor the Department over the lifetime of four cases that have received resolution determinations from the Department of Labor. HR is\npursuing an additional 11 cases to achieve a possible total lifetime savings of $22.5 million.\n\nDM implemented Executive Order 13522, \xe2\x80\x9cCreating Labor-Management Forums to Improve Delivery of Government Services,\xe2\x80\x9d by\nreceiving plan certification from the National Council on Federal Labor-Management Relations, assisting the 18 Department unions\nin determining their membership on the Department\xe2\x80\x99s Labor-Management Forum, obtaining approval from all members on the Forum\ncharter, providing guidance and assistance on the establishment of bargaining unit councils, and evaluating and providing feedback to\nthe Forum Management Team on proposed pilot projects.\n\nDM created and submitted seven comprehensive action plans to OPM and the Office of Management and Budget (OMB) in response to\nthe President\xe2\x80\x99s Memorandum, \xe2\x80\x9cImproving the Federal Recruitment and Hiring Process.\xe2\x80\x9d The plans identify goals, targets, time lines, and\nindicators of progress for hiring reform implementation by November 1, 2010.\n\nDM expanded leadership development programs for both Department and federal employees by launching the non-competitive Leadership\nEducation and Development Certificate Program Pilot for Department employees with an immediate need to enhance their leadership\nskills and redesigning the Senior Executive Service Candidate Development Program to offer opportunities to employees within other\nfederal agencies, including the Department of Education, Department of Energy, and Environmental Protection Agency.\n\nDM formulated and presented the business case for acquiring an HR management system to greatly enhance the efficiency and\neffectiveness of workforce planning, analysis, and reporting efforts. The HR management system has been included in the Secretary of\nCommerce\xe2\x80\x99s FY 2012 budget submission.\n\nFinancial Management\n\nDM achieved an unqualified audit opinion for the twelfth consecutive year in FY 2010, and plans to maintain the same in FY 2011 and\nbeyond.\n\nDM successfully completed an upgrade to the Office of Financial Management\xe2\x80\x99s (OFM) Corporate Database, a commercial off-the-shelf\nsoftware package for consolidating financial data and producing financial reports. The Corporate Database is an integrated solution that\nprovides financial statements and Adjusted Trial Balances reported at the Department, bureau, and Treasury Appropriation/Fund Group\nlevel. It also provides the ability to perform data analysis and produce the Department\xe2\x80\x99s footnotes, financial analysis reports, and other\nadditional information required for the government-wide financial statements.\n\nDM continued work on the Future Financial and Administrative Planning Business Analysis that will assist the Department in analyzing its\ncurrent financial and administrative environment, determining the long-term viability of its Commerce Business Systems (CBS) platform,\nand evaluating CBS against other potential options to support its financial management environment.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 159\n\x0cP e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\nDM migrated the OFM/CBS Solutions Center (CSC) Development and Test instances of CBS from the CSC in Gaithersburg, MD to the\nOMB-designated Shared Service Center, Department of Transportation/Federal Aviation Administration/Enterprise Services Center (DOT/\nFAA/ESC) in Oklahoma City, OK.\n\nAdministrative Services\n\nIn February 2010, the Department received a green score from OMB, the highest level, for both progress and status in energy and\nenvironmental management. For transportation management, the Department received a green in progress and a yellow for status, a\nsignificant improvement from its prior scorecard. As a result, the Department ranked second overall in the federal government.\n\nThe Department has been working with the General Services Administration to coordinate the Herbert C. Hoover Building\xe2\x80\x99s eight-phase\nrenovation project. The renovation improves building safety and security; enhances quality of life, restores some historical building\nfeatures; and replaces aging machinery, electrical systems piping, and HVAC systems.\n\nPhase 1 installed new cooling towers for the building\xe2\x80\x99s air conditioning system and built out new office spaces in Courtyard 6 to house\noperating units during the construction of their phases. This phase was completed in October 2009.\n\nPhase 2 is currently underway. This phase cleans and restores the building facade; and installs new site utilities, air conditioning chill\nwater plant, a main electrical power distribution system, and emergency generators. Office spaces will receive a new heating, ventilation\nand air conditioning system as well a new lighting system, carpeting, and painting. The exterior of the building will receive new perimeter\nsecurity, hardscaping, and landscaping.\n\nOn August 6, 2010, the Department submitted the Department\xe2\x80\x99s Real Property Cost Savings and Innovation Plan to OMB. This plan\nwas developed in response to a July 1 request from OMB for executive branch agencies to identify ways of collectively achieving $3\nbillion in savings by eliminating excess real property. As a result of initiatives in its plan, DM estimates that the Department can realize\napproximately $7.7 million in savings annually. To do so, however, will involve up-front investments totaling approximately $8.0 million\nfor necessary information technology (IT) infrastructure and equipment, and open systems furniture.\n\nInformation Office\n\nDM reinstituted the Department IT Investment Review Board to ensure that Department major IT investments utilize sound project\nmanagement practices and exhibit risk-based approaches. The reinvigorated board will ensure that Department investments are well-\nmanaged and of value to the taxpayer. As part of the Department\xe2\x80\x99s transparency efforts, DM evaluated and submitted 51 business cases\nto the federal IT Dashboard, demonstrating to the public the sound management of the Department\xe2\x80\x99s IT investments. On average, DM\nachieved within five percent of its cost, schedule, and performance targets for the major IT investments undergoing development and\nenhancement. DM developed solid business cases for major IT investments with the business cases ensuring that DM managed and wisely\ninvested those IT funds.\n\nDM established the Department Web Advisory Council to ensure that the Department Web presence reflects the appropriate use of social\nmedia and Web 2.0 technologies while maintaining the privacy of its Web users. DM approved Privacy Impact Assessments, including\nprocedures to log and verify extracts of sensitive information, and posted them to the Web.\n\nDM developed an IT security strategic plan to strengthen its IT security posture and operations and conducted rigorous IT security\ncompliance reviews based on federal standards and guidelines, and previous OIG certification and accreditation (C&A) recommendations;\n90 percent of the Department\xe2\x80\x99s 280 information systems have Authority to Operate (ATO) status.\n\n\n\n\n 160 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\nDM implemented monthly reviews of Department information systems utilizing information within the automated IT security tool, Cyber\nSecurity Assessment and Management (CSAM). DM used scorecards to develop quarterly trend analysis, and provided them to the\nDepartment\xe2\x80\x99s CIO Council. DM also implemented Department-wide plans of action and milestones (POA&M) management monitoring\nprogram using CSAM. Dashboards are sent to operating unit CIOs tracking POA&M status; by implementing this monitoring program,\nDM has improved operating unit POA&M management.\n\nDM worked with OFM to create the IT Audit Working Group to address and resolve Financial Statements Audit IT findings, develop\nenterprise-wide solutions, and prepare for future financial statements audits. The group developed and implemented a tracking and\nmanagement procedure to provide monthly progress reports on the resolution of audit findings. By July 2010, the group reported nearly\n84 percent of the 70 FY 2009 IT findings as closed.\n\nDM coordinated with the Federation of Computer Incident Response Team (CIRT), the U.S. Computer Emergency Readiness Team (US-\nCERT) at the Department of Homeland Security, to receive timely security alerts and notifications. As a result, the Department detected\nmalicious cyber attacks against its network and developed plans to remediate and prevent potential threats and vulnerabilities.\n\nAlmost all of the OIG\xe2\x80\x99s recommendations made were accepted by senior Agency leadership; implementation of these recommendations\nwill result in significant improvements to the Department\xe2\x80\x99s operations. The OIG\xe2\x80\x99s inspections and audits also captured significant financial\nbenefits for the Department, including recovery of funds returned to the Department, expenditures that were not supported by adequate\ndocumentation, recoveries from criminal and civil investigations, future financial benefits from recommendations for more efficient use\nof Department funds, and expenditure of funds that may have been inconsistent with applicable laws and regulations.\n\n\n Summary of Performance\n\nThe following outcomes apply to this objective with the measures below them providing an indication of how well the Department is\ndoing in achieving those outcomes.\n\n1.\t Ensure effective resource stewardship in support of the Department\xe2\x80\x99s programs (DM)\n\n2.\t Ensure retention of highly qualified staff in mission-critical positions (DM)\n\n3.\t Acquire and manage the technology resources to support program goals (DM)\n\n4.\t Promote improvements to Department programs and operations by identifying and completing work that (1) promotes integrity,\n efficiency, and effectiveness; and (2) prevents and detects fraud, waste, and abuse (OIG)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 161\n\x0cP e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 1 Provide accurate and timely \xe2\x97\x8f\xe2\x97\x8f Eliminate any significant \xe2\x97\x8f\xe2\x97\x8f Significant deficiency not eliminated\n financial information and conform deficiency within 1 year of\n to federal standards, laws, and determination Not Met\n regulations governing accounting \xe2\x97\x8f\xe2\x97\x8f Complete FY 2010 A-123 \xe2\x97\x8f\xe2\x97\x8f Completed FY 2010 A-123 assessment\n and financial management\n assessment of internal controls of internal controls\n 1 Effectively use commercial \xe2\x97\x8f\xe2\x97\x8f Increase use of competition by \xe2\x97\x8f\xe2\x97\x8f Maintained and monitored existing\n services management 2%, measured by procurement activities, however, no new cost\n dollars awarded comparisons were permitted under this\n year\xe2\x80\x99s appropriation language, therefore\n \xe2\x97\x8f\xe2\x97\x8f Decrease procurement N/A\n the result is considered not applicable\n dollars awarded on a cost-\n reimbursement, time and\n materials, and labor hours\n contracts by 10%\n 1 Obligate funds through\n performance-based contracting (% 50% 37% Not Met\n of eligible service contracting $)\n 2 Acquire and maintain diverse and \xe2\x97\x8f\xe2\x97\x8f Have new competency models \xe2\x97\x8f\xe2\x97\x8f Produced competency models for four\n highly qualified staff in mission- in place for three mission- mission-critical occupations\n critical occupations critical occupations for use in \xe2\x97\x8f\xe2\x97\x8f Established hiring process baseline at\n workforce recruitment, training,\n 133 days\n and development activities\n \xe2\x97\x8f\xe2\x97\x8f Trained 98 ALDP, ELDP, and APCP\n \xe2\x97\x8f\xe2\x97\x8f Meet or exceed the 80-day\n participants via leadership development\n hiring goals mandated by OPM\n programs, and 181 employees via the\n \xe2\x97\x8f\xe2\x97\x8f Train up to 50-70 participants Careers in Motion Program Met\n on leadership development \xe2\x97\x8f\xe2\x97\x8f Integrated Commerce Learning Center\n programs via ALDP, ELDP and\n in program administration to enhance\n APDP, and 180-200 participants\n measurement of results\n via Careers in Motion\n \xe2\x97\x8f\xe2\x97\x8f Integrate Commerce Learning\n Center in program administra-\n tion to enhance tracking and\n progress monitoring\n 3 Improve the management of \xe2\x97\x8f\xe2\x97\x8f IT investments have cost/ \xe2\x97\x8f\xe2\x97\x8f For the year, IT investments had cost/\n information technology schedule overruns and schedule overruns and performance\n performance shortfalls shortfalls averaging less than 10%\n averaging less than 10% \xe2\x97\x8f\xe2\x97\x8f Completed security assessments\n \xe2\x97\x8f\xe2\x97\x8f Perform IT security compliance and vulnerability assessments for all\n review of all operating units, operating units. Submitted findings and\n and 10 FISMA systems in CSAM recommendations to operating units and\n OCIO for review\n \xe2\x97\x8f\xe2\x97\x8f Deploy an enterprise-wide role-\n based cybersecurity training \xe2\x97\x8f\xe2\x97\x8f Implemented cybersecurity\n program development program and graduated\n 20 candidates from the Department\xe2\x80\x99s Met\n \xe2\x97\x8f\xe2\x97\x8f Deploy national security and\n first class. Enrolled candidates in the\n emergency network initial\n program\xe2\x80\x99s second class. More than\n operating capability\n eight candidates have obtained or are\n planning to obtain security-related\n certifications.\n \xe2\x97\x8f\xe2\x97\x8f Deployed national security and emer-\n gency network in the development\n environment. Received official approval\n to connect from Defense Intelligence\n Agency.\n (continued)\n\n\n 162 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\n Outcome Performance Measure Target Actual Status\n 4 Percentage of OIG\n recommendations accepted\n 95% 95% Met\n by Departmental and bureau\n management\n 4 Dollar value of financial benefit\n $38.0M $47.8M Exceeded\n identified by the OIG\n 4 Percentage of criminal and civil\n matters that are accepted for 75% 42% Not Met\n prosecution\n\n\n\nFY 2 0 1 0 S t a t u s\n\nDM and the OIG met or exceeded four of seven applicable targets in FY 2010. DM did not meet the targets for \xe2\x80\x9cObligate funds through\nperformance-based contracting (% of eligible service contracting $) and \xe2\x80\x9cProvide accurate and timely financial information and conform\nto federal standards laws, and regulations governing accounting and financial management.\xe2\x80\x9d The OIG did not meet the target for\n\xe2\x80\x9cPercentage of criminal and civil matters that are accepted for prosecution.\xe2\x80\x9d\n\n\n\nFY 2 0 1 0 Miss e d T a r g e t s\n\n Measure Obligate funds through performance-based contracting (% of eligible service contracting $) (DM)\n 37.28% of obligated dollars ($815,883.198) were awarded on performance-based contracts. While DM\n Explanation did not meet the goal of 50%, they are making progress in that Census Bureau exceeded the 50% goal and\n USPTO missed it by only 1.3%.\n Action DM will continue to seek to award more performance-based contracts.\n Measure Provide accurate and timely financial information and conform to federal standards, laws, and regula-\n tions governing accounting and financial management\n The significant deficiency was not eliminated. However, the other portion of the measure, \xe2\x80\x9cComplete\n Explanation\n FY 2010 A-123 assessment of internal controls,\xe2\x80\x9d was done.\n DM continues to make progress in this area, though the significant deficiency in IT controls remained in\n Action\n FY 2010.\n Measure Percentage of criminal and civil matters that are accepted for prosecution (OIG)\n Notwithstanding that the U.S. Attorneys have thresholds for accepting cases, due to the sensitivity of the\n Explanation Decennial Census, the OIG advocated for prosecution of a number of census-related cases that otherwise\n would not normally have been referred to the U.S. Attorney.\n Action No additional action taken.\n\n\n\nHis t o r i c a l T r e n d s\n\nDM has consistently achieved its IT and human resources targets since they began reporting in FY 2005. The OIG has met or exceeded all\nof its targets (with the exception of one\xe2\x80\x94see FY 2010 Missed Targets above) since it began reporting them in FY 2003.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 163\n\x0cP e r f o r m a n c e S e c t i o n * M a n ag e m e n t I n t e g r at i o n g oa l\n\n\n\n\n 164 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n ci a l\nS ec t i o n\n\x0cM e s s ag e f r o m t h e c h i e f f i na n c i a l o f f i c e r\n\n\n\n\nMessage from the Chief Financial Officer\n\nT\n his FY 2010 Performance and Accountability Report provides In support of this initiative, the Department established the Office\n financial and program performance information to enable of Risk Management and Program Evaluation, which leads multi-\n the Department\xe2\x80\x99s stakeholders to understand and evaluate disciplinary, Department-level teams to analyze and evaluate selected\nthe achievements that have been made relative to its mission and programs on a regularly scheduled basis throughout the year. The\nthe resources with which it is entrusted. The report summarizes first of these reviews, which was completed in August, highlighted\nhighlights of the Department\xe2\x80\x99s performance, provides detailed financial a need for revised metrics, identified operational efficiencies, and\ninformation, and fulfills the requirements of the Reports Consolidation recommended new approaches to aligning programs with Secretarial\nAct of 2000, the Chief Financial Officers Act, the Government priorities.\nPerformance and Results Act, the Federal Managers\xe2\x80\x99 Financial Integrity\nAct, and the Government Management Reform Act. Further strengthening new approaches to the budget process and\n Department-wide performance, we established an enterprise risk\nWe are proud to report that in FY 2010 the Department of Commerce management program in FY 2010. For the first time, the Department\nachieved an unqualified audit opinion for the twelfth consecutive year. will manage risks from a formally-structured, Department-wide\nHowever, the Department is continuing work to resolve a significant perspective. The new enterprise risk management program will work\ndeficiency concerning information technology security controls that in concert with program evaluation efforts to identify operational\nrelate to financial systems. issues and elevate them to the attention of senior leadership to\n ensure the best use of Department resources.\nOther highlights from FY 2010 include the completion of the phased\nmigration of the Chief Financial Officer and Assistant Secretary for The Department also continued to participate in the government-\nAdministration\xe2\x80\x99s (CFO/ASA) financial and enterprise application wide initiative to strengthen internal controls under the Federal\nsystems from the Consolidated Business Systems (CBS) Solutions Managers\xe2\x80\x99 Financial Integrity Act and OMB Circular A-123, and we\nCenter in Gaithersburg, MD and the Office of Computer Services are currently engaged in enhancing both financial and non-financial\nin Springfield, VA. These systems were seamlessly consolidated controls. These efforts are a reflection of our commitment to\nand relocated to a dedicated, certified data center operated by excellence in managing financial systems and safeguarding financial\nthe Department of Transportation\xe2\x80\x99s Enterprise Services Center in resources and investments. The Department\xe2\x80\x99s assessment for FY 2010\nOklahoma City, OK. identified no material weaknesses in its financial internal controls.\n Additionally, based on the work that has been done to strengthen IT\nDuring the past fiscal year, the Department also upgraded its security certification and accreditation documentation and processes,\nConsolidated Financial Reporting Corporate Database and continued the Department considers the material weakness that has been\nwork on the Future Financial and Administrative Planning Business previously reported in this area to be resolved. Overall IT security will,\nAnalysis. This effort will assist in analyzing the current financial and however, continue to receive considerable attention throughout the\nadministrative environment, determining the long-term viability of its Department as it works to maintain and further enhance its security\nCBS platform, and evaluating CBS against other potential options to profile as needed to protect its IT resources.\nsupport the financial management environment. We also continued\nto support the Information Technology Modernization Blueprint effort, The Department remains committed to maximizing the effectiveness\nwhich involves a critical review and prioritization of the Department\xe2\x80\x99s of its programs and ensuring their efficient delivery to the American\nadministrative business systems, and provides a framework for people. During FY 2011, we will continue to support mission-related\nmanaging projects from start through operation. programs with strong and effective financial management and\n internal controls.\nThe Department also established a new long-term approach to the\nbudget process. To accomplish this, we created a task force composed\nof representatives from all of the bureaus as well as the Office of\nBudget and Office of the Chief Information Officer. The team\nre-invented the Secretarial budget formulation process to ensure Scott Quehl\nthat each bureau\xe2\x80\x99s budget request reflects the strategic goals of the Chief Financial Officer\nDepartment and the priorities of the Secretary. The ultimate objective and Assistant Secretary for Administration\nis to align budget decision-making with strategic planning, and to November 15, 2010\ntransform the budget process into a program-based approach.\n\n\n\n 166\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n F i n a n ci a l\n M a n ag e m e n t\n and\n A n a lys i s\n\x0c\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n FINANCIAL M ANAGE M ENT AND ANALYSIS\n\n\n\n\n\xe2\x80\x8aU\xe2\x80\x89\n nder the Secretary\xe2\x80\x99s leadership, the Department is continuing to give the highest priority to providing accurate financial\n data to its internal and external customers, and to its accountability for all assets. Ensuring that there are strong\n internal controls throughout the Department remains a priority. The Department has created a financial management\nenvironment that complies with federal laws and regulations and that provides its executives with timely, accurate financial and\nperformance information. This is evidenced with the Department continuing to receive unqualified audit opinions, maintaining a\nsingle integrated financial system, and continuing its compliance with the Federal Financial Management Improvement Act (FFMIA).\nHighlights of accomplishments for FY 2010 and future initiatives are discussed further below.\n\n\n\n FINANCIAL MANAGEMENT SYSTEMS\n\nThe Department maintains an FFMIA-compliant financial management system, the Commerce Business Systems (CBS). CBS replaced\nnon-compliant legacy financial management systems. The financial information from these systems and CBS is integrated in the\nCorporate Database (as discussed further below) for consolidated financial reporting, resulting in a single integrated financial\nmanagement system.\n\nCBS provides reliable, timely information within a sophisticated security infrastructure. The system is capable of producing both\nfinancial and budget reports from information generated within the financial management system. CBS consists of a Core Financial\nSystem (CFS), including the Commerce Purchase Card System (CPCS) and the Budget and Execution Data Warehouse. CBS is\ninterfaced with the Commerce Standard Acquisition and Reporting System (CSTARS), the National Finance Center Payroll System,\nand the Automated Standard Application for Payments (ASAP). The Office of Financial Management/CBS Solutions Center (OFM/\nCSC) successfully migrated CBS to Web-based software architecture (Oracle 10g). This utilization of the Oracle Portal technology\nsimplified and consolidated access and password control. During FY 2009, the Census Bureau, National Oceanic and Atmospheric\nAdministration (NOAA), and the National Institute of Standards and Technology (NIST) successfully migrated their production\ninstances of CBS from Oracle client-server architecture to a Web-based application built upon Oracle 10g. As a result, the life\nexpectancy of CBS is extended to 2023, with at least one upgrade to a later version of Oracle.\n\nThe Corporate Database is a commercial, off-the-shelf software package for consolidating financial data and producing financial\nreports. The Corporate Database is an integrated solution that provides financial statements and Adjusted Trial Balances reported\nat the Department, bureau, and Treasury Appropriation/Fund Group level. It also provides the ability to perform data analysis and\nproduce the Department\xe2\x80\x99s footnotes, financial analysis reports, and other additional information required for the government-\nwide financial statements.\n\nDuring FY 2010, the Department accomplished the following initiatives:\n\n l\t Completed the upgrade of the Department\xe2\x80\x99s consolidated financial reporting corporate database to version 11.1.1.3;\n\n l\t Continued Operations and Maintenance activities for CBS;\n\n l\t Continued work on the Future Financial and Administrative Planning Business Analysis that will assist the Department in\n analyzing its current financial and administrative environment, determining the long-term viability of its CBS platform, and\n evaluating CBS against other potential options to support its financial management environment;\n\n\n\n\n 169\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n l\t Initiated standardization of all Office of Management and Budget (OMB) and non-OMB object classes to be utilized by all\n Department bureaus;\n\n l\t Continued to monitor bureau efforts in implementing standardized processes for identified accounting events, and track and\n measure the bureaus\xe2\x80\x99 performance through performance metric reports;\n\n l\t Continued to support the key areas of the Modernization Blueprint effort. This initiative facilitates a critical review and\n prioritization of the Department\xe2\x80\x99s administrative business systems and provides a framework for managing projects from start\n through operation;\n\n l\t Completed the phased migration planning and implementation for the Chief Financial Officer/Assistant Secretary for\n Administration (CFO/ASA) Financial and Enterprise Application Systems from the CSC in Gaithersburg, MD, and the Office\n of Computer Services in Springfield, VA, to a dedicated, certified data center operated by the Department of Transportation\xe2\x80\x99s\n Enterprise Services Center (DOT/ESC) in Oklahoma City; and\n\n l\t Finalized architecture and tentative deployment timeframe for each bureau to standardize the CBS architecture.\n\nIn FY 2011 and beyond, the Department will continue its efforts to enhance its financial systems. The Department plans to\naccomplish the following:\n\n l\t\tContinue Operations and Maintenance activities for CBS;\n\n l\t Complete the Future Financial and Administrative Planning Business Analysis and use this information and data to analyze the\n Department\xe2\x80\x99s financial and administrative environment, determine the long-term viability of its CBS platform, evaluate CBS\n against other potential options to support its financial management environment;\n\n l\t Continue the Modernization Blueprint program, focus on maintaining a comprehensive inventory of programs, initiatives, and\n systems across the CFO/ASA in order to enable Department managers to prioritize and plan resources, and perform better\n analyses of programs and initiatives that are underway or planned through FY 2013;\n\n l\t Finalize standard OMB and non-OMB object classes and implement in all Department bureaus;\n\n l\t Maintain and possibly enhance the OFM/CSC Portal that provides for a unified gateway for access to Department administrative\n applications, including single sign-on and self-service administration, as well as hosting the Modernization Blueprint program;\n and\n\n l\t Continue to monitor bureau efforts in implementing standardized processes for identified accounting events, and track and\n measure the bureaus\xe2\x80\x99 performance through performance metrics reports.\n\n\n FINANCIAL REPORTING\n\nThe Department is committed to making financial management a priority, and significant efforts are being made to further\nimprove the management of its financial resources. The Department has received unqualified opinions on its consolidated financial\nstatements since 1999. The Department met the financial statement submission deadlines for FY 2010. These achievements\nresulted from the Department\xe2\x80\x99s commitment to strong management controls and accountability for its resources. One significant\ndeficiency cited relating to deficiencies in general information technology (IT) controls remained from prior years. The Department\nhas corrective action plans (CAP) in progress to address these deficiencies. In FY 2010, the Department conducted an assessment of\nthe effectiveness of internal controls over financial reporting in accordance with OMB Circular A-123, Management\xe2\x80\x99s Responsibility\nfor Internal Control, Appendix A, including adhering to the risk-based three-year rotational testing plan. A Senior Management\nCouncil (SMC) and a Senior Assessment Team (SAT) worked together to provide oversight guidance and decision-making for the\n\n\n\n 170\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nA-123 implementation process. The final report, which reported no material weaknesses, was incorporated into management\xe2\x80\x99s\noverall assurance statement provided under the requirements of the Financial Managers\xe2\x80\x99 Financial Integrity Act (FMFIA). In addition,\nthe Department conducted an improper payment sample testing; the results revealed no significant improper payment or internal\ncontrol deficiencies. Overall, the Department\xe2\x80\x99s assessments demonstrate that the Department has strong internal controls over the\ndisbursement processes, the amounts of improper payment in the Department are immaterial, and the risk of improper payment is\nlow. See Appendix D for reporting details of the Improper Payments Information Act (IPIA) of 2002, as amended.\n\nThe Department accomplished the following initiatives that resulted in meeting the aforementioned goals:\n\n l\t Held meetings throughout the fiscal year with the Office of Inspector General (OIG) and independent auditors to ensure timely\n completion of the audit and issuance of the financial statements;\n\n l\t Prepared and monitored CAPs for the significant deficiency and management letter comments and monitored progress toward\n their completion throughout the year;\n\n l\t Each of the Department\xe2\x80\x99s bureaus/reporting entities has completed an entity-level controls assessment as required by OMB\n Circular A-123, Appendix A. Further control assessment testing was conducted for Control Environment;\n\n l\t Published guidance on the preparation and submission of financial statements, including a calendar of milestone dates.\n Each quarter, with the participation of all bureaus, guidance was reviewed and updated to reflect lessons learned and to\n identify best practices among the bureaus. When necessary, task forces were formed to resolve issues that could have impeded\n the Department\xe2\x80\x99s ability to produce timely, accurate financial statements;\n\n l\t Each of the Department\xe2\x80\x99s bureaus/reporting entities have currently completed or are performing, over a one to three-year\n period (depending on the size of the entity), improper payment risk assessments covering all of its programs/activities as\n required by OMB Circular A-123, Appendix C. These improper payment risk assessments of the entity\xe2\x80\x99s programs/activities\n also include assessments of the corporate control, procurement, and grants management environments, and will thereafter be\n updated or revised on a periodic basis;\n\n l\t Finalized revised capitalization thresholds and new bulk purchase thresholds for several bureaus/reporting entities for property,\n plant, and equipment acquisitions, effective FY 2011;\n\n l\t Held monthly or quarterly meetings led by the Department\xe2\x80\x99s Deputy CFO with individual bureau CFOs to discuss financial\n management issues, including financial statements, OMB Circular A-123, and financial performance metrics. These meetings\n were in addition to the Department\xe2\x80\x99s monthly CFO Council meetings led by the Department\xe2\x80\x99s CFO and the monthly Finance\n Officer meetings led by the Deputy CFO;\n\n l\t Monthly financial metrics were compiled, analyzed, and reported in the government-wide consolidated CFO measurement\n tracking system. Individual bureaus were provided with a monthly status report comparing and analyzing their results with\n the Department\xe2\x80\x99s goals, and the Department and government-wide results. The results of bureaus\xe2\x80\x99 metrics and any corrective\n actions needed were discussed at the bureau CFOs\xe2\x80\x99 individual monthly meetings; and\n\n l\t Facilitated intragovernmental transaction reconciliations using the Department\xe2\x80\x99s Corporate Database application to collect,\n extract, and report on a quarterly basis its intragovernmental account balances, by trading partner, to the Treasury Department.\n The Department took a proactive approach of initiating contact with all trading partner agencies to reconcile large differences.\n Although the Department has seen an improvement in trading partners\xe2\x80\x99 participation, continued improvement is needed in\n order to reconcile all differences.\n\n\n\n\n 171\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nAlthough the Department has accomplished much in the area of financial management, there is still a need to improve upon these\naccomplishments to ensure that the Department continues to produce and report accurate, reliable, and timely financial information.\n\nIn FY 2011 and beyond, the Department plans to accomplish the following:\n\n l\t Continue to enhance OMB Circular A-123, Management\xe2\x80\x99s Responsibility for Internal Controls, process and monitor the\n implementation of the CAPs for any identified deficiencies as a result of the A-123 and financial statement audit process;\n\n l\t Continue to identify areas that will facilitate the acceleration of providing accurate, reliable financial information to Department\n managers and central agencies. This will be achieved through ongoing meetings and workgroups among the Department\xe2\x80\x99s\n financial managers and participation in government-wide financial management committees and workgroups;\n\n l\t Continue to monitor and minimize improper payments, and continue to work with OMB and Treasury Department on\n implementations of Presidential Memorandums regarding \xe2\x80\x9cDo Not Pay List\xe2\x80\x9d screening requirements, and regarding recapturing\n improper payments through payment recapture audits; and\n\n l\t Continue to work with OMB, Treasury Department, and the government-wide Central Reporting Team to improve the\n intragovernmental transactions reconciliation process.\n\n\n GRANTS MANAGEMENT\n\nUnder the CFO/ASA, the Office of Acquisition Management (OAM) is responsible for the Department\xe2\x80\x99s enterprise-wide grants\nmanagement policy, projects, and oversight. The Department\xe2\x80\x99s focus is to standardize policy and procedures for its grant and\ncooperative agreement programs in order to strengthen compliance, work toward a single automated grants management system, and\nenhance/formalize workforce education. Targeted efforts continue to transform the decentralized Department grants management\ncommunity into an effective and efficient partnership. The sharing of resources and responsibilities to accomplish enterprise goals is\na recurring theme throughout the partnership effort.\n\nIntegral to the Department\xe2\x80\x99s effort to move aggressively into the world of electronic grants is the continued utilization of NOAA\xe2\x80\x99s\nGrants Online system, a back-office solution to the Grants.gov storefront. The system is designed to facilitate efficiencies through\nstandardized business processes and provide a direct interface to other Departmental systems and with grant recipients. It continues to\ndemonstrate significant success in reducing paperwork, increasing accountability, and simplifying the post award process. The Grants\nOnline system has also been identified as the solution to standardizing grants procedures in the Department. Grants Online is a\npaperless electronic grants management system that has gained government-wide recognition for streamlining and accelerating the\ngrants application process. This standardization effort is successfully aligning internal processes for the Federal Grants Management\nLine of Business system consolidation efforts.\n\nDuring the prior year, operational grants management responsibilities for grant programs of the International Trade Administration\n(ITA), Minority Business Development Administration (MBDA), and the Office of the Secretary were transferred from OAM to NOAA.\nThis action was taken pursuant to the recommendation of the Optimal Services Delivery Initiative, a Department taskforce charged\nwith streamlining Departmental operations and introducing new efficiencies into the management of its programs. This reorganization\nmoves the management of these programs from a manual, paper-driven process to the automated environment of Grants Online.\nThese three agencies are fully operational in integrating their grant management functions into the electronic processes of Grants\nOnline. The Department\xe2\x80\x99s Grants Management Line of Business Implementation Plan calls for the consolidation of NIST\xe2\x80\x99s Grants\nManagement Information System (GMIS) and the Economic Development Administration (EDA) Operations Planning and Control\nSystem (OPCS) to Grants Online by 2011. An intradepartmental working group has developed a project plan for the performance\n\n\n\n\n 172\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nof a fit gap analysis between bureau grants management systems and Grants Online which should be completed by June 2011.\nActive incorporation of the functions of these two systems into Grants Online should begin sometime in mid-2011.\n\nThe OAM Grants Management Division (GMD) will focus the Department\xe2\x80\x99s work in improving efficiency through continued progress\nin implementation of the streamlining and automation goals of Public Law (PL) 106-107. Key to that effort will be the creation of a\nDepartment-wide training and certification program for grants staff that will align over time with that being developed by the Grants\nPolicy Committee work group on training and certification.\n\nDuring FY 2010, the intra-departmental project team acting under the authority of the Departmental Grants Council continued\nits workforce development efforts by creating an interactive Web-based course on administrative requirements for grants and\ncooperative agreements. This course has been completed and deployed in FY 2010 on the Commerce Learning Center Web site.\n\nOAM coordinates quarterly Departmental Grants Council meetings and works closely with the OIG and the Office of General Counsel\nto implement sound policy and ensure consistency for the Department\xe2\x80\x99s financial assistance programs. The Department is committed\nto the goal of strengthening its grant operations and improving its business processes to provide better services to its customers\nin the federal grant recipient community. OAM has formally instituted a process of Grant Management Reviews which requires\nthat the respective grants divisions at NOAA, NIST, and EDA undergo a review of its functions and processes once every three years.\nThe reviews will be conducted by multi-bureau teams lead by OAM. The first of these reviews was completed at NIST in FY 2010.\n\nThe OAM Director and the Director of GMD serve on the Grants Executive Board and the Grants Policy Committee, participating\nin workgroups and pilot activities. The Department is now fully compliant with Grants.gov milestones and has revised its Grants\nand Cooperative Agreements Manual and Standard Grants Terms and Conditions to recognize the emerging growth of electronic\ngovernment. Continued review and updating of the manual will occur to keep pace with the new requirements engendered by the\ntransition to Grants.gov as the business process model for federal financial assistance programs.\n\nThe Department made significant progress in meeting the data-reporting requirements of the Federal Funding Accountability and\nTransparency Act of 2006 (PL 109-282). Significant technical requirements were presented by this act. As of FY 2010, the Department\nis up to date with its three grant-making bureaus in providing accepted data to the universal Web site, USAspending.gov, consistent\nwith the goal established in the FY 2008 PAR.\n\nOAM GMD is the point of contact for Catalogue of Federal Domestic Assistance (CFDA) updates and represents the Department at\nCFDA User Group meetings. GMD coordinates the response to annual CFDA data calls. Additionally, the responsibility for coordinating\nand processing Individual Background Screenings utilizing from CD-346 (Applicant for Funding Assistance) has been passed from the\nOIG to OAM/GMD in FY 2010. As of mid-August, GMD had processed over 600 Individual Background Screenings for Department\nbureaus through a Federal Bureau of Investigation database.\n\nThe passage of the American Reinvestment and Recovery Act (ARRA) of 2009 posed a major challenge to the Department\xe2\x80\x99s grants\nand acquisitions personnel and those in other government agencies. This legislation placed historic administrative and reporting\nburdens on agencies as the Department prepared to award the stimulus funds authorized by this act to mitigate the damage of the\nworst national recession in 50 years. During FY 2010, the Department extended its efforts to obligate all ARRA funds by September\n30, 2010. As of the end of September the Department has obligated 99.6 percent of its ARRA funding.\n\nThis effort includes a rigorous and demanding standard of monitoring and accuracy in ARRA recipient reporting which is managed\nby GMD. OAM has produced detailed and extensive guidance for client bureaus for ARRA reporting. As a result, the Department has\nestablished and achieved high standards of accuracy in data quality and timeliness in recipient reporting for more than 400 ARRA\n\n\n\n\n 173\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nawards by mid August 2010. GMD produces a daily download and summary of the status of ARRA awards. GMD provides daily\nguidance and support to bureaus of questions related to ARRA recipient reporting.\n\nGMD also provides an advisory in its communiqu\xc3\xa9s to the bureaus of the status of Central Contractor Registry (CCR) for all ARRA\nrecipients. CCR registration is required of all recipients annually. This advisory is provided as a risk management tool to prevent\nregistrations from expiring. Expiration of the CCR sets in motion a long and onerous process of re-registration which can adversely\nimpact an award. Additionally, data quality monitoring of bureau reporting of ARRA awards to USASpending.gov is performed\nby GMD.\n\nOAM has taken further steps to provide guidance to improve accuracy in data quality for all Department financial assistance\nprograms. Grants officers and subordinate supervisors along with program offices are required to verify that data reported to\nthe Federal Assistance Awards Data System (FAADS) and USASpending.gov are accurate and consistent. This element will be a\nperformance metric in grants management reviews conducted by GMD.\n\nOAM is a central player in Department efforts and has responded by establishing core work groups within the Department and\nparticipating in intergovernmental forums to collaborate with the Department\xe2\x80\x99s federal colleagues in the largest economic stimulus\nprogram ever undertaken by the federal government. OAM has led or teamed with collateral Department units to develop numerous\nguidance documents on reporting, internal controls, and award terms and conditions specifically targeted to ARRA awards. Web sites\ndedicated to ARRA have been established and significant outreach efforts undertaken to support prospective applicants for ARRA\nawards. Oversight processes have been developed to meet the requirements of ARRA and to support the continuing goals of the\nAdministration and Congress with respect to transparency and accountability.\n\nUnder OMB circulars, organizations receiving federal awards are assigned to a single federal agency (cognizant agency) which acts\non behalf of all federal agencies in approving indirect cost and other rates for that organization. The Department is responsible\nfor reviewing indirect cost proposals (IDC) submitted by assigned grantee organizations and, based on those reviews, negotiates\nappropriate indirect cost rates. OAM\xe2\x80\x99s responsibility for the management of this program continued throughout the fiscal year.\nNew rate review procedures that were implemented during FY 2007 produced greater levels of financial analysis that resulted\nin financial savings to the Department through indirect cost rate adjustments from grantees\xe2\x80\x99 proposed rates. In FY 2010, GMD\nexpects to approve in excess of 100 IDCs. Program focus for the coming year will include continued implementation of stronger\ninternal controls.\n\nOAM will continue to actively seek opportunities to support government-wide goals of transparency and data quality management.\n\n\n\n HUMAN CAPITAL\n\nBoth the President and Congress recognize that the federal workforce is central to the delivery of services to the U.S. public.\nAcknowledging that people are the key to mission accomplishment, Departmental leadership continues to implement and evaluate\nprograms to ensure that there is succession planning in the area of financial management. Internship and leadership development\nprograms are used as vehicles for making progress in the recruitment and retention of a highly-skilled and diverse workforce. Internship\nprograms are implemented through a variety of sources to provide finance and accounting majors an opportunity to gain hands-on\nexperience, while introducing potential future employees to the opportunities that exist at the Department. Ongoing training and\ndevelopment opportunities are offered as a component of continuous learning in the area of financial management.\n\n\n\n\n 174\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nIn FY 2010, the Department continued to recruit college-level graduates interested in pursuing a career in federal accounting through\nthe Federal Career Intern Program (FCIP). Created under Executive Order 13162, the FCIP has assisted federal agencies, including\nthe Department, in the effort to recruit the highest caliber people to the federal government, develop their professional abilities,\nand retain them through a possible conversion to permanent appointments in the competitive service. The FCIP is a two-year\nprogram through which interns are appointed to GS-5, 7, 9 (and equivalent) grade level positions allowing them to develop and/or\nenhance competencies essential to the Department\xe2\x80\x99s mission and needs. The program consists of an initial assignment, rotational\nassignments, formal classroom training, and mentoring sessions. Supervisors establish individual development plans, in conjunction\nwith the training officers and interns, to ensure that the two years of formal training offer opportunities to gain knowledge and skills\nrelevant to accomplishing organizational goals and necessary to perform successfully in the program. During the two-year internship,\nsupervisors closely monitor interns to assess their potential for continued employment in the federal government. Contingent upon\nsatisfactory performance throughout the internship program, interns are non-competitively converted to career or career-conditional\nappointments. During FY 2010, a class of four interns in financial management occupations graduated from the program, and a new\nclass of nine interns in financial management occupations entered the program to begin the two-year term. There are a total of 12\ninterns in FY 2010.\n\nThe Department also continued its recruitment efforts in the area of financial management by maintaining its partnership with the\nNational Academy Foundation (NAF) Academy of Finance (AOF). The NAF AOF students are brought on-board through the Student\nTemporary Employment Program to enhance their individual and collective learning experiences in the finance and accounting fields.\nAt the completion of the eight weeks of the NAF program, students make presentations to Department leaders to demonstrate\nnewly acquired skills in their respective areas. Departmental supervisors monitor the performance of the interns throughout their\nappointment, and after successful completion, many supervisors have extended the temporary appointment or utilized other programs\n(i.e., Student Career Experience Program) to bring in entry-level talent. In FY 2010, the Department recruited 14 AOF high school\nstudents for the summer 2010 term across eight bureaus and organizational units.\n\nIn addition to the recruitment efforts being implemented to attain a highly-skilled workforce in the area of financial management,\nthe Department has succession planning strategies in place, including the development of competencies within the current workforce.\nAs one of the Department\xe2\x80\x99s recognized mission-critical occupations, accounting and budgeting series employees at the GS-7 through\nGS-15 and equivalent levels are eligible to apply for the following major leadership development programs: Leadership Education and\nDevelopment Certificate Program, Aspiring Leaders Development Program, Executive Leadership Development Program, and Senior\nExecutive Service Candidate Development Program. These program activities include competency assessments, formal classroom\ntraining, developmental assignments, seminars, action learning task team projects, and mentoring sessions. In FY 2010, a total of six\nemployees in the financial management workforce participated in the Department\xe2\x80\x99s formal leadership development programs.\n\nApproximately 225 financial management professionals from all levels in the operating units participated in various training sessions\nduring the three-day Department 2010 Annual Financial Management Conference. The theme \xe2\x80\x9cSpring into Action\xe2\x80\x9d was actualized\nthrough interactive training modules and information sessions in areas such as strategic planning to produce results; teambuilding;\nand recruitment, development, and retention of employees. Additionally, special sessions were held to discuss major Administration\npriorities including OMB performance measurements, government-wide and Department ARRA implementation, and the Department\nbalanced scorecard and performance excellence program.\n\n\n\n\n 175\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n Debt Management\n\n\n RECEIVABLES AND DEBT MANAGEMENT\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x89\n he Department has incorporated the principles of the Credit Reform Act of 1990 into the operations of its credit and debt\n programs. Prescreening procedures, account-servicing standards, determined collection of delinquent debt, inventory\n management, and asset disposition standards have helped to diminish significantly the amount of risk inherent in credit\nprograms. These procedures were established to ensure that credit costs are properly identified and controlled, that borrowers\xe2\x80\x99\nneeds are met, and that costs to the taxpayers are minimized.\n (in Millions)\n\n\n\n\nThe Department\xe2\x80\x99s gross receivables increased 11.2 percent, from $533 million at September 30, 2009 to $593 million at September 30,\n2010, as reported on the Department\xe2\x80\x99s Treasury Report on Receivables (TROR). The TROR is the primary means for the Department to\nprovide comprehensive information on its gross receivables and delinquent debt due from the public. Debt over 180 days delinquent\ndecreased slightly from $41 million at September 30, 2009 to $40 million at September 30, 2010. Total delinquencies as a percentage\nof gross receivables decreased from 9.2 percent at September 30, 2009 to 7.5 percent at September 30, 2010, due to the decrease\nin total delinquencies.\n\n\n\n\n 176\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nThe Debt Collection Improvement Act of 1996 established the Treasury Department as the collection agency for eligible federal\nagency debts that are more than 180 days delinquent. It also established Treasury\xe2\x80\x99s Financial Management Service as the federal\ngovernment\xe2\x80\x99s debt collection center. Over $29 million in delinquent debt has been referred to Treasury for cross-servicing since\nFY 2002. Currently, over 68 percent of the Department\xe2\x80\x99s overall delinquent debt that is eligible for referral to Treasury is in litigation\nwith the Department of Justice for enforced collection.\nDuring FY 2001, the issuance of the revised Federal Claims Collection Standards and the revised OMB Circular A-129, Policies for\nFederal Credit Programs and Non-Tax Receivables, provided agencies greater latitude to maximize the effectiveness of federal debt\ncollection procedures. Since then, the Department has utilized all the tools available to improve the management of its debt.\n\n\n P AY M ENT P RACTICES\n\nElectronic Funds Transfer (EFT)\n\nThe Debt Collection Improvement Act of 1996 requires the use of EFT for most federal payments, with the exception of tax refunds.\nThe Department closely monitors its monthly EFT performance, and submits consolidated monthly EFT activity reports to OMB, as part\nof the Department\xe2\x80\x99s Performance Metrics data.\n\nThe Department\xe2\x80\x99s vendor EFT percentage decreased slightly from 99 percent for FY 2009 to 98 percent for FY 2010. The Department\nworked closely with its bureaus to identify opportunities for new or improved business processes. These efforts allowed the Department\nin FY 2010, on average, to consistently exceed OMB\xe2\x80\x99s vendor EFT performance goal of 96 percent. The Department\xe2\x80\x99s overall EFT\npercentage decreased from 98 percent for FY 2009 to 96 percent for FY 2010. This is primarily due to the need for non-EFT payroll\npayments to certain 2010 Decennial Census temporary employees. The Department believes its continued efforts to implement new\nor improved business processes will lead to future increases in vendor and overall EFT percentages.\n\n\n\n\n 177\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nThe Department\xe2\x80\x99s achievements in this area are illustrated in the table below:\n\n\n Total Volume\n (Actual Number of Transactions \xe2\x80\x94\n Payment Category EFT Percentage EFT and Non-EFT)\n FY 2010 FY 2009 FY 2010 FY 2009\n Grants 100% 100% 35,497 30,577\n Payroll 96% 98% 8,331,574 2,471,408\n Retirement Benefits 99% 99% 5,896 6,081\n Vendor 98% 99% 383,228 562,441\n Overall 96% 98% 8,756,195 3,070,507\n\n\nThe substantial increase in the total volume of payroll transactions from FY 2009 to FY 2010 is due to increased FY 2010 payments to\n2010 Decennial Census temporary employees. The decrease from FY 2009 to FY 2010 in the total volume of vendor payments is primarily\ndue to a large decrease in reimbursement payments to retailers for coupons redeemed under the National Telecommunications and\nInformation Administration\xe2\x80\x99s (NTIA) Digital-to-Analog Converter Box Program. The program provided households in the U.S. with\nforty-dollar coupons (two per household maximum) that could have been applied toward the purchase of digital-to-analog converter\nboxes. The program was substantially completed by mid-November 2009.\n\nBankcards\n\nThe Department is committed to the use of bankcards (purchase cards) as a means of streamlining Departmental procurements.\nBankcard usage is closely monitored, and those that are no longer needed are promptly closed. This has resulted in an overall\ndecrease, over the past nine fiscal years, in the number of bankcards in use, from 6,405 at September 30, 2001 to 5,020 at September\n30, 2010. The Department\xe2\x80\x99s emphasis on EFT-compliant payment methods has contributed to an overall increase over the past nine\nfiscal years, in bankcard purchases, from $131.6 million in FY 2001 to $167.1 million in FY 2010. The Department continues to\nmonitor the internal controls surrounding bankcard purchases to ensure that all such purchases are legal and proper.\n\nPrompt Payment\n\nThe Prompt Payment Act of 1982 requires agencies to pay their\nbills to vendors on a timely basis, and to pay interest penalties\nwhen payments are made late. The Department closely monitors\nits prompt payment performance, and submits consolidated\nmonthly prompt payment activity reports to OMB as part of the\nDepartment\xe2\x80\x99s Performance Metrics data.\n\nThe Department has increased slightly its prompt payment\nperformance to 99 percent in FY 2010 from 98 percent in\nFY 2009. Furthermore, the number of invoices with late-\npayment interest penalties remained steady with 5,014 in\nFY 2009 and 5,102 in FY 2010. The Department continues to\nfocus on improving its prompt payment percentage by working\nclosely with its bureaus to identify opportunities for new or\nimproved business processes.\n\n\n\n\n 178\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n ANALYSIS OF FY 2 0 1 0 FINANCIAL CONDITION AND RES U LTS\n\n\nComposition of Assets and Assets by Responsibility Segment\n\n\n\n\n\xe2\x80\x8aT\xe2\x80\x89 he composition (by percentage) and distribution (by responsibility segment) of the Department\xe2\x80\x99s assets remained\n consistent from September 30, 2009 to September 30, 2010.\n\n\n\nTotal assets amounted to $34.43 billion at September 30, 2010. Fund Balance with Treasury of $25.79 billion is the aggregate\namount of funds available to make authorized expenditures and pay liabilities. General Property, Plant, and Equipment, Net of\nAccumulated Depreciation (General PP&E) of $7.39 billion includes $4.21 billion of Construction-in-progress, primarily of satellites\nand weather measuring and monitoring systems; $1.42 billion of satellites and weather systems; $886 million of structures,\nfacilities, and leasehold improvements; and $871 million of other General PP&E. Direct Loans and Loan Guarantees, Net of $540\nmillion primarily relates to NOAA\xe2\x80\x99s direct loan programs. Other Assets of $712 million primarily includes Advances and Prepayments\nof $447 million; Accounts Receivable, Net of $155 million; and Inventory, Materials, and Supplies, Net of $98 million.\n\n\n\n\nTrends in Assets\n\nTotal Assets increased $476 million or 1 percent, from $33.96 billion at September 30, 2009 to $34.43 billion at September 30,\n2010. General PP&E, Net increased $636 million or 9 percent, from $6.76 billion to $7.39 billion, mainly due to an increase in\nSatellites/Weather Systems personal Property of $648 million. Fund Balance with Treasury increased $114 million or 0.5 percent, from\n$25.67 billion to $25.79 billion. Other Assets decreased by $303 million or 30 percent, from $1.02 billion to $712 million, primarily\ndue to a decrease of $264 million in Advances and Prepayments to another federal agency for NTIA\xe2\x80\x99s Public Safety Interoperable\nCommunications grant program.\n\n\n\n\n 179\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n $40,000\n $35,000\n $30,000\n (in Millions)\n\n\n\n\n $25,000\n $20,000\n $15,000\n $10,000\n $5,000\n $0\n\n\n\n\nComposition of Liabilities and Liabilities by Responsibility Segment\n\nThe composition (by percentage) and distribution (by responsibility segment) of the Department\xe2\x80\x99s liabilities somewhat changed from\nSeptember 30, 2009 to September 30, 2010. Accrued Grants increased from 10 percent of total liabilities at September 30, 2009\nto 16 percent of total liabilities at September 30, 2010, and Spectrum Auction Proceeds Liability to the Federal Communications\nCommission (FCC) decreased from 9 percent of total liabilities at September 30, 2009 to 1 percent of total liabilities at September\n30, 2010. As a result of the above fluctuations (explained in Trends in Liabilities section below), EDA\xe2\x80\x99s liabilities increased from\n8 percent of total liabilities at September 30, 2009 to 12 percent of total liabilities at September 30, 2010, and NTIA\xe2\x80\x99s liabilities\ndecreased from 11 percent of total liabilities at September 30, 2009 to 4 percent of total liabilities at September 30, 2010.\n\nTotal liabilities amounted to $4.68 billion at September 30, 2010. Unearned Revenue of $1.33 billion represents the portion of\nmonies received from customers for which goods and services have not been provided or rendered by the Department. Federal\nEmployee Benefits Liability of $769 million is composed of the actuarial present value of projected benefits for the NOAA Corps\nRetirement System ($503 million) and the NOAA Corps Post-retirement Health Benefits ($56 million), and Actuarial FECA Liability\n($210 million), which represents the actuarial liability for future workers\xe2\x80\x99 compensation benefits. Accrued Grants of $766 million,\nwhich relates to a diverse array of financial assistance programs and projects, includes EDA\xe2\x80\x99s accrued grants of $487 million for\nits economic development assistance funding to state and local governments. Accrued Payroll and Annual Leave of $561 million\nincludes salaries and wages earned by employees, but not disbursed as of September 30, 2010. Accounts Payable of $463 million\nconsists primarily of amounts owed for goods, services, or capitalized assets received, progress on contract performance by others,\nand other expenses due. Debt to Treasury of $518 million consists of monies borrowed primarily for NOAA\xe2\x80\x99s direct loan programs.\nOther Liabilities of $237 million primarily includes Environmental and Disposal Liabilities of $55 million, Accrued FECA Liability of\n$44 million, Accrued Benefits of $44 million, Resources Payable to Treasury of $19 million, Employment-related Liability of $18\nmillion, and Contingent Liabilities of $12 million.\n\n\n\n\n 180\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nTrends in Liabilities\n\nTotal Liabilities increased $59 million or 1 percent, from $4.62 billion at September 30, 2009 to $4.69 billion at September\n30, 2010. Accrued grants increased by $320 million or 72 percent, from $446 million to $766 million, primarily resulting from\nEDA\xe2\x80\x99s Accrued Grants increase of $209 million which resulted from additional funding under ARRA and a FY 2010 supplemental\nappropriation for a major storms and flooding disaster that occurred in 2010. NTIA\xe2\x80\x99s Accrued Grants also increased by $90 million,\nprimarily for the Broadband Technology Opportunities Program. Federal Employee Benefits increased $82 million or 12 percent,\nfrom $687 million to $$769 million, primarily from the effects of changes in economic and other assumptions on the actuarial\nvaluation for NOAA Corps Retirement System, and also from the effect of increased Decennial Census employees on the valuation\nof the Department\xe2\x80\x99s Actuarial FECA Liability. Debt to Treasury increased $31 million or 6 percent, from $487 million to $518\nmillion, mainly due to new borrowings in FY 2010 for NOAA\xe2\x80\x99s direct loan programs. There was a large decrease of $367 million\nor 92 percent, from $401 million to $34 million, in NTIA\xe2\x80\x99s Spectrum Auction Proceeds Liability to FCC. This liability represents FCC\nauction proceeds for which licenses have not yet been granted by FCC. During FY 2010, the liability was primarily reduced by net\nauction proceeds for which licenses have been granted, and by FCC administrative fees.\n\n\n\n\n 181\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nComposition of and Trends in Financing Sources\n\nThe Department\xe2\x80\x99s Financing Sources, shown on the Consolidated\nStatement of Changes in Net Position, are traditionally obtained\nprimarily from Appropriations Received, Net of Reductions.\nThe composition (by percentage) and dollar amount of the\nDepartment\xe2\x80\x99s financing sources changed significantly, however,\nfrom FY 2009 to FY 2010, mainly due to the large decrease of\n$16.49 billion, from $16.69 billion for FY 2009 to $197 million for\nFY 2010, in the transfers in of spectrum auction proceeds from FCC\nfrom the auction of licenses for recovered analog spectrum held in\nMarch 2008. When a license is granted by FCC, a financing source\nis recognized on the Consolidated Statement of Changes in Net\nPosition for the earned net auction proceeds.\n\nOther typical Financing Sources include net transfers to and from\nother federal agencies without reimbursement, and imputed\nfinancing sources from cost absorbed by other federal agencies.\n\nTotal Financing Sources decreased $12.87 billion or 48 percent, from $26.95 billion for FY 2009 to $14.08 billion for FY 2010. There\nwas a $16.49 billion decrease in the transfers in of spectrum auction proceeds, as explained above. Appropriations Received, Net\nof Reductions decreased by $3.93 billion or 23 percent, from $17.34 billion for FY 2009 to $13.41 billion for FY 2010, primarily\ndue to ARRA Appropriations Received of $7.92 billion being received in FY 2009, whereas there were not any ARRA Appropriations\nReceived in FY 2010. The above decrease in Appropriations Received is mainly offset by an increase in Appropriations Received of\n$4.06 billion in Census Bureau\xe2\x80\x99s Periodic Censuses and Programs budget account. On September 30, 2009, NTIA\xe2\x80\x99s Digital Television\nand Transition Public Safety Fund transferred $7.36 billion to the General Fund of the Treasury (FY 2009 negative financing\nsource), whereas no similar transfer was made in FY 2010. All other Financing Sources had a net increase of $36 million, from\n$284 million for FY 2009 to $320 million for FY 2010.\n\n\n\nFY 2010 Net Cost of Operations by Strategic Goal\n\nIn FY 2010, Net Cost of Operations amounted to $13.66 billion, which\nconsists of Gross Costs of $16.52 billion less Earned Revenue of\n$2.86 billion.\n\nStrategic Goal 1, Maximize U.S. Competitiveness and Enable Economic\nGrowth for American Industries, Workers, and Consumers, includes\nNet Program Costs of $6.47 billion (Gross Costs of $6.70 billion less\nEarned Revenue of $229 million) for Census Bureau. Census Bureau\ncarries out the Decennial Census, periodic censuses, and demographic\nand other surveys, and prepares and releases targeted data products\nfor economic and other programs. ITA\xe2\x80\x99s programs and activities also\nsupport Strategic Goal 1, with Net Program Costs of $478 million (Gross\nCosts of $495 million less Earned Revenue of $17 million). ITA assists\nthe export growth of small and medium-sized businesses, enforces\nU.S. trade laws and trade agreements, monitors and maintains trading\n\n\n 182\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c F i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\nrelationships with established markets, promotes new business in emerging markets, and improves access to overseas markets\nby identifying and pressing for the removal of trade barriers. Strategic Goal 1 also includes Net Program Costs of $560 million\n(Gross Costs of $578 million less Earned Revenue of $18 million) for EDA. EDA helps distressed communities address problems\nassociated with long-term economic distress, as well as sudden and severe economic dislocations including recovering from the\neconomic impacts of natural disasters, the closure of military installations and other federal facilities, changing trade patterns,\nand the depletion of natural resources.\n\nStrategic Goal 2, Promote U.S. Innovation and Industrial Competitiveness, includes Net Program Costs of ($141) million (Gross Costs\nof $1.96 billion less Earned Revenue of $2.10 billion) for the U.S. Patent and Trademark Office\xe2\x80\x99s (USPTO) patents and trademark\nprograms. The issuance of patents provides incentives to invent and invest in new technology by allowing innovators the opportunity\nto benefit from their discoveries. Registration of trademarks assists businesses in protecting their investments and safeguards\nconsumers against confusion and deception in the marketplace by providing notice of trademarks in use. Through dissemination\nof patent and trademark information, the Department promotes a global understanding of intellectual property protection and\nfacilitates the development and sharing of new technologies worldwide. NTIA\xe2\x80\x99s programs and activities also support Strategic Goal\n2, with Net Program Costs of $570 million (Gross Costs of $600 million less Earned Revenue of $30 million). NTIA serves as the\nprincipal adviser to the President on domestic and international communications and information policy-making, promotes access\nto telecommunications services for all Americans and competition in domestic and international markets, manages all federal use\nof the electromagnetic spectrum and generally promotes efficient use of spectrum, and conducts telecommunications technology\nresearch, including standards-setting in partnership with business and other federal agencies. Strategic Goal 2 also includes Net\nProgram Costs of $516 million (Gross Costs of $644 million less Earned Revenue of $128 million) for NIST\xe2\x80\x99s Measurement and\nStandards Laboratories. These laboratories are the stewards of the Nation\xe2\x80\x99s measurement infrastructure, and provide measurement\nmethods, reference materials, test procedures, instrument calibrations, fundamental data, and standards that comprise essential\ntools for research, production, and buyer-seller transactions.\n\nStrategic Goal 3, Promote Environmental Stewardship, includes Net Program Costs of $1.67 billion (Gross Costs of $1.78 billion less\nEarned Revenue of $110 million) related to NOAA\xe2\x80\x99s stewardship of ecosystems, which reflects NOAA\xe2\x80\x99s mission to conserve, protect,\nmanage, and restore fisheries and coastal and ocean resources. The Department has a responsibility for stewardship of the marine\necosystem and for setting standards to protect and manage the shared resources and harvests of the oceans. The Department\nstrives to balance sustainable development and healthy functioning marine ecosystems, and to conserve, protect, restore, and\nbetter manage resources.\n\n\n\n LI M ITATIONS OF THE FINANCIAL STATE M ENTS\n\nThese financial statements have been prepared to report the overall financial position and results of operations of the Department,\npursuant to the requirements of 31 U.S.C. 3515, Financial statements of agencies, item(b). While the statements have been\nprepared from the books and records of the Department in accordance with the form and content prescribed by OMB, the\nstatements are in addition to the financial reports used to monitor and control budgetary resources that are prepared from the\nsame books and records.\n\nThese financial statements should be read with the realization that they are for a component of the U.S. government, a sovereign\nentity. One implication of this is that liabilities cannot be liquidated without legislation that provides the resources to do so.\n\n\n\n\n 183\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF i n a n c i a l M a n ag e m e n t a n d A n a ly s i s\n\n\n\n\n 184\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n P r i n ci pa l\n F i n a n ci a l\n S tat e m e n t s\n\x0c\x0c P RINCI P AL FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Balance Sheets\nAs of September 30, 2010 and 2009 (In Thousands)\n FY 2010 FY 2009\n\n ASSETS\n Intragovernmental:\n Fund Balance with Treasury (Notes 2 and 18) $ 25,785,547 $ 25,671,762\n Accounts Receivable, Net (Note 3) 84,479 78,111\n Other - Advances and Prepayments 400,042 696,068\n Total Intragovernmental 26,270,068 26,445,941\n\n Cash (Note 4) 3,616 3,572\n Accounts Receivable, Net (Note 3) 70,780 31,429\n Direct Loans and Loan Guarantees, Net (Note 5) 540,147 511,092\n Inventory, Materials, and Supplies, Net (Note 6) 98,326 145,903\n General Property, Plant, and Equipment, Net (Note 7) 7,394,711 6,758,827\n Other (Note 8) 55,122 60,021\n TOTAL ASSETS $ 34,432,770 $ 33,956,785\n\n Stewardship Property, Plant, and Equipment (Note 23)\n\n LIABILITIES\n Intragovernmental:\n Accounts Payable $ 60,088 $ 134,877\n Debt to Treasury (Note 10) 517,930 487,275\n Other\n \t Spectrum Auction Proceeds Liability to Federal Communications Commission (Note 18) \t 33,838 400,451\n \t Resources Payable to Treasury 18,899 22,689\n \t Unearned Revenue 373,921 337,255\n \t Other (Note 11) 104,344 77,795\n Total Intragovernmental 1,109,020 1,460,342\n\n Accounts Payable 402,605 371,067\n Loan Guarantee Liabilities (Notes 5 and 16) 565 589\n Federal Employee Benefits (Note 12) 769,035 687,434\n Environmental and Disposal Liabilities (Note 13) 54,649 60,995\n Other\n \t Accrued Payroll and Annual Leave 561,154 540,082\n \t Accrued Grants 766,204 446,207\n \t Accrued Coupons for Digital-to-Analog Converter Box Program \t - 24,489\n \t Capital Lease Liabilities (Note 14) 9,278 12,589\n \t Unearned Revenue 958,474 974,015\n \t Other (Note 11) 49,181 42,956\n TOTAL LIABILITIES $ 4,680,165 $ 4,620,765\n\n Commitments and Contingencies (Notes 5, 14, and 16)\n\n\n NET POSITION\n Unexpended Appropriations\n \t Unexpended Appropriations - Earmarked Funds (Note 21) $ \t 4,099,319 $ \t 4,890,417\n \t Unexpended Appropriations - All Other Funds 8,782,873 8,246,105\n Cumulative Results of Operations\n \t Cumulative Results of Operations - Earmarked Funds (Note 21) 10,189,816 10,155,041\n \t Cumulative Results of Operations - All Other Funds 6,680,597 6,044,457\n TOTAL NET POSITION $ 29,752,605 $ 29,336,020\n TOTAL LIABILITIES AND NET POSITION $ 34,432,770 $ 33,956,785\n\nThe accompanying notes are an integral part of these statements.\n\n\n\n 187\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP RINCI P AL FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Statements of Net Cost\nFor the Years Ended September 30, 2010 and 2009 (Note 17) (In Thousands)\n\n FY 2010 FY 2009\n\n\nStrategic Goal 1: Maximize U.S. Competitiveness and Enable Economic Growth for American\nIndustries, Workers, and Consumers\n\t Gross Costs $ 8,140,086 $ 4,074,978\n\t Less: Earned Revenue \t (261,482) \t (280,564)\n\n\t Net Program Costs \t 7,878,604 \t 3,794,414\n\n\nStrategic Goal 2: Promote U.S. Innovation and Industrial Competitiveness\n\t Gross Costs 3,586,729 4,047,583\n\t Less: Earned Revenue \t (2,324,724) \t (2,167,582)\n\n\t Net Program Costs 1,262,005 1,880,001\n\n\nStrategic Goal 3: Promote Environmental Stewardship\n\t Gross Costs 4,800,594 4,417,956\n\t Less: Earned Revenue \t (277,123) \t (265,632)\n\n\t Net Program Costs 4,523,471 4,152,324\n\n\nNET COST OF OPERATIONS $ 13,664,080 $ 9,826,739\n\n\nThe accompanying notes are an integral part of these statements.\n\n\n\n\n 188\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c P RINCI P AL FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Statements of Changes in Net Position\nFor the Years Ended September 30, 2010 and 2009 (In Thousands)\n\n FY 2010 FY 2009\n\n Earmarked Earmarked\n Funds Consolidated Funds All Other Consolidated\n (Note 21) All Other Funds Total (Note 21) Funds Total\nCumulative Results Of Operations:\n\t Beginning Balance $ 10,155,041 $ 6,044,457 $ 16,199,498 $ 1,646,557 $ 5,388,893 $ 7,035,450\n\nBudgetary Financing Sources:\n\t Appropriations Used \t 249,598 13,406,937 13,656,535 \t 364,718 8,939,344 9,304,062\n\t Non-exchange Revenue 18,515 \t 1,028 19,543 21,432 \t - 21,432\n\t Donations and Forfeitures of Cash and\n\t\t Cash Equivalents \t - 1,335 1,335 \t - 846 846\n\t Transfers In of Spectrum Auction Proceeds from\n\t\t Federal Communications Commission (Note 18) \t 196,613 \t - 196,613 \t 16,689,557 \t - 16,689,557\n\t Transfer Out of Spectrum Auction Proceeds to\n\t\t Treasury General Fund (Note 18) \t - \t - \t - \t (7,363,000) \t - \t (7,363,000)\n\t Transfers In/(Out) Without Reimbursement, Net \t 18,613 \t 107,179 \t 125,792 \t 15,240 \t 83,201 \t 98,441\n\t Other Budgetary Financing Sources/(Uses), Net \t - \t 817 \t 817 \t - \t 1,540 \t 1,540\n\nOther Financing Sources (Non-exchange):\n\t Donations and Forfeitures of Property \t - \t 461 \t 461 \t - \t 55 \t 55\n\t Transfers In/(Out) Without Reimbursement, Net \t (349) \t (4,455) \t (4,804) \t - \t 4,254 \t 4,254\n\t Imputed Financing Sources from Cost Absorbed\n\t\t by Others \t 22,990 323,782 346,772 \t 981 234,763 235,744\n\t Downward Subsidy Reestimates Payable to\n\t\t Treasury \t - \t (8,087) \t (8,087) \t - \t (3,509) \t (3,509)\n\t Other Financing Sources/(Uses), Net \t - 18 18 (27) 1,392 1,365\n\nTotal Financing Sources 505,980 13,829,015 14,334,995 9,728,901 9,261,886 18,990,787\n\nNet Cost of Operations (471,205) (13,192,875) (13,664,080) (1,220,417) (8,606,322) (9,826,739)\n\nNet Change 34,775 636,140 670,915 8,508,484 655,564 9,164,048\n\nCumulative Results of Operations \xe2\x80\x93 Ending Balance 10,189,816 6,680,597 16,870,413 10,155,041 6,044,457 16,199,498\n\nUnexpended Appropriations:\n\t Beginning Balance \t 4,890,417 8,246,105 13,136,522 \t 462 5,179,925 5,180,387\n\nBudgetary Financing Sources:\n\t Appropriations Received (Note 18) \t - 14,109,905 14,109,905 \t 5,350,000 12,012,359 17,362,359\n\t Appropriations Transferred In/(Out), Net \t - \t 14,387 \t 14,387 \t (95,328) \t 39,123 \t (56,205)\n\t Other Adjustments (Note 18) \t (541,500) (180,587) (722,087) \t 1 (45,958) (45,957)\n\t Appropriations Used \t (249,598) (13,406,937) (13,656,535) \t (364,718) (8,939,344) (9,304,062)\n\nTotal Budgetary Financing Sources \t (791,098) 536,768 (254,330) \t 4,889,955 3,066,180 7,956,135\n\nUnexpended Appropriations \xe2\x80\x93 Ending Balance \t 4,099,319 \t 8,782,873 \t12,882,192 \t 4,890,417 \t 8,246,105 \t13,136,522\n\nNET POSITION $ \t14,289,135 $ 15,463,470 $ 29,752,605 $ \t15,045,458 $ 14,290,562 $ 29,336,020\n\nThe accompanying notes are an integral part of these statements.\n\n\n\n\n 189\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cP RINCI P AL FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Combined Statements of Budgetary Resources\nFor the Years Ended September 30, 2010 and 2009 (Note 18) (In Thousands)\n FY 2010 FY 2009\n Non-budgetary Credit Non-budgetary Credit\n Budgetary Program Financing Accounts Budgetary Program Financing Accounts\n\nBUDGETARY RESOURCES:\nUnobligated Balance, Brought Forward, October 1 $ 16,593,521 $ 2,335 $ 2,289,356 $ 59,577\nAdjustments to Unobligated Balance, Brought Forward \t - \t - \t 77 \t 389\nRecoveries of Prior-years Unpaid Obligations \t 230,289 \t 10,149 366,362 \t 1,515\nBudget Authority\n\t Appropriations \t 14,322,512 \t - \t 34,069,220 \t -\n\t Borrowing Authority \t - \t 78,375 \t - \t 88,368\n\t Spending Authority From Offsetting Collections\n\t\t Earned\n\t\t\t Collected 3,698,411 98,229 3,482,685 53,505\n\t\t\t Change in Receivables 37,895 \t - 18,868 \t -\n\t\t Change in Unfilled Customer Orders\n\t\t\t Advances Received 8,453 \t - (87,441) \t -\n\t\t\t Without Advances 193,858 \t - (42,305) \t -\n\t\t Previously Unavailable \t 2,716 \t - \t 2,113 \t -\nTotal Budget Authority 18,263,845 176,604 37,443,140 141,873\nNonexpenditure Transfers, Net 140,391 \t - 57,381 \t -\nTemporarily Not Available Pursuant to Public Law \t (52,543) \t - \t - \t -\nPermanently Not Available (722,371) \t (79,884) (8,326,575) \t (27,425)\nTOTAL BUDGETARY RESOURCES $ 34,453,132 $ 109,204 $ 31,829,741 $ 175,929\n\nSTATUS OF BUDGETARY RESOURCES:\nObligations Incurred\n\t Direct $ 18,874,186 $ 108,331 $ 12,089,149 $ 117,486\n\t Reimbursable 3,423,294 \t - 3,147,071 \t 56,108\nTotal Obligations Incurred 22,297,480 108,331 15,236,220 173,594\nUnobligated Balance\n\t Apportioned 2,651,510 \t - 7,800,617 \t -\n\t Exempt From Apportionment 577,107 \t - 356,139 \t -\nTotal Unobligated Balance 3,228,617 \t - 8,156,756 \t -\nUnobligated Balance Not Available (Note 2) 8,927,035 \t 873 8,436,765 \t 2,335\nTOTAL STATUS OF BUDGETARY RESOURCES $ 34,453,132 $ 109,204 $ 31,829,741 $ 175,929\n\nCHANGE IN UNPAID OBLIGATED BALANCE, NET:\nUnpaid Obligated Balance, Net, Brought Forward, October 1 \t \t\n\t Unpaid Obligations, Brought Forward $ 8,073,367 $ \t 261,279 $ 7,424,863 $ \t 215,703\n\t Less: Uncollected Customer Payments, Brought Forward (291,630) (735) (315,067) \t (735)\nTotal Unpaid Obligated Balance, Net, Brought Forward 7,781,737 260,544 7,109,796 214,968\nObligations Incurred 22,297,480 108,331 15,236,220 173,594\nLess: Gross Outlays (16,968,579) (130,346) (14,221,354) \t (126,503)\nLess: Actual Recoveries of Prior-years Unpaid Obligations (230,289) \t (10,149) (366,362) \t (1,515)\nChange in Uncollected Customer Payments (231,753) \t - 23,437 \t -\nTOTAL UNPAID OBLIGATED BALANCE, NET, END OF PERIOD $ 12,648,596 $ 228,380 $ 7,781,737 $ 260,544\nUnpaid Obligated Balance, Net, End of Period\n\t Unpaid Obligations $ 13,171,979 $ 229,115 $ 8,073,367 $ 261,279\n\t Less: Uncollected Customer Payments (523,383) (735) (291,630) \t (735)\nTOTAL UNPAID OBLIGATED BALANCE, NET, END OF PERIOD $ 12,648,596 $ 228,380 $ 7,781,737 $ 260,544\n\nNET OUTLAYS:\nGross Outlays $ 16,968,579 $ 130,346 $ 14,221,354 $ 126,503\nLess: Offsetting Collections (3,706,864) (98,229) (3,395,244) \t (53,505)\nLess: Distributed Offsetting (Receipts)/Outlays, Net \t (28,541) \t - \t (101,324) \t -\nNET OUTLAYS $ 13,233,174 $ 32,117 $ 10,724,786 $ 72,998\n\nThe accompanying notes are an integral part of these statements.\n\n\n\n\n 190\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nNotes to the Financial Statements\n(All Tables are Presented in Thousands, Unless Otherwise Noted)\n\n\n Note 1. Summary of Significant Accounting Policies\n\n\n\nA\t Reporting Entity\n\n\n\n\xe2\x80\x8aT\xe2\x80\x8a\n he Department of Commerce (the Department) is a cabinet-level agency of the Executive Branch of the U.S. government.\n Established in 1903 to promote U.S. business and trade, the Department\xe2\x80\x99s broad range of responsibilities includes predicting\n the weather, granting patents and registering trademarks, measuring economic growth, gathering and disseminating\nstatistical data, expanding U.S. exports, developing innovative technologies, helping local communities improve their economic\ndevelopment capabilities, promoting minority entrepreneurial activities, and monitoring the stewardship of national assets.\nThe Department is composed of 12 bureaus, the Emergency Oil and Gas and Steel Loan Guarantee Programs, the National\nIntellectual Property Law Enforcement Coordination Council, and Departmental Management.\n\nFor the Consolidating Statements of Net Cost (see Note 17), the Department\xe2\x80\x99s entities have been grouped together as follows:\n\n l\t National Oceanic and Atmospheric Administration (NOAA)\n l\t U.S. Patent and Trademark Office (USPTO)\n l\t Economics and Statistics Administration (ESA) \xe2\x80\x94 based on organizational structure\n l\t Bureau of Economic Analysis (BEA)\n l\t Census Bureau\n l\t National Institute of Standards and Technology (NIST)\n l\t National Telecommunications and Information Administration (NTIA)\n l\t Others\n l\t Bureau of Industry and Security (BIS)\n l\t Economic Development Administration (EDA)\n l\t Emergency Oil and Gas and Steel Loan Guarantee Programs (ELGP)\n l\t International Trade Administration (ITA)\n l\t Minority Business Development Agency (MBDA)\n l\t National Intellectual Property Law Enforcement Coordination Council (NIPC)\n l\t National Technical Information Service (NTIS)\n\n\n\n\n 191\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n l\t\tDepartmental Management (DM)\n l\t Franchise Fund\n l\t Gifts and Bequests (G&B)\n l\t Herbert C. Hoover Building Renovation Project (HCHB)\n\n l\t Office of Inspector General (OIG)\n l\t Salaries and Expenses (S&E)\n l\t Working Capital Fund (WCF)\n\n\nB\t Basis of Accounting and Presentation\nThe Department\xe2\x80\x99s fiscal year ends September 30. These financial statements reflect both accrual and budgetary accounting\ntransactions. Under the accrual method of accounting, revenues are recognized when earned and expenses are recognized when\nincurred, without regard to the receipt or payment of cash. Budgetary accounting is designed to recognize the obligation of funds\naccording to legal requirements, which in many cases is made prior to the occurrence of an accrual-based transaction. Budgetary\naccounting is essential for compliance with legal constraints and controls over the use of federal funds.\n\nThese financial statements have been prepared from the accounting records of the Department in conformance with U.S. generally\naccepted accounting principles (GAAP) and the form and content for entity financial statements specified by the Office of\nManagement and Budget (OMB) in Revised Circular No. A-136, Financial Reporting Requirements. GAAP for federal entities are\nthe standards prescribed by the Federal Accounting Standards Advisory Board, which is the official body for setting the accounting\nstandards of the U.S. government.\n\nThroughout these financial statements, intragovernmental assets, liabilities, earned revenue, and costs have been classified\naccording to the type of entity with whom the transactions were made. Intragovernmental assets and liabilities are those from\nor to other federal entities. Intragovernmental earned revenue represents collections or accruals of revenue from other federal\nentities, and intragovernmental costs are payments or accruals to other federal entities.\n\nThe Department has allocation transfer transactions with other federal agencies as both a transferring (parent) entity and/or a\nreceiving (child) entity. Allocation transfers are legal delegations by one department of its authority to obligate budget authority\nand outlay funds to another department. A separate fund account (allocation account) is created in the U.S. Treasury as a\nsubset of the parent fund account for tracking and reporting purposes. All allocation transfers of balances are credited to this\naccount, and subsequent obligations and outlays incurred by the child entity are charged to this allocation account as they\nexecute the delegated activity on behalf of the parent entity. Generally, all financial activity related to these allocation transfers\n(e.g. budget authority, obligations, and outlays) is reported in the financial statements of the parent entity, from which the\nunderlying legislative authority, appropriations, and budget apportionments are derived. EDA allocates funds, as the parent, to\nthe U.S. Department of Agriculture\xe2\x80\x99s Rural Development Administration. Therefore, all financial activity related to these funds\nare reported in the Department\xe2\x80\x99s financial statements. NIST, NOAA, EDA, Census Bureau, BEA, NTIS, and USPTO receive allocation\ntransfers, as the child, from the General Services Administration, Environmental Protection Agency, Delta Regional Authority,\nand Appalachian Regional Commission. Activity relating to these child allocation transfers is not reported in the Department\xe2\x80\x99s\nfinancial statements.\n\n\n\n\n 192\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nC\t Earmarked Funds\nEarmarked funds are financed by specifically identified revenues, often supplemented by other financing sources, which remain\navailable over time. These specifically identified revenues and other financing sources are required by statute to be used for\ndesignated activities, benefits, or purposes, and must be accounted for separately from the government\xe2\x80\x99s general revenues.\nEarmarked funds include a general fund, public enterprise revolving funds (not including credit reform financing funds), special\nfunds, and a trust fund. (See Note 21, Earmarked Funds.)\n\n\n\nD\t Elimination of Intra-entity and Intra-Departmental Transactions and Balances\nTransactions and balances within a reporting entity (intra-entity) have been eliminated from the financial statements, except\nas noted below. Transactions and balances among the Department\xe2\x80\x99s entities (intra-Departmental) have been eliminated from\nthe Consolidated Balance Sheets, the Consolidated Statements of Net Cost, and the Consolidated Statements of Changes in\nNet Position. The Statements of Budgetary Resources are presented on a combined basis; therefore, intra-Departmental and\nintra-entity transactions and balances have not been eliminated from these statements.\n\n\n\nE\t Fund Balance with Treasury\nFund Balance with Treasury is the aggregate amount of funds in the Department\xe2\x80\x99s accounts with the U.S. Department of the\nTreasury (Treasury). Deposit Funds include amounts held in customer deposit accounts and the Spectrum Auction Proceeds\nLiability to the Federal Communications Commission (FCC).\n\nTreasury processes cash receipts and disbursements for the Department\xe2\x80\x99s domestic operations. Cash receipts and disbursements\nfor the Department\xe2\x80\x99s overseas operations are primarily processed by the U.S. Department of State\xe2\x80\x99s financial service centers.\n\n\n\nF\t Accounts Receivable, Net\nAccounts Receivable are recognized primarily when the Department performs reimbursable services or sells goods. Accounts\nReceivable are reduced to net realizable value by an Allowance for Uncollectible Accounts. This allowance is estimated periodically\nusing methods such as the identification of specific delinquent receivables, and the analysis of aging schedules and historical\ntrends adjusted for current market conditions.\n\n\n\nG\t Advances and Prepayments\nAdvances are payments the Department has made to cover a part or all of a grant recipient\xe2\x80\x99s anticipated expenses, or are\nadvance payments for the cost of goods and services to be acquired. For grant awards, the recipient is required to periodically\n(monthly or quarterly) report the amount of costs incurred. Prepayments are payments the Department has made to cover certain\nperiodic expenses before those expenses are incurred, such as subscriptions and rent. Advances and Prepayments are included in\nOther Assets.\n\n\n\n\n 193\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nH\t Direct Loans and Loan Guarantees\nA direct loan is recorded as a receivable after the Department disburses funds to a borrower. The Department also makes loan\nguarantees with respect to the payment of all or part of the principal or interest on debt obligations of non-federal borrowers to\nnon-federal lenders. A borrower-defaulted loan guaranteed by the Department is recorded as a receivable from the borrower after\nthe Department disburses funds to the lender.\n\nInterest Receivable generally represents uncollected interest income earned on loans. For past-due loans, only up to 180 days of\ninterest income is generally recorded.\n\nForeclosed Property is acquired primarily through foreclosure and voluntary conveyance, and is recorded at the fair market value\nat the time of acquisition. Foreclosed Property is adjusted to the current fair market value each fiscal year-end.\n\nDirect Loans and Loan Guarantees Obligated before October 1, 1991 (pre-FY 1992): Loans Receivable are reduced by an Allowance for\nLoan Losses, which is based on an analysis of each loan\xe2\x80\x99s outstanding balance. The value of each receivable, net of any Allowance\nfor Loan Losses, is supported by the values of pledged collateral and other assets available for liquidation, and by the Department\xe2\x80\x99s\nanalysis of financial information of parties against whom the Department has recourse for the collection of these receivables.\n\nThe Economic Development Revolving Fund is required to make annual interest payments to Treasury after each fiscal year-end,\nbased on its outstanding receivables as of September 30.\n\nDirect Loans and Loan Guarantees Obligated after September 30, 1991 (post-FY 1991): Post-FY 1991 obligated direct loans and loan\nguarantees and the resulting receivables are governed by the Federal Credit Reform Act of 1990.\n\nFor a direct or guaranteed loan disbursed during a fiscal year, a subsidy cost is initially recognized. Subsidy costs are intended to\nestimate the long-term cost to the U.S. government of its loan programs. The subsidy cost equals the present value of estimated\ncash outflows over the life of the loan, minus the present value of estimated cash inflows, discounted at the applicable Treasury\ninterest rate. Administrative costs such as salaries are not included in the subsidy costs. Subsidy costs can arise from interest rate\ndifferentials, interest subsidies, delinquencies and defaults, loan origination and other fees, and other cash flows. The Department\ncalculates its subsidy costs based on a model created and provided by OMB.\n\nA Loan Receivable is recorded at the present value of the estimated cash inflows less cash outflows. The difference between the\noutstanding principal of the loan and the present value of its net cash inflows is recorded as the Allowance for Subsidy Cost.\nA subsidy reestimate is normally performed annually, as of September 30. The subsidy reestimate takes into account all factors\nthat may have affected the estimated cash flows. Any adjustment resulting from the reestimate is recognized as a subsidy expense\n(or a reduction in subsidy expense). The portion of the Allowance for Subsidy Cost related to subsidy modifications and reestimates\nis calculated annually, as of September 30.\n\nThe amount of any downward subsidy reestimates as of September 30 must be disbursed to Treasury in the subsequent fiscal year.\nAppropriations are normally obtained in the following fiscal year for any upward subsidy reestimates.\n\n\nI\t Inventory, Materials, and Supplies, Net\nInventory, Materials, and Supplies, Net are stated at the lower of cost or net realizable value primarily under the average, weighted-\naverage, and first-in, first-out methods, and are adjusted for the results of physical inventories. Inventory, Materials, and Supplies\nare expensed when consumed. There are no restrictions on their sale, use, or disposition.\n\n\n 194\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nJ\t General Property, Plant, and Equipment, Net\nGeneral Property, Plant, and Equipment, Net (General PP&E) is composed of capital assets used in providing goods or services.\nGeneral PP&E is stated at full cost, including all costs related to acquisition, delivery, and installation, less Accumulated Depreciation.\nGeneral PP&E also includes assets acquired through capital leases, which are initially recorded at the amount recognized as a\nliability for the capital lease at its inception.\n\nCapitalization Thresholds: The Department\xe2\x80\x99s general policy is to capitalize General PP&E if the initial acquisition price is\n$25 thousand or more and the useful life is two years or more. NOAA is an exception to this policy, based on a cost vs. benefits\nand materiality analysis given the size of NOAA, having a capitalization threshold of $200 thousand. General PP&E with an\nacquisition cost less than the capitalization threshold is expensed when purchased. NOAA and Census Bureau have bulk purchase\ncapitalization thresholds of $1 million and $250 thousand, respectively, for personal property bulk purchases. For other bureaus,\nwhen the purchase of a large quantity of personal property items, each costing less than the capitalization threshold, would\nmaterially distort the amount of costs reported in a given period, the purchase is capitalized as a group.\n\nDepreciation: Depreciation is expensed on a straight-line basis over the estimated useful life of the asset with the exception of\nleasehold improvements, which are depreciated over the remaining life of the lease or over the useful life of the improvement,\nwhichever is shorter. Land and Construction-in-progress are not depreciated.\n\nReal Property: The U.S. General Services Administration (GSA) provides most of the facilities in which the Department operates,\nand generally charges rent based on comparable commercial rental rates. Accordingly, GSA-owned properties are not included\nin the Department\xe2\x80\x99s General PP&E. The Department\xe2\x80\x99s real property primarily consists of facilities for NIST and NOAA. Land\nImprovements consist of a retaining wall to protect against shoreline erosion.\n\nConstruction-in-progress: Costs for the construction, modification, or modernization of General PP&E are initially recorded as\nConstruction-in-progress. The Department\xe2\x80\x99s construction-in-progress consists primarily of satellites under development for NOAA,\nand major laboratory renovations and construction projects under development for NIST. Upon completion of the work, the costs\nare transferred to the appropriate General PP&E account.\n\n\nK\t Notes Receivable\nNotes Receivable, included in Other Assets, arise through the NOAA sale of foreclosed property to non-federal parties. The property is\nused as collateral, and an Allowance for Uncollectible Amounts is established if the net realizable value of the collateral is less than the\noutstanding balance of the Notes Receivable. An analysis of the collectibility of receivables is performed periodically. Any gains realized\nthrough the sale of foreclosed property are initially deferred and recognized in proportion to the percentage of principal repaid.\n\n\nL\t Non-entity Assets\nNon-entity assets are assets held by the Department that are not available for use in its operations. Non-entity Fund Balance\nwith Treasury includes customer deposits held by the Department until customer orders are received, and monies payable to the\nTreasury General Fund for custodial activity and for loan programs. Non-entity Direct Loans and Loan Guarantees, Net represents\nEDA\xe2\x80\x99s Drought Loan Portfolio. The Portfolio collections are submitted to Treasury monthly.\n\n\n\n\n 195\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nML\t iabilities\n\nA liability for federal accounting purposes is a probable and measurable future outflow or other sacrifice of resources as a result\nof past transactions or events.\n\nAccounts Payable: Accounts Payable are amounts primarily owed for goods, services, or capitalized assets received, progress on\ncontract performance by others, and other expenses due.\n\nDebt to Treasury: The Department has borrowed funds from Treasury for its various credit programs: Fisheries Finance Traditional,\nTuna Fleet, and Individual Fishing Quota (IFQ) Direct Loans, Fishing Vessel Obligation Guarantee (FVOG) Program, Bering Sea\nPollock Fishery Buyout, Pacific Groundfish Buyback Loans, Crab Buyback Loans, Bering Sea and Aleutian Islands Non-Pollock\nBuyback Loans, and Emergency Steel Loan Guarantee Program. To simplify interest calculations, all borrowings are dated\nOctober 1. Interest rates are based on a weighted average of rates during the term of the borrowed funds. The weighted average\nrate for each cohort\xe2\x80\x99s borrowing is recalculated at the end of each fiscal year during which disbursements are made. Annual interest\npayments on unpaid principal balances as of September 30 are required. Principal repayments are required only at maturity, but are\npermitted at any time during the term of the loan. The Department\xe2\x80\x99s primary financing source for repayments of Debt to Treasury is\nthe collection of principal on the associated Loans Receivable. Balances of any borrowed but undisbursed funds will earn interest at\nthe same rate used in calculating interest expense. The amount reported for Debt to Treasury includes accrued interest payable.\n\nThe Department has also borrowed funds from Treasury for its Digital Television Transition and Public Safety Fund. This NTIA fund,\nwhich was created by the Digital Television Transition and Public Safety Act of 2005, receives proceeds from the auction of licenses\nfor recovered analog spectrum from discontinued analog television signals, and provides funding for several programs from these\nreceipts. This Act, as well as the Security and Accountability For Every Port Act of 2006, also provided borrowing authority to the\nDepartment to commence specified programs prior to the availability of earned auction proceeds. As of September 30, 2009, NTIA\nhas fully reimbursed Treasury for the borrowings, without interest. For more information on certain programs under the Digital\nTelevision Transition and Public Safety Fund, see Note 18.\n\nSpectrum Auction Proceeds Liability to Federal Communications Commission: FCC completed the auction of licenses for recovered\nanalog spectrum in March 2008. These auction proceeds provide funding for several programs. Auction proceeds are considered\na liability to FCC until FCC grants the license. When the license is granted, a budgetary financing source is recognized on the\nConsolidated Statement of Changes in Net Position for the earned net auction proceeds (auction proceeds less FCC administrative\nfees due to FCC), and the liability is reduced by the dollar amount of the license granted. See Note 18 for more information on\nNTIA\xe2\x80\x99s Digital Television and Transition Public Safety Fund.\n\nResources Payable to Treasury: Resources Payable to Treasury includes liquidating fund assets in excess of liabilities that are being\nheld as working capital for the Economic Development Revolving Fund loan programs and the FVOG loan guarantee program.\nEDA\xe2\x80\x99s Drought Loan Portfolio is a non-entity asset; therefore, the amount of the Portfolio is also recorded as a liability to the\nTreasury General Fund. The Portfolio collections are returned to the Treasury General Fund annually, and the liability is reduced\naccordingly.\n\nUnearned Revenue: Unearned Revenue is the portion of monies received for which goods and services have not yet been provided\nor rendered by the Department. Revenue is recognized as reimbursable costs are incurred, and the Unearned Revenue balance\nis reduced accordingly. Unearned Revenue also includes the balances of customer deposit accounts held by the Department.\nThe intragovernmental Unearned Revenue primarily relates to monies collected in advance under reimbursable agreements.\nThe majority of the Unearned Revenue with the public represents patent and trademark application and user fees that are\npending action.\n\n\n\n\n 196\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nAccrued FECA Liability: The Federal Employees Compensation Act (FECA) provides income and medical cost protection to covered\nfederal civilian employees injured on the job, to employees who have incurred work-related occupational diseases, and to\nbeneficiaries of employees whose deaths are attributable to job-related injuries or occupational diseases. The FECA program\nis administered by the U.S. Department of Labor (DOL), which pays valid claims against the Department and subsequently seeks\nreimbursement from the Department for these paid claims. Accrued FECA Liability, included in Intragovernmental Other Liabilities,\nrepresents amounts due to DOL for claims paid on behalf of the Department.\n\nLoan Guarantee Liabilities: Post-FY 1991 obligated loan guarantees are governed by the Federal Credit Reform Act of 1990. For a\nguaranteed loan disbursed during a fiscal year, a subsidy cost is initially recognized. Subsidy costs are intended to estimate the\nlong-term cost to the U.S. government of its loan programs. The subsidy cost equals the present value of estimated cash outflows\nover the lives of the loans, minus the present value of estimated cash inflows, discounted at the applicable Treasury interest rate.\nAdministrative costs such as salaries are not included in the subsidy costs. Subsidy costs can arise from interest rate differentials,\ninterest subsidies, delinquencies and defaults, loan origination and other fees, and other cash flows. The Department calculates its\nsubsidy costs based on a model created and provided by OMB.\n\nFor a non-acquired guaranteed loan outstanding, the present value of the estimated cash inflows less cash outflows of the loan\nguarantee is recognized as a Loan Guarantee Liability. The Loan Guarantee Liability is normally reestimated annually each year,\nas of September 30. The subsidy reestimate takes into account all factors that may have affected the estimated cash flows.\nAny adjustment resulting from the reestimate is recognized as a subsidy expense (or a reduction in subsidy expense).\n\nFederal Employee Benefits:\n\nActuarial FECA Liability: Actuarial FECA Liability represents the liability for future workers\xe2\x80\x99 compensation (FWC) benefits, which\nincludes the expected liability for death, disability, medical, and miscellaneous costs for approved cases. The liability is determined\nby DOL annually, as of September 30, using a method that utilizes historical benefits payment patterns related to a specific\nincurred period to predict the ultimate payments related to that period. The projected annual benefit payments are discounted\nto present value using OMB\xe2\x80\x99s economic assumptions for ten-year Treasury notes and bonds. To provide more specifically for the\neffects of inflation on the liability for FWC benefits, wage inflation factors (Cost of Living Allowance) and medical inflation factors\n(Consumer Price Index - Medical) are applied to the calculation of projected future benefits. These factors are also used to adjust\nhistorical payments of benefits by the Department to current-year constant dollars.\n\nThe model\xe2\x80\x99s resulting projections are analyzed by DOL to ensure that the amounts are reliable. The analysis is based on two tests:\n(1) a comparison of the percentage change in the liability amount by agency to the percentage change in the actual payments;\nand (2) a comparison of the ratio of the estimated liability to the actual payment of the beginning year calculated for the current\nprojection to the liability-payment ratio calculated for the prior projection.\n\nNOAA Corps Retirement System Liability and NOAA Corps Post-retirement Health Benefits Liability: These liabilities are recorded\nat the actuarial present value of projected benefits, calculated annually, as of September 30. The actuarial cost method used\nto determine these liabilities is the aggregate entry age normal method. Under this method, the actuarial present value of\nprojected benefits is allocated on a level basis over the earnings or the service of the group between entry age and assumed\nexit ages. The portion of this actuarial present value allocated to the valuation year is called the normal cost. For purposes of\ncalculating the normal cost, certain actuarial assumptions utilized for the actual valuation of U.S. Military Retirement System\nare used. Actuarial gains and losses, and prior and past service costs, if any, are recognized immediately in the year they occur,\nwithout amortization. The medical claim rates used for the NOAA Corps Post-retirement Health Benefits Liability actuarial calculations\nare based on the claim rates used for the U.S. Department of Defense Medicare-Eligible Retiree Health Care Fund actuarial valuations.\n\n\n\n\n 197\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nDemographic assumptions appropriate to covered personnel are also used. For background information about these plans, see\nNote 1.Q, Employee Retirement Benefits.\n\nEnvironmental and Disposal Liabilities: NIST operates a nuclear reactor licensed by the U.S. Nuclear Regulatory Commission, in\naccordance with NIST\xe2\x80\x99s mission of setting standards and examining new technologies. The Department currently estimates the\ncost of decommissioning this facility to be $76.8 million. The NIST decommissioning estimate includes an assumption that an\noffsite waste disposal facility will become available, when needed, estimated in 2029. Currently, an offsite disposal location has\nnot been identified, and the NIST environmental liability cost estimate includes an amount approved by the Nuclear Regulatory\nCommission for offsite waste disposal. The total estimated decommissioning cost is being accrued on a straight-line basis over the\nexpected life of the facility. Under current legislation, funds to cover the expense of decommissioning the facility\xe2\x80\x99s nuclear reactor\nshould be requested in a separate appropriation when the decommissioning date becomes relatively certain.\n\nThe Department has incurred cleanup costs related to the costs of removing, containing, and/or disposing of hazardous waste from\nfacilities used by NOAA. The Department has estimated its liabilities for environmental cleanup costs at all NOAA-used facilities,\nincluding the decommissioning of ships. The largest of NOAA\xe2\x80\x99s environmental liabilities relates to the clean-up of the Pribilof\nIslands in Alaska, which contains waste from the U.S. Department of Defense\xe2\x80\x99s use during World War II. The Department does not\nrecognize a liability for environmental cleanup costs for NOAA-used facilities that are less than $25\xe2\x80\xafthousand per project. When\nan estimate of cleanup costs includes a range of possible costs, the most likely cost is reported. When no cost is more likely than\nanother, the lowest estimated cost in the range is reported. The liability is reduced as progress payments are made.\n\nThe Department may have liabilities associated with asbestos-containing materials (ACM) and lead-based paints (LBP) at certain\nNOAA facilities. The Department has scheduled surveys to assess the potential for liabilities for ACM and LBP contamination.\nAll known issues, however, are contained, and NOAA facilities meet current environmental standards. No cost estimates are\npresently available for facilities that have not yet been assessed for ACM or LBP issues.\n\nAccrued Payroll and Annual Leave: These categories include salaries, wages, and other compensation earned by employees, but not\ndisbursed as of September 30. Annually, as of September 30, the balances of Accrued Annual Leave are adjusted to reflect current\npay rates. Sick leave and other types of non-vested leave are expensed as taken.\n\nAccrued Grants: The Department administers a diverse array of financial assistance programs and projects concerned with the\nentire spectrum of business and economic development efforts that promote activities such as expanding U.S. exports, creating\njobs, contributing to economic growth, developing innovative technologies, promoting minority entrepreneurship, protecting\ncoastal oceans, providing weather services, managing worldwide environmental data, and using telecommunications and\ninformation technologies to better provide public services. Disbursements of funds under the Department\xe2\x80\x99s grant programs are\ngenerally made when requested by grantees. These drawdown requests may be received and fulfilled before grantees make the\nprogram expenditures. When the Department has disbursed funds but the grant recipient has not yet reported expenditures, these\ndisbursements are recorded as advances. If a recipient, however, reports program expenditures that have not been advanced by\nthe Department by September 30, such amounts are recorded as grant expenses and grants payable as of September 30.\n\nAccrued Coupons for Digital-to-Analog Converter Box Program: NTIA\xe2\x80\x99s Digital-to-Analog Converter Box Program provided\nhouseholds in the U.S. with forty-dollar coupons (two per household maximum) that could have been applied toward the purchase\nof digital-to-analog converter boxes. This liability represented the projected amount due for coupons issued as of September 30,\n2009. The program was substantially completed by mid-November 2009. See Note 18 for more information on the Digital-to-\nAnalog Converter Box Program.\n\n\n\n\n 198\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nCapital Lease Liabilities: Capital leases are leases for property, plant, and equipment that transfer substantially all the benefits and\nrisks of ownership to the Department.\n\nITA Foreign Service Nationals\xe2\x80\x99 Voluntary Separation Pay: This liability, included in Other Liabilities, is based on the salaries and\nbenefit statuses of employees in countries where governing laws require a provision for separation pay.\n\nContingent Liabilities and Contingencies: A contingency is an existing condition, situation, or set of circumstances involving\nuncertainty as to possible gain or loss. The uncertainty will ultimately be resolved when one or more future events occur or fail\nto occur. A contingent liability (included in Other Liabilities) and an expense are recognized when a past event has occurred,\nand a future outflow or other sacrifice of resources is measurable and probable. A contingency is considered probable when the\nfuture confirming event or events are more likely than not to occur, with the exception of pending or threatened litigation and\nunasserted claims. For pending or threatened litigation and unasserted claims, the future confirming event or events are likely\nto occur. A contingency is disclosed in the Notes to the Financial Statements if any of the conditions for liability recognition are\nnot met and there is at least a reasonable possibility that a loss or an additional loss may have been incurred. A contingency is\nconsidered reasonably possible when the chance of the future confirming event or events occurring is more than remote but less\nthan probable. A contingency is not recognized as a contingent liability and an expense nor disclosed in the Notes to the Financial\nStatements when the chance of the future event or events occurring is remote. A contingency is considered remote when the\nchance of the future event or events occurring is slight.\n\nLiabilities Not Covered by Budgetary Resources: These are liabilities for which congressional actions are needed before budgetary\nresources can be provided. The Department anticipates that liabilities not covered by budgetary resources will be funded from\nfuture budgetary resources when required. These amounts are detailed in Note 15.\n\nUnder accrual accounting, the expense for annual leave is recognized when the leave is earned. However, for most of the\nDepartment\xe2\x80\x99s fund groups, appropriations are provided to pay for the leave when it is taken. As a result, budgetary resources do\nnot cover a large portion of Accrued Annual Leave.\n\nThe Department generally receives budgetary resources for Federal Employee Benefits when they are needed for disbursements.\n\n\nN\t Commitments\nCommitments are preliminary actions that will ultimately result in an obligation to the U.S. government if carried through, such\nas purchase requisitions, estimated travel orders, or unsigned contracts/grants. Major long-term commitments are disclosed in\nNote 16, Commitments and Contingencies.\n\n\nO\t Net Position\nNet Position is the residual difference between assets and liabilities, and is composed of Unexpended Appropriations and Cumulative\nResults of Operations.\n\nUnexpended Appropriations represent the total amount of unexpended budget authority, both obligated and unobligated.\nUnexpended Appropriations are reduced for Appropriations Used and adjusted for other changes in budgetary resources, such as\ntransfers and rescissions. Cumulative Results of Operations is the net result of the Department\xe2\x80\x99s operations since inception.\n\n\n\n\n 199\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nP\t Revenues and Other Financing Sources\nAppropriations Used: Most of the Department\xe2\x80\x99s operating funds are provided by congressional appropriations of budget authority.\nThe Department receives appropriations on annual, multiple-year, and no-year bases. Upon expiration of an annual or multiple-\nyear appropriation, the obligated and unobligated balances retain their fiscal year identity, and are maintained separately within\nan expired account. The unobligated balances can be used to make legitimate obligation adjustments, but are otherwise not\navailable for expenditures. Annual and multiple-year appropriations are canceled at the end of the fifth year after expiration.\nNo-year appropriations do not expire. Appropriations of budget authority are recognized as used when costs are incurred, for\nexample, when goods and services are received or benefits and grants are provided.\n\nExchange and Non-exchange Revenue: The Department classifies revenue as either exchange revenue or non-exchange revenue.\nExchange revenue is derived from transactions in which both the government and the other party receive value, including processing\npatents and registering trademarks, the sale of weather data, nautical charts, and navigation information, and other sales of\ngoods and services. This revenue is presented on the Department\xe2\x80\x99s Consolidated Statements of Net Cost, and serves to reduce\nthe reported cost of operations borne by the taxpayer. Non-exchange revenue is derived from the government\xe2\x80\x99s sovereign right\nto demand payment, including fines for violations of fisheries and marine protection laws. Non-exchange revenue is recognized\nwhen a specifically identifiable, legally enforceable claim to resources arises, and to the extent that collection is probable and the\namount is reasonably estimable. This revenue is not considered to reduce the cost of the Department\xe2\x80\x99s operations and is therefore\nreported on the Consolidated Statements of Changes in Net Position.\n\nIn certain cases, law or regulation sets the prices charged by the Department, and, for program and other reasons, the Department\nmay not receive full cost (e.g., the processing of patents and registering of trademarks, and the sale of weather data, nautical\ncharts, and navigation information). Prices set for products and services offered through the Department\xe2\x80\x99s working capital funds\nare intended to recover the full costs incurred by these activities.\n\nImputed Financing Sources from Cost Absorbed by Others (and Related Imputed Costs): In certain cases, operating costs of the\nDepartment are paid for in full or in part by funds appropriated to other federal entities. For example, Civil Service Retirement\nSystem pension benefits for applicable Departmental employees are paid for in part by the U.S. Office of Personnel Management\n(OPM), and certain legal judgments against the Department are paid for in full from the Judgment Fund maintained by Treasury.\nThe Department includes applicable Imputed Costs on the Consolidated Statements of Net Cost. In addition, an Imputed Financing\nSource from Cost Absorbed by Others is recognized on the Consolidated Statements of Changes in Net Position.\n\nTransfers In/(Out): Intragovernmental transfers of budget authority (i.e., appropriated funds) or of assets without reimbursement\nare recorded at book value.\n\n\n\nQ\t Employee Retirement Benefits\nCivil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS): Most employees of the Department\nparticipate in either the CSRS or FERS defined-benefit pension plans. FERS went into effect on January 1, 1987. FERS and Social\nSecurity automatically cover most employees hired after December 31, 1983. Employees hired prior to January 1, 1984 could elect\nto either join FERS and Social Security, or remain in CSRS.\n\nThe Department is not responsible for and does not report CSRS or FERS assets, accumulated plan benefits, or liabilities applicable\nto its employees. OPM, which administers the plans, is responsible for and reports these amounts.\n\n\n\n\n 200\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nFor CSRS-covered regular employees, the Department was required to make contributions to the plan equal to 7 percent of an\nemployee\xe2\x80\x99s basic pay. Employees contributed 7 percent of basic pay. For each fiscal year, OPM calculates the U.S. government\xe2\x80\x99s\nservice cost for covered employees, which is an estimate of the amount of funds, that, if accumulated annually and invested over\nan employee\xe2\x80\x99s career, would be enough to pay that employee\xe2\x80\x99s future benefits. Since the U.S. government\xe2\x80\x99s estimated service cost\nexceeds contributions made by employer agencies and covered employees, this plan is not fully funded by the Department and its\nemployees. The Department has recognized an Imputed Cost and an Imputed Financing Source From Cost Absorbed by Others for\nthe difference between the estimated service cost and the contributions made by the Department and its covered employees.\n\nFor FERS-covered regular employees, the Department was required to make contributions of 11.2 percent of basic pay. Employees\ncontributed 0.8 percent of basic pay. For each fiscal year, OPM calculates the U.S. government\xe2\x80\x99s service cost for covered employees.\nSince the U.S. government\xe2\x80\x99s estimated service cost exceeds contributions made by employer agencies and covered employees, this\nplan was not fully funded by the Department and its employees. The Department has recognized an Imputed Cost and an Imputed\nFinancing Source From Cost Absorbed by Others for the difference between the estimated service cost and the contributions made\nby the Department and its covered employees.\n\nEmployees participating in FERS are covered under the Federal Insurance Contributions Act (FICA), for which the Department\ncontributes a matching amount to the Social Security Administration.\n\nNOAA Corps Retirement System: Active-duty officers of the NOAA Corps are covered by the NOAA Corps Retirement System, an\nunfunded, pay-as-you-go, defined-benefit plan administered by the Department. Participants do not contribute to this plan. Plan\nbenefits are based primarily on years of service and compensation. Participants, as of September 30, 2010, included 318 active\nduty officers, 355 nondisability retiree annuitants, 17 disability retiree annuitants, and 47 surviving families. Key provisions include\nvoluntary nondisability retirement after 20 years of active service, disability retirement, optional survivor benefits, Consumer Price\nIndex (CPI) optional survivor benefits, and CPI adjustments for benefits.\n\nForeign Service Retirement and Disability System, and the Foreign Service Pension System: Foreign Commercial Officers are covered\nby the Foreign Service Retirement and Disability System and the Foreign Service Pension System. ITA makes contributions to the\nsystems based on a percentage of an employee\xe2\x80\x99s pay. Both systems are multi-employer plans administered by the U.S. Department\nof State. The Department is not responsible for and does not report plan assets, accumulated plan benefits, or liabilities applicable\nto its employees. The U.S. Department of State, which administers the plan, is responsible for and reports these amounts.\n\nThrift Savings Plan (TSP): Employees covered by CSRS and FERS are eligible to contribute to the U.S. government\xe2\x80\x99s TSP, administered\nby the Federal Retirement Thrift Investment Board. A TSP account is automatically established for FERS-covered employees,\nand the Department makes a mandatory contribution of one percent of basic pay. FERS and CSRS covered employees\nhave no limit on the percentage of pay contributed to their TSP account. However, the total contribution for 2010 may not\nexceed the IRS limit of $16.5 thousand. The Department makes no matching contributions for CSRS-covered employees.\nTSP participants age 50 or older who are already contributing the maximum amount of contributions for which they are eligible may\nalso make catch-up contributions, subject to the IRS dollar limit for catch-up contributions.\n\nFederal Employees Health Benefit (FEHB) Program: Most Departmental employees are enrolled in the FEHB Program, which provides\npost-retirement health benefits. OPM administers this program and is responsible for the reporting of liabilities. Employer\nagencies and covered employees are not required to make any contributions for post-retirement health benefits. OPM calculates\nthe U.S. government\xe2\x80\x99s service cost for covered employees each fiscal year. The Department has recognized the entire service cost\nof these post-retirement health benefits for covered employees as an Imputed Cost and an Imputed Financing Source From Cost\nAbsorbed by Others.\n\n\n\n\n 201\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nNOAA Corps Post-retirement Health Benefits: Active-duty officers of the NOAA Corps are covered by the health benefits program for\nthe NOAA Corps, which provides post-retirement health benefits. This is a pay-as-you-go plan administered by the Department.\nParticipants do not make any contributions to this plan.\n\nFederal Employees Group Life Insurance (FEGLI) Program: Most Department employees are entitled to participate in the FEGLI\nProgram. Participating employees can obtain basic term life insurance, with the employee paying two-thirds of the cost and the\nDepartment paying one-third. Additional coverage is optional, to be paid fully by the employee. The basic life coverage may be\ncontinued into retirement if certain requirements are met. OPM administers this program and is responsible for the reporting\nof liabilities. For each fiscal year, OPM calculates the U.S. government\xe2\x80\x99s service cost for the post-retirement portion of basic life\ncoverage. Because the Department\xe2\x80\x99s contributions to the basic life coverage are fully allocated by OPM to the pre-retirement\nportion of coverage, the Department has recognized the entire service cost of the post-retirement portion of basic life coverage as\nan Imputed Cost and an Imputed Financing Source From Cost Absorbed by Others.\n\n\n\nR\t Use of Estimates\nThe preparation of financial statements requires the Department to make estimates and assumptions that affect these financial\nstatements. Actual results may differ from those estimates.\n\n\n\nS\t Tax Status\nThe Department is not subject to federal, state, or local income taxes. Accordingly, no provision for income taxes is recorded.\n\n\n\nT\t Fiduciary Activities\nFiduciary activities are the collection or receipt, and the management, protection, accounting, and disposition by the U.S.\ngovernment of cash or other assets in which non-federal individuals or entities have an ownership interest that the U.S. government\nmust uphold. Fiduciary cash and other assets are not assets of the U.S. government, and, accordingly, are not recognized in the\naccompanying consolidated financial statements.\n\nThe Department\xe2\x80\x99s fiduciary activities consist of the following:\n\nThe Patent Cooperation Treaty authorizes USPTO to collect patent filing and search fees on behalf of the World Intellectual\nProperty Organization (WIPO), European Patent Office, Korean Intellectual Property Office, and the Australian Patent Office, from\nU.S. citizens requesting an international patent. The Madrid Protocol Implementation Act authorizes USPTO to collect trademark\napplication fees on behalf of the International Bureau of WIPO from U.S. citizens requesting an international trademark. These\nfiduciary activities are reported in Note 20.\n\n\n\n\n 202\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 2. Fund Balance with Treasury\n\nFund Balance with Treasury, by type, is as follows:\n FY 2010 FY 2009\n General Funds $ 15,013,746 $ 14,878,540\n Revolving Funds 912,082 730,441\n Special Funds\n \t Patent and Trademark Surcharge Fund 233,529 233,529\n \t Digital Television Transition and Public Safety Fund 9,396,152 9,230,126\n \t Others \t 84,423 \t 91,440\n Deposit Funds\n \t Spectrum Auction Proceeds Liability to FCC \t 33,838 \t 400,451\n \t Others \t 123,020 \t 115,738\n Trust Funds 2,104 674\n Other Fund Types (13,347) (9,177)\n Total $ 25,785,547 $ 25,671,762\n\n\n\nStatus of Fund Balance with Treasury is as follows:\n FY 2010 FY 2009\n Temporarily Precluded From Obligation $ 603,783 $ 553,954\n Unobligated Balance\n Available 3,228,225 8,156,433\n Unavailable 8,927,908 8,439,100\n Obligated Balance Not Yet Disbursed 12,648,592 7,781,735\n Non-budgetary \t 377,039 \t 740,540\n Total $ 25,785,547 $ 25,671,762\n\nSee Note 18, Combined Statements of Budgetary Resources, for legal arrangements affecting the Department\xe2\x80\x99s use of Fund Balance\nwith Treasury for FY 2010 and FY 2009.\n\n\n\n\n 203\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 3. Accounts Receivable, Net\n\n FY 2010\n Accounts Allowance for Accounts\n Receivable, Uncollectible Receivable,\n Gross Accounts Net\n Intragovernmental $ 84,479 $ \t - $ 84,479\n With the Public $ 82,980 $ (12,200) $ 70,780\n\n FY 2009\n Accounts Allowance for Accounts\n Receivable, Uncollectible Receivable,\n Gross Accounts Net\n Intragovernmental $ 78,111 $ \t - $ 78,111\n With the Public $ 43,974 $ (12,545) $ 31,429\n\n\nAs a major partner in the federal response to the 2010 gulf oil spill incident, NOAA has incurred certain costs for providing\ncoordinated scientific weather and biological response services to that region, for which it expects to be reimbursed. As of\nSeptember 30, 2010, NOAA has recorded receivables from the Coast Guard (Intragovernmental) for $2.4M. NOAA has also\nrecorded receivables from British Petroleum BP (with the public) of $20.3M in the investigation and restoration assessment fund as\nauthorized under the Department of Justice Oil Pollution Act ruling of 1989. NOAA believes these receivables are fully collectible,\nbased on costs submitted to date and reimbursements received. Therefore, no allowance for uncollectible accounts has been\nestablished for these receivables.\n\n\n\n Note 4. Cash\n\n FY 2010 FY 2009\n Cash Not Yet Deposited with Treasury $ 3,222 $ 3,248\n Imprest Funds \t 394 \t 324\n Total $ 3,616 $ 3,572\n\n\nCash Not Yet Deposited with Treasury primarily represents patent and trademark fees that were not processed as of September 30,\ndue to the lag time between receipt and initial review. Certain bureaus maintain imprest funds for operational necessity, such as\nlaw enforcement activities, and for environments that do not permit the use of electronic payments.\n\n\n\n\n 204\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 5. Direct Loans and Loan guarantees, NET\n\nThe Department operates the following direct loan and loan guarantee programs:\n\n Direct Loan Programs:\n EDA Drought Loan Portfolio\n EDA Economic Development Revolving Fund\n NOAA Alaska Purse Seine Fishery Buyback Loans1\n NOAA Bering Sea and Aleutian Islands Non-Pollock Buyback Loans\n NOAA Bering Sea Pollock Fishery Buyback\n NOAA Coastal Energy Impact Program (CEIP)\n NOAA Crab Buyback Loans\n NOAA Federal Gulf of Mexico Reef Fish Buyback Loans1\n NOAA Fisheries Finance Individual Fishing Quota (IFQ) Loans\n NOAA Fisheries Finance Traditional Loans\n NOAA Fisheries Finance Tuna Fleet Loans\n NOAA Fisheries Loan Fund\n NOAA New England Groundfish Buyback Loans1\n NOAA New England Lobster Buyback Loans1\n NOAA Pacific Groundfish Buyback Loans\n 1 No loans have been issued under these programs as of September 30, 2010.\n\n\n\n Loan Guarantee Programs:\n EDA Economic Development Revolving Fund\n ELGP-Oil/Gas Emergency Oil and Gas Loan Guarantee Program\n ELGP-Steel Emergency Steel Loan Guarantee Program\n NOAA Fishing Vessel Obligation Guarantee Program (FVOG Program)\n\n\nThe net assets for the Department\xe2\x80\x99s loan programs consist of:\n\n FY 2010 FY 2009\n Direct Loans Obligated Prior to FY 1992 $ 23,834 $ 27,046\n Direct Loans Obligated After FY 1991 514,038 481,370\n Defaulted Guaranteed Loans from Pre-FY 1992 Guarantees \t 4 \t 4\n Defaulted Guaranteed Loans from Post-FY 1991 Guarantees 2,271 2,672\n Total $ 540,147 $ 511,092\n\n\n\n\n 205\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nDirect Loans Obligated Prior to FY 1992 consist of:\n\n FY 2010\n Loans Value of Assets\n Direct Receivable, Interest Allowance for Related to\n Loan Program Gross Receivable Loan Losses Direct Loans, Net\n CEIP $ 20,318 $ 5,035 $ (18,636) $ 6,717\n Drought Loan Portfolio 11,522 156 (117) 11,561\n Economic Development\n Revolving Fund 5,579 33 (56) 5,556\n Total $ 37,419 $ 5,224 $ (18,809) $ 23,834\n\n\n FY 2009\n Loans Value of Assets\n Direct Receivable, Interest Allowance for Related to\n Loan Program Gross Receivable Loan Losses Direct Loans, Net\n CEIP $ 20,443 $ 4,874 $ (18,780) $ 6,537\n Drought Loan Portfolio 14,104 188 (158) 14,134\n Economic Development\n Revolving Fund 6,405 46 (76) 6,375\n Fisheries Loan Fund 293 38 (331) \t -\n Total $ 41,245 $ 5,146 $ (19,345) $ 27,046\n\n\n\n\n 206\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nDirect Loans Obligated After FY 1991 consist of:\n\n FY 2010\n Loans Allowance for Value of Assets\n Receivable, Interest Subsidy Cost Related to\n Direct Loan Program Gross Receivable (Present Value) Direct Loans, Net\n Bering Sea and Aleutian Islands\n Non-Pollock Buyback Loans $ 33,645 $ 1,036 $ 7,825 $ 42,506\n Bering Sea Pollock Fishery Buyback 49,232 \t 143 6,185 55,560\n Crab Buyback Loans 94,049 2,957 20,770 117,776\n Fisheries Finance IFQ Loans 21,665 245 3,379 25,289\n Fisheries Finance Traditional Loans \t197,583 \t 1,938 28,477 227,998\n Fisheries Finance Tuna Fleet Loans \t 374 \t 1 \t (2) \t 373\n Pacific Groundfish Buyback Loans 33,472 \t 1,043 10,021 44,536\n Total $ 430,020 $ 7,363 $ 76,655 $ 514,038\n\n\n FY 2009\n Loans Allowance for Value of Assets\n Receivable, Interest Subsidy Cost Related to\n Direct Loan Program Gross Receivable (Present Value) Direct Loans, Net\n Bering Sea and Aleutian Islands\n Non-Pollock Buyback Loans $ 34,500 $ 1,023 $ 8,380 $ 43,903\n Bering Sea Pollock Fishery Buyback 49,970 \t 116 3,558 53,644\n Crab Buyback Loans 94,904 3,037 20,718 118,659\n Fisheries Finance IFQ Loans 20,149 203 2,779 23,131\n Fisheries Finance Traditional Loans \t165,529 \t 2,256 21,945 189,730\n Fisheries Finance Tuna Fleet Loans \t 5,769 \t 34 \t 671 \t 6,474\n Pacific Groundfish Buyback Loans 34,366 \t 1,051 10,412 45,829\n Total $ 405,187 $ 7,720 $ 68,463 $ 481,370\n\n\nNew Disbursements of Direct Loans (Post-FY 1991):\n\n Direct Loan Program FY 2010 FY 2009\n Fisheries Finance IFQ Loans $ 5,349 $ 3,126\n Fisheries Finance Traditional Loans 84,935 19,907\n Total $ 90,284 $ 23,033\n\n\n\n\n 207\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nSubsidy Expense for Direct Loans by Program and Component:\n\nSubsidy Expense for New Disbursements of Direct Loans:\n FY 2010\n Fees and\n Interest Rate Other\n Direct Loan Program Differential Defaults Collections Other Total\nFisheries Finance IFQ Loans $ \t (1,094) $ \t 21 $ \t (36) $ \t 424 $ \t (685)\nFisheries Finance Traditional Loans \t(13,777) \t 202 \t (486) \t 7,447 \t (6,614)\nTotal $ (14,871) $ 223 $ \t (522) $ 7,871 $ (7,299)\n\n FY 2009\n Fees and\n Interest Rate Other\n Direct Loan Program Differential Defaults Collections Other Total\nFisheries Finance IFQ Loans $ \t (593) $ \t 14 $ \t (21) $ \t 238 $ \t (362)\nFisheries Finance Traditional Loans \t (2,718) \t 37 \t (125) \t 1,542 \t (1,264)\nTotal $ (3,311) $ 51 $ \t (146) $ 1,780 $ (1,626)\n\nModifications and Reestimates:\n FY 2010 FY 2010\n Total Interest Rate Technical Total\n Direct Loan Program Modifications Reestimates Reestimates Reestimates\nBering Sea and Aleutian Islands\n Non-Pollock Buyback Loans $ \t - $ \t - $ \t 274 $ \t 274\nBering Sea Pollock Fishery Buyback \t - \t - \t (3,483) \t (3,483)\nCrab Buyback Loans \t - \t - 901 901\nFisheries Finance IFQ Loans \t - \t - \t (95) \t (95)\nFisheries Finance Traditional Loans \t - \t - 582 582\nFisheries Finance Tuna Fleet Loans \t - \t - \t 572 \t 572\nPacific Groundfish Buyback Loans \t - \t - \t 154 \t 154\nTotal $ \t - $ \t - $ (1,095) $ (1,095)\n\n\n FY 2009 FY 2009\n Total Interest Rate Technical Total\n Direct Loan Program Modifications Reestimates Reestimates Reestimates\nBering Sea and Aleutian Islands\n Non-Pollock Buyback Loans $ \t - $ \t - $ \t (8,801) $ \t (8,801)\nBering Sea Pollock Fishery Buyback \t - \t - \t (472) \t (472)\nCrab Buyback Loans \t - \t - (1,037) (1,037)\nFisheries Finance IFQ Loans \t - \t - \t 491 \t 491\nFisheries Finance Traditional Loans \t - \t - 3,854 3,854\nFisheries Finance Tuna Fleet Loans \t - \t - \t (15) \t (15)\nPacific Groundfish Buyback Loans \t - \t - \t (1,110) \t (1,110)\nTotal $ \t - $ \t - $ (7,090) $ (7,090)\n\n\n\n\n 208\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nTotal Direct Loan Subsidy Expense:\n\n Direct Loan Program FY 2010 FY 2009\n Bering Sea and Aleutian Islands Non-\n Pollock Buyback Loans $ \t 274 $ \t (8,801)\n Bering Sea Pollock Fishery Buyback \t (3,483) \t (472)\n Crab Buyback Loans \t 901 \t (1,037)\n Fisheries Finance IFQ Loans (780) 129\n Fisheries Finance Traditional Loans \t (6,032) \t 2,590\n Fisheries Finance Tuna Fleet Loans \t 572 \t (15)\n Pacific Groundfish Buyback Loans \t 154 \t (1,110)\n Total $ \t (8,394) $ \t (8,716)\n\n\nSubsidy Rates for Direct Loans by Program and Component:\n\nBudget Subsidy Rates for Direct Loans for the Current Fiscal-year\xe2\x80\x99s Cohorts:\n\n FY 2010\n Fees and\n Interest Rate Other\n Direct Loan Program Differential Defaults Collections Other Total\n Fisheries Finance IFQ Loans (21.26) % 0.42 % \t (0.57) % \t 9.41 % \t(12.00) %\n Fisheries Finance Traditional Loans (16.90) % 0.42 % \t (0.54) % \t 8.53 % \t (8.49) %\n\n\n FY 2009\n Fees and\n Interest Rate Other\n Direct Loan Program Differential Defaults Collections Other Total\n Fisheries Finance IFQ Loans (20.11) % 0.39 % \t (0.69) % \t 7.63 % \t(12.78) %\n Fisheries Finance Traditional Loans (16.21) % 0.16 % \t (0.57) % \t 10.19 % \t (6.43) %\n\nThe budget subsidy rates disclosed pertain only to the reporting period\xe2\x80\x99s cohorts. These rates cannot be applied to the new\ndisbursements of direct loans during the reporting period to yield the subsidy expense. The subsidy expense for new disbursements\nof direct loans for the reporting period could result from disbursements of loans from both the reporting period\xe2\x80\x99s cohorts and prior\nfiscal-year(s) cohorts. The subsidy expense for the reporting period may also include modifications and reestimates.\n\n\n\n\n 209\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nSchedule for Reconciling Allowance for Subsidy Cost (Post-FY 1991 Direct Loans):\n FY 2010 FY 2009\n Beginning Balance of the Allowance for Subsidy Cost $ \t 68,463 $ \t 63,174\n\n Add Subsidy Expense for Direct Loans Disbursed During the\n Reporting Years by Component:\n \t\t Interest Rate Differential Costs 14,871 3,311\n \t\t Default Costs (Net of Recoveries) (223) (51)\n \t\t Fees and Other Collections 522 146\n \t\t Other Subsidy Costs (7,871) (1,780)\n Total of the above Subsidy Expense Components 7,299 1,626\n\n Adjustments:\n \t\t Fees Received (316) (92)\n \t\t Foreclosed Property Acquired \t - 167\n \t\t Subsidy Allowance Amortization \t 114 \t (3,502)\n Total of adjustments (202) (3,427)\n Ending Balance of the Allowance for Subsidy Cost Before Reestimates \t 75,560 \t 61,373\n Add or Subtract Subsidy Reestimates by Component:\n \t\t Technical/Default Reestimates \t 1,095 \t 7,090\n Ending Balance of the Allowance for Subsidy Cost $ 76,655 $ 68,463\n\n\nDefaulted Guaranteed Loans from Pre-FY 1992 Guarantees:\n\n FY 2010\n Value of Assets\n Defaulted Related to Defaulted\n Loan Guarantee Guaranteed Loans Interest Allowance for Guaranteed Loans\n Program Receivable, Gross Receivable Loan Losses Receivable, Net\nFVOG Program $ 11,997 $ \t 4 $ \t (11,997) $ \t 4\n\n FY 2009\n Value of Assets\n Defaulted Related to Defaulted\n Loan Guarantee Guaranteed Loans Interest Allowance for Guaranteed Loans\n Program Receivable, Gross Receivable Loan Losses Receivable, Net\nFVOG Program $ 11,997 $ \t 4 $ \t (11,997) $ \t 4\n\n\n\n\n 210\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nDefaulted Guaranteed Loans from Post-FY 1991 Guarantees:\n\n FY 2010\n Value of Assets\n Defaulted Allowance for Related to Defaulted\n Loan Guarantee Guaranteed Loans Interest Subsidy Cost Guaranteed Loans\n Program Receivable, Gross Receivable (Present Value) Receivable, Net\nFVOG Program \t $ 14,128 $ \t 1,254 $ \t (13,111) $ 2,271\n\n\n FY 2009\n Value of Assets\n Defaulted Allowance for Related to Defaulted\n Loan Guarantee Guaranteed Loans Interest Subsidy Cost Guaranteed Loans\n Program Receivable, Gross Receivable (Present Value) Receivable, Net\nFVOG Program \t $ 14,128 $ \t 1,254 $ \t (12,710) $ 2,672\n\n\n\nLoan Guarantees:\n\nGuaranteed Loans Outstanding:\n\nOutstanding non-acquired guaranteed loans as of September 30, 2010 and 2009, which are not reflected in the financial statements,\nare as follows:\n\n FY 2010 FY 2009\n Outstanding Amount of Outstanding Amount of\n Principal of Outstanding Principal of Outstanding\n Loan Guarantee Guaranteed Loans, Principal Guaranteed Loans, Principal\n Program Face Value Guaranteed Face Value Guaranteed\nFVOG Program $ \t 3,939 $ \t 3,939 $ \t 4,331 $ \t 4,331\n\n\n\n\n 211\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nNew Guaranteed Loans Disbursed:\n\n There were no new guaranteed loans disbursed during FY 2010 and FY 2009.\n\nLoan Guarantee Liabilities:\n FY 2010 FY 2009\n Loan Guarantee Loan Guarantee\n Liabilities for Post- Liabilities for Post-\n FY\xe2\x80\xaf1991 Guarantees, FY\xe2\x80\xaf1991 Guarantees,\n Loan Guarantee Program Present Value Present Value\n FVOG Program $ 565 $ 589\n\n\nSubsidy Expense for Loan Guarantees by Program and Component:\n\nSubsidy Expense for New Loan Guarantees Disbursed:\n\n As there were no new loan guarantees disbursed during FY 2010 and FY 2009, there is not any related subsidy expense.\n\nModifications and Reestimates:\n FY 2010 FY 2010\n Loan Guarantee Total Interest Rate Technical Total\n Program Modifications Reestimates Reestimates Reestimates\n FVOG Program $ \t - $ \t - $ \t 510 $ \t 510\n\n\n FY 2009 FY 2009\n Loan Guarantee Total Interest Rate Technical Total\n Program Modifications Reestimates Reestimates Reestimates\n FVOG Program $ \t - $ \t - $ \t 451 $ \t 451\n\n\nTotal Loan Guarantee Subsidy Expense:\n\n Loan Guarantee Program FY 2010 FY 2009\n FVOG Program $ \t 510451 $ \t 451\n\n\n\n\n 212\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nSubsidy Rates for Loan Guarantees by Program and Component:\n\nBudget Subsidy Rates for Loan Guarantees for the Current Fiscal-year\xe2\x80\x99s Cohorts:\n There were no new cohorts of guaranteed loans during FY 2010 and FY 2009.\n\n\nSchedule for Reconciling Loan Guarantee Liabilities (Post-FY 1991 Loan Guarantees):\n\n FY 2010 FY 2009\n Beginning Balance of Loan Guarantee Liabilities $ \t 589 $ \t 621\n Adjustments:\n \t Loan Guarantee Modifications \t - \t -\n \t Fees Received 8 29\n \t Interest Accumulation on the Liabilities Balance \t (32) \t (57)\n \t Other \t - \t (4)\n Ending Balance of Loan Guarantee Liabilities $ 565 $ 589\n\n\nAdministrative Expenses:\n\nAdministrative expenses in support of the Department\xe2\x80\x99s direct loan and loan guarantee programs consist of:\n\n Direct Loan Program FY 2010 FY 2009\n Drought Loan Portfolio and\n Economic Development Revolving Fund $ 776 $ 1,091\n NOAA Direct Loan Programs 2,494 3,169\n Total $ 3,270 $ 4,260\n\n Loan Guarantee Program FY 2010 FY 2009\n Emergency Oil and Gas Loan Guarantee Program $ \t - $ \t 17\n Emergency Steel Loan Guarantee Program \t 98 \t 134\n FVOG Program \t 180 \t 262\n Total $ 278 $ 413\n\n\n\n\n 213\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 6. Inventory, Materials, and Supplies, Net\n\n Category Cost Flow Assumption FY 2010 FY 2009\n Inventory\n Items Held for Current Sale\n \t NIST Standard Reference Materials Average $ 22,340 $ 22,200\n \t Other Various 166 198\n Allowance for Excess, Obsolete, and\n Unserviceable Items (140) (155)\n Total Inventory, Net 22,366 22,243\n\n\n Materials and Supplies\n Items Held for Use\n \t NOAA\xe2\x80\x99s National Logistics Support Center Weighted-average 49,178 54,632\n \t NOAA\xe2\x80\x99s National Reconditioning Center Weighted-average 42,775 38,548\n \t Census Bureau\xe2\x80\x99s Decennial Census First-in, first-out 26,089 50,269\n \t Other Various 4,699 4,820\n Allowance for Excess, Obsolete, and\n Unserviceable Items (46,781) (24,609)\n Total Materials and Supplies, Net 75,960 123,660\n Total $ 98,326 $ 145,903\n\n\nNIST\xe2\x80\x99s Standard Reference Materials Program provides reference materials for quality assurance of measurements, while NOAA\xe2\x80\x99s\nMaterials and Supplies are primarily repair parts for weather forecasting equipment. The Census Bureau\xe2\x80\x99s Decennial Census\nmaterials and supplies are comprised of employment forms, payroll forms, various other administrative forms, and training and\nproduction materials.\n\n\n\n\n 214\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 7. General Property, Plant, and Equipment, Net\n\n FY 2010\n Useful Life Accumulated\n Category (Years) Cost Depreciation Net Book Value\n Land N/A $ \t 16,787 $ \t - $ \t 16,787\n Land Improvements 30-40 2,996 (1,286) 1,710\n Structures, Facilities, and\n Leasehold Improvements 2-60 1,406,982 (520,827) 886,155\n Satellites/Weather Systems\n Personal Property 3-20 5,080,613 (3,656,875) 1,423,738\n Other Personal Property 2-30 2,365,104 (1,518,219) 846,885\n Assets Under Capital Lease 3-40 \t 23,562 \t (17,693) \t 5,869\n Construction-in-progress N/A \t 4,213,567 \t - \t 4,213,567\n Total \t $ \t 13,109,611 $ \t (5,714,900) $ \t 7,394,711\n\n\n FY 2009\n Useful Life Accumulated\n Category (Years) Cost Depreciation Net Book Value\n Land N/A $ \t 16,787 $ \t - $ \t 16,787\n Land Improvements 30-40 2,996 (1,194) 1,802\n Structures, Facilities, and\n Leasehold Improvements 2-60 1,338,090 (475,533) 862,557\n Satellites/Weather Systems\n Personal Property 3-20 4,522,903 (3,747,384) 775,519\n Other Personal Property 2-30 2,083,682 (1,379,468) 704,214\n Assets Under Capital Lease 3-40 \t 25,407 \t (18,437) \t 6,970\n Construction-in-progress N/A \t 4,390,978 \t - \t 4,390,978\n Total \t $ \t 12,380,843 $ \t (5,622,016) $ \t 6,758,827\n\n\n\n\n 215\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 8. Other Assets\n\n FY 2010 FY 2009\n With the Public \t \t\n Advances and Prepayments $ 47,254 $ 52,061\n Note Receivable 1,410 1,853\n Bibliographic Database 6,454 6,103\n Other \t 4 \t 4\n Total $ 55,122 $ 60,021\n\n\nAs of September 30, 2010 and 2009, there is one Note Receivable with a maturity date of July 2024 and an interest rate of\n7.0 percent. The balances include accrued interest.\n\nThe bibliographic database relates to NTIS\xe2\x80\x99s scientific and technical information used to prepare products and services for sale.\nThe database is stated at capitalized costs of $62.7 million and $59.5 million, less accumulated amortization of $56.2 million and\n$53.4\xe2\x80\xafmillion, at September 30, 2010 and 2009, respectively.\n\n\n\n Note 9. Non-entity Assets\n\nThe assets that are not available for use in the Department\xe2\x80\x99s operations are summarized below:\n\n FY 2010 FY 2009\n Intragovernmental \t \t\n Fund Balance with Treasury $ \t 153,731 $ \t 506,015\n Total Intragovernmental 153,731 506,015\n\n With the Public\n Cash \t 652 \t 971\n Accounts Receivable, Net 8,022 706\n Direct Loans and Loan\n Guarantees, Net \xe2\x80\x93 Drought Loan Portfolio \t 11,561 \t 14,134\n Total $ 173,966 $ 521,826\n\n\n\n\n 216\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 10. Debt to Treasury\n\n FY 2010\n Beginning Net Borrowings Ending\n Loan Program Balance (Repayments) Balance\n Direct Loan Program\n Fisheries Finance, Financing Account $ 482,405 $ 32,436 $ 514,841\n\n Loan Guarantee Program\n FVOG Program \t 4,870 (1,781) 3,089\n Total $ \t 487,275 $ 30,655 $ 517,930\n\n\nFor the Direct Loan and Loan Guarantee Programs, maturity dates range from September 2012 to September 2038, and interest\nrates range from 2.59 to 6.97 percent.\n\n FY 2009\n Beginning Net Borrowings Ending\n Loan Program Balance (Repayments) Balance\n Direct Loan Program\n Fisheries Finance, Financing Account $ 465,095 $ 17,310 $ 482,405\n\n Loan Guarantee Program\n FVOG Program \t 6,831 (1,961) 4,870\n\n Digital Television Transition and\n Public Safety Fund \t 4,727 \t (4,727) \t -\n Total $ \t 476,653 $ 10,622 $ 487,275\n\n\n\n\n 217\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 11. Other Liabilities\n\n FY 2010 FY 2009\n Non-current\n Current Portion Portion Total Total\n Intragovernmental\n Accrued FECA Liability $ 33,802 $ 10,451 $ 44,253 $ 37,024\n Accrued Benefits 43,613 \t - 43,613 36,642\n Custodial Activity 7,964 \t - 7,964 \t -\n Downward Subsidy Reestimates\n Payable to Treasury 8,087 \t - 8,087 3,509\n Other 427 \t - 427 620\n Total $ 93,893 $ 10,451 $ 104,344 $ 77,795\n\n\n With the Public\n ITA Foreign Service Nationals\xe2\x80\x99\n Voluntary Separation Pay $ 2,207 $ 8,487 $ 10,694 $ 9,693\n Contingent Liabilities 11,643 512 12,155 13,962\n Employment-related 17,954 \t - 17,954 10,018\n Other 8,378 \t - 8,378 9,283\n Total $ 40,182 $ 8,999 $ 49,181 $ 42,956\n\n\n\nThe Current Portion represents liabilities expected to be paid by September 30, 2011, while the Non-current Portion represents\nliabilities expected to be paid after September 30, 2011.\n\n\n\n\n 218\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 12. Federal Employee Benefits\n\nThese liabilities consist of:\n\n FY 2010 FY 2009\n Actuarial FECA Liability $ \t 210,235 $ \t 171,234\n NOAA Corps Retirement System Liability \t 502,800 \t 471,600\n NOAA Corps Post-retirement Health Benefits Liability \t 56,000 \t 44,600\n Total $ \t 769,035 $ \t 687,434\n\n\nActuarial FECA Liability:\n\nActuarial FECA liability is calculated annually, as of September 30. For discounting projected annual future benefit payments to\npresent value, the interest rate assumptions used by DOL were as follows:\n\n FY 2010 FY 2009\n Year 1 \t 3.65% \t 4.22%\n Year 2 and Thereafter \t 4.30% \t 4.72%\n\n\nThe wage inflation factors (Cost of Living Allowance) and medical inflation factors (Consumer Price Index - Medical) applied to the\ncalculation of projected future benefits, and also used to adjust the methodology\xe2\x80\x99s historical payments to current year constant\ndollars, were as follows:\n\n FY 2010\n Cost of Living Consumer Price\n Fiscal Year Allowance Index - Medical\n 2011 2.23% 3.45%\n 2012 1.13% 3.43%\n 2013 1.70% 3.64%\n 2014 1.90% 3.66%\n 2015 1.93% 3.73%\n\n FY 2009\n Cost of Living Consumer Price\n Fiscal Year Allowance Index - Medical\n 2010 0.47% 3.42%\n 2011 1.40% 3.29%\n 2012 1.50% 3.48%\n 2013 1.80% 3.71%\n 2014 2.00% 3.71%\n\n\n\n\n 219\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nNOAA Corps Retirement System Liability:\n\nThis liability represents the unfunded actuarial present value of projected plan benefits. The actuarial calculation is performed\nannually, as of September 30. The September 30, 2010 and 2009 actuarial calculations used the following economic assumptions:\n FY 2010 FY 2009\n Discount Rate \t 4.89% \t 5.75%\n Annual Basic Pay Scale Increases \t 3.12% \t 3.75%\n Annual Inflation 2.37% 3.00%\n\nThe related pension costs included in the Consolidated Statements of Net Cost are as follows:\n FY 2010 FY 2009\n Normal Cost $ 9,100 $ 6,600\n Interest on the Unfunded Liability \t 26,500 \t 25,200\n Actuarial (Gains)/Losses, Net1 12,500\n \t From Experience \t 5,200 \t\n \t From Discount Rate Assumption Change \t 65,100\n \t From Long-term Assumption Changes \t\n \t\t Annual Inflation \t (37,800)\n \t\t Annual Basic Pay Scale Increases \t (14,900)\n \t\t Demographic \t (400)\n Total Pension Costs $ 52,800 $ 44,300\n\n\nNOAA Corps Post-retirement Health Benefits Liability:\n\nThis liability represents the unfunded actuarial present value of projected post-retirement plan benefits. The actuarial calculation\nis performed annually, as of September 30. The September 30, 2010 and 2009 actuarial calculations used the following economic\nassumption:\n FY 2010 FY 2009\n Discount Rate \t 4.77% \t 5.75%\n\nThe related post-retirement health benefits costs included in the Consolidated Statements of Net Cost are as follows:\n FY 2010 FY 2009\n Normal Cost $ \t 1,800 $ \t 1,300\n Interest on the Unfunded Liability \t 2,000 \t 2,700\n Actuarial (Gains)/Losses, Net1 (5,100)\n \t From Experience \t 2,100 \t\n \t From Discount Rate Assumption Change \t 3,800\n \t From Long-term Assumption Changes \xe2\x80\x93\n \t Medical Claims Costs \t 5,200\n Total Post-retirement Health Benefits Costs $ \t 14,900 $ \t (1,100)\n\n1 Effective FY 2010, actuarial gains and losses from changes in long-term assumptions are required to be separately disclosed.\n\n\n 220\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 13. Environmental and Disposal Liabilities\n\n FY 2010 FY 2009\n Pribilof Islands Cleanup $ \t 3,017 $ \t 10,030\n Nuclear Reactor \t 48,598 \t 48,039\n Other \t 3,034 \t 2,926\n Total $ 54,649 $ 60,995\n\n\n\n\n Note 14. Leases\n\nCapital Leases:\n\nAssets under capital leases are as follows:\n\n FY 2010 FY 2009\n Structures, Facilities, and Leasehold Improvements $ \t 23,538 $ \t 22,860\n Equipment \t 24 \t 2,547\n Less: Accumulated Depreciation \t (17,693) \t (18,437)\n Net Assets Under Capital Leases $ 5,869 $ 6,970\n\n\nCapital Lease Liabilities are primarily related to NOAA. NOAA has real property capital leases covering both land and buildings.\nThe majority of these leases are for weather forecasting offices, but the leases are also for radar system sites, river forecasting\ncenters, and National Weather Service enforcement centers. NOAA\xe2\x80\x99s real property capital leases range from 10 to 40 years.\n\n\n\n\n 221\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nCapital Lease Liabilities:\n\nFuture payments due under capital leases are as follows:\n\n FY 2010\n General PP&E Category\n Fiscal Year Real Property Personal Property Total\n 2011 $ 4,081 $ \t - $ 4,081\n 2012 3,878 \t - 3,878\n 2013 3,729 \t - 3,729\n 2014 3,049 \t - 3,049\n 2015 1,901 \t - 1,901\n Thereafter 10,770 \t - 10,770\n Total Future Lease Payments 27,408 \t - 27,408\n Less: Imputed Interest (13,399) \t - (13,399)\n Less: Executory Costs (4,731) \t - (4,731)\n Net Capital Lease Liabilities $ 9,278 $ \t - $ 9,278\n\n\n FY 2009\n General PP&E Category\n Fiscal Year Real Property Personal Property Total\n 2010 $ 3,973 $ \t 10 $ 3,983\n 2011 4,008 \t - 4,008\n 2012 3,790 \t - 3,790\n 2013 3,647 \t - 3,647\n 2014 2,971 \t - 2,971\n Thereafter 12,831 \t - 12,831\n Total Future Lease Payments 31,220 \t 10 \t 31,230\n Less: Imputed Interest (13,149) \t - (13,149)\n Less: Executory Costs (5,492) \t - (5,492)\n Net Capital Lease Liabilities $ 12,579 $ 10 $ \t 12,589\n\n\n\n\n 222\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nOperating Leases:\n\nMost of the Department\xe2\x80\x99s facilities are rented from GSA, which generally charges rent that is intended to approximate commercial\nrental rates. For federally owned property rented from GSA, the Department generally does not execute an agreement with GSA;\nthe Department, however, is normally required to give 120 to 180 days notice to vacate. For non-federally owned property rented\nfrom GSA, an occupancy agreement is generally executed, and the Department may normally cancel these agreements with\n120 days notice.\n\nThe Department\xe2\x80\x99s (1) estimated real property rent payments to GSA for FY\xe2\x80\xaf2011 through FY 2015; and (2) future payments due\nunder noncancellable operating leases (non-GSA real property) are as follows:\n\n FY 2010\n General PP&E Category\n GSA Non-GSA\n Fiscal Year Real Property Real Property\n 2011 $ 246,673 $ 17,187\n 2012 219,218 19,651\n 2013 209,557 18,058\n 2014 213,000 13,254\n 2015 214,639 11,754\n Thereafter 1 118,527\n Total Future Lease Payments N/A $ 198,431\n\n 1\t Not estimated.\n\n\n\n\n 223\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 15. Liabilities Not Covered by Budgetary Resources\n\n FY 2010 FY 2009\n Intragovernmental\n Accrued FECA Liability $ 37,216 $ 35,616\n Total Intragovernmental 37,216 35,616\n\n Accrued Payroll \t 36,359 \t 26,987\n Accrued Annual Leave 264,720 253,347\n Federal Employee Benefits 769,035 687,434\n Environmental and Disposal Liabilities 54,649 60,995\n Contingent Liabilities 12,155 13,962\n Unearned Revenue 551,263 681,032\n ITA Foreign Service Nationals\xe2\x80\x99 Voluntary Separation Pay 10,694 9,693\n Other 253 578\n Total $ 1,736,344 $ 1,769,644\n\n\nDue to USPTO\xe2\x80\x99s funding structure, budgetary resources do not cover a portion of its Unearned Revenue. The Unearned Revenue\nreported above is the portion of USPTO\xe2\x80\x99s Unearned Revenue that is considered not covered by budgetary resources. USPTO\xe2\x80\x99s\nUnearned Revenue is a liability for revenue received before the patent or trademark work has been completed. Budgetary resources\nderived from the current reporting period\xe2\x80\x99s revenue have been partially used to cover the current reporting period\xe2\x80\x99s costs associated\nwith unearned revenue from a prior reporting period. In addition, the current patent fee structure sets low initial application fees\nthat are followed by income from maintenance fees as a supplement in later years to cover the full cost of the patent examination\nand issuance processes. The combination of these funding circumstances requires USPTO to obtain additional budgetary resources\nto cover its liability for unearned revenue.\n\n\n\n\n 224\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 16. Commitments and Contingencies\n\nCommitments:\n\nThe Department has entered into long-term contracts for the purchase, construction, and modernization of environmental satellites\nand weather measuring and monitoring systems. A summary of major long-term commitments as of September 31, 2010 is shown\nbelow.\n\nMajor Long-term Commitments:\n FY 2010\n Description FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Thereafter Total\nGeostationary Operational\n Environmental Satellites $ 787,600 $ 819,600 $ 817,000 $ 816,900 $ 817,500 $ 1,795,600 $ 5,854,200\nConvergence Satellites 1,060,800 1,160,000 960,000 740,000 610,000 4,489,500 9,020,300\nPolar Operational\n Environmental Satellites 40,900 40,900 40,900 40,900 40,900 25,900 230,400\nOther Weather Service 147,210 129,792 116,543 120,438 114,881 77,749 706,613\nOcean Surface Topography 50,000 53,000 29,000 2,000 2,000 3,000 139,000\nClimate Sensors \t 49,400 55,400 51,100 50,600 35,500 47,100 289,100\nOther 2 \t - \t - \t - \t - \t - 2\nTotal $ 2,135,912 $ 2,258,692 $ 2,014,543 $ 1,770,838 $ 1,620,781 $ 6,438,849 $ 16,239,615\n\nLegal Contingencies:\n\nThe Department is subject to potential liabilities in various administrative proceedings, legal actions, environmental suits, and\nclaims brought against it. In the opinion of the Department\xe2\x80\x99s management and legal counsel, the ultimate resolution of these\nproceedings, actions, suits, and claims will not materially affect the financial position or net costs of the Department.\n\nProbable Likelihood of an Adverse Outcome:\n\nThe Department is subject to potential liabilities where adverse outcomes are probable, and claims are approximately $12.2 million\nand $14.0\xe2\x80\xafmillion as of September 30, 2010 and 2009, respectively. Accordingly, $12.2\xe2\x80\xafmillion and $14.0\xe2\x80\xafmillion of contingent\nliabilities were included in Other Liabilities on the Consolidated Balance Sheets as of September 30, 2010 and 2009, respectively.\nFor a majority of these claims, any amounts ultimately due will be paid out of Treasury\xe2\x80\x99s Judgment Fund. For the claims to be paid\nby Treasury\xe2\x80\x99s Judgment Fund, once the claims are settled or court judgments are assessed relative to the Department, the liability\nwill be removed and an Imputed Financing Source From Cost Absorbed by Others will be recognized.\n\nReasonably Possible Likelihood of an Adverse Outcome:\n\nThe Department and other federal agencies are subject to potential liabilities for a variety of environmental cleanup costs, many of\nwhich are associated with the Second World War, at various sites within the U.S. Since some of the potential liabilities represent\nclaims with no stated amount, the exact amount of total potential liabilities is unknown, but may exceed $86.1 million as of\nSeptember 30, 2010. For these potential liabilities, it is reasonably possible that an adverse outcome will result. It is not possible,\nhowever, to speculate as to a range of loss. In the absence of a settlement agreement, decree, or judgment, there is neither an\nallocation of response costs between the U.S. government and other potentially responsible parties, nor is there an attribution of\nsuch costs to or among the federal agencies implicated in the claims. Although the Department has been implicated as a responsible\n\n\n 225\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nparty, the U.S. Department of Justice was unable to provide an amount for these potential liabilities that is attributable to the\nDepartment. Of these potential liabilities, all will be funded by Treasury\xe2\x80\x99s Judgment Fund, if any amounts are ultimately due.\n\nThe Department and other federal agencies are subject to other potential liabilities. Since some of the potential liabilities\nrepresent claims with no stated amount, the exact amount of total potential liabilities is unknown, but may exceed $270.7\xe2\x80\xafmillion\nas of September 30, 2010. For these potential liabilities, it is reasonably possible that an adverse outcome will result. It is not\npossible, however, to speculate as to a range of loss. Of these potential liabilities, most will be funded by Treasury\xe2\x80\x99s Judgment\nFund, if any amounts are ultimately due.\n\nGuaranteed Loan Contingencies:\n\nFishing Vessels Obligation Guarantee Program: This loan guarantee program has outstanding non-acquired guaranteed loans\n(fully guaranteed by the Department) as of September 30, 2010 and 2009, with outstanding principal balances totaling $3.9 and\n$4.3 million, respectively. A loan guarantee liability of $565 thousand and $589 thousand is recorded for the outstanding\nguarantees at September 30, 2010 and 2009, respectively.\n\nRestructuring the National Polar-orbiting Operational Environmental Satellite System (NPOESS) to the Joint Polar Satellite\nSystem (JPSS)\n\nIn 2010, the Executive Office of the President directed the restructure of the government\xe2\x80\x99s approach to meeting its polar-orbiting\nenvironmental data collection needs. Accordingly, the President\xe2\x80\x99s FY 2011 budget contains a restructuring of the National Polar-\norbiting Operational Environmental Satellite System (NPOESS) in order to put the critical program on a more sustainable pathway\ntoward success. The Joint Polar Satellite Program (JPSS) is a national priority -- essential to meeting both civil and military\nweather forecasting, storm tracking, and climate monitoring requirements. After reviewing options, including those suggested\nby an Independent Review Team (IRT) and Congressional Committees, the President\xe2\x80\x99s FY 2011 budget takes significant new steps.\nThe Executive Office of the President directed NOAA and the Air Force to no longer continue to jointly procure NPOESS. This decision\nis in the best interest of the American public to preserve critical operational weather and climate observations into the future.\n\nThe three agencies (DoD, NOAA, and NASA) have and will continue to partner to ensure a successful way forward for the respective\nprograms, while utilizing international partnerships to sustain and enhance weather and climate observation from space.\n\nThe major challenge of NPOESS was jointly executing the program between three agencies of different sizes with divergent\nobjectives and different acquisition procedures. The new system will resolve this challenge by splitting the procurements. NOAA\nand NASA will take primary responsibility for the afternoon orbit, and DoD will take primary responsibility for the morning orbit.\nThe agencies will continue to partner in those areas that have been successful in the past, such as a shared ground system.\nThe restructured programs will also eliminate the NPOESS tri-agency structure that has made management and oversight difficult,\ncontributing to the poor performance of the program.\n\nNOAA and the Air Force have already begun to move into a transition period during which the current joint procurement will end. The\nagencies will continue a successful relationship that they have developed for their polar and geostationary satellite programs to-date.\n\nThe restructuring effort will continue throughout FY 2011. During this time, NOAA and the Air Force will work together to\ndecide which program components of the DoD Construction Work in Progress (CWIP) will remain with DoD versus which program\ncomponents will transfer to NOAA to become part of JPSS. If any program component that remains with NOAA is not needed for\nJPSS, the value of those components will be written off. One component that will not be used by NOAA is the Conical-scanning\nMicrowave Image/Sounder (CMIS) sensor, with costs incurred of $107.5M, which was charged to expense in FY 2010. The amount\nof any additional CWIP impairment charges due to the satellite restructuring cannot be estimated.\n\n\n 226\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 17. Consolidated Statements of Net Cost\n\nFY 2010 Consolidating Statement of Net Cost:\n\n Intra-\n Departmental Combining Departmental Consolidating\n NOAA USPTO ESA NIST NTIA Others Management Total Eliminations Total\n\nStrategic Goal 1: Maximize U.S.\nCompetitiveness and Enable\nEconomic Growth for American\nIndustries, Workers, and\nConsumers\n Intragovernmental Gross Costs $ \t - $ \t - $ 1,045,041 $ 30 $ \t - $ 273,146 $ 77,819 $ 1,396,036 $ \t (87,024) $ 1,309,012\n Gross Costs With the Public \t - \t - 5,770,979 102,393 \t - 926,965 30,737 6,831,074 \t - 6,831,074\n Total Gross Costs \t - \t - 6,816,020 102,423 \t - 1,200,111 108,556 8,227,110 \t (87,024) 8,140,086\n Intragovernmental Earned\n Revenue \t - \t - \t (230,177) \t - \t - \t (28,747) \t (74,893) \t (333,817) 87,024 \t (246,793)\n Earned Revenue From the\n Public \t - \t - \t (5,724) \t - \t - \t (8,962) \t (3) \t (14,689) \t - \t (14,689)\n Total Earned Revenue \t - \t - \t (235,901) \t - \t - \t (37,709) \t (74,896) \t (348,506) 87,024 \t (261,482)\n Net Program Costs \t - \t - 6,580,119 102,423 \t - 1,162,402 33,660 7,878,604 \t - 7,878,604\nStrategic Goal 2: Promote\nU.S. Innovation and Industrial\nCompetitiveness\n Intragovernmental Gross Costs \t - 425,881 \t - 133,541 386,909 7,425 77,820 1,031,576 \t (98,523) 933,053\n Gross Costs With the Public \t - 1,581,057 \t - 788,127 213,178 40,576 30,738 2,653,676 \t - 2,653,676\n Total Gross Costs \t - 2,006,938 \t - 921,668 600,087 48,001 108,558 3,685,252 \t (98,523) 3,586,729\n Intragovernmental Earned\n Revenue \t - \t (9,375) \t - \t(113,045) \t (29,939) \t (38,567) \t (74,893) \t (265,819) 98,523 \t (167,296)\n Earned Revenue From the\n Public \t - \t(2,092,307) \t - \t (54,445) \t (151) \t (10,522) \t (3) \t (2,157,428) \t - \t (2,157,428)\n Total Earned Revenue \t - \t(2,101,682) \t - \t(167,490) \t (30,090) \t (49,089) \t (74,896) \t (2,423,247) 98,523 \t (2,324,724)\n Net Program Costs \t - \t (94,744) \t - 754,178 569,997 \t (1,088) 33,662 1,262,005 \t - 1,262,005\nStrategic Goal 3: Promote\nEnvironmental Stewardship\n Intragovernmental Gross Costs 772,455 \t - \t - \t - \t - \t - 77,850 850,305 \t (99,604) 750,701\n Gross Costs With the Public 4,019,147 \t - \t - \t - \t - \t - 30,746 4,049,893 \t - 4,049,893\n Total Gross Costs 4,791,602 \t - \t - \t - \t - \t - 108,596 4,900,198 \t (99,604) 4,800,594\n Intragovernmental Earned\n Revenue \t (203,896) \t - \t - \t - \t - \t - \t (74,915) \t (278,811) 99,604 \t (179,207)\n Earned Revenue From the\n Public \t (97,913) \t - \t - \t - \t - \t - \t (3) \t (97,916) \t - \t (97,916)\n Total Earned Revenue \t (301,809) \t - \t - \t - \t - \t - \t (74,918) \t (376,727) 99,604 \t (277,123)\n\t Net Program Costs 4,489,793 \t - \t - \t - \t - \t - 33,678 4,523,471 \t - 4,523,471\nNET COST OF OPERATIONS $ 4,489,793 $ \t (94,744) $ 6,580,119 $ 856,601 $ 569,997 $ 1,161,314 $ 101,000 $ 13,664,080 $ \t - $ 13,664,080\n\n\n\n\n 227\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nFY 2009 Consolidating Statement of Net Cost:\n\n Intra-\n Departmental Combining Departmental Consolidating\n NOAA USPTO ESA NIST NTIA Others Management Total Eliminations Total\n\nStrategic Goal 1: Maximize U.S.\nCompetitiveness and Enable\nEconomic Growth for American\nIndustries, Workers, and\nConsumers\n Intragovernmental Gross Costs $ \t - $ \t - $ 547,708 $ 11 $ \t - $ 227,060 $ 76,704 $ 851,483 $ \t (84,380) $ 767,103\n Gross Costs With the Public \t - \t - 2,478,857 121,300 \t - 672,145 35,573 3,307,875 \t - 3,307,875\n Total Gross Costs \t - \t - 3,026,565 121,311 \t - 899,205 112,277 4,159,358 \t (84,380) 4,074,978\n Intragovernmental Earned\n Revenue \t - \t - \t (237,357) \t - \t - \t (29,831) \t (81,588) \t (348,776) 84,380 \t (264,396)\n Earned Revenue From the\n Public \t - \t - \t (6,878) \t - \t - \t (9,266) \t (24) \t (16,168) \t - \t (16,168)\n Total Earned Revenue \t - \t - \t (244,235) \t - \t - \t (39,097) \t (81,612) \t (364,944) 84,380 \t (280,564)\n Net Program Costs \t - \t - 2,782,330 121,311 \t - 860,108 30,665 3,794,414 \t - 3,794,414\nStrategic Goal 2: Promote\nU.S. Innovation and Industrial\nCompetitiveness\n Intragovernmental Gross Costs \t - 404,786 \t - 129,844 202,327 6,530 76,704 820,191 \t (97,949) 722,242\n Gross Costs With the Public \t - 1,577,154 \t - 694,433 996,539 21,640 35,575 3,325,341 \t - 3,325,341\n Total Gross Costs \t - 1,981,940 \t - 824,277 1,198,866 28,170 112,279 4,145,532 \t (97,949) 4,047,583\n Intragovernmental Earned\n Revenue \t - \t (7,443) \t - \t(127,114) \t (32,216) \t (14,914) \t (81,591) \t (263,278) 97,949 \t (165,329)\n Earned Revenue From the\n Public \t - \t(1,919,687) \t - \t (71,177) \t (209) \t (11,158) \t (22) \t(2,002,253) \t - \t(2,002,253)\n Total Earned Revenue \t - \t(1,927,130) \t - \t(198,291) \t (32,425) \t (26,072) \t (81,613) \t(2,265,531) 97,949 \t(2,167,582)\n Net Program Costs \t - 54,810 \t - 625,986 1,166,441 2,098 30,666 1,880,001 \t - 1,880,001\nStrategic Goal 3: Promote\nEnvironmental Stewardship\n Intragovernmental Gross Costs 677,895 \t - \t - \t - \t - \t - 76,727 754,622 \t (82,650) 671,972\n Gross Costs With the Public 3,710,398 \t - \t - \t - \t - \t - 35,586 3,745,984 \t - 3,745,984\n Total Gross Costs 4,388,293 \t - \t - \t - \t - \t - 112,313 4,500,606 \t (82,650) 4,417,956\n Intragovernmental Earned\n Revenue \t (184,643) \t - \t - \t - \t - \t - \t (81,615) \t (266,258) 82,650 \t (183,608)\n Earned Revenue From the\n Public \t (82,001) \t - \t - \t - \t - \t - \t (23) \t (82,024) \t - \t (82,024)\n Total Earned Revenue \t (266,644) \t - \t - \t - \t - \t - \t (81,638) \t (348,282) 82,650 \t (265,632)\n\t Net Program Costs 4,121,649 \t - \t - \t - \t - \t - 30,675 4,152,324 \t - 4,152,324\nNET COST OF OPERATIONS $ 4,121,649 $ 54,810 $ 2,782,330 $ 747,297 $ 1,166,441 $ 862,206 $ 92,006 $ 9,826,739 $ \t - $ 9,826,739\n\n\n\n\n 228\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nMajor Programs: The following tables illustrate major programs of the Department. \xe2\x80\x9cOther Programs\xe2\x80\x9d refers to the other programs\nwithin each strategic goal. The \xe2\x80\x9cOthers\xe2\x80\x9d column refers to the Department\xe2\x80\x99s reporting entities that are not listed. The Others column\ndata and the Other Programs data are presented solely to reconcile these tables to the Combining Total columns on the Consolidating\nStatements of Net Cost.\n\nFY 2010 Statement of Net Cost by Major Program (Combining Basis):\n\n Census Combining\n Program Costs NOAA Bureau NIST USPTO Others Total\nStrategic Goal 1: Maximize U.S. Competitiveness and Enable\nEconomic Growth for American Industries, Workers, and\nConsumers\nDecennial and Periodic Censuses \t\n\t Gross Costs $\t - $ 5,648,403 $\t - $\t - $\t - $ 5,648,403\n\t Less: Earned Revenue \t - \t - \t - \t - \t - \t -\n\t Net Program Costs \t - 5,648,403 \t - \t - \t - 5,648,403\nOther Programs\n\t Gross Costs \t - 1,053,844 102,423 \t - 1,422,440 2,578,707\n\t Less: Earned Revenue \t - \t (229,415) \t - \t - \t (119,091) \t (348,506)\n\t Net Program Costs \t - 824,429 102,423 \t - 1,303,349 2,230,201\nNet Program Costs for Strategic Goal 1 \t - 6,472,832 102,423 \t - 1,303,349 7,878,604\n\nStrategic Goal 2: Promote U.S. Innovation and Industrial\nCompetitiveness\nMeasurement and Standards Laboratories\n\t Gross Costs \t - \t - 643,838 \t - \t - 643,838\n\t Less: Earned Revenue \t - \t - \t (127,894) \t - \t - \t (127,894)\n\t Net Program Costs \t - \t - 515,944 \t - \t - 515,944\nPatents\n\t Gross Costs \t - \t - \t - 1,777,871 \t - 1,777,871\n\t Less: Earned Revenue \t - \t - \t - \t(1,887,538) \t - \t (1,887,538)\n\t Net Program Costs \t - \t - \t - \t (109,667) \t - \t (109,667)\nTrademarks\n\t Gross Costs \t - \t - \t - 182,565 \t - 182,565\n\t Less: Earned Revenue \t - \t - \t - \t (214,144) \t (214,144)\n\t Net Program Costs \t - \t - \t - \t (31,579) \t - \t (31,579)\nOther Programs\n\t Gross Costs \t - \t - 277,830 46,502 756,646 1,080,978\n\t Less: Earned Revenue \t - \t - \t (39,596) \t - \t (154,075) \t (193,671)\n\t Net Program Costs \t - \t - 238,234 46,502 602,571 887,307\nNet Program Costs for Strategic Goal 2 \t - \t - 754,178 \t (94,744) 602,571 1,262,005\n\nStrategic Goal 3: Promote Environmental Stewardship\nEcosystems\n\t Gross Costs 1,781,600 \t - \t - \t - \t - 1,781,600\n\t Less: Earned Revenue \t (109,657) \t - \t - \t - \t - \t (109,657)\n\t Net Program Costs 1,671,943 \t - \t - \t - \t - 1,671,943\nOther Programs\n\t Gross Costs 3,010,002 \t - \t - \t - 108,596 3,118,598\n\t Less: Earned Revenue \t (192,152) \t - \t - \t - \t (74,918) \t (267,070)\n\t Net Program Costs 2,817,850 \t - \t - \t - 33,678 2,851,528\nNet Program Costs for Strategic Goal 3 4,489,793 \t - \t - 33,678 4,523,471\nNET COST OF OPERATIONS $ 4,489,793 $ 6,472,832 $ 856,601 $\t (94,744) $ 1,939,598 $ 13,664,080\n\n\n\n 229\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nFY 2009 Statement of Net Cost by Major Program (Combining Basis):\n\n Census Combining\n Program Costs NOAA Bureau NIST USPTO Others Total\nStrategic Goal 1: Maximize U.S. Competitiveness and Enable\nEconomic Growth for American Industries, Workers, and\nConsumers\nDecennial and Periodic Censuses \t\n\t Gross Costs $\t - $ 2,015,059 $\t - $\t - $\t - $ 2,015,059\n\t Less: Earned Revenue \t - \t - \t - \t - \t - -\n\t Net Program Costs \t - 2,015,059 \t - \t - \t - 2,015,059\nOther Programs\n\t Gross Costs \t - 911,079 121,311 \t - 1,111,909 2,144,299\n\t Less: Earned Revenue \t - \t (238,281) \t - \t - \t (126,663) \t (364,944)\n\t Net Program Costs \t - 672,798 121,311 \t - 985,246 1,779,355\nNet Program Costs for Strategic Goal 1 \t - 2,687,857 121,311 \t - 985,246 3,794,414\n\nStrategic Goal 2: Promote U.S. Innovation and Industrial\nCompetitiveness\nMeasurement and Standards Laboratories\n\t Gross Costs \t - \t - 689,751 \t - \t - 689,751\n\t Less: Earned Revenue \t - \t - \t (170,517) \t - \t - \t (170,517)\n\t Net Program Costs \t - \t - 519,234 \t - \t - 519,234\nPatents\n\t Gross Costs \t - \t - \t - 1,744,676 \t - 1,744,676\n\t Less: Earned Revenue \t - \t - \t - \t(1,697,432) \t - \t (1,697,432)\n\t Net Program Costs \t - \t - \t - 47,244 \t - 47,244\nTrademarks\n\t Gross Costs \t - \t - \t - 193,187 \t - 193,187\n\t Less: Earned Revenue \t - \t - \t - \t (229,698) \t (229,698)\n\t Net Program Costs \t - \t - \t - \t (36,511) \t - \t (36,511)\nOther Programs\n\t Gross Costs \t - \t - 134,526 44,077 1,339,315 1,517,918\n\t Less: Earned Revenue \t - \t - \t (27,774) \t - \t (140,110) \t (167,884)\n\t Net Program Costs \t - \t - 106,752 44,077 1,199,205 1,350,034\nNet Program Costs for Strategic Goal 2 \t - \t - 625,986 54,810 1,199,205 1,880,001\n\nStrategic Goal 3: Promote Environmental Stewardship\nEcosystems\n\t Gross Costs 1,701,525 \t - \t - \t - \t - 1,701,525\n\t Less: Earned Revenue \t (135,569) \t - \t - \t - \t - \t (135,569)\n\t Net Program Costs 1,565,956 \t - \t - \t - \t - 1,565,956\nOther Programs\n\t Gross Costs 2,686,768 \t - \t - \t - 112,313 2,799,081\n\t Less: Earned Revenue \t (131,075) \t - \t - \t - \t (81,638) \t (212,713)\n\t Net Program Costs 2,555,693 \t - \t - \t - 30,675 2,586,368\nNet Program Costs for Strategic Goal 3 4,121,649 \t - \t - \t - 30,675 4,152,324\nNET COST OF OPERATIONS $ 4,121,649 $ 2,687,857 $ 747,297 $ 54,810 $ 2,215,126 $ 9,826,739\n\n\n\n\n 230\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 18. Combined Statements of Budgetary Resources\n\nThe amount of Budget Authority, Appropriations, on the Combined Statements of Budgetary Resources (SBR) reconciles to the\namount of Budgetary Financing Sources, Appropriations Received, reported on the Consolidated Statements of Changes in Net\nPosition (SCNP) as follows:\n\n FY 2010 FY 2009\n Budget Authority, Appropriations (SBR) $ 14,322,512 $ 34,069,220\n Less:\n Appropriated Receipts for NOAA and DM/G&B, Classified as\n Exchange Revenue \t (15,994) \t (17,304)\n Appropriated Receipts for NTIA\xe2\x80\x99s Digital Television Transition\n and Public Safety Fund, Classified as Transfers In of Spectrum\n Auction Proceeds from Federal Communications Commission (196,613) \t(16,689,557)\n Budgetary Financing Sources, Appropriations Received (SCNP) $ 14,109,905 $ 17,362,359\n\n\nBudget Authority, Appropriations, included on the SBR decreased significantly from FY 2009 to FY 2010 primarily due to the large\ndecrease of $16.49 billion in appropriated receipts for NTIA\xe2\x80\x99s Digital Television Transition and Public Safety Fund and appropriations\nof $7.92 billion received in FY 2009 under the American Recovery and Reinvestment Act of 2009 (Public Law 111-5). Additional\ninformation on the above noted appropriations is included in this note.\n\nTotal borrowing authority available for NOAA\xe2\x80\x99s loan programs amounted to $228.4 million and $260.5 million at September 30,\n2010 and 2009, respectively. During FY 2009, the Digital Television Transition and Public Safety Fund\xe2\x80\x99s borrowing authority was\ndecreased by $914.9 million to zero; this decrease is included as a reduction of budgetary resources on the SBR for FY 2009 on the\nline Permanently Not Available. The Borrowing Authority amounts reported in the SBR Budgetary Resources section represent only\nborrowing authority realized during the fiscal year being reported. See Note 1M, Debt to Treasury, for debt repayment requirements,\nfinancing sources for repayments, and other terms of borrowing authority used.\n\nNinety-five percent of the Department\xe2\x80\x99s reporting entities have one or more permanent no-year appropriations to finance\noperations.\n\nReductions to the Department\xe2\x80\x99s appropriations under Public Laws 111-226, 111-212, 111-224, and 111-118 amounted to\n$696.5 million for FY 2010, while reductions for FY 2009 under Public Law 111-8 amounted to $25.6 million. These reductions are\nincluded in the SBR Budgetary Resources line Permanently Not Available. These reductions are also part of the amounts reported\non the line Other Adjustments in the Unexpended Appropriations section, Budgetary Financing Sources subsection, of the SCNP.\n\nLegal arrangements affecting the Department\xe2\x80\x99s use of Unobligated Balances of Budget Authority and/or Fund Balance with\nTreasury during FY 2010 and FY 2009 include the following:\n\n l\t The Department\xe2\x80\x99s Deposit Funds, reported in Note 2, Fund Balance with Treasury, are not available to finance operating\n activities. These funds are also included in Note 2 on the line Non-budgetary (breakdown by status).\n\n\n\n\n 231\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n l\t The Department\xe2\x80\x99s Fund Balance with Treasury as of September 30, 2010 and 2009 includes $581.2 million of USPTO\n offsetting collections exceeding prior years\xe2\x80\x99 appropriations of $581.2 million and $528.7 million, respectively. USPTO\n may use these funds only as authorized by the U.S. Congress, and only as made available by the issuance of a Treasury\n warrant. These funds are included in Note 2 on the lines General Funds (breakdown by type), and Temporarily Precluded\n From Obligation (breakdown by status).\n l\t The Omnibus Budget Reconciliation Act of 1990 established surcharges on certain statutory patent fees collected by\n USPTO. Subsequent legislation extended the surcharges through the end of FY 1998. These surcharges were deposited\n into the Patent and Trademark Surcharge Fund, a Special Fund Receipt Account at Treasury. USPTO may use monies from\n this account only as authorized by Congress and made available by the issuance of a Treasury warrant. At September 30,\n 2010 and 2009, $233.5 million is held in the Patent and Trademark Surcharge Fund. These funds are included in Note 2\n on the lines Special Fund (Patent and Trademark Surcharge Fund) (breakdown by type), and Non-budgetary (breakdown\n by status).\n l\t The Department\xe2\x80\x99s Fund Balance with Treasury as of September 30, 2010 and 2009 includes funds temporarily not available\n for the Digital Television and Transition Public Safety Fund of $8.74 billion and $8.29 billion, respectively. These funds are\n included in Note 2 on the lines Digital Television and Transition Public Safety Fund - Special Funds section (breakdown\n by type), and Unobligated Balance - Unavailable (breakdown by status). On the SBR for FY 2010, these funds are included\n on the line Unobligated Balance Not Available.\n l\t The Department\xe2\x80\x99s Fund Balance with Treasury as of September 30, 2010 and 2009 includes $20.4 and $23.1 million,\n respectively, of funds temporarily not available for the Coastal Zone Management Fund, which accounts for the Coastal\n Energy Impact Program direct loans. These funds are included in Note 2 on the lines Revolving Funds (breakdown by\n type), and Temporarily Precluded From Obligation (breakdown by status).\n l\t For loan programs prior to the Federal Credit Reform Act of 1990 (pre-FY 1992 loans), most or all liquidating fund\n unobligated balances in excess of working capital needs are required to be transferred to Treasury as soon as practicable\n during the following fiscal year.\n l\t For direct loan programs under the Federal Credit Reform Act of 1990 (post-FY 1991 loans) that have outstanding debt\n to Treasury, regulations require that most unobligated balances be returned to Treasury on September 30, or require that\n the borrowing authority be cancelled on September 30.\n l\t For loan guarantee programs under the Federal Credit Reform Act of 1990 that have outstanding debt to Treasury,\n regulations require that unobligated balances in excess of the outstanding guaranteed loans\xe2\x80\x99 principal and interest be\n returned to Treasury on September 30.\n\nThere are no material differences between the amounts reported in the FY 2009 Combined Statement of Budgetary Resources and\nthe actual FY 2009 amounts reported in the FY 2011 budget of the U.S. government.\n\n\n\n\n 232\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nApportionment Categories of Obligations Incurred:\n\nThe amounts of direct and reimbursable obligations incurred against amounts apportioned under Category A, Category B, and\nExempt from Apportionment are as follows:\n\n FY 2010\n Direct Reimbursable Total\n Category A $ \t 8,365,156 $ 2,529,674 $ 10,894,830\n Category B \t 10,457,428 25,150 10,482,578\n Exempt from Apportionment \t 159,933 868,470 1,028,403\n Total $ 18,982,517 $ 3,423,294 $ 22,405,811\n\n FY 2009\n Direct Reimbursable Total\n Category A $ \t 5,638,199 $ 2,273,490 $ 7,911,689\n Category B \t 6,395,748 77,395 6,473,143\n Exempt from Apportionment \t 172,688 852,294 1,024,982\n Total $ 12,206,635 $ 3,203,179 $ 15,409,814\n\nCategory A apportionments distribute budgetary resources by fiscal quarters, whereas Category B apportionments typically\ndistribute budgetary resources by activities, projects, objects, or a combination of these categories.\n\nUndelivered Orders:\n\nUndelivered orders were $12.36 billion and $7.87 billion at September 30, 2010 and 2009, respectively.\n\nAmerican Recovery and Reinvestment Act of 2009:\n\nThe Department received Appropriations of $7.92 billion in FY 2009 under the American Recovery and Reinvestment Act of\n2009, including $4.70 billion for NTIA\xe2\x80\x99s Broadband Technology Opportunities Program; $1.00 billion for Census Bureau\xe2\x80\x99s Periodic\nCensuses and Programs; $650.0 million for NTIA\xe2\x80\x99s Digital-to-Analog Converter Box Program; and $600.0 million for NOAA\xe2\x80\x99s\nProcurement, Acquisition, and Construction.\n\nDigital Television Transition and Public Safety Fund:\n\nThe Digital Television Transition and Public Safety Fund (Fund) was created by the Digital Television Transition and Public Safety\nAct of 2005. This NTIA fund receives proceeds from the auction of licenses for recovered analog spectrum from discontinued\nanalog television signals, and provides funding for several programs from these receipts. Funding for these programs, prior to the\navailability of auction receipts, was provided by Treasury borrowings, as discussed in Note 1, Summary of Significant Accounting\nPolicies.\n\nThe Federal Communications Commission (FCC) completed the auction of licenses for recovered analog spectrum in March 2008.\nThe auction resulted in proceeds of $18.96 billion, which were deposited to the Fund by FCC on June 30, 2008. A net auction\nproceed (auction proceed less any FCC administrative fees due to FCC) becomes a budgetary resource on the SBR when FCC grants\nthe license and the net auction proceed is provided as a budgetary resource by OMB. Net auction proceeds for which licenses\nhave been granted, totaling $196.6 million and $16.69 billion for FY 2010 and FY 2009, respectively, are included as a budgetary\n\n\n\n 233\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nresource on the SBR (Budget Authority, Appropriations), and as a budgetary financing source on the SCNP. Auction proceeds\nfor which licenses have not yet been granted, totaling $33.8 million and $400.5 million as of September 30, 2010 and 2009,\nrespectively, are considered a non-budgetary financing source (unavailable for use), and, accordingly, are not included in the SBR\nand are recorded as a liability to FCC on the Consolidated Balance Sheet. For the proprietary financial statements, an auction\nproceed is considered a liability to FCC until FCC grants the license. When the license is granted, a financing source (Transfers In of\nSpectrum Auction Proceeds from FCC) is recognized on the SCNP for the earned net auction proceeds, and the liability is reduced\nby the dollar amount of the license granted.\n\nAs of September 30, 2010, payments for the programs under the Fund may not exceed $2.82 billion. On September 30, 2009, the\nFund transferred $7.36 billion to the General Fund of the Treasury. This transfer is included as a reduction of budgetary resources\non the SBR for year-end FY 2009 on the line Permanently Not Available, and is reported on the SCNP for year-end FY 2009 as\na negative budgetary financing source. The Department understands that Congress\xe2\x80\x99 intent is for the Fund to further transfer\nfunds beyond the needs of its programs to the General Fund of the Treasury. At September 30, 2010, the Fund has a Net Position,\nCumulative Results of Operations balance of $9.53 billion.\n\nBelow is a brief summary of the three largest programs under this Fund, and significant financial activity recorded for the FY 2010\nand FY 2009 SBR under this Fund for each program:\n\nPublic Safety Interoperable Communications (PSIC): This is a grant program to assist public safety agencies in the acquisition of,\ndeployment of, or training for the use of interoperable communications systems that can utilize reallocated public safety spectrum\nfor radio communication. The Fund may make payments not to exceed $1.00 billion for this program. The Department has in place\na Memorandum of Understanding with the Federal Emergency Management Agency (FEMA), in which FEMA administers the PSIC\ngrant program. NTIA provides FEMA with funds for the grants under the program, and for the charges for FEMA\xe2\x80\x99s management and\nadministrative services. NTIA records budgetary obligations with FEMA, while FEMA records the grants activity under the program.\nBudgetary obligations for FY 2010 and FY 2009 under the PSIC program amounted to $8.8 million and $5.6 million, respectively.\nBudgetary obligations through September 30, 2008 under the PSIC program amounted to $981.4 million.\n\nDigital-to-Analog Converter Box Program: This program provided eligible households in the U.S. and territories with forty-dollar\ncoupons (two per household maximum) that could be applied toward the purchase of digital-to-analog converter boxes. The Fund\nmay make payments not to exceed $1.52 billion for this program. Budgetary obligations for FY 2010 and FY 2009 under this fund\nfor this program amounted to $0.0 million and $535.1 million, respectively.\n\nNational Alert and Tsunami Warning Program: This program is to implement a unified national alert system capable of alerting\nthe public, on a national, regional, or local basis to emergency situations by using a variety of communications technologies. The\nFund made payments not exceeding $156.0 million for this program. The Department shall use $50.0 million of such amounts to\nimplement a tsunami warning and coastal vulnerability program. Budgetary obligations for FY 2010 and FY 2009 amounted to\n$37.5 million and $49.8 million, respectively.\n\n\n Note 19. Custodial Nonexchange Activity\n\nNOAA receives interest, penalties, and fines primarily related to its past due Accounts Receivable, while BIS receives civil monetary\npenalties from private entities that violate the Export Administration Act. These collections are required to be transferred to Treasury.\nFor FY 2010, the Department had custodial nonexchange revenue of $19.5 million; custodial nonexchange revenue of $8.0 million\nwas payable to Treasury at September 30, 2010. For FY 2009, the Department had custodial nonexchange revenue of $9.9 million;\ncustodial nonexchange revenue of $706 thousand was payable to Treasury at September 30, 2009.\n\n\n\n\n 234\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 20. Fiduciary Activities\n\nSchedule of Fiduciary Activities for the Year Ended September 30, 2010\n FY 2010\n Patent\n Cooperation Madrid\n Treaty Protocol Total\n Fiduciary Net Assets, Beginning Balance $ \t 9,134 $ \t 452 $ \t 9,586\n Contributions \t 121,679 \t 9,923 \t 131,602\n Disbursements to and on Behalf of Beneficiaries \t (121,361) \t (9,799) \t (131,160)\n Increase/(Decrease) in Fiduciary Net Assets \t 318 \t 124 \t 442\n Fiduciary Net Assets, Ending Balance $ \t 9,452 $ \t 576 $ \t 10,028\n\n\nFiduciary Net Assets as of September 30, 2010\n FY 2010\n Patent\n Cooperation Madrid\n Treaty Protocol Total\n Fund Balance with Treasury $ \t 9,452 $ \t 576 $ \t 10,028\n\n\nSchedule of Fiduciary Activities for the Year Ended September 30, 2009\n FY 2009\n Patent\n Cooperation Madrid\n Treaty Protocol Total\n Fiduciary Net Assets, Beginning Balance $ \t 11,598 $ \t 311 $ \t 11,909\n Contributions 116,818 \t 8,618 \t 125,436\n Disbursements to and on Behalf of Beneficiaries \t (119,282) \t (8,477) \t (127,759)\n Increase/(Decrease) in Fiduciary Net Assets \t (2,464) \t 141 \t (2,323)\n Fiduciary Net Assets, Ending Balance $ \t 9,134 $ \t 452 $ \t 9,586\n\n\nFiduciary Net Assets as of September 30, 2009\n FY 2009\n Patent\n Cooperation Madrid\n Treaty Protocol Total\n Fund Balance with Treasury $ \t 9,134 $ \t 452 $ \t 9,586\n\n\n\n\n 235\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 21. Earmarked Funds\n\nThe following tables depict major earmarked funds separately chosen based on their significant financial activity and importance to\ntaxpayers. All other earmarked funds not shown are aggregated as \xe2\x80\x9cOther Earmarked Funds.\xe2\x80\x9d\nUnited States Department of Commerce Consolidated Balance Sheet\nAs of September 30, 2010\n\n Digital- Damage\n NTIA Digital Broadband to-Analog Assessment\n Television Technology Converter and\n USPTO Transition and Opportunities Box Coastal Zone NTIS Restoration Other Total\n Earmarked Public Safety Program - Program - Management Revolving Revolving Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Fund Funds Funds\n\nASSETS\n\t Fund Balance with Treasury $ 1,334,757 $ 9,396,152 $ 4,172,152 $ 6,319 $ 20,439 $ 29,749 $ 42,163 $ 82,539 $ 15,084,270\n\t Cash 2,570 \t - \t - \t - \t - \t - \t - \t - 2,570\n\t Accounts Receivable, Net 758 \t - \t - \t - \t - 2,503 265 182 3,708\n\t Direct Loans and Loan\t\n \t Guarantees, Net \t - \t - \t - \t - 6,717 \t - \t - \t - 6,717\n\t Inventory, Materials, and \t\n \t Supplies, Net \t - \t - \t - \t - \t - 30 \t - \t - 30\n\t General Property, Plant, \t\n \t and Equipment, Net 174,397 \t - \t 49 \t - \t - 2,274 \t - \t - 176,720\n\t Other 13,167 139,738 20,335 \t - \t - 6,948 \t - 200 180,388\n\t TOTAL ASSETS $ 1,525,649 $ 9,535,890 $ 4,192,536 $ 6,319 $ 27,156 $ 41,504 $ 42,428 $ 82,921 $ 15,454,403\n\nLIABILITIES\n\t Accounts Payable $ 70,114 $ 534 $ 1,450 $\t - $\t - $ 12,244 $ 408 $ 154 $ 84,904\n\t Federal Employee Benefits 8,299 \t - \t - \t - \t - 1,208 \t - \t - 9,507\n\t Other\n \t Accrued Payroll and 165,490 56 1,135 \t - \t - 1,661 50 179 168,571\n \t\t Annual Leave\n \t Accrued Grants \t - \t 1,453 \t 96,902 \t - \t - \t - \t - 3,424 101,779\n \t Unearned Revenue 774,388 \t - \t - \t - \t - 10,556 \t - \t - 784,944\n \t Other 15,053 \t - \t - \t - \t - 411 40 \t 59 15,563\n\t TOTAL LIABILITIES $ 1,033,344 $ 2,043 $ 99,487 $\t - $\t - $ 26,080 $ 498 $ 3,816 $ 1,165,268\n\n NET POSITION\n\t Unexpended Appropriations $\t - $\t - $ 4,093,000 $ 6,319 $\t - $\t - $\t - $\t - $ 4,099,319\n\t Cumulative Results of \t\n \t Operations 492,305 9,533,847 \t 49 \t - 27,156 15,424 41,930 79,105 10,189,816\n\t TOTAL NET POSITION $ 492,305 $ 9,533,847 $ 4,093,049 $ 6,319 $ 27,156 $ 15,424 $ 41,930 $ 79,105 $ 14,289,135\n\t TOTAL LIABILITIES AND\n NET POSITION $ 1,525,649 $ 9,535,890 $ 4,192,536 $ 6,319 $ 27,156 $ 41,504 $ 42,428 $ 82,921 $ 15,454,403\n\n\n\n\n 236\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Balance Sheet\nAs of September 30, 2009\n\n Digital- Damage\n NTIA Digital Broadband to-Analog Assessment\n Television Technology Converter and\n USPTO Transition and Opportunities Box Coastal Zone NTIS Restoration Other Total\n Earmarked Public Safety Program - Program - Management Revolving Revolving Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Fund Funds Funds\n\n ASSETS\n \t Fund Balance with Treasury $ 1,212,683 $ 9,230,126 $ 4,597,413 $ 262,443 $ 23,155 $ 22,699 $ 37,168 $ 90,557 $ 15,476,244\n \t Cash 2,278 \t - \t - \t - \t - \t - \t - \t - 2,278\n \t Accounts Receivable, Net 438 \t - 235 \t - \t - 2,391 165 184 3,413\n \t Direct Loans and Loan\t\n \t Guarantees, Net \t - \t - \t - \t - 6,537 \t - \t - \t - 6,537\n \t Inventory, Materials, and \t\n \t Supplies, Net \t - \t - \t - \t - \t - 38 \t - \t - 38\n \t General Property, Plant, \t\n \t and Equipment, Net 205,802 \t - \t - \t - \t - 1,930 \t - \t - 207,732\n \t Other 13,062 396,640 61,217 \t - \t - 6,456 \t - 155 477,530\n \t TOTAL ASSETS $ 1,434,263 $ 9,626,766 $ 4,658,865 $ 262,443 $ 29,692 $ 33,514 $ 37,333 $ 90,896 $ 16,173,772\n\n LIABILITIES\n \t Accounts Payable $ 90,026 $ 1,375 $ 941 $ 8,034 $\t - $ 9,623 $ 583 $ 304 $ 110,886\n \t Federal Employee Benefits 8,097 \t - \t - \t - \t - 993 \t - \t - 9,090\n \t Other\n \t Accrued Payroll and 144,270 146 247 \t - \t - 1,546 50 135 146,394\n \t\t Annual Leave\n \t Accrued Grants \t - \t 8,333 \t - \t 615 \t - \t - \t - 3,099 12,047\n \t\t Accrued Coupons for\n \t\t Digital-to-Analog\n \t\t Converter Box \t\n \t\t Program \t - \t - \t - 25,533 \t - \t - \t - \t - 25,533\n \t Unearned Revenue 800,256 \t - \t - \t - \t - 7,950 \t - \t - 808,206\n \t Other 15,820 \t - \t - \t - \t - 287 51 \t - 16,158\n \t TOTAL LIABILITIES $ 1,058,469 $ 9,854 $ 1,188 $ 34,182 $\t - $ 20,399 $ 684 $ 3,538 $ 1,128,314\n\n NET POSITION\n \t Unexpended Appropriations $\t - $\t - $ 4,657,677 $ 228,261 $\t - $\t - $\t - $ 4,479 $ 4,890,417\n \t Cumulative Results of \t\n \t Operations 375,794 9,616,912 \t - \t - 29,692 13,115 36,649 82,879 10,155,041\n \t TOTAL NET POSITION $ 375,794 $ 9,616,912 $ 4,657,677 $ 228,261 $ 29,692 $ 13,115 $ 36,649 $ 87,358 $ 15,045,458\n \t TOTAL LIABILITIES AND\n NET POSITION $ 1,434,263 $ 9,626,766 $ 4,658,865 $ 262,443 $ 29,692 $ 33,514 $ 37,333 $ 90,896 $ 16,173,772\n\n\n\n\n 237\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Statement of Net Cost\nFor the Year Ended September 30, 2010\n\n NTIA Digital Broadband Digital- Damage\n Television Technology to-Analog Assessment\n USPTO Transition and Opportunities Converter Box Coastal Zone NTIS and Other Total\n Earmarked Public Safety Program - Program - Management Revolving Restoration Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Revolving Fund Funds Funds\n\nStrategic Goal 1: Maximize U.S. Competitiveness and Enable Economic\nGrowth for American Industries, Workers, and Consumers\n Gross Costs $\t - $\t - $ \t - $\t - $ \t - $\t - $\t - $ 5,652 $ 5,652\n Less: Earned Revenue \t - \t - \t - \t - \t - \t - \t - \t - \t -\n Net Program Costs \t - \t - \t - \t - \t - \t - \t - 5,652 5,652\n\nStrategic Goal 2: Promote U.S. Innovation and Industrial Competitiveness\n Gross Costs 2,006,938 279,527 262,653 (17,558) \t - 48,007 \t - \t - 2,579,567\n Less: Earned Revenue \t(2,101,682) \t - (223) \t - \t - (49,093) \t - \t - (2,150,998)\n Net Program Costs \t (94,744) 279,527 262,430 (17,558) \t - (1,086) \t - \t - 428,569\n\nStrategic Goal 3: Promote Environmental Stewardship\n Gross Costs \t - \t - \t - \t - \t (144) \t - 6,991 30,457 37,304\n Less: Earned Revenue \t - \t - \t - \t - \t (320) \t - \t - \t - (320)\n Net Program Costs \t - \t - \t - \t - \t (464) \t - 6,991 30,457 36,984\nNET COST OF OPERATIONS $ \t (94,744) $ 279,527 $ 262,430 $ (17,558) $ \t (464) $ (1,086) $ 6,991 $ 36,109 $ 471,205\n\n\nUnited States Department of Commerce Consolidated Statement of Net Cost\nFor the Year Ended September 30, 2009\n\n NTIA Digital Broadband Digital- Damage\n Television Technology to-Analog Assessment\n USPTO Transition and Opportunities Converter Box Coastal Zone NTIS and Other Total\n Earmarked Public Safety Program - Program - Management Revolving Restoration Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Revolving Fund Funds Funds\n\nStrategic Goal 1: Maximize U.S. Competitiveness and Enable Economic\nGrowth for American Industries, Workers, and Consumers\n Gross Costs $\t - $\t - $ \t - $\t - $ \t - $\t - $\t - $ 1,343 $ 1,343\n Less: Earned Revenue \t - \t - \t - \t - \t - \t - \t - \t - \t -\n Net Program Costs \t - \t - \t - \t - \t - \t - \t - 1,343 1,343\n\nStrategic Goal 2: Promote U.S. Innovation and Industrial Competitiveness\n Gross Costs 1,981,940 763,565 12,503 351,135 \t - 28,173 \t - \t - 3,137,316\n Less: Earned Revenue \t(1,927,130) 122 (235) \t - \t - (26,075) \t - \t - (1,953,318)\n Net Program Costs 54,810 763,687 12,268 351,135 \t - 2,098 \t - \t - 1,183,998\n\nStrategic Goal 3: Promote Environmental Stewardship\n Gross Costs \t - \t - \t - \t - 1,400 \t - 12,285 21,789 35,474\n Less: Earned Revenue \t - \t - \t - \t - \t (398) \t - \t - \t - (398)\n Net Program Costs \t - \t - \t - \t - 1,002 \t - 12,285 21,789 35,076\nNET COST OF OPERATIONS $ 54,810 $ 763,687 $ 12,268 $ 351,135 $ 1,002 $ 2,098 $ 12,285 $ 23,132 $ 1,220,417\n\n\n\n\n 238\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Statement of Changes in Net Position\nFor the Year Ended September 30, 2010\n\n Damage\n NTIA Digital Broadband Digital- Assessment\n Television Technology to-Analog and\n USPTO Transition and Opportunities Converter Box Coastal Zone NTIS Restoration Other Total\n Earmarked Public Safety Program - Program - Management Revolving Revolving Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Fund Funds Funds\n\n Cumulative Results of\n Operations:\n \t Beginning Balance $ 375,794 $ 9,616,912 $\t - $\t - $ 29,692 $ 13,115 $ 36,649 $ 82,879 $ 10,155,041\n\n Budgetary Financing Sources:\n \t Appropriations Used \t - \t - 262,677 \t (17,558) \t - \t - \t - 4,479 249,598\n \t Non-exchange Revenue \t - \t - \t - \t - \t - \t - 4,762 13,753 18,515\n \t Transfers In of Spectrum\n \t Auction Proceeds from\n \t Federal Communications\n \t Commission \t - 196,613 \t - \t - \t - \t - \t - \t - 196,613\n \t Transfers In/(Out) Without\n \t Reimbursement, Net \t - \t - \t - \t - \t (3,000) \t - 7,510 14,103 18,613\n\n Other Financing Sources\n (Non-exchange):\n Transfers In/(Out) Without\n Reimbursement, Net \t - \t (151) \t (198) \t - \t - \t - \t - \t - \t (349)\n Imputed Financing Sources\n from Cost Absorbed by\n Others \t 21,767 \t - \t - \t - \t - 1,223 \t - \t - 22,990\n Total Financing Sources \t 21,767 196,462 262,479 \t (17,558) \t (3,000) 1,223 12,272 32,335 505,980\n Net Cost of Operations 94,744 \t (279,527) \t (262,430) 17,558 464 1,086 \t (6,991) \t(36,109) \t (471,205)\n Net Change 116,511 \t (83,065) \t 49 \t - \t (2,536) 2,309 5,281 \t (3,774) 34,775\n Cumulative Results of\n Operations - Ending Balance 492,305 9,533,847 \t 49 \t - 27,156 15,424 41,930 79,105 10,189,816\n\n Unexpended Appropriations:\n \t Beginning Balance \t - \t - 4,657,677 228,261 \t - \t - \t - 4,479 4,890,417\n\n Budgetary Financing Sources:\n \t Other Adjustments \t - \t - \t (302,000) \t (239,500) \t - \t - \t - \t - \t (541,500)\n \t Appropriations Used \t - \t - \t (262,677) 17,558 \t - \t - \t - \t (4,479) \t (249,598)\n Total Budgetary Financing\n Sources \t - \t - \t (564,677) \t (221,942) \t - \t - \t - \t (4,479) (791,098)\n Unexpended Appropriations -\n Ending Balance \t - \t - 4,093,000 6,319 \t - \t - \t - \t - 4,099,319\n NET POSITION $ 492,305 $ 9,533,847 $ 4,093,049 $ 6,319 $ 27,156 $ 15,424 $ 41,930 $ 79,105 $ 14,289,135\n\n\n\n\n 239\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nUnited States Department of Commerce Consolidated Statement of Changes in Net Position\nFor the Year Ended September 30, 2009\n\n Damage\n NTIA Digital Broadband Digital- Assessment\n Television Technology to-Analog and\n USPTO Transition and Opportunities Converter Box Coastal Zone NTIS Restoration Other Total\n Earmarked Public Safety Program - Program - Management Revolving Revolving Earmarked Earmarked\n Funds Fund Recovery Act Recovery Act Fund Fund Fund Funds Funds\n\n Cumulative Results of\n Operations:\n \t Beginning Balance $ 432,604 $ 1,069,096 $\t - $\t - $ 33,694 $ 14,232 $ 37,869 $ 59,062 $ 1,646,557\n\n Budgetary Financing Sources:\n \t Appropriations Used \t - \t (27) 12,268 351,135 \t - \t - \t - 1,342 364,718\n \t Non-exchange Revenue \t - \t - \t - \t - \t - \t - 5,335 16,097 21,432\n \t Transfers In of Spectrum\n \t Auction Proceeds from\n \t Federal Communications\n \t Commission \t - \t 16,689,557 \t - \t - \t - \t - \t - \t - \t 16,689,557\n \t Transfer Out of Spectrum\n \t Auction Proceeds to\n \t Treasury General Fund \t - \t (7,363,000) \t - \t - \t - \t - \t - \t - \t (7,363,000)\n \t Transfers In/(Out) Without\n \t Reimbursement, Net \t (2,000) \t (15,000) \t - \t - \t (3,000) \t - 5,730 29,510 15,240\n\n Other Financing Sources\n (Non-exchange):\n \t Imputed Financing Sources\n \t from Cost Absorbed by\n \t Others \t - \t - \t - \t - \t - 981 \t - \t - 981\n \t Other Financing Sources/\n \t (Uses), Net \t - \t (27) \t - \t - \t - \t - \t - \t - \t (27)\n Total Financing Sources \t (2,000) 9,311,503 12,268 351,135 \t (3,000) 981 11,065 46,949 9,728,901\n Net Cost of Operations \t (54,810) \t (763,687) \t (12,268) \t(351,135) \t (1,002) \t(2,098) \t(12,285) \t(23,132) \t(1,220,417)\n Net Change \t (56,810) 8,547,816 \t - \t - \t (4,002) \t(1,117) \t (1,220) 23,817 8,508,484\n Cumulative Results of\n Operations - Ending Balance 375,794 9,616,912 \t - \t - 29,692 13,115 36,649 82,879 10,155,041\n\n Unexpended Appropriations:\n \t Beginning Balance \t - \t (27) \t - \t - \t - \t - \t - 489 462\n\n Budgetary Financing Sources:\n \t Appropriations Received \t - \t - 4,700,000 650,000 \t - \t - \t - \t - 5,350,000\n \t Appropriations Transferred\n \t In/(Out), Net \t - \t - \t (30,055) \t (70,604) \t - \t - \t - 5,331 \t (95,328)\n \t Other Adjustments \t - \t - \t - \t - \t - \t - \t - \t 1 \t 1\n \t Appropriations Used \t - 27 \t (12,268) \t (351,135) \t - \t - \t - \t (1,342) \t (364,718)\n Total Budgetary Financing\n Sources \t - 27 4,657,677 228,261 \t - \t - \t - 3,990 4,889,955\n Unexpended Appropriations -\n Ending Balance \t - \t - 4,657,677 228,261 \t - \t - \t - 4,479 4,890,417\n NET POSITION $ 375,794 $ 9,616,912 $ 4,657,677 $ 228,261 $ 29,692 $ 13,115 $ 36,649 $ 87,358 $ 15,045,458\n\n\nBelow is a description of major earmarked funds shown in the above tables.\n\nThe USPTO Earmarked Funds consist of its Salaries and Expenses Fund, and the Patent and Trademark Surcharge Fund.\n\n\n\n\n 240\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nThe Salaries and Expenses Fund contains monies used for the administering of the laws relevant to patents and trademarks and\nadvising the Secretary of Commerce, the President of the United States, and the Administration on patent, trademark, and copyright\nprotection, and trade-related aspects of intellectual property. This fund is used for USPTO\xe2\x80\x99s two core business activities\xe2\x80\x94granting\npatents and registering trademarks\xe2\x80\x94that promote the use of intellectual property rights as a means of achieving economic\nprosperity. These activities give innovators, businesses, and entrepreneurs the protection and encouragement they need to turn\ntheir creative ideas into tangible products, and also provide protection for their inventions and trademarks. Since FY 1993, the\nSalaries and Expenses Fund has been funded primarily by the collection of fees for patent and trademark services. The USPTO may\nuse monies from this fund only as authorized by Congress via appropriations.\n\nThe Patent and Trademark Surcharge Fund, a Special Fund Receipt Account at Treasury, is discussed in Note 18, Combined\nStatements of Budgetary Resources. The USPTO may use monies from this account only as authorized by Congress and made\navailable by the issuance of a Treasury warrant. As of September 30, 2010, $233.5 million is held in this fund.\n\nThe NTIA Digital Television Transition and Public Safety Fund makes digital television available to every home in America, improves\ncommunications between local, state, and federal agencies, allows smaller television stations to broadcast digital television, and\nimproves how warnings are received when disasters occur. NTIA received funding from borrowings from the Bureau of Public Debt,\nand repaid the Bureau of Public Debt from the proceeds of the auction of recovered analog spectrum which was completed in\nMarch 2008. The proceeds from the auction provide funding for several programs, and has been and is expected to be further used\nto reduce the National Deficit. The law establishing this program can be found in the Deficit Reduction Act of 2005, P.L. 109-171\nSection 3001-3014.\n\nThe Broadband Technology Opportunities Program - Recovery Act includes funds from the American Recovery and Reinvestment Act\nof 2009 (Recovery Act) that provides awards to eligible entities to develop and expand broadband services to rural and underserved\nareas and improve access to broadband by public safety agencies. Specifically, funds will be used for innovative programs that\nencourage sustainable adoption of broadband services, to upgrade technology and capacity at public computing centers, including\ncommunity colleges and public libraries, and for the development and maintenance of statewide broadband inventory maps.\n\nThe Digital-to-Analog Converter Box Program - Recovery Act includes funds from the Recovery Act that allowed NTIA to issue\ncoupons to households to ensure vulnerable populations were prepared for the transition from analog-to-digital television\ntransmission.\n\nThe Coastal Zone Management Fund, operated by NOAA, is primarily used for interstate projects, demonstration projects for improving\ncoastal zone management, and emergency grants to state coastal zone management agencies to address unforeseen or disaster-\nrelated circumstances. The law establishing the Coastal Zone Management Fund can be found in 16 USC Section 1456a.\n\nThe NTIS Revolving Fund is used to collect, process, market, and disseminate government-sponsored and foreign scientific,\ntechnical, and business information, and to assist other agencies with their information programs. Activities funded by the NTIS\nRevolving Fund allow customers, both public and private, access to scientific and technical information produced by and for the\nfederal government. All receipts from the sale of products and services are deposited in this fund, and all expenses, including\ncapital expenditures, are paid from it.\n\nThe Damage Assessment and Restoration Revolving Fund receives monies for the reimbursement of expenses related to oil or hazardous\nsubstance spill response activities, or natural resource damages assessment, restoration, rehabilitation, replacement, or acquisition\nactivities conducted by NOAA. The recovered sums by a federal, state, indian, or foreign trustee for natural resource damages is\nretained by the trustee and is only used to reimburse or pay costs incurred by the trustee for the damaged natural resources. The law\nestablishing the Damage Assessment and Restoration Revolving Fund can be found in 33 USC Section 2706. Natural Resources.\n\n\n\n 241\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 22. Reconciliation of Net Cost of Operations to Budget\n\nThe Reconciliation of Net Cost of Operations to Budget reconciles the Department\xe2\x80\x99s Resources Used to Finance Activities\n(first section), which consists of the budgetary basis of accounting Net Obligations plus the proprietary basis of accounting Other\nResources, to the proprietary basis of accounting Net Cost of Operations. The second section, Resources Used to Finance Items\nNot Part of Net Cost of Operations, reverses out items included in the first section that are not included in Net Cost of Operations.\nThe third section, Components of Net Cost of Operations that Will Not Require or Generate Resources in the Current Period, adds\nitems included in Net Cost of Operations that are not included in the first section.\n\nThe third section\xe2\x80\x99s subsection, Components Requiring or Generating Resources in Future Periods, includes costs reported in the\ncurrent period that are included in the Liabilities Not Covered by Budgetary Resources reported in Note 15. This subsection does\nnot include costs reported in prior fiscal years that are also included in Liabilities Not Covered by Budgetary Resources.\n\nThe reconciliations of Net Cost of Operations to Budget for FY 2010 and FY 2009 are as follows:\n FY 2010 FY 2009\nResources Used to Finance Activities:\nBudgetary Resources Obligated\nObligations Incurred $ 22,405,811 $ 15,409,814\nLess: Spending Authority From Offsetting Collections and Recoveries \t (4,280,000) \t (3,795,302)\nObligations Net of Offsetting Collections and Recoveries 18,125,811 11,614,512\nLess: Distributed Offsetting (Receipts)/Outlays, Net \t (28,541) \t (101,324)\nNet Obligations 18,097,270 11,513,188\n\nOther Resources\nDonations and Forfeitures of Property 461 55\nTransfers In/(Out) Without Reimbursement, Net \t (4,804) \t 4,254\nImputed Financing From Cost Absorbed by Others 346,772 235,744\nDownward Subsidy Reestimates Payable to Treasury \t (8,087) \t (3,509)\nOther Financing Sources/(Uses), Net 18 1,365\nNet Other Resources Used to Finance Activities 334,360 237,909\nTotal Resources Used to Finance Activities 18,431,630 11,751,097\n\nResources Used to Finance Items Not Part of Net Cost of Operations:\nChange in Budgetary Resources Obligated for Goods, Services, and Benefits Ordered but Not Yet Provided (4,489,923) (1,225,950)\nResources that Fund Expenses Recognized in Prior Periods \t (6,255) \t (67,368)\nBudgetary Obligation for Downward Subsidy Reestimates Payable to Treasury \t (6,190) \t (20,653)\nBudgetary Offsetting Collections and Receipts that Do Not Affect Net Cost of Operations:\n\t Distributed Offsetting (Receipts)/Outlays, Net (excludes Clearing Accounts\xe2\x80\x99 Gross Costs) 28,541 101,324\n Credit Program Collections which Increase Loan Guarantee Liabilities or Allowance for Subsidy Cost 71,812 26,908\n Budgetary Financing Sources/(Uses), Net 8,272 8,695\nResources that Finance the Acquisition of Assets \t (1,433,050) \t (1,087,927)\nOther Resources or Adjustments to Net Obligated Resources that Do Not Affect Net Cost of Operations:\n Change in Unfilled Customer Orders 202,311 (129,746)\n Donations and Forfeitures of Property (461) (55)\n Transfers In/(Out) Without Reimbursement, Net \t 4,804 \t (4,254)\n\t Downward Subsidy Reestimates Payable to Treasury \t 8,087 \t 3,509\n Other Financing Sources/(Uses), Net \t (18) \t (1,365)\n\t Other \t - \t (15,002)\nTotal Resources Used to Finance Items Not Part of Net Cost of Operations (5,612,070) (2,411,884)\nTotal Resources Used to Finance Net Cost of Operations 12,819,560 9,339,213\n\nComponents of Net Cost of Operations that Will Not Require or Generate Resources in the Current Period:\n (continued)\n\n\n 242\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n FY 2010 FY 2009\nComponents Requiring or Generating Resources in Future Periods\nIncrease in Accrued Annual Leave Liability 11,373 19,665\nIncrease in Federal Employee Benefits 81,601 20,871\nIncrease (Decrease) in Contingent Liabilities \t (1,807) \t (15,267)\nReestimates of Credit Subsidy Expense (2,857) 2,045\nOther 11,223 5,363\nTotal Components of Net Cost of Operations that Will Require or Generate Resources in Future Periods 99,533 32,677\n\nComponents Not Requiring or Generating Resources\nDepreciation and Amortization 524,296 400,474\nNOAA Impairment of Construction-in-progress (Note 16) 107,518 \t -\nNOAA Issuances of Materials and Supplies 29,325 22,768\nCensus Bureau Issuances of Materials and Supplies \t 37,383 \t 5,027\nRevaluation of Assets or Liabilities \t 40,871 \t 27,062\nOther \t 5,594 \t (482)\nTotal Components of Net Cost of Operations that Will Not Require or Generate Resources 744,987 454,849\nTotal Components of Net Cost of Operations that Will Not Require or Generate Resources in the Current Period 844,520 487,526\nNET COST OF OPERATIONS $ 13,664,080 $ 9,826,739\n\n\n\n\n 243\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n Note 23. Stewardship PROPERTY, PLANT, AND EQUIPMENT\n\nThis note provides information on certain resources entrusted to the Department and certain stewardship responsibilities assumed\nby the Department. The physical properties of stewardship property, plant, and equipment (Stewardship PP&E) resemble those\nof the General PP&E that is capitalized traditionally in the financial statements of federal entities. Due to the nature of these\nassets, however, valuation would be difficult and matching costs with specific periods would not be meaningful. Therefore, federal\naccounting standards require the disclosure of the nature and quantity of these assets. NOAA, NIST, and the Census Bureau are the\nonly entities within the Department that have Stewardship PP&E. Additional information on Stewardship PP&E is presented in the\nRequired Supplementary Information section.\n\nStewardship Marine Sanctuaries, Marine National Monuments, and Conservation Area:\n\nNOAA maintains the following Stewardship PP&E, which are similar in nature to stewardship land:\n\nNational Marine Sanctuaries: In 1972, Congress passed the Marine Protection, Research, and Sanctuaries Act (Act) in response\nto a growing awareness of the intrinsic environmental and cultural value of coastal waters. The Act authorized the Secretary of\nCommerce to designate discrete areas as National Marine Sanctuaries. These protected waters provide a secure habitat for species\nclose to extinction, and also protect historically significant shipwrecks and prehistoric artifacts. The sanctuaries are also used\nfor recreational diving and sport fishing, and support valuable commercial industries such as fishing and kelp harvesting. As of\nSeptember 30, 2010, 13 National Marine Sanctuaries, which include near-shore coral reefs and open ocean, have been designated,\ncovering a total area of nearly 19,000 square miles. Each individual sanctuary site (Monterey Bay, the Florida Keys, the Olympic\nCoast, and Channel Island are the largest four) conducts research and monitoring activities to characterize existing resources and\ndocument changes.\n\nPapah\xc3\xa3naumoku\xc3\xa3kea Marine National Monument: The majority of all coral reef habitats located in U.S. waters surround the\nNorthwestern Hawaiian Islands (NWHI). The NWHI Coral Reef Ecosystem Reserve is the nation\xe2\x80\x99s largest marine protected area, and\nwas established by Executive Orders in December 2000 and January 2001, in accordance with the National Marine Sanctuaries\nAmendments Act of 2000. On June 15, 2006, the President created the world\xe2\x80\x99s second largest marine conservation area off\nthe coast of the northern Hawaiian Islands. This conservation area, designated the Northwestern Papah\xc3\xa3naumoku\xc3\xa3kea Marine\nNational Monument, encompasses nearly 140,000 square miles of U.S. waters, including approximately 5,200 square miles of\nrelatively undisturbed coral reef habitat that is home to more than 7,000 species. The Monument is managed by NOAA, with the\nDepartment of the Interior, and the State of Hawaii.\n\nRose Atoll Marine National Monument: On January 6, 2009, President Bush designated Rose Atoll in American Samoa a Marine\nNational Monument. The atoll includes the Rose Atoll National Wildlife Refuge. It also includes about 20 acres of land and 1,600\nacres of lagoon and is one of the most pristine atolls in the world. The areas around the atoll support a dynamic reef ecosystem\nthat is home to many land and marine species, many of which are threatened or endangered. The Department of the Interior has\nprimary management responsibility of the atoll while NOAA has primary management responsibility for the marine areas of the\nmonument seaward of mean low water, with respect to fishery-related activities regulated pursuant to the Magnuson-Stevens\nFishery Conservation and Management Act (16 U.S.C. 1801 et seq. ) and any other applicable authorities. An inter-governmental\ncommittee comprised of NOAA, Department of the Interior, and the American Samoa Government has been established to develop\nand coordinate management strategies. NOAA is progressing with fisheries management strategies, and has begun scoping to\nconsider designation as a National Marine Sanctuary.\n\n\n\n\n 244\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nMarianas Trench Marine National Monument: On January 6, 2009, President Bush designated the Marianas Trench Marine National\nMonument. The Monument consists of approximately 95,000 square miles of submerged lands and waters of the Mariana\nArchipelago. It includes three units: the Islands Unit, the waters and submerged lands of the three northernmost Mariana Islands;\nthe Volcanic Unit, the submerged lands within 1 nautical mile of 21 designated volcanic sites; and the Trench Unit, the submerged\nlands extending from the northern limit of the Exclusive Economic Zone of the United States in the Commonwealth of the\nNorthern Mariana Islands (CNMI) to the southern limit of the Exclusive Economic Zone of the United States in the Territory of\nGuam. No waters are included in the Volcanic and Trench Units, and CNMI maintains all authority for managing the three islands\nwithin the Islands Unit (Farallon de Pajaros or Uracas, Maug, and Asuncion) above the mean low water line. The Department of\nthe Interior has primary management responsibility for the monument while NOAA has primary management responsibility with\nrespect to fishery-regulated activities regulated pursuant to the Magnuson-Stevens Fishery Conservation and Management Act\nand any other applicable authorities. An advisory council for the Monument will be established in 2011. NOAA is progressing with\nfisheries management strategies, and, in 2011, will begin scoping for management plan development, along with the Department\nof the Interior.\n\nPacific Remote Islands Marine National Monument: On January 6, 2009, President Bush designated the Pacific Remote Islands\nMarine National Monument. The Pacific Remote Islands area consists of Wake, Baker, Howland, and Jarvis Islands, Johnston Atoll,\nKingman Reef, and Palmyra Atoll, which lie to the south and west of Hawaii. With the exception of Wake Island, these islands\nare administered as National Wildlife Refuges by the U.S. Fish and Wildlife Service of the Department of the Interior. They sustain\nmany endemic species including corals, fish, shellfish, marine mammals, seabirds, water birds, land birds, insects, and vegetation\nnot found elsewhere.\n\nNOAA has primary responsibility for management of the monument seaward of the area 12 nautical miles of the mean low water\nlines of Wake, Baker, Howland, and Jarvis Islands, Johnston Atoll, Kingman Reef, and Palmyra Atoll, with respect to fishery-related\nactivities regulated pursuant to the Magnuson-Stevens Fishery Conservation and Management Act and any other applicable legal\nauthorities. NOAA is progressing with fisheries management strategies, and additional management strategies will be developed\nin coming years, in cooperation with the Department of the Interior\xe2\x80\x99s Fish and Wildlife Service.\n\nAleutian Islands Habitat Conservation Area: On July 28, 2006, NOAA Fisheries Service formally established the Aleutian Islands\nHabitat Conservation Area in Alaska, which covers nearly 370,000 square miles and may harbor among the highest diversity of\ndeep-water corals in the world. The conservation area established a network of fishing closures in the Aleutian Islands and Gulf of\nAlaska, and protects habitat for deep water corals and other sensitive features that are slow to recover once disturbed by fishing\ngear or other activities. Six small areas that include fragile coral gardens discovered by NOAA Fisheries Service scientists are\nclosed to all bottom-contact fishing gear. This effort is part of a network of new marine protected areas in Alaskan waters designed\nto protect essential fish habitat and prevent any further damage of the area.\n\nWritten policy statements or permit guidelines for the National Marine Sanctuaries and Monuments have been developed for the\nareas of acoustic impacts, artificial reefs, climate change, invasive species, and marine debris. Submarine cable policy will be\nfinalized in 2011. The Office of Marine National Sanctuaries may be updating artificial reefs policy to reflect recent information\nabout the effects of artificial reefs on natural habitats. The Office of Marine National Sanctuaries answers the most frequently\nasked questions related to alternative energy and oil and gas policy decisions for national marine sanctuaries.\n\nHeritage Assets:\n\nHeritage assets are unique for their historical or natural significance, for their cultural, educational, or artistic importance, or for\ntheir significant architectural characteristics. The Department generally expects that these assets will be preserved indefinitely.\n\n\n\n\n 245\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nIn cases where a heritage asset also has a practical and predominant use for general government operations, the asset is considered\na multi-use heritage asset. The cost of a multi-use heritage asset is capitalized as General PP&E and is depreciated over the useful\nlife of the asset.\n\nNOAA has established policies for heritage assets to ensure the proper care and handling of these assets under its control or\njurisdiction. The Deputy Under Secretary of NOAA has established the Heritage Assets Working Committee to administer NOAA\xe2\x80\x99s\nstewardship policies and procedures. In carrying out these policies and procedures, the Working Committee:\n\n l\t Maintains a nationwide inventory of heritage assets, ensuring that they are identified and recorded in the Personal Property\n Heritage Asset Accountability System;\n l\t Establishes nationwide NOAA policies, procedures, and standards for the preservation, security, handling, storage, and display\n of NOAA heritage assets;\n l\t Tracks and updates each loan of NOAA heritage assets, including assigning current values and inventory numbers, and\n reporting the current conditions of heritage assets;\n l\t Determines the feasibility of new asset loans, such as meters, standard tide gauges, portraits, and books for exhibit loans;\n l\t Collects heritage assets and properties of historic, cultural, artistic, or educational significance to NOAA.\n\nNOAA maintains the following Heritage Assets:\n\nGalveston Laboratory: Galveston Laboratory is comprised of seven buildings that were originally part of Fort Crockett, Texas,\nan army coastal defense facility built shortly after 1900. These buildings are eligible for placement on the National Register.\nDue to their historic significance, exterior architectural features, and predominant use in government operations, the Galveston\nLaboratory is considered a multi-use heritage asset.\n\nThe Marine Mammal Stranding Network Building was replaced, after the existing structure was not usable after damage caused\nby Hurricane Ike. The Sea Water System now includes new electrical lines and pump housing.\n\nNational Marine Fisheries Service (NMFS) St. George Sealing Plant: On St. George Island, in the Pribilof Islands group, Alaska, is the\nonly remaining northern fur seal pelt processing building in the world. In 1986, the building was listed on the National Register\nof Historic Properties, within the Seal Islands National Historic Landmark. The Pribilof Islands commercial fur seal harvest was\nan extremely profitable business for the U.S. government, and, by the early 1900s, had covered the purchase price of Alaska. The\nbuilding is the largest on the island, and is comprised of four distinct work areas from the seal pelt processing area. In 1950, the\noriginal wood-framed pelt processing plant was destroyed in a fire and rebuilt in 1951 with concrete walls on remnants of the\noriginal foundation. Harsh weather and a lack of maintenance funding after the expiration of the Northern Fur Seal Convention in\n1985 resulted in significant deterioration of the building by the early 1990s.\n\nIn November 1999, after numerous site surveys and assessments, the building\xe2\x80\x99s crumbling foundation was stabilized and the\nbuilding\xe2\x80\x99s exterior was painted. This effort allowed for NOAA\xe2\x80\x99s continued, but limited, use of the building by the NMFS Alaska\nRegion and Alaska Fisheries Science Center to achieve NOAA\xe2\x80\x99s mission on St. George Island. In addition, the U.S. Fish and Wildlife\nService (USFWS) Alaska Maritime National Wildlife Refuge used the building as a bunkhouse until 2006 when NOAA\xe2\x80\x99s Safety\nOfficer and the USFWS Safety Officer both determined the bunkhouse portion of the building lacked sufficient means of egress in\nthe event of fire and deemed it to be unsafe for habitation. It was determined by USFWS that the cost of making the necessary\nmodifications to the space was not fiscally justifiable. NOAA\xe2\x80\x99s Preserve America program funded an interpretive display project in\nthe Seal Plant to promote public outreach and education for the modest tourism program on St. George.\n\n\n\n 246\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nNMFS Cottage M, St. George: The last remnants of the U.S. commercial harvest of northern fur seals can be found on St. George\nIsland, in the Pribilof Islands group, Alaska. In 1986, Cottage M (locally known as Cottage C), was listed on the National Register\nof Historic Places within the Seal Islands National Historic Landmark. This building was constructed in the 1930s and was the\nresidence of the island doctor and hospital through 1955, when the current clinic/hospital was built. Later, the construction of a\nhealth clinic on St. George Cottage M provided housing for government scientists and managers. In recent years, USFWS Alaska\nMaritime National Wildlife Refuge staff have also used the building. NMFS Cottage M is considered a multi-use heritage asset\nbecause of the critical housing for NOAA\xe2\x80\x99s research and management staff, along with USFWS staff. During 2010, investments\nwere made to improve energy efficiency during active operational periods and to allow the building to be winterized and secured\nduring periods when the building is not occupied.\n\nNMFS St. Paul Old Clinic/Hospital: On St. Paul Island, in the Pribilof Islands group, Alaska, fewer historic structures remain\nthan on St. George Island. In 1986, the clinic/hospital was listed on the National Register of Historic Places within the Seal\nIslands National Historic Landmark. The old clinic/hospital is the combination of three historic buildings (physician\xe2\x80\x99s house, 1929;\ndispensary, 1929; and hospital, 1934) connected in 1974 with an addition. The building was used as a clinic/hospital through\n2006 under a Memorandum of Agreement between NMFS and the Department of Health, Education and Welfare, and later, the\nIndian Health Service/Bureau of Indian Affairs. Since August 2007, NMFS has maintained the facility. While the facility remains\nlargely unused at this time, except for occasional storage needs, NMFS will continue to maintain the facility, and plans to retain\nit to accommodate its expanding mission needs on St. Paul Island. This building experienced a severe freeze-up and flooding due\nto broken pipes. NOAA Fisheries has invested resources to clean up the damage and abate hazardous materials contained in the\nbuilding, including asbestos, lead-based paint, PCB\xe2\x80\x99s, and mercury. This work is expected to be completed during the first quarter\nof FY 2011.\n\nNMFS Aquarium: In Woods Hole, Massachusetts, this aquarium was established in 1875 by Spencer Baird, the originator of NMFS.\nIn addition to being part of the first laboratory of today\xe2\x80\x99s NMFS, this aquarium is the oldest marine research display aquarium\nin the world. It is used to educate the public, raise public awareness of NMFS activities, and accommodate in-house research\nfor the Northeast Fisheries Science Center, part of NOAA\xe2\x80\x99s mission. The aquarium houses 16 permanent exhibition tanks and\napproximately 12 freestanding aquaria and touch tanks holding more than 140 species of fish and invertebrates. The tanks range\nin size from 75 to 2,800 gallons. NMFS Aquarium is considered a multi-use heritage asset because it is also used for NOAA\xe2\x80\x99s\nscientific research, which is part of its mission.\n\nOffice of Atmospheric Research (OAR) Great Lakes Environmental Research Laboratory (GLERL), Lake Michigan Field Station (LMFS):\nIn Muskegon, Michigan, the GLERL main building, constructed in 1904 by the U.S. Life Saving Service, is eligible for National Register\ndesignation and has been recognized by state and local historical societies for its maritime significance. With the creation of the\nU.S. Coast Guard in 1915, the facility was transferred and served as a base for search and rescue operations for 75 years. In 2004, a\nrenovation project was completed that restored the exterior to its original architecture and color scheme - a style that is considered\nrare. Today, GLERL carries out research and provides scientific products, expertise, and services required for effective management\nand protection of Great Lakes and coastal ecosystems. GLERL/LMFS includes three buildings and a research vessel dockage. The\nfunction of the field station is to provide a base of operations for GLERL\xe2\x80\x99s primary research vessel, which is presently the Research\nVessel Laurentian, and to provide a focal point for GLERL\xe2\x80\x99s research on Lake Michigan. Due to its historic significance, exterior\narchitectural features, and predominant use in government operations, GLERL/LMFS is considered a multi-use heritage asset.\n\nNOAA\xe2\x80\x99s collection-type heritage assets are comprised primarily of books, journels, publications, photographs and motion pictures,\nmanuscripts, records, nautical chart plates, and artifacts. Many of these heritage assets are maintained by the NOAA Central Library\n(Library). As evidenced by a search of international catalogs, 35 to 50 percent of the Library\xe2\x80\x99s collection is unique. Historically, 40 percent\nof the items catalogued are not found anywhere else. Many older books cannot be replaced. The works include 17th century works of\nFrancis Bacon and Robert Boyle, 18th century works of Daniel Bernouilli, Daniel Defoe, and Pierre Bougher, and 19th and 20th century\n\n\n\n 247\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nworks of Benjamin Franklin and George Washington Carver. The Library has an extensive collection of historical Coast and Geodetic\nSurvey materials (from 1807) and Weather Bureau materials (from the 1830s), including foreign and historical meteorological data,\ninformation on instruments, and metadata.\n\nNOAA\xe2\x80\x99s collection-type heritage assets include items in the Thunder Bay Sanctuary Research Collection (Collection). In 2004, the Thunder\nBay National Marine Sanctuary (jointly managed by NOAA and the State of Michigan to protect and interpret a nationally significant\ncollection of shipwrecks and other maritime heritage resources) established an agreement with the Alpena County George N. Fletcher\nPublic Library to jointly manage this Collection. Amassed over a period of more than 40 years by historian C. Patrick Labadie, the\nCollection includes information about such diverse subjects as Great Lakes ports and waterways, docks, cargoes, ships, shipbuilders,\nowners and fleets, machinery and rigging, notable maritime personalities, and shipwrecks. Special features of the Collection are extensive\ncollections of a) data cards listing most of the ships on the Great Lakes before year 1900, a roster of some 15,000 vessels complete with\ndescriptive data and highlights of the ships\xe2\x80\x99 careers and their ultimate losses; and b) ship photograph negatives of 19th and 20th century\nGreat Lakes ships. Heritage assets also include copies of vessel ownership documents, contemporary ship photographs, books, and other\nitems documenting the Great Lakes history.\n\nNOAA\xe2\x80\x99s collection-type heritage assets also include items in the National Climatic Data Center Library. Heritage assets include a) books,\nmanuals, and slides; b) thermometers, gauges, and radiosondes; and c) laboratory equipment.\n\nHistorical artifacts are designated collection-type heritage assets if they help illustrate the social, educational, and cultural\nheritage of NOAA and its predecessor agencies (Coast and Geodetic Survey, U.S. Fish Commission, the Weather Bureau, the\nInstitutes for Environmental Research, the Environmental Science Services Administration, etc.). These include, but are not limited\nto, bells, gyrocompasses, brass citations, flags, pennants, chronometers, ship seals, clocks, compasses, fittings, miscellaneous ship\nfragments, lithographic plates, barometers, rain gauges, and any items that represent the uniqueness of the mission of NOAA and\nits predecessor agencies.\n\nThe NOAA Logistics Office completed a review of the NOAA National Climatic Data Center in FY 2010 and has concluded that many\nitems previously reported as separate items belong in an existing heritage assets collection. This resulted in a significant decrease in\ncollection-type heritage assets.\n\nNIST currently maintains collection-type heritage assets under its Museum and History Program, which collects, conserves,\nand exhibits artifacts, such as scientific instruments, equipment, objects, and records of significance to NIST and predecessor\nagencies. This program provides institutional memory and demonstrates the contributions of NIST to the development of standards\nmeasurement, technology, and science. The Information Services Division (ISD) maintains the historical archives, rare book\ncollection, and oversees the oral history program. The historical archives and rare book collection contain titles that are considered\n\xe2\x80\x9cclassics\xe2\x80\x9d of historical scientific interest, books by prominent contemporary scientists, and books by NIST authors or about NIST\nwork. Titles are recommended for inclusion by ISD staff and customers. Materials are not specifically purchased for the collection\nnor are funds specifically allocated for the collection. Photos and manuscripts include images of NIST staff, facilities, and artifacts\nthat demonstrate NIST accomplishments.\n\nNIST\xe2\x80\x99s Museum and History Program has policies in place for acquisitions and loans. Objects are either on display or in storage\nand are not used by visitors. Archives, including the historical book collection, are used according to established research library\npolicies and procedures. When considering artifacts for accession, the following criteria are considered:\n\n l\t Direct connection to NIST program activity\n l\t Direct connection to a NIST prominent person\n\n\n\n 248\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n l\t Physical size\n l\t Safety considerations\n\nArchive material is not loaned. Artifacts are rarely loaned, but can be loaned within established policies and procedures for\neducational purposes, scholarly research, and limited public exhibition to qualified institutions. The loan policy packet for these\nartifacts includes an introduction to the NIST Loan Program, Borrower Checklist, Artifact Loan Request, NIST Loan Policy, Insurance\nRequirements, Facilities Report, Outgoing Loan Agreement, Condition Report Form, and Outgoing Loan Process.\n\nISD preserves and promotes the history of NIST through a program that collects, organizes, and preserves records of enduring\nvalue and encourages and supports their use by researchers. The policies and procedures cover such topics as submitting reference\ninquiries, regulations for use of the archives collection, scope of archives collection, criteria for accepting archival material,\nproviding physical and bibliographic access, preservation, and reviewing the collection.\n\nCollection-type heritage assets maintained by Census Bureau are items considered unique for their historical, cultural, educational,\ntechnological, methodological, or artistic importance. They help illustrate the social, educational, and cultural heritage of Census\nBureau. Some items because of their age or obvious historical significance are inherently historical artifacts. Some examples of these\nhistorical artifacts include:\n\n1900 Hollerith Key Punch: Census Bureau clerks used the key punch during the 1900s to punch round holes into cards for tabulation\nby electric tabulating machines housed at the Census Bureau. The key punch increased the speed with which clerks could transfer\ndata entered on census schedules to the punch cards used to tabulate census results.\n\nHollerith Tabulator (Dial): The Hollerith Tabulator dial was manufactured by the Tabulating Machine Company for the Census\nBureau and it has been in the agency\xe2\x80\x99s possession since. The Hollerith Tabulator dial mechanically illustrated the data being read\nfrom punched paper cards entered into the tabulator. The holes punched in cards were sensed by pins or pointers making contact\nthrough the holes to a drum. The completion of an electric circuit through a hole advanced the counter on this dial representing\ndata tabulated for a specific population, economic, or agriculture inquiry on the census schedule.\n\nGang Punch: The Gang punch was manufactured by the Tabulating Machine Company for the Census Bureau, and it has been in\nthe agency\xe2\x80\x99s possession since. The gang punch was used for recording facts common to a number of punch cards, such as the\nmonth, day, year, etc. It is equipped with a number of moveable punches, which can easily be changed and set for any desired\ncombination. Using the gang punch, clerks could punch a number of cards at once, thus speeding the transcription of data.\n\nPantograph: This item was manufactured by the Tabulating Machine Company for the Census Bureau, and it has been in the\nagency\xe2\x80\x99s possession since. Census Bureau clerks used the pantograph, or keyboard punch, to transfer information on the census\nschedule to punch cards. To operate the pantograph, the clerk guided one end of the lever over a board showing the categories\nof information from the census (age, sex, place of birth, etc.) and depressed the lever at the appropriate position, punching a hole\nin the punch card. With the information found on the schedule translated into punch holes on cards, the data could then be read\nand the results tallied by tabulators designed to read the punch cards.\n\nCensus Bureau Enumerators Badge: The Census Bureau provided enumerators with badges during the 1900s and later censuses,\nand recipients were instructed to wear them when on duty. The 1900s instructions to enumerators noted that the badge offered\nadditional evidence of the bearer\xe2\x80\x99s authority to ask the question required by law. Furthermore, enumerators were instructed to wear\nthe badge attached to the vest under the coat, and to exhibit it only when it would aid the enumerator in obtaining the information.\nUpon completion of the census, the Census Bureau permitted enumerators to keep the badge as a souvenir of their service.\n\n\n\n 249\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\nData Stewardship Button: The data stewardship button served as a visible reminder to employees that the Census Bureau complies\nwith all federal legal requirements affecting the collection, handling, and dissemination of personal and business information.\nIn addition, the Census Bureau believes that individuals and businesses have fundamental rights to be treated fairly and ethically\nwhen asked to provide their personal information to the government for statistical purposes.\n\nSteel Hand Bander: The steel hand bander is used to secure paper, boxes, and other goods to pallets, via ribbons of steel, for\nshipment. The Census Bureau has used similar banders since the early 20th century to secure boxes of questionnaires, publications,\netc., for shipment to census offices throughout the United States, Puerto Rico, and the Island Areas.\n\nUnisys Tape and Reel: It is assumed that Unisys Corporation manufactured this tape and reel in the 1980s, and it has been in the Census\nBureau\xe2\x80\x99s possession since new. This tape technology, released in 1964, introduced what is now generally known as 9-track tape. The\nmagnetic tape is \xc2\xbd inch wide, with eight data tracks and one parity track for a total of nine parallel tracks. Data is stored as 8-bit\ncharacters, spanning the full width of the tape (including the parity bit). Various recording methods are used to place the data on tape,\ndepending on the tape speed and data density, including PE (phase encoding), GCR (group code recording), and NRZI (non-return-to-\nzero, inverted).\n\nFilm Optical Sensing Device for Input to Computers (FOSDIC): This 1980s file cabinet-sized version of FOSDIC was manufactured by\nthe Census Bureau for the 1990 census and it has been in the agency\xe2\x80\x99s possession since. During the 1950s, the Census Bureau and\nthe National Bureau of Standards developed a system called Film Optical Sensing Device for Input to Computers (FOSDIC), which\ntook census and survey questionnaires that had been photographed onto microfilm, read blackened dots opposite the appropriate\nanswers, and transferred that data to magnetic tape. These tapes constituted the input for the Census Bureau\xe2\x80\x99s computers. One\nimportant result of this process was the elimination of most discrepancies in data records sent for processing. First used to process\n1960 census results, FOSDIC played an integral part in the Census Bureau\xe2\x80\x99s data processing system into the mid-1990s.\n\nArtwork and Gifts: Census Bureau\xe2\x80\x99s artwork and gifts include items bequeathed to, given to, or commissioned by the agency, such\nas posters, paintings, sculptures, postage stamps, photographs, antiques, memorial plaques, cultural artifacts from other statistical\nagencies and countries, awards, time capsules, buttons and badges, and more.\n\nCensus Bureau has developed a Project Charter for heritage assets which has developed policy and procedures for the acquisition\nand removal of Census Bureau heritage assets. If a Census Bureau employee receives a gift from a foreign government\xe2\x80\x99s statistical\nagency or any other agency while on official government travel, the Census Bureau employee will deliver the item to a member\nof Census Bureau\xe2\x80\x99s Heritage Assets Committee for review upon his or her return to Census Bureau, if the item is valued at more\nthan $25 dollars. The Committee will decide if the item meets the criteria for a heritage asset based on the uniqueness, historical\nage, and/or if the item helps to illustrate Census Bureau\xe2\x80\x99s historic contributions to the nation\xe2\x80\x99s growth. If the item is deemed a\nheritage asset, the applicable property management office will ensure the heritage asset is catalogued and stored in a safe, secure\nenvironment, allowing for appropriate preservation and conservation. All necessary actions will be taken to reduce deterioration\nof heritage assets due to environmental conditions, and to limit damage, loss, and misuse of heritage assets. The Committee meets\non a regular basis to determine if any heritage assets should be removed from the approved list, or if a newly arrived item should\nbe classified as a heritage asset. Once a determination has been made to no longer classify an item as a heritage asset, Census\nBureau will follow any applicable established policies and procedures for surplus property.\n\n\n\n\n 250\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n(In Actual Quantities)\n\n Collection-type Heritage Assets\n Quantity of Quantity of\n Items Held Items Held\n September 30, FY 2010 FY 2010 September 30,\n Category Description of Assets 2009 Additions Withdrawals 2010\n NOAA Central Library:\n Circulating Collection Books, journals, and other\n publications 1 N/A - 1\n Rare Book Room\n Collection Books and publications 1 N/A - 1\n Weather Bureau\n Collection Publications 1 N/A 1(a) \t -\n Collection of Coast and Publications acquired or issued by\n Geodetic Survey Materials the Coast and Geodetic Survey from\n from 1807 to 1970 1807 to 1970 1 N/A 1(a) \t -\n Collection of photographs\n and motion pictures Photographs and motion pictures 1 N/A \t - 1\n Other Artifacts, documents, and other\n items 56 1 \t - 57\n National Ocean Service\xe2\x80\x93 Data cards, photograph negatives,\n Thunder Bay Sanctuary document copies, photographs,\n Research Collection books, and other items 106,254 \t - \t - 106,254\n National Climatic Data Artifacts, books, documents, and\n Center Library other items 5,113 11 4,254 870\n NOAA Others Artifacts, artwork, books, films,\n instruments, maps, and records 3,732 73 17 3,788\n NIST Artifacts and National Bureau of Standards\n Scientific Measures (NBS)/NIST scientific instruments,\n equipment, and objects 343 \t - \t - 343\n NIST Historical Books Books of historical scientific\n and Manuscripts interest, books by prominent\n contemporary scientists, and\n books by NBS/NIST authors and\n manuscripts of NBS/NIST staff,\n facilities, and artifacts 61 \t - \t - 61\n Census Bureau Artwork Artifacts, artwork, books, films,\n and Gifts instruments, and records 132 \t - \t - 132\n Census Bureau Publications, books, manuscripts,\n Collectable Assets photographs, and maps 19 \t 3 \t - 22\n Total 115,715 88 4,273 111,530\n N/A - Not applicable; effective FY 2009, this category is reported as one collection.\n (a) Collection merged into Rare Book Room Collection.\n\n\nAdditional information on the condition of the above Heritage Assets is presented in the Required Supplementary Information section.\n\n\n\n\n 251\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\n\n\n\n\n 252\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n C o n so l i dat i n g\n B a l a n ce\n Sheet\n\x0c\x0c United States Department of Commerce Consolidating Balance Sheet\n As of September 30, 2010 (In Thousands)\n Intra-\n Consolidating Departmental Census Franchise\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0\n Total Eliminations BIS Bureau DM/G&B DM/S&E DM/WCF EDA ELGP ESA/BEA Fund HCHB ITA MBDA NIPC NIST NOAA NTIA NTIS OIG USPTO\n\n ASSETS\n\n Intragovernmental:\n Fund Balance with Treasury $ 25,785,547 $\t - $ 31,433 $ 3,116,374 $ 2,104 $ 24,513 $ 43,081 $ 1,471,675 $ 49,058 $ 15,033 $ 3,397 $ 22,456 $ 115,919 $ 14,408 $ 218 $ 1,418,149 $ 4,254,493 $ 13,713,515 $30,446 $ 22,843 $ 1,436,432\n Accounts Receivable, Net 84,479 \t (15,877) 411 11,858 \t - 6,398 52 447 \t - \t - \t - \t - 2,313 \t - \t - 4,921 70,395 183 2,111 659 608\n Other - Advances and Prepayments 400,042 \t (80,625) 1,220 31,826 \t - 3,641 2,590 805 \t - 1,554 315 \t - 6,617 640 \t - 12,866 253,480 161,239 325 561 2,988\n Total Intragovernmental 26,270,068 \t (96,502) 33,064 3,160,058 2,104 34,552 45,723 1,472,927 49,058 16,587 3,712 22,456 124,849 15,048 218 1,435,936 4,578,368 13,874,937 32,882 24,063 1,440,028\n\n Cash 3,616 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 393 \t - 23 \t - 3,200\n Accounts Receivable, Net 70,780 \t - 10,092 2,620 \t - 6 11 5 \t - 9 \t - \t - 124 138 \t - 6,433 50,787 13 392 \t - 150\n\n\n\n\nP E R F O R M A N C E\n Direct Loans and Loan Guarantees, Net 540,147 \t - \t - \t - \t - \t - \t - 17,117 \t - \t - \t - \t - \t - \t - \t - \t - 523,030 \t - \t - \t - \t -\n Inventory, Materials, and Supplies, Net 98,326 \t - \t - 167 \t - \t - 3 \t - \t - \t - \t - \t - \t - \t - \t - 26,865 71,261 \t - 30 \t - \t -\n General Property, Plant, and Equipment, Net 7,394,711 \t - 28 180,267 7,637 1,752 3,672 1,599 \t - 586 281 6,246 2,106 \t - \t - 695,801 6,313,899 4,166 2,274 \t - 174,397\n Other 55,122 \t - \t - 1,152 4 2 \t (1) 2 \t - 4 \t (1) \t - 2,789 \t - \t - 57 34,311 1 6,623 1 10,178\n\n\n\n\nA N D\n TOTAL ASSETS $ 34,432,770 $ \t (96,502) $ 43,184 $ 3,344,264 $ 9,745 $ 36,312 $ 49,408 $ 1,491,650 $ 49,058 $ 17,186 $ 3,992 $ 28,702 $ 129,868 $ 15,186 $ 218 $ 2,165,092 $ 11,572,049 $ 13,879,117 $ 42,224 $ 24,064 $ 1,627,953\n\n\n LIABILITIES\n\n Intragovernmental:\n Accounts Payable $ 60,088 $\t (14,533) $ 1,357 $ 8,964 $\t - $ 807 $ 1,022 $ 190 $\t - $ 2,736 $ 202 $\t - $ 4,242 $ 284 $\t - $ 3,408 $ 36,090 $ 2,983 $ 7,541 $ 63 $ 4,732\n Debt to Treasury 517,930 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 517,930 \t - \t - \t - \t -\n Other\n \t Spectrum Auction Proceeds Liability to Federal\n \t Communications Commission 33,838 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 33,838 \t - \t - \t -\n \t Resources Payable to Treasury 18,899 \t - \t - \t - \t - \t - \t - 17,442 \t - \t - \t - \t - \t - \t - \t - \t - 1,457 \t - \t - \t - \t -\n \t Unearned Revenue 373,921 \t (80,625) 2,389 138,831 \t - 6,602 29,185 63,458 \t - \t - 1,314 \t - 1,039 179 \t - 96,744 58,382 42,034 6,747 1,819 5,823\n \t Other 104,344 \t (1,344) 9,035 27,525 \t - 1,274 1,453 532 \t - 742 4 6 3,741 624 \t - 7,097 37,338 780 412 272 14,853\n\n\n\n\nA C C O U N T A B I L I T Y\n Total Intragovernmental 1,109,020 \t (96,502) 12,781 175,320 \t - 8,683 31,660 81,622 \t - 3,478 1,520 6 9,022 1,087 \t - 107,249 651,197 79,635 14,700 2,154 25,408\n\n Accounts Payable 402,605 \t - 2,026 147,001 \t - 1,129 4,501 1,311 \t - 894 61 225 4,476 666 \t - 24,883 142,472 1,242 4,703 1,633 65,382\n Loan Guarantee Liabilities 565 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 565 \t - \t - \t - \t -\n Federal Employee Benefits 769,035 \t - 3,003 97,492 \t - 1,804 4,803 1,323 \t - 424 30 8 7,874 2,701 \t - 9,578 628,350 1,837 1,208 301 8,299\n Environmental and Disposal Liabilities 54,649 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 48,598 6,051 \t - \t - \t - \t -\n\n\n\n\nR E P O R T\n Other\n \t Accrued Payroll and Annual Leave 561,154 \t - 5,318 92,309 \t - 4,946 11,160 3,818 3 7,597 138 32 30,913 991 \t - 45,753 181,244 6,301 1,661 3,480 165,490\n \t Accrued Grants 766,204 \t - \t - \t - \t - \t - \t - 487,483 \t - \t - \t - \t - 2,843 3,234 \t - 78,639 77,462 116,543 \t - \t - \t -\n \t Capital Lease Liabilities 9,278 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 9,278 \t - \t - \t - \t -\n \t Unearned Revenue 958,474 \t - 4,133 2,686 \t - \t - \t - 7 \t - \t - \t - \t - 14,722 \t - \t - 23,408 37,847 274 4,528 \t - 870,869\n \t Other 49,181 \t - 79 27,055 \t - 1 \t - 512 \t - \t (1) \t - \t (1) 10,696 1 \t - 234 10,406 \t (1) \t - \t - 200\n\n TOTAL LIABILITIES $ 4,680,165 $ \t (96,502) $ 27,340 $ 541,863 $ \t - $ 16,563 $ 52,124 $ 576,076 $ 3 $ 12,392 $ 1,749 $ 270 $ 80,546 $ 8,680 $\t - $ 338,342 $ 1,744,872 $ 205,831 $ 26,800 $ 7,568 $ 1,135,648\n\n\n NET POSITION \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t -\n\n Unexpended Appropriations \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t -\n \t Unexpended Appropriations - Earmarked Funds $ 4,099,319 $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $\t - $ 4,099,319 $\t - $\t - $\t -\n \t Unexpended Appropriations - All Other Funds 8,782,873 \t - 22,112 2,407,026 \t - 20,630 \t - 918,197 49,055 8,592 \t - 22,194 78,649 10,256 218 1,106,825 4,081,930 40,741 \t - 16,448 \t -\n Cumulative Results of Operations\n \t Cumulative Results of Operations - Earmarked Funds 10,189,816 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 4,159 \t - \t - \t - 144,032 9,533,896 15,424 \t - 492,305\n \t Cumulative Results of Operations - All Other Funds 6,680,597 \t - \t (6,268) 395,375 9,745 \t (881) \t (2,716) \t (2,623) \t - \t (3,798) 2,243 6,238 \t (33,486) \t (3,750) \t - 719,925 5,601,215 \t (670) \t - 48 \t -\n\n TOTAL NET POSITION $ 29,752,605 $ \t - $ 15,844 $ 2,802,401 $ 9,745 $ 19,749 $ \t (2,716) $ 915,574 $ 49,055 $ 4,794 $ 2,243 $ 28,432 $ 49,322 $ 6,506 $ 218 $ 1,826,750 $ 9,827,177 $ 13,673,286 $ 15,424 $ 16,496 $ 492,305\n\n TOTAL LIABILITIES AND NET POSITION $ 34,432,770 $ \t (96,502) $ 43,184 $ 3,344,264 $ 9,745 $ 36,312 $ 49,408 $ 1,491,650 $ 49,058 $ 17,186 $ 3,992 $ 28,702 $ 129,868 $ 15,186 $ 218 $ 2,165,092 $ 11,572,049 $ 13,879,117 $ 42,224 $ 24,064 $ 1,627,953\n\n\n See accompanying independent auditors\xe2\x80\x99 report.\n\n\n\n\n 255\n CONSOLIDATING BALANCE SHEET\n\x0cCONSOLIDATING BALANCE SHEET\n\n\n\n\n 256\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n R eq u i r e d\n S u ppl e m e n ta r y\n I n fo r m at i o n\n (UNAUDITED)\n\x0c\x0c R e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\n\n\n\nRequired Supplementary Information (unaudited)\n\nA\t Deferred Maintenance\nDeferred maintenance is maintenance that was not performed when it should have been, that was scheduled and not performed,\nor that was delayed for a future period. Maintenance is the act of keeping property, plant, and equipment (PP&E) in acceptable\noperating condition and includes preventive maintenance, normal repairs, replacement of parts and structural components,\nand other activities needed to preserve the asset so that it can deliver acceptable performance and achieve its expected life.\nMaintenance excludes activities aimed at expanding the capacity of an asset or otherwise upgrading it to serve needs different\nfrom or significantly greater than those originally intended. Critical maintenance is defined as those projects where the required\nmaintenance will have a critical impact on the public access, functionality and mission support, health and safety, and life cycle\ncost of a facility if the maintenance is not performed. The significant portions of Departmental deferred maintenance relate to the\nPP&E of both NOAA and NIST (see below for abbreviations). These two entities represent 95\xe2\x80\xafpercent of the Department\xe2\x80\x99s General\nPP&E, Net balance as of September 30, 2010.\n\nNational Oceanic and Atmospheric Administration (NOAA):\n\nNOAA uses the Condition Assessment Survey (CAS) method to identify and quantify deferred maintenance for assets meeting\nNOAA\xe2\x80\x99s $200 thousand capitalization threshold. The CAS method employs a periodic inspection of real property and heritage\nassets to determine its current condition and to estimate costs to correct any deficiencies. Estimated costs reflect potential costs\nvariance of +/- 10 percent.\n\nThe following shows NOAA\xe2\x80\x99s deferred maintenance for projects with estimated costs greater than $50 thousand, as of\nSeptember 30, 2010:\n\n (In Thousands)\n\n Estimated Cost to Return\n PP&E Category Asset Condition\n to Acceptable Condition\n Buildings and Structures 4 $ 5,486 to $ 6,706\n Heritage Assets 4, 3 11,756 to 14,369\n Total $ 17,242 to $ 21,075\n\n\nNOAA has established a facility condition code to classify the condition of the Buildings and Structures. Each Building\nand Structure is assessed an individual facility condition code. The average of the individual facility condition codes\ndetermines the CAS Asset Condition. The CAS method for Buildings and Structures is based on a five-point scale, with\n1 representing excellent condition; 2 \xe2\x80\x93 good condition; 3 \xe2\x80\x93 fair condition; 4 \xe2\x80\x93 poor condition; and 5 \xe2\x80\x93 very poor condition.\nThe amounts reported represent non-critical maintenance to bring the assets to good condition. The CAS method for\nheritage assets is based on the same five-point scale as the Buildings and Structures. Acceptable condition is considered\nto be those assets rated in good or excellent condition. There is an annual call each year to the NOAA components,\nrequesting their submissions of new projects and updates to existing unfunded projects to reflect changes in requirements\nor costs.\n\n\n\n\n 259\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cR e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\n\n\n\nNational Institute of Standards and Technology (NIST):\n\nNIST also uses the CAS method to estimate deferred maintenance. NIST values the condition of assets using a five-point scale,\nwith 1 representing excellent condition; 2 \xe2\x80\x93 good condition; 3 \xe2\x80\x93 acceptable condition; 4 \xe2\x80\x93 poor condition; and 5 \xe2\x80\x93 very poor\ncondition. Assets that are assessed at 4 or 5 require repairs and maintenance to increase their value to 3, or acceptable condition.\nThe following shows NIST\xe2\x80\x99s deferred maintenance as of September 30, 2010:\n\n (In Thousands)\n\n Estimated Cost to Return\n PP&E Category Asset Condition\n to Acceptable Condition\n Mechanical and Electrical Devices 5 $ 318,400 to $ 428,200\n Buildings (Internal Structures) 4 25,300 to 34,200\n Buildings (External Structures) 4 44,400 to 55,700\n\n Total $ 388,100 to $ 518,100\n\n\n\nB\t Stewardship Marine Sanctuaries, Marine National Monuments, and Conservation Area\nNOAA maintains the following sanctuaries, marine national monuments, and conservation area, which are similar in nature to\nstewardship land and which are more fully described in Note 23, Stewardship Property, Plant, and Equipment, of the Notes to the\nFinancial Statements.\n\nNational Marine Sanctuaries: These protected waters provide a secure habitat for species close to extinction, and also protect\nhistorically significant shipwrecks and prehistoric artifacts. Each of the 13 individual sanctuary sites, which include near-shore\ncoral reefs and open ocean, conducts research and monitoring activities to characterize existing resources and document changes.\nThe waters and resources of the National Marine Sanctuaries are generally in good condition, though some specific resources\n(e.g. certain coral reefs, some commercial and recreational fisheries, and some benthic habitats) are threatened.\n\nPapah\xc3\xa3naumoku\xc3\xa3kea Marine National Monument: The majority of all coral reef habitats located in U.S. waters surround the\nNorthwestern Hawaiian Islands (NWHI). The Papah\xc3\xa3naumoku\xc3\xa3kea Marine National Monument, located off the coast of the NWHI,\nencompasses nearly 140,000 square miles of U.S. waters, including approximately 5,200 square miles of relatively undisturbed\ncoral reef habitat that is home to more than 7,000 species. The condition of the Papah\xc3\xa3naumoku\xc3\xa3kea Marine National Monument\nis good, but the Monument does face emerging threats.\n\nRose Atoll Marine National Monument: The atoll includes the Rose Atoll National Wildlife Refuge. It also includes about 20 acres\nof land and 1,600 acres of lagoon and is one of the most pristine atolls in the world. The areas around the atoll support a dynamic\nreef ecosystem that is home to many land and marine species, many of which are threatened or endangered. The condition of the\nRose Atoll Marine National Monument is good.\n\nMarianas Trench Marine National Monument: The Marianas Trench Marine National Monument consists of approximately 95,000\nsquare miles of submerged lands and waters of the Mariana Archipelago. It includes three units: the Islands Unit, the waters\nand submerged lands of the three northernmost Mariana Islands; the Volcanic Unit, the submerged lands within 1 nautical mile\nof 21 designated volcanic sites; and the Trench Unit, the submerged lands extending from the northern limit of the Exclusive\nEconomic Zone of the United States in the Commonwealth of the Northern Mariana Islands (CNMI) to the southern limit of the\nExclusive Economic Zone of the United States in the Territory of Guam. The condition of the Marianas Trench Marine National\nMonument is good.\n\n\n 260\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c R e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\n\n\n\nPacific Remote Islands Marine National Monument: The Pacific Remote Islands area consists of Wake, Baker, Howland, and Jarvis\nIslands, Johnston Atoll, Kingman Reef, and Palmyra Atoll, which lie to the south and west of Hawaii. With the exception of Wake\nIsland, these islands are administered as National Wildlife Refuges by the U.S. Fish and Wildlife Service of the Department of the\nInterior. They sustain many endemic species including corals, fish, shellfish, marine mammals, seabirds, water birds, land birds,\ninsects, and vegetation not found elsewhere. The condition of the Pacific Remote Islands Marine National Monument is good.\n\nAleutian Islands Habitat Conservation Area: This conservation area in Alaska, which covers nearly 370,000 square miles, may harbor\namong the highest diversity of deep-water corals in the world, and protects habitat for deep water corals and other sensitive\nfeatures that are slow to recover once disturbed by fishing gear or other activities. The condition of the Aleutian Islands Habitat\nConservation Area is generally good, although some specific resources are threatened. For example, the conservation area contains\nsix small areas of fragile coral gardens.\n\n\nC\t Collection-type Heritage Assets\nNOAA\xe2\x80\x99s collection-type heritage assets are comprised primarily of books, journals, publications, photographs and motion pictures,\nmanuscripts, records, nautical chart plates, and artifacts. Many of these heritage assets are maintained by the NOAA Central Library\n(Library). As evidenced by a search of international catalogs, 35 to 50 percent of the Library\xe2\x80\x99s collection is unique. Historically,\n40 percent of the items catalogued are not found anywhere else. The Library has an extensive collection of historical Coast\nand Geodetic Survey materials (from 1807) and Weather Bureau materials (from the 1830s), including foreign and historical\nmeteorological data, information on instruments, and metadata.\n\nNOAA\xe2\x80\x99s collection-type heritage assets include items in the Thunder Bay Sanctuary Research Collection, composed primarily of\na) data cards listing most of the ships on the Great Lakes before 1900, a roster of some 15,000 vessels complete with descriptive\ndata and highlights of the ships\xe2\x80\x99 careers and their ultimate losses; and b) ship photograph negatives of 19th and 20th century\nGreat Lakes ships.\n\nNOAA\xe2\x80\x99s collection-type heritage assets also include items in the National Climatic Data Center Library. Heritage assets include a) books,\nmanuals, and slides; b) thermometers, gauges, and radiosondes; and c) laboratory equipment.\n\nNOAA uses the Condition Assessment Survey (CAS) method to describe the condition of its assets. The CAS method is based on a\nfive-point scale with 1 representing excellent condition; 2 \xe2\x80\x93 good condition; 3 \xe2\x80\x93 fair condition; 4 \xe2\x80\x93 poor condition; and 5 \xe2\x80\x93 very\npoor condition. Assets with the condition assessment level between 1 through 3 are defined as being suitable for public display.\nThe books, journals, and other publications that make up the majority of the NOAA Central Library collection-type heritage assets\nare in 4 \xe2\x80\x93 poor condition, and 5 \xe2\x80\x93 very poor condition. The heritage assets of the Thunder Bay Sanctuary Research Collection are\nin 2 \xe2\x80\x93 good condition, and the heritage assets of the National Climatic Data Center Library are generally in 3 \xe2\x80\x93 fair condition.\n\nNIST currently maintains the Museum and History Program, which collects, conserves, and exhibits artifacts such as scientific\ninstruments, equipment, objects and records of significance to NIST and the National Bureau of Standards (NBS). This program\nprovides institutional memory and demonstrates the contributions of NIST to the development of standards, measurement,\ntechnology, and science. Conditions of these artifacts are listed in the Registrar\xe2\x80\x99s database and are generally fair.\n\nNIST Information Services Division (ISD) maintains the historical archives, rare book collection, and oversees the oral history\nprogram. The historical collection contains titles that are considered \xe2\x80\x9cclassics\xe2\x80\x9d of historical scientific interest, books by prominent\ncontemporary scientists, and books by NIST authors or about NIST work. Materials are not specifically purchased for the collection\nnor are funds specifically allocated for the collection. Conditions of these books are generally fair. The photos and manuscripts\n\n\n\n\n 261\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cR e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\n\n\n\nmaintained include images of NIST staff, facilities, and artifacts that demonstrate NIST accomplishments. These images are in\ngood condition.\n\nHeritage assets at the Census Bureau are items considered unique for their historical, cultural, educational, technological,\nmethodological, or artistic importance. These assets help illustrate the social, educational, and cultural heritage of the Census\nBureau. Some items, because of their age or obvious historical significance, are inherently historical artifacts. These historical\nartifacts include but are not limited to: Hollerith Key Punch, Hollerith Tabulator, Gang Punch, Pantograph, Census Enumerators\nBadge, Steel Hand Bander, Unisys Tape and Reel, Film Optical Sensing Device, and any items which represent the uniqueness of the\nmission of the Census Bureau. The heritage assets at the Census Bureau are classified as generally being in good condition.\n\n\nD\t Schedule of Budgetary Resources by Major Budget Account\nThe following table illustrates the Department\xe2\x80\x99s FY 2010 budgetary resources by major budget account. The \xe2\x80\x9cOther Programs\xe2\x80\x9d\ncolumn refers to the Department\xe2\x80\x99s reporting entities and their budget accounts that are not listed.\n\n\n\n\n 262\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c United States Department of Commerce Schedule of Budgetary Resources by Major Budget Account\n For the Year Ended September 30, 2010 (In Thousands)\n NTIA NTIA Digital- NOAA\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0\n NOAA NTIA Digital Census Bureau Broadboand to-Analog Procurement,\n NOAA USPTO Procurement, Television ITA Census Bureau Periodic Technology Converter Acquisition,\n Operations, Salaries Acquisition, Transition and Operations Periodic EDA Censuses and Opportunities Box and\n Combining Research, and and and Public Safety and Censuses and Grant Programs - Program - Program - Construction - Other\n Total Facilities Expenses Construction Fund Administration Programs Fund Recovery Act Recovery Act Recovery Act Recovery Act Programs\n\n BUDGETARY RESOURCES:\n Unobligated Balance, Brought Forward, October 1 $ 16,595,856 $ 168,805 $ 118,692 $ 105,529 $ 8,696,735 $ 11,200 $ 28,896 $ 353,040 $ 899,562 $ 4,592,703 $ 161,054 $ 280,199 $ 1,179,441\n Adjustments to Unobligated Balance, Brought Forward \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t -\n Recoveries of Prior-years Unpaid Obligations 240,438 21,108 19,796 6,155 2,575 9,060 10,327 30,793 2,947 141 85,806 \t - 51,730\n Budget Authority\n \t Appropriations 14,322,512 3,382,294 \t - 1,358,353 196,613 446,766 6,965,707 309,000 \t - \t - \t - \t - 1,663,779\n \t Borrowing Authority 78,375 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 78,375\n\n\n\n\nP E R F O R M A N C E\n \t Spending Authority From Offsetting Collections\n \t\t Earned\n \t\t\t Collected 3,796,640 238,310 2,101,227 239 21 20,287 1,317 18,050 679 459 \t - \t - 1,416,051\n \t\t\t Change in Receivables 37,895 39,357 248 \t - \t - \t (1,803) \t - \t - \t - \t (235) \t - \t - 328\n\n\n\n\nA N D\n \t\t Change in Unfilled Customer Orders\n \t\t\t Advances Received 8,453 \t (10,151) \t (25,788) \t - \t - 570 \t - \t (6,770) \t - \t - \t - \t - 50,592\n \t\t\t Without Advances 193,858 123,109 \t - \t - \t - 7,151 \t - \t - \t - \t - \t - \t - 63,598\n \t\t\t Anticipated for Rest of Year, Without Advances \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t -\n \t\t Previously Unavailable 2,716 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 2,716\n Total Budget Authority 18,440,449 3,772,919 2,075,687 1,358,592 196,634 472,971 6,967,024 320,280 679 224 \t - \t - 3,275,439\n Nonexpenditure Transfers, Net 140,391 109,038 \t - \t (1,358) \t - 4,990 \t - \t (1,882) \t - \t - \t - \t - 29,603\n Temporarily Not Available Pursuant to Public Law \t (52,543) \t - \t (52,543) \t - \t - \t - \t - \t - \t - \t - \t - \t - \t -\n Permanently Not Available \t (802,255) \t (19,701) \t - \t (26,000) \t (1) \t (522) \t (131,152) 1 \t - \t (302,000) \t(239,500) \t - \t (83,380)\n TOTAL BUDGETARY RESOURCES $ 34,562,336 $ 4,052,169 $ 2,161,632 $ 1,442,918 $ 8,895,943 $ 497,699 $ 6,875,095 $ 702,232 $ 903,188 $ 4,291,068 $ 7,360 $ 280,199 $ 4,452,833\n\n\n STATUS OF BUDGETARY RESOURCES:\n Obligations Incurred\n \t Direct $ 18,982,517 $ 3,460,737 $\t - $ 1,392,711 $ 54,059 $ 458,200 $ 5,012,516 $ 630,800 $ 903,185 $ 4,288,050 $ 1,258 $ 279,217 $ 2,501,784\n \t Reimbursable 3,423,294 379,109 1,938,958 \t - \t - 19,131 \t - 9,917 \t - \t - \t - \t - 1,076,179\n\n\n\n\nA C C O U N T A B I L I T Y\n Total Obligations Incurred 22,405,811 3,839,846 1,938,958 1,392,711 54,059 477,331 5,012,516 640,717 903,185 4,288,050 1,258 279,217 3,577,963\n Unobligated Balance\n \t Apportioned 2,651,510 160,436 222,674 33,655 97,381 12,561 1,850,183 61,515 3 3,018 6,102 982 203,000\n \t Exempt From Apportionment 577,107 \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - 577,107\n Total Unobligated Balance 3,228,617 160,436 222,674 33,655 97,381 12,561 1,850,183 61,515 3 3,018 6,102 982 780,107\n Unobligated Balance Not Available 8,927,908 51,887 \t - 16,552 8,744,503 7,807 12,396 \t - \t - \t - \t - \t - 94,763\n\n\n\n\nR E P O R T\n TOTAL STATUS OF BUDGETARY RESOURCES $ 34,562,336 $ 4,052,169 $ 2,161,632 $ 1,442,918 $ 8,895,943 $ 497,699 $ 6,875,095 $ 702,232 $ 903,188 $ 4,291,068 $ 7,360 $ 280,199 $ 4,452,833\n\n CHANGE IN UNPAID OBLIGATED BALANCE, NET:\n Unpaid Obligated Balance, Net, Brought Forward, October 1\n \t Unpaid Obligations, Brought Forward $ 8,334,646 $ 2,028,825 $ 331,249 $ 1,111,134 $ 533,392 $ 89,218 $ 872,166 $ 967,153 $ 77,063 $ 4,945 $ 101,389 $ 176,754 $ 2,041,358\n \t Less: Uncollected Customer Payments, Brought Forward \t (292,365) \t (206,975) 525 \t - \t - \t (9,324) \t - \t - \t - \t (235) \t - \t - \t (76,356)\n Total Unpaid Obligated Balance, Net, Brought Forward 8,042,281 1,821,850 331,774 1,111,134 533,392 79,894 872,166 967,153 77,063 4,710 101,389 176,754 1,965,002\n Obligations Incurred 22,405,811 3,839,846 1,938,958 1,392,711 54,059 477,331 5,012,516 640,717 903,185 4,288,050 1,258 279,217 3,577,963\n Less: Gross Outlays \t(17,098,925) \t(3,570,825) \t(1,953,366) \t(1,234,110) \t (30,608) \t(467,635) \t(5,228,711) \t (292,513) \t (942,187) \t (123,720) \t (16,624) \t(124,306) \t(3,114,320)\n Less: Actual Recoveries of Prior-years Unpaid Obligations \t (240,438) \t (21,108) \t (19,796) \t (6,155) \t (2,575) \t (9,060) \t (10,327) \t (30,793) \t (2,947) \t (141) \t (85,806) \t - \t (51,730)\n Change in Uncollected Customer Payments \t (231,753) \t (162,466) \t (248) \t - \t - \t (5,348) \t - \t - \t - 235 \t - \t - \t (63,926)\n Total Unpaid Obligated Balance, net, End of Period $ 12,876,976 $ 1,907,297 $ 297,322 $ 1,263,580 $ 554,268 $ 75,182 $ 645,644 $ 1,284,564 $ 35,114 $ 4,169,134 $ 217 $ 331,665 $ 2,312,989\n Unpaid Obligated Balance, Net, End of Period\n \t Unpaid Obligations $ 13,401,094 $ 2,276,738 $ 297,045 $ 1,263,580 $ 554,268 $ 89,854 $ 645,644 $ 1,284,564 $ 35,114 $ 4,169,134 $ 217 $ 331,665 $ 2,453,271\n \t Less: Uncollected Customer Payments \t (524,118) \t (369,441) 277 \t - \t - \t (14,672) \t - \t - \t - \t - \t - \t - \t (140,282)\n TOTAL UNPAID OBLIGATED BALANCE, NET, END OF PERIOD $ 12,876,976 $ 1,907,297 $ 297,322 $ 1,263,580 $ 554,268 $ 75,182 $ 645,644 $ 1,284,564 $ 35,114 $ 4,169,134 $ 217 $ 331,665 $ 2,312,989\n\n NET OUTLAYS:\n Gross Outlays $ 17,098,925 $ 3,570,825 $ 1,953,366 $ 1,234,110 $ 30,608 $ 467,635 $ 5,228,711 $ 292,513 $ 942,187 $ 123,720 $ 16,624 $ 124,306 $ 3,114,320\n Less: Offsetting Collections \t (3,805,093) \t (228,159) \t(2,075,439) \t (239) \t (21) \t (20,857) \t (1,317) \t (11,280) \t (679) \t (459) \t - \t - \t(1,466,643)\n Less: Distributed Offsetting (Receipts)/Outlays, Net \t (28,541) \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t - \t (28,541)\n NET OUTLAYS $ 13,265,291 $ 3,342,666 $ \t (122,073) $ 1,233,871 $ 30,587 $ 446,778 $ 5,227,394 $ 281,233 $ 941,508 $ 123,261 $ 16,624 $ 124,306 $ 1,619,136\n\n\n\n\n 263\n R e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\x0cR e q u i r e d s upp l e m e n t a r y i n f o r m a t i o n ( u n a u d i t e d )\n\n\n\n\n 264\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n R eq u i r e d\n S u ppl e m e n ta r y\n S t e wa r d s h i p\n I n fo r m at i o n\n (UNAUDITED)\n\x0c\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\nRequired Supplementary Stewardship\nInformation (unaudited)\nStewardship Investments\n\nStewardship investments are substantial investments made by the federal government for the benefit of the nation, but are not\nphysical assets owned by the federal government. Though treated as expenses when incurred to determine the Department\xe2\x80\x99s Net\nCost of Operations, these items merit special treatment so that users of federal financial reports know the extent of investments\nthat are made for the long-term benefit of the nation.\n\nInvestments in Non-federal Physical Property:\n\nNon-federal physical property investments are expenses included in the Department\xe2\x80\x99s Net Cost of Operations for the purchase,\nconstruction, or major renovation of physical property owned by state and local governments. Based on a review of the Department\xe2\x80\x99s\nprograms, NOAA and EDA have significant investments in non-federal physical property.\n\nNOAA:\n\n National Estuarine Research Reserves (NERR): The NERR system consists of 27 estuarine reserves protected by federal,\n state, and local partnerships that work to preserve and protect the nation\xe2\x80\x99s estuaries. The NERR system helps to fulfill\n NOAA\xe2\x80\x99s stewardship mission to sustain healthy coasts by improving the nation\xe2\x80\x99s understanding and stewardship of\n estuaries. Estuarine reserves are the areas where freshwater from rivers meet the ocean. These areas are known as bays,\n swamps, sloughs, and sounds. These important coastal habitats are used as spawning grounds and nurseries for the nation\xe2\x80\x99s\n commercial fish and shellfish. Estuaries filter much of the polluted runoff from rivers and streams that would otherwise\n contaminate oceans. The reserves were created with the passage of the Coastal Zone Management Act of 1972, and, as of\n September 30, 2010, encompassed approximately 1.3 million acres of estuarine waters, wetlands, and uplands. The newest\n reserve, Mission-Aransas, TX, was designated on May 3, 2006. NERRs are state-operated and managed in cooperation with\n NOAA. NOAA\xe2\x80\x99s investments in non-federal physical property are for the acquisition of lands and development or construction\n of facilities, auxiliary structures, and public access routes for any NERR site.\n\n Coastal and Estuarine Land Conservation Program: This program was established under the Commerce, Justice, and State\n Appropriations Act of 2002, \xe2\x80\x9cfor the purpose of protecting important coastal and estuarine areas that have significant\n conservation, recreation, ecological, historical, or aesthetic values, or that are threatened by conversion from their natural\n or recreational state to other uses.\xe2\x80\x9d The investments in non-federal physical property include matching grants awarded to\n state and local governments for land acquisition in coastal and estuarine areas. Since FY 2002, matching grants have been\n directed to 176 such projects.\n\n Coastal Zone Management Fund: The Coastal Zone Management Program is authorized by the Coastal Zone Management Act\n of 1972, and administered at the federal level by NOAA\xe2\x80\x99s Office of Ocean and Coastal Resource Management. The investments\n in non-federal physical property include incidental expenses of land acquisition, and low-cost construction on behalf of\n various state and local governments, for the purpose of preservation or restoration of coastal resources and habitats. NOAA\xe2\x80\x99s\n financing supports various coastal states in their redevelopment of deteriorating and urbanized waterfronts and ports, as\n well as providing for public access to beaches and coastal areas. The state and local governments receive funding for these\n\n\n\n\n 267\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n investments through NOAA grant expenditures, and these grant expenditures also include funding for purposes other than the\n investments in non-federal physical property. There is currently not in place a mechanism for the state and local governments\n to determine and report to NOAA the amount of monies they expend for the investments in non-federal physical property.\n The Department, accordingly, cannot report the amount of investments in non-federal physical property for the Coastal Zone\n Management Fund.\n\n NOAA\xe2\x80\x99s investments in non-federal physical property for FY 2006 through FY 2010 were as follows:\n (In Millions)\n\n Program FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total\n National Estuarine Research Reserves $ 6.8 $ 11.6 $ 11.8 $ 11.7 $ 14.7 $ 56.6\n Coastal and Estuarine Land Conservation Program 18.5 34.7 28.1 21.6 32.4 135.3\n Total $ 25.3 $ 46.3 $ 39.9 $ 33.3 $ 47.1 $ 191.9\n\n\nEDA:\n\n Public Works: The Public Works program promotes long-range economic development in distressed areas by providing\n investments for vital public infrastructure and development facilities. These critical investments enable communities to\n attract new, or support existing, businesses that will generate new jobs and income for unemployed and underemployed\n residents. Among the types of projects funded are water, sewer, fiber optics, access roads, and facilities such as industrial and\n business parks, business incubator and skill training facilities, and port improvements.\n\n Economic and Defense Adjustments: The Economic and Defense Adjustments program provides flexible investments for communities\n facing sudden or severe economic distress to diversify and stabilize its economy. Factors that seriously threaten the economic\n survival of local communities include essential plant closures, military base closures or realignments, defense laboratory or\n contractor downsizings, natural resource depletion, out-migration, under-employment, and destructive impacts of foreign trade.\n\n Global Climate Change Mitigation Incentive Fund (GCCMIF): The GCCMIF program was established to strengthen the linkage\n between economic development and environmental quality. The purpose and mission of the GCCMIF program is to finance\n projects that foster economic development by advancing the green economy in distressed communities. The GCCMIF\n program is the development and use of products and services that contribute to economic growth and alleviate economic\n distress by respecting and revitalizing the environment. The GCCMIF program supports projects that create jobs through, and\n increase private capital investment in, efforts to limit the nation\xe2\x80\x99s dependence on fossil fuels, enhance energy efficiency, curb\n greenhouse gas emissions, and protect natural systems.\n\n Disaster Recovery: The Disaster Recovery program awards grants for the repair of infrastructure and economic development\n related facilities damaged by floods and other natural disasters. Funding for the Disaster Recovery program is generally\n through supplemental funding from Congress for recovery efforts to save, sustain, and preserve private enterprise and job\n creation in economically distressed communities.\n\n\n\n\n 268\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n EDA\xe2\x80\x99s investments in non-federal physical property for FY 2006 through FY 2010 were as follows:\n (In Millions)\n\n Program FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total\n Public Works $ 180.1 $ 155.5 $ 133.5 $ 139.9 $ 175.8 $ 784.8\n Economic and Defense Adjustments 53.1 53.5 60.0 68.6 61.4 296.6\n Global Climate Change Mitigation Incentive Fund - - - 0.2 32.4 32.6\n Disaster Recovery 24.2 4.4 1.8 6.3 5.5 42.2\n Total $ 257.4 $ 213.4 $ 195.3 $ 215.0 $ 275.1 $ 1,156.2\n\n The above investments require matching funds by state and local governments of 20 to 50 percent.\n\nInvestments in Human Capital:\n\nHuman capital investments are expenses, included in the Department\xe2\x80\x99s Net Cost of Operations, for education and training programs\nthat are intended to increase or maintain national economic productive capacity and produce outputs and outcomes that provide\nevidence of the constant or increasing national productive capacity. These investments exclude education and training expenses\nfor federal civilian and military personnel. Based on a review of the Department\xe2\x80\x99s programs, the most significant dollar investments\nin human capital are by NOAA.\n\nNOAA:\n\n National Sea Grant College Program: Sea Grant is a nationwide network, administered through NOAA, of 32 university-\n based programs that work with coastal communities. With the adoption in 1966 of the National Sea Grant College Act,\n Congress established an academic/industry/government partnership that would enhance the nation\xe2\x80\x99s education, economy,\n and environment into the 21st century. The program supports activities designed to increase public awareness of coastal,\n ocean, and Great Lakes issues, to provide information to improve management decisions in coastal, ocean, and Great Lakes\n policy, and to train graduate students in marine and Great Lakes science. The Knauss Fellowship Program offers qualified\n masters and doctoral students the opportunity to spend a year working on marine and Great Lakes policy issues with\n the Executive and Legislative branches of the federal government. There is also a Graduate Fellowship Program for Ph.D.\n candidates in the specialized areas of population dynamics and marine resource economics. Participants in this program can\n receive up to three years of funding.\n\n National Estuarine Research Reserve Program: This program supports activities designed to increase public awareness of\n estuary issues, provide information to improve management decisions in estuarine areas, and train graduate students in\n estuarine science. The National Estuarine Research Reserve System\xe2\x80\x99s Graduate Research Fellowship (GRF) Program offers\n qualified masters and doctoral students the opportunity to address scientific questions of local, regional, and national\n significance. The result is high-quality research focused on improving coastal management issues. All GRF projects must be\n conducted in a National Estuarine Research Reserve and enhance the scientific understanding of the reserve\xe2\x80\x99s ecosystem.\n The program awarded 53 fellowships in FY 2009. In FY 2010, 50 fellowships were awarded.\n\n Educational Partnership Program: The NOAA Educational Partnership Program (EPP) with Minority Serving Institutions (MSI)\n provides financial assistance through competitive processes to minority serving institutions that support research and training\n of students in NOAA-related sciences. The program\xe2\x80\x99s goal is to increase the number of trained and graduated students from\n underrepresented communities in science and technology directly related to NOAA\xe2\x80\x99s mission. The EPP/MSI also seeks to\n\n\n\n\n 269\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n increase collaborative research efforts between NOAA scientists and researchers at minority serving academic institutions.\n Financial assistance is provided through four competitive program components: the Cooperative Science Centers, the\n Environmental Entrepreneurship Program, the Graduate Sciences Program, and the Undergraduate Scholars Program.\n\n NOAA provides funding to eligible MSIs on a competitive basis to educate, train, and graduate students in NOAA sciences,\n particularly atmospheric, oceanic, environmental, living marine resources, remote sensing, and scientific environmental\n technology. NOAA EPP Cooperative Science Centers\xe2\x80\x99 goals are to:\n\n l\t Train and graduate students, particularly from underrepresented communities, in NOAA mission sciences;\n l\t Develop expertise in a NOAA scientific area;\n\n \xe2\x80\xa2\t Strengthen and build capacity in a NOAA scientific and management area\n\n \xe2\x80\xa2\t Build research experience in a NOAA scientific and management area\n l\t Increase graduation rates of students from underrepresented communities in NOAA mission sciences;\n l\t Impact NOAA workforce statistics by increasing representation from underrepresented communities in NOAA mission\n sciences; and\n l\t Leverage NOAA funds to build the education and research capacity at MSIs.\n\n The EPP/MSI Environmental Entrepreneurship Program (EEP) provides funding to eligible minority serving institutions on a\n competitive basis to engage students to pursue advanced academic study and entrepreneurship opportunities in the NOAA-\n related sciences. NOAA\xe2\x80\x99s EEP supports student training and experiential learning opportunities for the purpose of stimulating\n job creation and business development, and revitalizing local communities. EEP\xe2\x80\x99s objective is to increase the number of\n students at MSIs proficient in environmental business enterprises.\n\n The Graduate Sciences Program (GSP) is aimed primarily at increasing opportunities for students in NOAA-related fields to\n pursue research and educational training in atmospheric, environmental, remote sensing, and oceanic sciences at MSIs when\n possible. The GSP offers between two years (master\xe2\x80\x99s candidates) to four years (doctoral students) of NOAA-related research\n and training opportunities. The GSP provides college graduates entry-level employment and hands-on research and work\n experience at NOAA. Nine students were selected to participate in the GSP in FY 2009. The program added six students in\n FY 2010.\n\n The Undergraduate Scholarship Program is designed to increase the number of students who undertake course work and\n graduate with degrees in the targeted areas integral to NOAA\xe2\x80\x99s mission. Appointments are for two years, and are made\n to students who have recently declared or are about to declare a major in atmospheric, oceanic, or environmental science.\n The students participate in research, training, and development activities at NOAA offices and facilities during two summer\n internships. 10 students started the program in FY 2009. The program added 10 students in FY 2010\n\n Ernest F. Hollings Undergraduate Scholarship Program: This program was established in 2005 to (1) increase undergraduate\n training in oceanic and atmospheric science, research, technology, and education, and foster multidisciplinary training\n opportunities; (2) increase public understanding and support for stewardship of the ocean and atmosphere and improve\n environmental literacy; (3) recruit and prepare students for public service careers with NOAA and other agencies at the federal,\n state, and local levels of government; and (4) recruit and prepare students for careers as teachers and educators in oceanic and\n atmospheric science and to improve scientific and environmental education in the U.S. There were 112 students that started the\n program in 2008. 122 students started the program in FY 2009. The program added 139 students in FY 2010.\n\n\n\n 270\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n The Educational Partnership Program and the Ernest F. Hollings Undergraduate Scholarship Program are both administered by\n the NOAA Office of Education. As a result of the Deepwater Horizon oil spill, the impact suffered by the Office of Education\xe2\x80\x99s\n scholarship programs was due to a lack of NOAA mentors in the various labs and offices across NOAA. Many of NOAA\xe2\x80\x99s\n scientists were called to the Gulf region during the summer which was the same time the scholarship recipients started their\n internships. Some internships were cancelled and the students were reassigned new mentors and some interns were able\n to work on samples/data retrieved from the Gulf. The oil spill provided a different type of learning opportunity for some of\n our students which has significantly affected their career paths and choices. The students\xe2\x80\x99 involvement included analyzing\n samples/data, caring for displaced fowl, and contemplating solutions for the clean-up.\n\n Southeast Fisheries Science Center\xe2\x80\x99s Recruiting Training Research Program: This is a joint program between NMFS and\n Virginia Tech to: (1) recruit top undergraduates into the field of fisheries population dynamics and careers with NMFS;\n (2) train graduate students; and (3) conduct population dynamics and stock assessment research in support of the NMFS\n mission. The program also offers graduate courses and workshops in computer programming, simulation modeling, and fish\n population dynamics. In both 2009 and 2010, 15 undergraduate students from across the country participated in a week-\n long undergraduate workshop, 8 students participated in a six-week summer program, and 3 M.S. students were supported\n by the program at Virginia Tech. In 2011, the program is expected to operate at a similar scale.\n\n The following table summarizes NOAA\xe2\x80\x99s investments in human capital for FY 2006 through FY 2010:\n\n (In Millions)\n\n Program FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total\n National Sea Grant College Program $ \t 0.7 $ \t 0.5 $ \t 0.5 $ \t 0.7 $ \t 0.9 $ \t 3.3\n National Estuarine Research Reserve Program \t 0.9 \t 0.8 \t 0.8 \t 1.0 \t 1.3 \t 4.8\n Educational Partnership Program \t13.9 \t14.2 \t12.8 \t15.0 \t14.3 \t 70.2\n Ernest F. Hollings Undergraduate Scholarship\n Program \t 3.8 \t 4.1 \t 3.6 \t 3.6 \t 4.6 \t 19.7\n Southeast Fisheries Science Center\xe2\x80\x99s Recruiting\n Training Research Program \t 1 \t 1 \t 1 \t 0.4 \t 0.5 \t 0.9\n Total $ \t19.3 $ \t19.6 $ \t17.7 $ \t20.7 $ \t21.6 $ \t 98.9\n 1\t Not applicable\n\n\n The following table further summarizes NOAA\xe2\x80\x99s human capital investments for FY 2006 to FY 2010 by performance goal:\n\n (In Millions)\n\n Performance Outcome FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Protect, Restore, and Manage the Use of Coastal and\n Ocean Resources $ \t 19.3 $ \t 19.6 $ \t 17.7 $ \t 20.7 $ \t 21.6\n\n\n\n\n 271\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\nInvestments in Research and Development (R&D):\n\nInvestments in R&D are expenses that are included in the Department\xe2\x80\x99s Net Cost of Operations. The investments are divided into three\ncategories: (1) basic research, the systematic study to gain knowledge or understanding of the fundamental aspects of phenomena\nand of observable facts without specific applications toward processes or products in mind; (2) applied research, the systematic study\nto gain knowledge or understanding necessary for determining the means by which a recognized and specific need may be met; and\n(3) development, the systematic use of the knowledge and understanding gained from research for the production of useful materials,\ndevices, systems, or methods, including the design and development of prototypes and processes. The investments are made with\nthe expectation of maintaining or increasing national economic productive capacity, or yielding other future economic or societal\nbenefits. Based on a review of the Department\xe2\x80\x99s programs, the only significant investments in R&D are by NIST and NOAA.\n\nNIST:\n\n NIST Laboratories Program:\n\n NIST Laboratories have been the stewards of the nation\xe2\x80\x99s measurement infrastructure since their inception in 1901 as the\n National Bureau of Standards. NIST Laboratories foster scientific and technological leadership by helping the U.S. to drive\n and take advantage of the increased pace of technological change, fostering more efficient transactions in the domestic and\n global marketplace, and addressing other critical needs assigned to NIST by the Administration and Congress. In support of\n the President\xe2\x80\x99s Plan for Science and Innovation, NIST develops and disseminates measurement techniques, reference data, test\n methods, standards, and other infrastructural technologies and services required by U.S. industry, government, and academia to\n compete in the 21st century. NIST laboratories promote innovation, facilitate trade, and ensure public safety and security by\n strengthening the nation\xe2\x80\x99s measurement and standards infrastructure.\n\n The American Recovery and Reinvestment Act of 2009 included $250 million (including transfers from the Department of Health\n and Human Services and Department of Energy) in funding for NIST laboratory research, measurements, and other services\n supporting economic growth and U.S. innovation through funding of such items as competitive grants, research fellowships,\n advanced measurement equipment and supplies, standards-related research that supports the security and interoperability of\n electronic medical records to reduce health care costs and improve the quality of care, and development of a comprehensive\n framework for a nationwide, fully interoperable smart grid for the U.S. electric power system. This funding will result in\n additional R&D investments for the NIST Laboratories Program.\n\n Advanced Technology Program (ATP)/Technology Innovation Program (TIP):\n\n ATP is a cost-shared funding program for businesses that was intended to develop new technologies for commercial use. ATP\n was abolished by the America COMPETES Act, which was signed into law by President Bush on August 9, 2007. This same Act\n established TIP, which supports, promotes, and accelerates innovation in the United States by offering cost-shared funding\n for high-risk, high-reward research in areas of critical national need.\n\n Critical national need areas in TIP are those for which government attention is demanded because the magnitude of the\n problem is large and the societal challenges that need to be overcome are not being addressed. TIP was explicitly established\n within NIST to assist U.S. small- and medium-size businesses, institutes of higher education, national laboratories, and non-\n profit research organizations to conduct high-risk, high-reward research that has the potential for yielding transformational\n results with wide-reaching implications, and that is within NIST\xe2\x80\x99s areas of technical competence. The America COMPETES Act\n statute allows for continued support for previously awarded ATP projects and new TIP awards.\n\n\n\n\n 272\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n The following table summarizes NIST\xe2\x80\x99s R&D investments for FY 2006 through FY 2010 by R&D Category:\n\n (In Millions)\n\n Advanced Technology Program/\n NIST Laboratories Technology Innovation Program Total\n\n FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY\n R&D Category 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010\n\n Basic Research $ 85.2 $ 110.7 $ 132.8 $ 144.9 $ 162.0 $ - $ - $ - $ - $ - $ 85.2 $ 110.7 $ 132.8 $ 144.9 $ 162.0\n\n Applied Research 345.8 345.3 381.0 378.5 395.9 58.0 31.0 23.2 25.0 26.2 403.8 376.3 404.2 403.5 422.1\n\n Development 16.7 15.3 14.4 15.4 15.3 58.0 30.9 23.2 25.1 26.2 74.7 46.2 37.6 40.5 41.5\n\n Total $ 447.7 $ 471.3 $ 528.2 $ 538.8 $ 573.2 $ 116.0 $ 61.9 $ 46.4 $ 50.1 $ 52.4 $ 563.7 $ 533.2 $ 574.6 $ 588.9 $ 625.6\n\n\n\n The following tables further summarize NIST\xe2\x80\x99s R&D investments for FY 2006 through FY 2010 by performance outcome.\n\n (In Millions)\n\n FY 2010\n Basic Applied\n Performance Outcome Development Total\n Research Research\n NIST Laboratories: Promote Innovation, Facilitate Trade, and\n Ensure Public Safety and Security by Strengthening the Nation\xe2\x80\x99s \t\n Measurements and Standards Infrastructure $ \t162.0 $ \t395.9 $ \t15.3 $ 573.2\n Technology Innovation Program: Promote U.S. Competitiveness\n by Directing Federal Investment and R&D into Areas of Critical\n National Need that Support, Promote, and Accelerate High-risk, \t\n High-reward Research in the United States. $ \t - $ 26.2 $ \t26.2 $ 52.4\n Total $ \t162.0 $ \t422.1 $ \t41.5 $ 625.6\n\n\n (In Millions)\n\n FY 20091\n Basic Applied\n Performance Outcome Development Total\n Research Research\n NIST Laboratories: Promote Innovation, Facilitate Trade, and\n Ensure Public Safety and Security by Strengthening the Nation\xe2\x80\x99s \t\n Measurements and Standards Infrastructure $ \t144.9 $ \t378.5 $ \t15.4 $ 538.8\n Technology Innovation Program: Promote U.S. Competitiveness\n by Directing Federal Investment and R&D into Areas of Critical\n National Need that Support, Promote, and Accelerate High-risk, \t\n High-reward Research in the United States. $ \t - $ \t 25.0 $ \t25.1 $ 50.1\n Total $ \t144.9 $ \t403.5 $ \t40.5 $ 588.9\n\n\n\n\n 273\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n (In Millions)\n\n FY 2008\n Basic Applied\n Performance Outcome Development Total\n Research Research\n NIST Laboratories: Promote Innovation, Facilitate Trade, and\n Ensure Public Safety and Security by Strengthening the Nation\xe2\x80\x99s \t\n Measurements and Standards Infrastructure $ \t132.8 $ \t381.0 $ \t14.4 $ 528.2\n Advanced Technology Program: Accelerate Private Investment in\n and Development of High-risk, Broad-impact Technologies \t - \t 23.2 \t23.2 46.4\n Total $ \t132.8 $ \t404.2 $ \t37.6 $ 574.6\n\n\n (In Millions)\n\n FY 2007\n Basic Applied\n Performance Outcome Development Total\n Research Research\n NIST Laboratories: Promote Innovation, Facilitate Trade, and\n Ensure Public Safety and Security by Strengthening the Nation\xe2\x80\x99s \t\n Measurements and Standards Infrastructure $ \t110.7 $ \t345.3 $ \t15.3 $ 471.3\n Advanced Technology Program: Accelerate Private Investment in\n and Development of High-risk, Broad-impact Technologies \t - \t 31.0 \t30.9 61.9\n Total $ \t110.7 $ \t376.3 $ \t46.2 $ 533.2\n\n\n (In Millions)\n\n FY 2006\n Basic Applied\n Performance Outcome Development Total\n Research Research\n NIST Laboratories: Promote Innovation, Facilitate Trade, and\n Ensure Public Safety and Security by Strengthening the Nation\xe2\x80\x99s \t\n Measurements and Standards Infrastructure $ \t 85.2 $ \t 345.8 $ \t 16.7 $ 447.7\n Advanced Technology Program: Accelerate Private Investment in\n and Development of High-risk, Broad-impact Technologies \t - \t 58.0 \t 58.0 116.0\n Total $ \t85.2 $ \t 403.8 $ \t 74.7 $ 563.7\n\n\n\nNOAA:\n\n NOAA conducts a substantial program of environmental R&D in support of its mission, much of which is performed to improve\n the United States\xe2\x80\x99 understanding of and ability to predict environmental phenomena. The scope of research includes:\n\n l\t Improving predictions and warnings associated with the weather, on timescales ranging from minutes to weeks;\n l\t Improving predictions of climate, on timescales ranging from months to centuries;\n\n\n\n\n 274\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n l\t Improving understanding of natural relationships to better predict and manage renewable marine resources and coastal\n and ocean ecosystems.\n\n NOAA also conducts research that is intended to provide a solid scientific basis for environmental policy-making in government.\n Examples of this research include determining the stratospheric ozone-depleting potential of proposed substitutes for\n chlorofluorocarbons (CFCs), and identifying the causes of the episodic high rural ozone levels that significantly damage crops\n and forests.\n\n NOAA conducts most R&D in-house; however, contractors to NOAA undertake most systems R&D. External R&D work\n supported by NOAA includes that undertaken through federal-academic partnerships such as the National Sea Grant College\n Program, the Cooperative Institutes of the Environmental Research Laboratories, the Climate and Global Change Program,\n and the Coastal Ocean Program.\n\n Here is a brief description of the major R&D programs of NOAA:\n\n Environmental and Climate: The Office of Oceanic and Atmospheric Research is NOAA\xe2\x80\x99s primary research and development\n office. This office conducts research in three major areas: climate research; weather and air quality research; and ocean,\n coastal, and Great Lakes research. NOAA\xe2\x80\x99s research laboratories, Climate Program Office, and research partners conduct a\n wide range of research into complex climate systems, including the exploration and investigation of ocean habitats and\n resources. NOAA\xe2\x80\x99s research organizations conduct applied research on the upper and lower atmosphere as well as the space\n environment.\n\n Fisheries: NOAA\xe2\x80\x99s National Marine Fisheries Service (NMFS) is responsible for the conservation and management of living\n marine resources and their habitat within the Nation\xe2\x80\x99s Exclusive Economic Zone. NMFS manages these resources through\n science-based conservation and management to ensure their continuation as functioning components of productive\n ecosystems, while also affording economic opportunities and enhancing the quality of life for the American public. Fishery\n stocks and protected species are surveyed; catch, bycatch, incidental take, economic and social data are collected, and research\n is conducted to better understand the variables affecting the abundance and variety of marine fishes and protected species,\n their habitat, and the benefits they provide to society. Protection of endangered species, restoration of coastal and estuarine\n fishery habitats, and enforcement of fishery regulations are primary NOAA activities. The research and management of living\n marine resources is conducted in partnership with states, tribes, universities, other countries, international organizations, and\n a broad range of stakeholders who benefit from the use and existence of living marine resources and their habitat.\n\n Marine Operations and Maintenance and Aircraft Services: These efforts support NOAA\xe2\x80\x99s programs requiring operating days\n and flight hours to collect data at sea and in the air. NOAA\xe2\x80\x99s Marine and Aviation Operations manage a wide variety of\n specialized aircraft and ships to complete NOAA\xe2\x80\x99s environmental and scientific missions. The aircraft collect the environmental\n and geographic data essential to NOAA hurricane and other weather and atmospheric research, conduct aerial surveys for\n hydrologic research to help predict flooding potential from snowmelt, and provide support to NOAA\xe2\x80\x99s fishery research and\n marine mammal assessment programs. NOAA\xe2\x80\x99s ship fleet provides oceanographic and atmospheric research and fisheries\n research vessels to support NOAA\xe2\x80\x99s strategic plan elements and mission.\n\n Weather Service: The National Weather Service conducts applied research and development, building upon research conducted\n by NOAA laboratories and the academic community. Applied meteorological and hydrological research is integral to providing\n more timely and accurate weather, water, and climate services to the public.\n\n\n\n\n 275\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n Other Programs: As a national lead for coastal stewardship, National Ocean Service promotes a wide range of research\n activities to create the strong science foundation required to advance the sustainable use of precious coastal systems.\n Understanding of the coastal environment is enhanced through coastal ocean activities that support science and resource\n management programs. The National Environmental Satellite Data and Information Service, through its Office of Research\n and Applications, conducts atmospheric, climatological, and oceanic research into the use of satellite data for monitoring\n environmental characteristics and their changes. It also provides guidance for the development and evolution of spacecraft\n and sensors to meet future needs.\n\n NOAA\xe2\x80\x99s R&D investments by program for FY 2006 through FY 2010 were as follows:\n\n (In Millions)\n\n Program FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total\n Environmental and Climate $ 324.2 $ 289.3 $ 331.2 $ 337.0 $ 344.1 $ 1,625.8\n Fisheries 56.3 49.3 53.6 55.7 59.9 274.8\n Marine Operations and Maintenance and\n Aircraft Services 50.7 51.1 51.5 38.4 34.3 226.0\n Weather Service 15.1 40.8 56.7 58.4 53.9 224.9\n Others 124.1 120.2 111.1 103.8 102.0 561.2\n Total $ 570.4 $ 550.7 $ 604.1 $ 593.3 $ 594.2 $ 2,912.7\n\n\n\n The following table summarizes NOAA\xe2\x80\x99s R&D investments for FY 2006 through FY 2010 by R&D category:\n\n (In Millions)\n\n R&D Category FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total\n Applied Research $ 523.1 $ 475.7 $ 517.6 $ 491.3 $ 452.4 $ 2,460.1\n Development 47.3 75.0 86.5 102.0 141.8 452.6\n Total $ 570.4 $ 550.7 $ 604.1 $ 593.3 $ 594.2 $ 2,912.7\n\n\n\n The following tables further summarize NOAA\xe2\x80\x99s R.D investments for FY 2006 through FY 2010 by performance outcome.\n\n (In Millions)\n\n FY 2010\n Applied\n Performance Outcome Development Total\n Research\n Protect, Restore, and Manage the Use of Coastal and Ocean Resources $ 218.4 $ \t 6.8 $ 225.2\n Advance Understanding of Climate Variability and Change 125.1 \t 84.0 209.1\n Provide Accurate and Timely Weather and Water Information 108.0 \t 48.4 156.4\n Support Safe, Efficient, and Environmentally Sound Commercial Navigation 0.9 \t 2.6 3.5\n Total $ 452.4 $ \t141.8 $ 594.2\n\n\n\n\n 276\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c REQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n (In Millions)\n\n FY 2009\n Applied\n Performance Outcome Development Total\n Research\n Protect, Restore, and Manage the Use of Coastal and Ocean Resources $ 211.5 $ \t 8.1 $ 219.6\n Advance Understanding of Climate Variability and Change 140.4 \t 60.5 200.9\n Provide Accurate and Timely Weather and Water Information 138.9 \t 32.7 171.6\n Support Safe, Efficient, and Environmentally Sound Commercial Navigation 0.5 \t 0.7 1.2\n Total $ 491.3 $ \t102.0 $ 593.3\n\n\n (In Millions)\n\n FY 2008\n Applied\n Performance Outcome Development Total\n Research\n Protect, Restore, and Manage the Use of Coastal and Ocean Resources $ 229.8 $ \t 11.4 $ 241.2\n Advance Understanding of Climate Variability and Change 145.9 \t 35.7 181.6\n Provide Accurate and Timely Weather and Water Information 140.3 \t 39.2 179.5\n Support Safe, Efficient, and Environmentally Sound Commercial Navigation 1.6 \t 0.2 1.8\n Total $ 517.6 $ \t86.5 $ 604.1\n\n\n (In Millions)\n\n FY 2007\n Applied\n Performance Outcome Development Total\n Research\n Protect, Restore, and Manage the Use of Coastal and Ocean Resources Through an\n Ecosystem Approach to Management $ 225.9 $ \t 12.3 $ 238.2\n Understand Climate Variability and Change to Enhance Society\xe2\x80\x99s Ability to Plan\n and Respond 145.9 \t 12.3 158.2\n Serve Society\xe2\x80\x99s Needs for Weather and Water Information 101.6 \t 50.2 151.8\n Support the Nation\xe2\x80\x99s Commerce with Information for Safe, Efficient, and\n Environmentally Sound Transportation 2.3 \t 0.2 2.5\n Total $ 475.7 $ \t75.0 $ 550.7\n\n\n\n\n 277\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cREQ U IRED S U P P LE M ENTARY STEWARDSHI P INFOR M ATION ( u n a u d i t e d )\n\n\n\n\n (In Millions)\n\n FY 2006\n Applied\n Performance Outcome Development Total\n Research\n Protect, Restore, and Manage the Use of Coastal and Ocean Resources Through an\n Ecosystem-based Management $ 250.7 $ \t 14.0 $ 264.7\n Understand Climate Variability and Change to Enhance Society\xe2\x80\x99s Ability to Plan\n and Respond 160.2 \t 12.3 172.5\n Serve Society\xe2\x80\x99s Needs for Weather and Water Information 109.0 \t 20.9 129.9\n Support the Nation\xe2\x80\x99s Commerce with Information for Safe, Efficient, and\n Environmentally Sound Transportation 3.2 \t 0.1 3.3\n Total $ 523.1 $ \t47.3 $ 570.4\n\n\n\n\n 278\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cF I N A N C I A L S E C T I O N\n\n\n\n\n I n d e pe n d e n t\n A u d i to r s \xe2\x80\x99\n Report\n\x0c\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n November 12, 2010\n\n MEMORANDUM FOR: The Honorable Gary Locke\n The Secretary of Commerce\n\n\n\n FROM: Todd J. Zinser\n\n SUBJECT: FY 2010 Consolidated Financial Statements\n Final Report No. 11-010-FS\n\n I am pleased to provide you with the attached audit report, which presents an unqualified opinion\n on the Department of Commerce\xe2\x80\x99s fiscal year 2010 consolidated financial statements. KPMG LLP,\n an independent public accounting firm, performed the audit in accordance with U.S. generally\n accepted government auditing standards and Office of Management and Budget Bulletin 07-04,\n Audit Requirements for Federal Financial Statements, as amended.\n\n In its audit of the Department, KPMG found\n\n \xe2\x80\xa2 that the financial statements were fairly presented in all material respects and in conformity\n with U.S. generally accepted accounting principles;\n\n \xe2\x80\xa2 one significant deficiency related to weaknesses in controls over the Department\xe2\x80\x99s financial\n management systems, which was not considered a material weakness in internal control; and\n\n \xe2\x80\xa2 no instances of reportable noncompliance with applicable laws, regulations, contracts, and\n grant agreements; and\n\n \xe2\x80\xa2 no instances in which the Department\xe2\x80\x99s financial management systems did not substantially\n comply with the requirements of the Federal Financial Management Improvement Act of 1996.\n\n My office oversaw the audit performance. We reviewed KPMG\xe2\x80\x99s report and related\n documentation and made inquiries of its representatives. Our review disclosed no instances where\n KPMG did not comply, in all material respects, with U.S. generally accepted government auditing\n standards. However, our review cannot be construed as an audit in accordance with these\n standards; it was not intended to enable us to express\xe2\x80\x94nor do we express\xe2\x80\x94any opinion on the\n Department\xe2\x80\x99s consolidated financial statements, conclusions about the effectiveness of internal\n controls, or conclusions on compliance with laws, regulations, contracts, and grant agreements.\n KPMG is solely responsible for the attached audit report, dated November 10, 2010, and the\n conclusions expressed in the report.\n\n\n\n\n 281\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n An audit action plan is not required to address the significant deficiency reported by KPMG. We\n have asked the Chief Information Officer to provide a plan that addresses the related specific\n recommendations included in the separate, limited-distribution information technology general\n controls report (report no. 11-010-IT) in accordance with Department Administrative Order 213-5,\n Audit Resolution and Follow-up.\n\n If you wish to discuss the contents of this report, please call me at (202) 482-4661, or Ann C.\n Eilers, Principal Assistant Inspector General for Audit and Evaluation, at (202) 482-2754.\n\n We appreciate the cooperation and courtesies the Department extended to both KPMG and my\n staff during the audit.\n\n\n Attachment\n\n\n cc: Scott B. Quehl, Chief Financial Officer and Assistant Secretary for Administration\n Simon Szykman, Chief Information Officer\n\n\n\n\n 282\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n KPMG LLP\n 2001 M Street, NW\n Washington, DC 20036-3389\n\n\n\n\n INDEPENDENT AUDITORS\xe2\x80\x99 REPORT\n\n\n Inspector General, U.S. Department of Commerce and\n Secretary, U.S. Department of Commerce:\n\n We have audited the accompanying consolidated balance sheets of the U.S. Department\n of Commerce (Department) as of September 30, 2010 and 2009, and the related\n consolidated statements of net cost and changes in net position, and combined statements\n of budgetary resources (hereinafter referred to as consolidated financial statements) for\n the years then ended. The objective of our audits was to express an opinion on the fair\n presentation of these consolidated financial statements. In connection with our fiscal year\n 2010 audit, we also considered the Department\xe2\x80\x99s internal controls over financial reporting\n and tested the Department\xe2\x80\x99s compliance with certain provisions of applicable laws,\n regulations, contracts, and grant agreements that could have a direct and material effect\n on these consolidated financial statements.\n\n Summary\n\n As stated in our opinion on the consolidated financial statements, we concluded that the\n Department\xe2\x80\x99s consolidated financial statements as of and for the years ended\n September 30, 2010 and 2009, are presented fairly, in all material respects, in conformity\n with U.S. generally accepted accounting principles.\n\n Our consideration of internal control over financial reporting resulted in identifying\n certain deficiencies, related to weaknesses in the Department\xe2\x80\x99s general information\n technology controls, that we consider to be a significant deficiency as defined in the\n Internal Control Over Financial Reporting section of this report. We did not identify any\n deficiencies in internal control over financial reporting that we consider to be material\n weaknesses as defined in the Internal Control Over Financial Reporting section of this\n report.\n The results of our tests of compliance with certain provisions of laws, regulations,\n contracts, and grant agreements disclosed no instances of noncompliance or other matters\n that are required to be reported herein under Government Auditing Standards, issued by\n the Comptroller General of the United States, and Office of Management and Budget\n (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as\n amended.\n\n\n\n\n KPMG LLP is a Delaware limited liability partnership,\n the U.S. member firm of KPMG International Cooperative\n (\xe2\x80\x9cKPMG International\xe2\x80\x9d), a Swiss entity.\n\n\n\n\n 283\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n The following sections discuss our opinion on the Department\xe2\x80\x99s consolidated financial\n statements; our consideration of the Department\xe2\x80\x99s internal controls over financial\n reporting; our tests of the Department\xe2\x80\x99s compliance with certain provisions of applicable\n laws, regulations, contracts, and grant agreements; and management\xe2\x80\x99s and our\n responsibilities.\n\n Opinion on the Consolidated Financial Statements\n\n We have audited the accompanying consolidated balance sheets of the U.S. Department\n of Commerce as of September 30, 2010 and 2009, and the related consolidated\n statements of net cost and changes in net position, and the combined statements of\n budgetary resources for the years then ended.\n\n In our opinion, the consolidated financial statements referred to above present fairly, in\n all material respects, the financial position of the U.S. Department of Commerce as of\n September 30, 2010 and 2009, and its net costs, changes in net position, and budgetary\n resources for the years then ended, in conformity with U.S. generally accepted\n accounting principles.\n\n The information in the Management\xe2\x80\x99s Discussion and Analysis, Required Supplementary\n Stewardship Information, and Required Supplementary Information sections is not a\n required part of the consolidated financial statements, but is supplementary information\n required by U.S. generally accepted accounting principles. We have applied certain\n limited procedures, which consisted principally of inquiries of management regarding the\n methods of measurement and presentation of this information. However, we did not audit\n this information and, accordingly, we express no opinion on it.\n\n Our audits were conducted for the purpose of forming an opinion on the consolidated\n financial statements taken as a whole. The September 30, 2010 consolidating balance\n sheet on page 255 is presented for purposes of additional analysis of the consolidated\n balance sheet rather than to present the financial position of the Department\xe2\x80\x99s bureaus\n individually. The September 30, 2010 consolidating balance sheet has been subjected to\n the auditing procedures applied in the audit of the consolidated financial statements and,\n in our opinion, is fairly stated, in all material respects, in relation to the\n September 30, 2010 consolidated balance sheet taken as a whole. The information in the\n FY 2010 Performance Section, Appendices, and the information on pages VI through XI\n are presented for purposes of additional analysis and are not required as part of the\n consolidated financial statements. This information has not been subjected to auditing\n procedures and, accordingly, we express no opinion on it.\n\n Internal Control Over Financial Reporting\n\n A deficiency in internal control exists when the design or operation of a control does not\n allow management or employees, in the normal course of performing their assigned\n functions, to prevent, or detect and correct misstatements on a timely basis. A material\n weakness is a deficiency, or a combination of deficiencies, in internal control such that\n\n\n\n\n 284\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n there is a reasonable possibility that a material misstatement of the entity\xe2\x80\x99s financial\n statements will not be prevented, or detected and corrected on a timely basis.\n Our consideration of the internal control over financial reporting was for the limited\n purpose described in the Responsibilities section of this report and was not designed to\n identify all deficiencies in internal control over financial reporting that might be\n deficiencies, significant deficiencies, or material weaknesses. In our fiscal year 2010\n audit, we did not identify any deficiencies in internal control over financial reporting that\n we consider to be material weaknesses, as defined above. However, we identified the\n following deficiency relating to the Department\xe2\x80\x99s financial management systems,\n summarized below, and in more detail in Exhibit I, that we consider to be a significant\n deficiency in internal control over financial reporting. A significant deficiency is a\n deficiency, or a combination of deficiencies, in internal control that is less severe than a\n material weakness, yet important enough to merit attention by those charged with\n governance.\n Information technology access and configuration management controls. We\n found that although the Department has taken corrective actions to address certain\n information technology (IT) control weaknesses, access and configuration\n management control weaknesses still exist. Despite the positive efforts made by\n the Department to implement effective management, operational, and technical\n controls to help establish sound information security practices over financial\n management systems, the Department needs to make continued improvement in\n its IT access and configuration management controls to fully ensure that financial\n data being processed on the Department\xe2\x80\x99s systems has integrity, is securely\n maintained, and is available only to authorized users.\n\n Exhibit II presents the status of the prior year significant deficiency.\n\n We noted certain additional matters that we reported to management of the Department in\n two separate documents addressing information technology and other internal control\n matters, respectively.\n\n Compliance and Other Matters\n\n The results of certain of our tests of compliance as described in the Responsibilities\n section of this report, exclusive of those referred to in the Federal Financial Management\n Improvement Act of 1996 (FFMIA), disclosed no instances of noncompliance or other\n matters that are required to be reported herein under Government Auditing Standards or\n OMB Bulletin No. 07-04, as amended.\n\n The results of our tests of FFMIA disclosed no instances in which the Department\xe2\x80\x99s\n financial management systems did not substantially comply with the (1) Federal financial\n management systems requirements, (2) applicable Federal accounting standards, and\n (3) the United States Government Standard General Ledger at the transaction level.\n\n *******\n\n\n\n\n 285\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n Responsibilities\n\n Management\xe2\x80\x99s Responsibilities. Management is responsible for the consolidated\n financial statements; establishing and maintaining effective internal control; and\n complying with laws, regulations, contracts, and grant agreements applicable to the\n Department.\n\n Auditors\xe2\x80\x99 Responsibilities. Our responsibility is to express an opinion on the fiscal year\n 2010 and 2009 consolidated financial statements of the Department based on our audits.\n We conducted our audits in accordance with auditing standards generally accepted in the\n United States of America; the standards applicable to financial audits contained in\n Government Auditing Standards, issued by the Comptroller General of the United States;\n and OMB Bulletin No. 07-04, as amended. Those standards and OMB Bulletin No. 07-\n 04, as amended, require that we plan and perform the audits to obtain reasonable\n assurance about whether the consolidated financial statements are free of material\n misstatement. An audit includes consideration of internal control over financial reporting\n as a basis for designing audit procedures that are appropriate in the circumstances, but not\n for the purpose of expressing an opinion on the effectiveness of the Department\xe2\x80\x99s internal\n control over financial reporting. Accordingly, we express no such opinion.\n\n An audit also includes:\n\n \xef\x82\xb7 Examining, on a test basis, evidence supporting the amounts and disclosures in the\n consolidated financial statements;\n \xef\x82\xb7 Assessing the accounting principles used and significant estimates made by\n management; and\n \xef\x82\xb7 Evaluating the overall consolidated financial statement presentation.\n\n We believe that our audits provide a reasonable basis for our opinion.\n\n In planning and performing our fiscal year 2010 audit, we considered the Department\xe2\x80\x99s\n internal control over financial reporting by obtaining an understanding of the\n Department\xe2\x80\x99s internal control, determining whether internal controls had been placed in\n operation, assessing control risk, and performing tests of controls as a basis for designing\n our auditing procedures for the purpose of expressing our opinion on the consolidated\n financial statements, but not for the purpose of expressing an opinion on the effectiveness\n of the Department\xe2\x80\x99s internal control over financial reporting. Accordingly, we do not\n express an opinion on the effectiveness of the Department\xe2\x80\x99s internal control over\n financial reporting. We did not test all internal controls relevant to operating objectives as\n broadly defined by the Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982.\n\n As part of obtaining reasonable assurance about whether the Department\xe2\x80\x99s fiscal year\n 2010 consolidated financial statements are free of material misstatement, we performed\n tests of the Department\xe2\x80\x99s compliance with certain provisions of laws, regulations,\n\n\n\n\n 286\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n contracts, and grant agreements, noncompliance with which could have a direct and\n material effect on the determination of the consolidated financial statement amounts, and\n certain provisions of other laws and regulations specified in OMB Bulletin No. 07-04, as\n amended, including the provisions referred to in Section 803(a) of FFMIA. We limited\n our tests of compliance to the provisions described in the preceding sentence, and we did\n not test compliance with all laws, regulations, contracts, and grant agreements applicable\n to the Department. However, providing an opinion on compliance with laws, regulations,\n contracts, and grant agreements was not an objective of our audit and, accordingly, we do\n not express such an opinion.\n\n ______________________________\n\n The Department\xe2\x80\x99s response to the significant deficiency identified in our audit is\n presented in Exhibit I. We did not audit the Department\xe2\x80\x99s response and, accordingly, we\n express no opinion on it.\n\n This report is intended solely for the information and use of the Department\xe2\x80\x99s\n management, the Department\xe2\x80\x99s Office of Inspector General, OMB, the U.S. Government\n Accountability Office, and the U.S. Congress and is not intended to be and should not be\n used by anyone other than these specified parties.\n\n\n\n November 10, 2010\n\n\n\n\n 287\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n U.S. Department of Commerce\n Independent Auditors\xe2\x80\x99 Report\n Exhibit I \xe2\x80\x93 Significant Deficiency\n\n Information Technology Access and Configuration Management Controls Need\n Improvement (Repeat Condition Since 1998)\n\n For many years, the U.S. Department of Commerce (the Department) Office of Inspector\n General (OIG), and departmental self-assessments have identified weaknesses in the\n Department\xe2\x80\x99s information technology (IT) and financial systems controls. As at many\n federal entities, information security is recognized as a top management challenge for the\n Department. During our fiscal year (FY) 2010 assessment of the Department\xe2\x80\x99s IT general\n and financial systems controls, performed in support of the FY 2010 consolidated\n financial statement audit, we found that there is continued emphasis on implementing\n minimum security requirements for Federal information systems that are recommended\n by the National Institute of Standards and Technology (NIST). We also noted that the\n bureaus and the Department took steps to implement management, operational, and\n technical controls to help establish sound information security practices and address\n known weaknesses.\n\n Despite continued progress, during our FY 2010 audit, we identified weaknesses in IT\n access and configuration management controls. Our FY 2010 IT assessment was focused\n on the IT general controls over the Department\xe2\x80\x99s major financial management systems\n and supporting network infrastructure, using GAO\xe2\x80\x99s Federal Information System\n Controls Audit Manual (FISCAM). The two FISCAM IT general control review areas,\n which we consider collectively to be a significant deficiency in internal control, as\n defined by the American Institute of Certified Public Accountants, and our related\n findings, are as follows:\n\n \xef\x82\xa7 Access controls. In close concert with an organization\xe2\x80\x99s security management, access\n controls for general support systems and financial systems should provide reasonable\n assurance that computer resources such as data files, application programs, and\n computer-related facilities and equipment are protected against unauthorized\n modification, disclosure, loss, or impairment. Access controls are facilitated by an\n organization\xe2\x80\x99s entity-wide security program. Such controls include physical controls\n and logical controls.\n\n The objectives of limiting access are to ensure that users have only the access needed\n to perform their duties; that access to very sensitive resources, such as security\n software programs, is limited to very few individuals; and that employees are\n restricted from performing incompatible functions or functions beyond their\n responsibility. This is reiterated by Federal guidelines. For example, OMB Circular\n A-130 and supporting NIST Special Publications provide guidance related to the\n maintenance of technical access controls. In addition, the Department of Commerce\n IT Security Program Policy and Minimum Implementation Standards contain many\n requirements for operating Department IT devices in a secure manner.\n\n During FY 2010, we noted that access controls should be improved at all bureaus and\n at the Department level, primarily in the areas of: (1) managing user accounts to\n\n\n\n\n 288\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n U.S. Department of Commerce\n Independent Auditors\xe2\x80\x99 Report\n Exhibit I \xe2\x80\x93 Significant Deficiency, Continued\n\n appropriately disable and recertify network, financial system, and database accounts,\n (2) improving logical controls over financial application, database, and network\n access, (3) strengthening password controls, (4) restricting data center access and\n improving data center procedures, (5) granting system roles and privileges on the\n principle of least privilege, (6) monitoring user actions through audit trails that are\n established in compliance with established baselines, (7) enforcing multi-factor\n authentication, (8) preventing the use of shared accounts and passwords, (9) CIRT\n contractors not receiving annual incident response training, and (10) strengthening\n remote access controls. We recognize that the Department and its bureaus have\n certain compensating controls in place to help reduce the risk of the identified\n vulnerabilities, and we have considered such compensating controls as part of our\n overall consolidated financial statement audit.\n\n \xef\x82\xa7 Configuration management. Configuration management involves the identification\n and management of security features for all hardware, software, and firmware\n components of an information system at a given point and systematically controls\n configuration changes throughout the system\xe2\x80\x99s life cycle. Establishing controls over\n modifications to information system components and related documentation helps to\n ensure that only authorized systems and related program modifications are\n implemented. This is accomplished by instituting policies, procedures, and techniques\n to help ensure that hardware, software and firmware programs and program\n modifications are properly authorized, tested, and approved, and that access to and\n distribution of programs is carefully controlled. Without proper controls, there is a\n risk that security features could be inadvertently or deliberately omitted or turned off,\n or that processing irregularities or malicious code could be introduced into the IT\n environment.\n\n Effective configuration management prevents unauthorized changes to information\n system resources and provides reasonable assurance that systems are configured and\n operating securely and as intended. Without effective configuration management,\n users do not have adequate assurance that the system and network will perform as\n intended and to the extent needed to support missions.\n\n During FY 2010, we noted that configuration management controls should be\n improved at seven bureaus in the areas of: (1) patch and configuration management\n vulnerabilities exist, (2) configuration and change management procedures need\n improvement, (3) implementing documented and approved configuration\n management policy and procedures, (4) vulnerability scans not being performed at the\n defined frequency, and (5) audit configuration settings not complying with approved\n baselines..\n\n Recommendations\n\n Specific recommendations are included in a separate limited distribution IT general\n controls report, issued as part of the FY 2010 consolidated financial statement audit. The\n\n\n\n\n 289\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n U.S. Department of Commerce\n Independent Auditors\xe2\x80\x99 Report\n Exhibit I \xe2\x80\x93 Significant Deficiency, Continued\n\n Department should monitor bureau actions to ensure effective implementation of our\n recommendations.\n\n Management\xe2\x80\x99s Response\n\n The Department agrees with KPMG\xe2\x80\x99s findings, conclusions, and recommendations\n regarding improvements to its general information technology controls. We are in the\n process of finalizing corrective action plans to address KPMG\xe2\x80\x99s recommendations.\n\n\n\n\n 290\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c NOTES TO THE FINANCIAL STATE M ENTS\n I n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n U.S. Department of Commerce\n Independent Auditors\xe2\x80\x99 Report\n Exhibit II \xe2\x80\x93 Status of Prior Year Significant Deficiency\n\n\n\n Reported Prior Year Fiscal Year 2010\n Issue Recommendation Status\n Financial Management Systems Need Improvement\n Weaknesses in general The Department should monitor During FY 2010, we\n controls were identified in all bureau actions to ensure effective considered the\n five FISCAM review areas. implementation of our weaknesses in two of\n recommendations. the five FISCAM\n review areas,\n collectively, to be a\n significant deficiency\n (see comments in\n Exhibit I).\n\n\n\n\n 291\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cNOTES TO THE FINANCIAL STATE M ENTS\nI n d e p e n d e n t Au d i t o r s \xe2\x80\x99 R e p o r t\n\n\n\n\n 292\n F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cA ppe n d i ces\n\x0c\x0c APPENDIX A: A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n PERFORMANCE AND RESOURCE TABLES\n\n\n\n\nT\n o make the report more useful, this FY 2010 Performance and Accountability Report (PAR) reports on targets\n and measures from the FY 2011 Annual Performance Plan (APP), that more accurately reflects updated targets\n\xe2\x80\x8a \xe2\x80\x89of each performance measure. Individual bureau-specific APPs can be found on the Department Web site at\nhttp://www.osec.doc.gov/bmi/budget/budgetsub_perf_strategicplans.htm. The resource tables with the performance tables are\nalso combined to make the information easier to follow.\n\nThe following tables provide an array of information that previously was shown in separate tables. The information should help the\nreader clearly understand the resources expended for each Strategic Goal, Objective, and Performance Outcome/Objective.\n\nThe system of reporting does not currently allow the Department to report on resources at the performance measure level, but it\nis the Department\xe2\x80\x99s hope to develop this capability in the future. Unless otherwise noted, funding includes reimbursable amounts.\nFor a given year, it is important to note that if a performance measure has been exceeded (more than 125 percent of target),\nthe status box for that year will be shaded blue. If a performance measure has been met (100 to 125 percent of target), the box\nis shaded green. The status box for a measure that was slightly below target (95 to 99 percent of the target) is shaded yellow,\nwhile the box for a measure that was definitely not met is shaded red. In addition, in FY 2008 OMB introduced a new category,\n\xe2\x80\x9cimproved but not met.\xe2\x80\x9d In those cases, the box is shaded orange. No targets that were in the form of text (e.g., a series of\nmilestones met) would ever be considered exceeded since they cannot be quantified.\n\nThe information in the tables will follow the following format:\n\n\xe2\x97\x8f\xe2\x97\x8f Strategic Goal and Resources\n\xe2\x97\x8f\xe2\x97\x8f Objective and Resources\n\xe2\x97\x8f\xe2\x97\x8f Performance Outcome/Objective and Resources\n\xe2\x97\x8f\xe2\x97\x8f Performance Measure\n\nNote: Unless otherwise indicated, measures that do not have FY 2010 targets are not included in any count in this document.\nFY 2010 resources for each performance outcome/objective may be estimates and may be updated in the budget for FY 2012.\nFY 2009 resources may have been updated since the FY 2009 PAR.\n\nTarget and performance data are tracked back to FY 2001 where available. If a measure was developed after FY 2001, actual\nperformance data is shown back to the year that the measure first appeared.\n\nFTE = Full-time equivalent employment. All dollar amounts shown are in millions, unless otherwise indicated.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 295\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nSTRATEGIC GOAL 1\nMaximize U.S. competitiveness and enable economic growth for American industries, workers,\nand consumers\n STRATEGIC GOAL 1 TOTAL RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $2,015.1 $1,809.6 $1,842.1 $1,857.3 $2,018.6 $2,096.1 $2,214.9 $2,643.8 $4,804.4 $7,580.3\n FTE 13,914 11,916 11,265 11,475 11,953 12,223 11,637 12,107 29,294 96,720\n 1\tFromFY 2002-FY 2009, prior year amounts differ from previous PARs because the Department decided in FY 2010 to include all reimbursable\n amounts that applied to performance measures, and in FY 2008, the Department and NIST shifted the performance outcome, \xe2\x80\x9cRaise the productivity\n and competitiveness of small manufacturers (NIST)\xe2\x80\x9d from Strategic Goal 2 to Strategic Goal 1, becoming Strategic Objective 1.4.\n\n\nSTRATEGIC OBJECTIVE 1.1\nFoster domestic economic development as well as export opportunities\n OBJECTIVE 1.1 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $756.9 $677.5 $645.0 $633.2 $625.6 $614.1 $646.9 $643.4 $792.9 $675.3\nFTE 2,240 1,990 2,013 1,869 1,908 1,849 1,704 1,615 1,576 1,572\n\n\nPerformance OUTCOME: Promote private investment and job creation in economically distressed\ncommunities (EDA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding1 $362.3 $296.6 $258.3 $254.8 $212.5 $208.3 $223.9 $229.7 $306.3 $211.9\nFTE 165 155 149 137 139 128 132 129 129 164\n1\tActualsreflect direct obligations for economic development assistance programs (EDAP) and salaries and expenses (S&E); totals do not include\n one-time, disaster investments, or reimbursable funding.\n\n\n EDA Performance measure\n MEASURE: Private investment leveraged \xe2\x80\x93 9 year totals (in millions)1\n Year Status Actual Target\n FY 2010 Met $2,758 $2,410\n FY 2009 Met $2,228 $2,040\n FY 2008 Exceeded $4,173 $2,080\n FY 2007 Exceeded $1,937 $1,350\n FY 2006 Exceeded $2,331 $1,162\n 1\tEDA tracks the results of its investments and jobs created/retained at 3, 6, and 9 year periods. The FY 2010 actual is a result of investments made\n in FY 2001. Since EDA did not begin tracking results until FY 1997 in this format, 9 year results are not available for the years prior to FY 2006.\n\n\n\n\n 296 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n EDA Performance measure\n MEASURE: Private investment leveraged \xe2\x80\x93 6 year totals (in millions)1\n Year Status Actual Target\n FY 2010 Exceeded $2,281 $818\n FY 2009 Met $855 $810\n FY 2008 Exceeded $1,393 $970\n FY 2007 Exceeded $2,118 $1,200\n FY 2006 Met $1,059 $1,020\n FY 2005 Exceeded $1,781 $1,040\n FY 2004 Exceeded $1,740 $650\n FY 2003 Exceeded $2,475 $581\n 1\tThis is the 6 year result measure. FY 2010 actuals are the result of investments made in FY 2004.\n\n\n EDA Performance measure\n MEASURE: Private investment leveraged \xe2\x80\x93 3 year totals (in millions)1\n Year Status Actual Target\n FY 2010 Exceeded $1,544 $259\n FY 2009 Exceeded $484 $265\n FY 2008 Exceeded $1,013 $270\n FY 2007 Exceeded $810 $330\n FY 2006 Exceeded $1,669 $320\n FY 2005 Exceeded $1,791 $390\n FY 2004 Exceeded $947 $480\n FY 2003 Exceeded $1,251 $400\n FY 2002 Exceeded $640 $420\n FY 2001 Exceeded $971 $130\n 1\tThis is the 3 year result measure. FY 2010 actuals are the result of investments made in FY 2007.\n\n\n EDA Performance measure\n MEASURE: Jobs created/retained \xe2\x80\x93 9 year totals1\n Year Status Actual Target\n FY 2010 Not Met 66,527 72,000\n FY 2009 Not Met 45,866 56,500\n FY 2008 Met 57,701 56,900\n FY 2007 Exceeded 73,559 54,000\n FY 2006 Met 50,546 50,400\n 1\tEDA tracks the results of its investments and jobs created/retained at 3, 6, and 9 year periods. The FY 2010 actual is a result of investments made\n in FY 2001. Since EDA did not begin tracking results until FY 1997 in this format, 9 year results are not available for the years prior to FY 2006.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 297\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n EDA Performance measure\n MEASURE: Jobs created/retained \xe2\x80\x93 6 year totals1\n Year Status Actual Target\n FY 2010 Met 26,695 22,427\n FY 2009 Met 24,533 22,900\n FY 2008 Met 30,719 28,900\n FY 2007 Exceeded 49,806 36,000\n FY 2006 Exceeded 42,958 28,200\n FY 2005 Exceeded 47,374 28,400\n FY 2004 Exceeded 68,109 27,000\n FY 2003 Exceeded 47,607 25,200\n1\tThis is the 6 year result measure. FY 2010 actuals are the result of investments made in FY 2004.\n\n\n EDA Performance measure\n MEASURE: Jobs created/retained \xe2\x80\x93 3 year totals1\n Year Status Actual Target\n FY 2009 Exceeded 9,159 6,628\n FY 2009 Exceeded 9,137 7,019\n FY 2008 Exceeded 14,819 7,227\n FY 2007 Exceeded 16,274 8,999\n FY 2006 Exceeded 11,833 9,170\n FY 2005 Exceeded 19,672 11,500\n FY 2004 Exceeded 21,901 14,400\n FY 2003 Exceeded 39,841 11,300\n FY 2002 Exceeded 29,912 11,300\n FY 2001 Exceeded 12,898 5,400\n1\tThis is the 3 year result measure. FY 2010 actuals are the result of investments made in FY 2007.\n\n\n\n\n 298 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Improve community capacity to achieve and sustain economic growth (EDA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding1 $76.7 $68.8 $67.3 $67.3 $68.0 $72.1 $83.5 $82.5 $120.4 $81.1\n FTE 89 84 80 80 74 32 33 32 32 41\n 1\tActuals reflect direct obligations for EDAP and S&E; totals do not include one-time, disaster investments, or reimbursable funding.\n\n\n EDA Performance measure\n MEASURE: Percentage of economic development districts (EDD) and Indian tribes implementing economic development projects\n from the comprehensive economic development strategy (CEDS) that lead to private investment and jobs\n Year Status Actual Target\n FY 2010 Not Met 89% 95%\n FY 2009 Slightly Below 93% 95%\n FY 2008 Slightly Below 92% 95%\n FY 2007 Met 95% 95%\n FY 2006 Met 96% 95%\n FY 2005 Met 97% 95%\n FY 2004 Met 95% 95%\n FY 2003 Met 99% 95%\n\n\n EDA Performance measure\n MEASURE: Percentage of sub-state jurisdiction members actively participating in the economic development district (EDD) program\n Year Status Actual Target\n FY 2010 Slightly Below 87% 89-93%\n FY 2009 Met 92% 89-93%\n FY 2008 Met 90% 89-93%\n FY 2007 Met 92% 89-93%\n FY 2006 Met 90% 89-93%\n FY 2005 Met 91% 89-93%\n FY 2004 Met 90% 89-93%\n FY 2003 Met 97% 89-93%\n FY 2002 Met 95% 93%\n FY 2001 Met 92% 85%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 299\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n EDA Performance measure\n MEASURE: Percentage of University Center clients taking action as a result of the assistance facilitated by the University Center\n Year Status Actual Target\n FY 2010 Met 76% 75%\n FY 2009 Not Met 70% 75%\n FY 2008 Met 80% 75%\n FY 2007 Met 84% 75%\n FY 2006 Met 76% 75%\n FY 2005 Met 79% 75%\n FY 2004 Met 78% 75%\n FY 2003 Met 78% 75%\n\n\n EDA Performance measure\n MEASURE: Percentage of those actions taken by University Center clients that achieved the expected results\n Year Status Actual Target\n FY 2010 Met 90% 80%\n FY 2009 Met 92% 80%\n FY 2008 Met 84% 80%\n FY 2007 Met 89% 80%\n FY 2006 Met 82% 80%\n FY 2005 Met 87% 80%\n FY 2004 Met 88% 80%\n FY 2003 Met 86% 80%\n\n\n EDA Performance measure\n MEASURE: Percentage of Trade Adjustment Assistance Center (TAAC) clients taking action as a result\n of the assistance facilitated by the TAACs\n Year Status Actual Target\n FY 2010 Not Met 82% 90%\n FY 2009 Slightly Below 88% 90%\n FY 2008 Met 92% 90%\n FY 2007 Met 99% 90%\n FY 2006 Met 90% 90%\n FY 2005 Met 99% 90%\n FY 2004 Met 90% 90%\n FY 2003 Met 92% 90%\n\n\n\n\n 300 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n EDA Performance measure\n MEASURE: Percentage of those actions taken by Trade Adjustment Assistance Center clients that achieved the expected results\n Year Status Actual Target\n FY 2010 Met 100% 95%\n FY 2009 Slightly Below 93% 95%\n FY 2008 Met 95% 95%\n FY 2007 Met 95% 95%\n FY 2006 Met 96% 95%\n FY 2005 Met 97% 95%\n FY 2004 Met 98% 95%\n FY 2003 Met 98% 95%\n\n\nPerformance OUTCOME: Increase access to the marketplace and financing for minority-owned businesses (MBDA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $27.9 $28.3 $29.0 $28.7 $29.8 $29.8 $29.9 $28.5 $30.1 $31.5\n FTE 90 92 92 92 96 94 94 75 82 89\n\n\n MBDA Performance measure\n MEASURE: Dollar value of contract awards obtained (billions)\n Year Status Actual Target\n FY 2010 Exceeded $1.50 $1.00\n FY 2009 Exceeded $2.12 $0.90\n FY 2008 Met $0.91 $0.90\n FY 2007 Exceeded $1.20 $0.85\n FY 2006 Exceeded $1.17 $0.85\n FY 2005 Exceeded $1.10 $0.80\n FY 2004 Met $0.95 $0.80\n FY 2003 Not Met $0.70 $1.00\n FY 2002 Exceeded $1.30 $1.00\n FY 2001 Exceeded $1.60 $0.70\n\n\n MBDA Performance measure\n MEASURE: Percent increase in client gross receipts\n Year Status Actual Target\n FY 2010 Met 6.0% 6.0%\n FY 2009 Met 6.0% 6.0%\n FY 2008 Met 6.0% 6.0%\n FY 2007 Met 5.0% 5.0%\n FY 2006 Met 6.0% 5.0%\n FY 2005 Exceeded 15.0% 5.0%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 301\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n MBDA Performance measure\n MEASURE: Dollar value of financial awards obtained (billions)\n Year Status Actual Target\n FY 2010 Exceeded $1.80 $0.60\n FY 2009 Exceeded $0.91 $0.50\n FY 2008 Exceeded $1.09 $0.50\n FY 2007 Met $0.55 $0.45\n FY 2006 Not Met $0.41 $0.45\n FY 2005 Met $0.50 $0.45\n FY 2004 Exceeded $0.60 $0.40\n FY 2003 Met $0.40 $0.40\n FY 2002 Met $0.40 $0.40\n FY 2001 Not Met $0.60 $1.00\n\n MBDA Performance measure\n MEASURE: Number of new job opportunities created\n Year Status Actual Target\n FY 2010 Exceeded 5,845 4,000\n FY 2009 Met 4,134 3,000\n FY 2008 Exceeded 4,603 3,000\n FY 2007 Exceeded 3,506 2,050\n FY 2006 Exceeded 4,254 1,800\n FY 2005 Exceeded 2,270 1,800\n\n MBDA Performance measure\n MEASURE: Satisfaction rating for the American Customer Satisfaction Index (ACSI)1\n Year Status Actual Target\n FY 2010 N/A N/A N/A\n FY 2009 Not Met 67% 75%\n FY 2008 N/A N/A N/A\n FY 2007 Exceeded 4.0% 3.0%\n FY 2006 N/A N/A N/A\n FY 2005 Exceeded 13.0% 5.0%\n1\tThe ACSI survey only occurs in odd years, so data does not appear in FY 2010, FY 2008, and FY 2006.\n\n\n MBDA Performance measure\n MEASURE: Cumulative economic impact\n Year Status Actual Target\n FY 2010 Exceeded $22.7B $16B\n\n\n\n\n 302 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Strengthen U.S. competitiveness in domestic and international markets (ITA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual1 Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $161.0 $208.5 $72.7 $56.0 $62.6 $52.1 $59.0 $44.8 $53.0 $54.5\n FTE 1,038 1,236 402 287 264 257 243 228 213 227\n 1\tIn\n FY 2005, ITA reorganized its performance structure, reducing the number of outcomes from four to two outcomes for this strategic objective.\n FY 2002 actuals shown here reflect the level for the \xe2\x80\x9cStrengthen U.S. industries\xe2\x80\x9d outcome and the two discontinued outcomes.\n\n\n ITA Performance measure\n MEASURE: Annual cost savings resulting from the adoption of Manufacturing and Services (MAS) recommendations\n contained in MAS studies and analysis\n Year Status Actual Target\n FY 2010 Exceeded $647M $350M\n FY 2009 Exceeded $552M $350M\n FY 2008 Exceeded $455M $350M\n FY 2007 Exceeded $413M $168M\n FY 2006 Not Met $287M $350M\n\n\n ITA Performance measure\n MEASURE: Percent of industry-specific trade barriers addressed that were removed or prevented\n Year Status Actual Target\n FY 2010 Met 35% 30%\n FY 2009 Exceeded 30% 20%\n FY 2008 Exceeded 29% 15%\n\n\n ITA Performance measure\n MEASURE: Percent of industry-specific trade barrier milestones completed\n Year Status Actual Target\n FY 2010 Exceeded 75% 55%\n FY 2009 Exceeded 72% 55%\n FY 2008 Exceeded 73% 55%\n FY 2007 Not Met 54% 85%\n FY 2006 Slightly Below 81% 85%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 303\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ITA Performance measure\n MEASURE: Percent of agreement milestones completed\n Year Status Actual Target\n FY 2010 Met 100% 100%\n FY 2009 Not Met 23% 100%\n FY 2008 Not Met 70% 100%\n FY 2007 Exceeded 100% 70%\n FY 2006 Exceeded 100% 70%\n\n\nPerformance OUTCOME: Broaden and deepen U.S. exporter base (ITA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual1 Actual Actual\nFunding $129.0 $75.3 $217.7 $226.4 $252.7 $251.8 $250.6 $257.9 $283.1 $296.3\nFTE 858 423 1,290 1,273 1,335 1,338 1,202 1,151 1,120 1,051\n1\tFor\n FY 2008, funding includes $23.0M previously for the discontinued outcome, \xe2\x80\x9cIncrease exports to commercially significant markets including\n FTA countries, China, and India.\xe2\x80\x9d\n\n\n ITA Performance measure\n MEASURE: Export success firms/active clients (CS overall effectiveness)\n Year Status Actual Target\n FY 2010 Exceeded 29.1% 11.0%\n FY 2009 Exceeded 23.3% 10.50%\n\n\n ITA Performance measure\n MEASURE: US&FCS small and medium-sized enterprises (SME) new-to-export (NTE)/total change in SME exporters (CS SME NTE effectiveness)\n Year Status Actual Target\n FY 2010 Not Met 2.28% 12.74%\n FY 2009 Exceeded 15.22% 12.37%\n\n\n ITA Performance measure\n MEASURE: Number of SME new-to-market (NTM) firms/number of SME firms exporting to two to nine foreign markets (NTM effectiveness)\n Year Status Actual Target\n FY 2010 Not Met 3.11% 3.92%\n FY 2009 Not Met 3.49% 3.81%\n\n\n ITA Performance measure\n MEASURE: Commercial diplomacy success (cases) (annual)\n Year Status Actual Target\n FY 2010 Not Met 112 166\n FY 2009 Met 196 162\n FY 2008 Met 181 160\n\n\n\n\n 304 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ITA Performance measure\n MEASURE: Increase in the percent of small and medium-sized firms that export\n Year Status Actual Target\n FY 2010 Exceeded 6.42% 2.80%\n FY 2009 Exceeded 4.69% 2.75%\n\n\n ITA Performance measure\n MEASURE: Percentage of advocacy bids won\n Year Status Actual Target\n FY 2010 Not Met 9% 17%\n FY 2009 N/A 11% N/A\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 305\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 1 . 2\nAdvance responsible economic growth and trade while protecting American security\n OBJECTIVE 1.2 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $126.9 $157.4 $164.9 $168.5 $192.6 $205.6 $199.2 $199.8 $210.5 229.0\nFTE 733 929 940 975 998 986 912 849 881 923\n\n\nPerformance OUTCOME: Identify and resolve unfair trade practices (ITA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $68.0 $92.8 $88.1 $94.6 $115.8 $123.5 $118.2 $123.5 $125.2 $126.5\nFTE 360 571 574 610 638 633 544 496 528 559\n\n\n ITA Performance measure\n MEASURE: Percent reduction in trade distorting foreign subsidy programs\n Year Status Actual Target\n FY 2010 Met 1.7% > 1.5%\n FY 2009 Exceeded 1.8% > 1%\n FY 2008 Exceeded 1.6% >0.5%\n\n\n ITA Performance measure\n MEASURE: Percent of AD/CVD determinations issued within statutory and/or regulatory deadlines\n Year Status Actual Target\n FY 2010 Met 94% 90%\n FY 2009 Slightly Below 86% 90%\n FY 2008 Met 90% 90%\n\n\n ITA Performance measure\n MEASURE: Percent of ministerial errors in IA\xe2\x80\x99s dumping and subsidy calculations\n Year Status Actual Target\n FY 2010 Exceeded 7.9% < 10%\n FY 2009 Exceeded 8% < 11%\n FY 2008 Met 10% < 12%\n\n\n\n\n 306 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ITA Performance measure\n MEASURE: Percentage of market access and compliance cases resolved successfully\n Year Status Actual Target\n FY 2010 Met 58% 50%\n FY 2009 Exceeded 61% 35%\n FY 2008 Met 39% 35%\n FY 2007 Exceeded 54% 25%\n FY 2006 Exceeded 46% 25%\n\n\n ITA Performance measure\n MEASURE: Value of market access and compliance cases resolved successfully\n Year Status Actual Target\n FY 2010 Exceeded $21.4B $2.5B\n FY 2009 Exceeded $25.4B $2.0B\n FY 2008 Exceeded $12.3B $1.5B\n\n\n\nPerformance OUTCOME: Maintain and strengthen an adaptable and effective U.S. export control and treaty compliance\nsystem (BIS)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $53.6 $58.7 $68.4 $67.7 $71.3 $73.0 $70.4 $66.1 $73.3 $89.9\n FTE 342 328 336 335 330 309 324 310 310 320\n\n\n BIS Performance measure\n MEASURE: Percent of licenses requiring interagency referral referred within 9 days\n Year Status Actual Target\n FY 2010 Slightly Below 90% 95%\n FY 2009 Met 99% 95%\n FY 2008 Met 98% 95%\n FY 2007 Met 98% 95%\n FY 2006 Met 98% 95%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 307\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n BIS Performance measure\n MEASURE: Median processing time for new regime regulations (months)\n Year Status Actual Target\n FY 2010 Met 3.0 3.0\n FY 2009 Exceeded 2.0 3.0\n FY 2008 Exceeded 2.0 3.0\n FY 2007 Exceeded 2.0 3.0\n FY 2006 Met 2.5 3.0\n FY 2005 Exceeded 1.0 3.0\n FY 2004 Exceeded 2.0 3.0\n FY 2003 Not Met 7.0 3.0\n\n\n BIS Performance measure\n MEASURE: Percent of attendees rating seminars highly\n Year Status Actual Target\n FY 2010 Met 94% 85%\n FY 2009 Met 93% 85%\n FY 2008 Met 93% 85%\n FY 2007 Met 90% 85%\n FY 2006 Met 90% 85%\n\n\n BIS Performance measure\n MEASURE: Percent of declarations received from U.S. industry in accordance with CWC regulations (time lines) that are processed, certified,\n and submitted to the State Department in time so the United States can meet its treaty obligations\n Year Status Actual Target\n FY 2010 Met 100% 100%\n FY 2009 Met 100% 100%\n FY 2008 Met 100% 100%\n FY 2007 Met 100% 100%\n FY 2006 Met 100% 100%\n\n\n\n\n 308 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n BIS Performance measure\n MEASURE: Number of actions that result in a deterrence or prevention of a violation and cases which result in a\n criminal and/or administrative charge\n Year Status Actual Target\n FY 2010 Slightly Below 806 850\n FY 2009 Met 876 850\n FY 2008 Exceeded 881 675\n FY 2007 Exceeded 930 450\n FY 2006 Exceeded 872 350\n FY 2005 Exceeded 583 275\n FY 2004 Met 310 250\n FY 2003 Exceeded 250 85\n FY 2002 Met 82 75\n FY 2001 Met 81 70\n\n\n BIS Performance measure\n MEASURE: Percent of shipped transactions in compliance with the licensing requirements of the\n Export Administration Regulations (EAR)\n Year Status Actual Target\n FY 2010 Met 98% 95%\n FY 2009 Met 96% 95%\n FY 2008 Met 87% 87%\n\n\n BIS Performance measure\n MEASURE: Percentage of post-shipment verifications completed and categorized above the \xe2\x80\x9cunfavorable\xe2\x80\x9d classification\n Year Status Actual Target\n FY 2010 Met 256 PSVs/93% 260 PSVs/85%\n FY 2009 Met 314PSVs/88% 260 PSVs/85%\n FY 2008 Met 136 PSVs/93% 215 PSVs/80%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 309\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Integrate non-U.S. actors to create a more effective global export control\nand treaty compliance system (BIS)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $1.6 $1.8 $4.4 $2.7 $1.8 $2.8 $4.6 $5.1 $5.6 $5.7\nFTE 13 13 13 13 13 13 13 12 12 13\n\n\n BIS Performance measure\n MEASURE: Number of end-use checks completed\n Year Status Actual Target\n FY 2010 Not Met 708 850\n FY 2009 Not Met 737 850\n FY 2008 Not Met 490 850\n FY 2007 Met 854 850\n FY 2006 Exceeded 942 700\n\n\nPerformance OUTCOME: Ensure continued U.S. technology leadership in industries that are essential\nto national security (BIS)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $3.7 $4.1 $4.0 $3.5 $3.7 $6.3 $6.0 $5.1 $6.4 $6.9\nFTE 18 17 17 17 17 31 31 31 31 31\n\n\n BIS Performance measure\n MEASURE: Percent of industry assessments resulting in BIS determination, within three months of completion,\n on whether to revise export controls\n Year Status Actual Target\n FY 2010 Met 100% 100%\n FY 2009 Met 100% 100%\n FY 2008 Met 100% 100%\n FY 2007 Met 100% 100%\n FY 2006 N/A N/A1 100%\n 1\tNo assessments fell within the metric timeframe in FY 2006.\n BIS completed two industry assessments late in the fourth quarter of FY 2006, thus not\n meeting the three month window (before the end of the fiscal year) to make a final determination on revising export controls. This was the first\n year this measure was in place. Industry assessment data will be available in subsequent fiscal years.\n\n\n\n\n 310 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 1 . 3\nAdvance key economic and demographic data that support effective decision-making of policymakers,\nbusinesses, and the American public\n OBJECTIVE 1.3 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $1,024.9 $866.2 $920.9 $1,008.7 $1,097.7 $1,164.5 $1,261.5 $1,709.4 $3,688.4 $6,549.3\n FTE 10,854 8,908 8,223 8,563 8,976 9,321 8,954 9,575 26,767 94,146\n\n\nPerformance OUTCOME: Provide benchmark measures of the U.S. population, economy, and governments\n(ESA/CENSUS)\n\n Performance OUTCOME RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $967.0 $799.5 $846.9 $314.5 $340.5 $373.5 $468.7 $917.9 $2,873.8 $5,703.9\n FTE 10,380 8,420 7,729 8,038 8,433 8,778 8,418 3,072 20,007 87,418\n 1\tInFY 2008, Census split the outcome, \xe2\x80\x9cMeet the needs of policymakers, businesses, non-profit organizations, and the public for current and\n benchmark measures of the U.S. population, economy and governments,\xe2\x80\x9d into this outcome and performance outcome, \xe2\x80\x9cProvide current measures\n of the U.S. population, economy, and governments.\xe2\x80\x9d Funds for FY 2003 are shown in this outcome and reflect both outcomes. FTE for years prior\n to FY 2008 are shown in this outcome and reflect both outcomes.\n\n\n ESA/Census Performance measure\n MEASURE: Correct street features in the TIGER (geographic) database (number of counties completed) to more effectively support\n Census Bureau censuses and surveys, facilitate the geographic partnerships between federal, state, local and tribal governments,\n and support the E-Government initiative in the President\xe2\x80\x99s Management Agenda\n Year Status Actual Target\n Increased TIGER update submissions Increase TIGER update submissions\n FY 2010 Exceeded\n electronically by 51% electronically by 10%\n Complete updates to eligible counties in the United\n FY 2009 Met Completed\n States, Puerto Rico, and Island Areas\n FY 2008 Met 320 320\n FY 2007 Met 737 690\n FY 2006 Met 700 700\n FY 2005 Met 623 610\n FY 2004 Met 602 600\n FY 2003 Met 250 250\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 311\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ESA/Census Performance measure\n MEASURE: Complete key activities for cyclical census programs on time to support effective decision-making by policymakers, businesses,\n and the public and meet constitutional and legislative mandates\n Year Status Actual Target\n FY 2010 Met At least 90% of key prep activities completed on time At least 90% of key prep activities completed on time\n FY 2009 Met At least 90% of key prep activities completed on time At least 90% of key prep activities completed on time\n Some of the planned dress rehearsal activities\n FY 2008 Not Met At least 90% of key prep activities completed on time\n were cancelled\n FY 2007 Met >90% of key prep activities completed on time At least 90% of key prep activities completed on time\n FY 2006 Met 100% of activities completed on time At least 90% of key prep activities completed on time\n FY 2005 Met Activities completed on time Various activities with different dates\n\n\n ESA/Census Performance measure\n MEASURE: Meet or exceed the overall federal score of customer satisfaction on the E-Government American Customer Satisfaction Index (ACSI)1\n Year Status Actual Target\n FY 2010 Not Met Score was lower in 2 of 4 quarters Meet or exceed overall federal score\n FY 2009 Not Met 68.0 75.2\n FY 2008 Not Met 66.0 73.9\n FY 2007 Met 74.0 71.0\n FY 2006 Met 72.0 71.3\n FY 2005 Met 73.0 73.0\n FY 2004 Slightly Below 71.0 72.0\n 1\tThis measure applies to the second outcome as well, \xe2\x80\x9cProvide current measures of the U.S. population, economy, and governments.\xe2\x80\x9d\n\n\nPerformance OUTCOME: Provide current measures of the U.S. population, economy, and governments\n(ESA/CENSUS)\n\n Performance OUTCOME RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding N/A N/A N/A $615.6 $673.1 $705.4 $705.8 $703.1 $715.9 $733.1\nFTE N/A N/A N/A N/A N/A N/A N/A 5,979 6,231 6,187\n1\tInFY 2008, Census split the outcome, \xe2\x80\x9cMeet the needs of policymakers, businesses, non-profit organizations, and the public for current and\n benchmark measures of the U.S. population, economy, and governments,\xe2\x80\x9d into this outcome and performance outcome, \xe2\x80\x9cProvide benchmark\n measures of the U.S. population, economy, and governments.\xe2\x80\x9d Funds for FY 2003 and FTE from years prior to FY 2008 are shown in the previous\n outcome and reflect both outcomes.\n\n\n\n\n 312 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ESA/Census Performance measure\n MEASURE: Achieve pre-determined collection rates for Census Bureau censuses and surveys in order to provide statistically reliable data to\n support effective decision-making of policymakers, businesses, and the public\n Year Status Actual Target\n At least 90% of key censuses and surveys meet/exceed\n FY 2010 Met Met percentages\n collection rates/levels of reliability\n At least 90% of key censuses and surveys meet/exceed\n FY 2009 Met Met percentages\n collection rates/levels of reliability\n At least 90% of key censuses and surveys meet/exceed\n FY 2008 Met Met percentages\n collection rates/levels of reliability\n At least 90% of key censuses and surveys meet/exceed\n FY 2007 Met Met percentages\n collection rates/levels of reliability\n At least 90% of key censuses and surveys meet/exceed\n FY 2006 Met Met percentages\n collection rates/levels of reliability\n FY 2005 Met Met percentages Various %s \xe2\x80\x93 see FY 2006 APP\n FY 2004 Met Met percentages Various %s \xe2\x80\x93 see FY 2005 APP\n FY 2003 Met Met percentages Various %s \xe2\x80\x93 see FY 2004 APP\n\n\n ESA/Census Performance measure\n MEASURE: Release data products for key Census Bureau programs on time to support effective\n decision-making of policymakers, businesses, and the public\n Year Status Actual Target\n 1)\t 100% of Economic Indicators released on time 1)\t 100% of Economic Indicators released on time\n FY 2010 Met 2)\t At least 90% of other key census and survey data 2)\t At least 90% of other key census and survey data\n released on time released on time\n 1)\t 100% of Economic Indicators released on time 1)\t 100% of Economic Indicators released on time\n FY 2009 Met\n 2)\t At least 90% of key prep activities completed on time 2)\t At least 90% of key prep activities completed on time\n 1)\t 100% of Economic Indicators released on time 1)\t 100% of Economic Indicators released on time\n FY 2008 Met\n 2)\t At least 90% of key prep activities completed on time 2)\t At least 90% of key prep activities completed on time\n 1)\t 100% of Economic Indicators released on time 1)\t 100% of Economic Indicators released on time\n FY 2007 Met 2)\t At least 90% of other key censuses and surveys data 2)\t At least 90% of other key censuses and surveys data\n released on time released on time\n 1)\t 100% of Economic Indicators released on time\n 1)\t 100% of Economic Indicators\n FY 2006 Met 2)\t At least 90% of other key censuses and surveys data\n 2)\t 100% of other products\n released on time\n FY 2005 Met 22 products 22 products\n FY 2004 Exceeded 10 products 7 products\n FY 2003 Not Met 2 products 3 products\n FY 2002 Met Maintained FY 2009 time Maintained FY 2009 time\n FY 2001 Met Maintained FY 2009 time Maintained FY 2009 time\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 313\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Provide timely, relevant, and accurate economic statistics (ESA/BEA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $57.9 $66.7 $74.0 $78.6 $84.1 $85.6 $87.0 $88.4 $98.7 $112.3\nFTE 474 488 494 525 543 543 536 524 529 541\n\n\n ESA/BEA Performance measure\n MEASURE: Timeliness: Reliability of delivery of economic data (number of scheduled releases issued on time)\n Year Status Actual Target\n FY 2010 Exceeded 61 55\n FY 2009 Met 56 57\n FY 2008 Met 571 58\n FY 2007 Met 54 54\n FY 2006 Met 54 54\n FY 2005 Met 54 54\n FY 2004 Met 54 54\n FY 2003 Met 48 48\n FY 2002 Met 50 50\n FY 2001 Met 100% 100%\n 1\tIn\n FY 2008, the Annual Industry Accounts statistical release was rescheduled from December 13, 2007 to January 29, 2008, in order to include\n important information from the Census 2006 Annual Survey of Manufactures (ASM). By delaying this release, BEA was able to provide a better\n product for BEA\xe2\x80\x99s data users, so this measure is considered \xe2\x80\x9cMet.\xe2\x80\x9d\n\n\n ESA/BEA Performance measure\n MEASURE: Relevance: Customer satisfaction with quality of products and services (mean rating on a 5-point scale)\n Year Status Actual Target\n FY 2010 Met 4.4 > 4.0\n FY 2009 Met 4.2 > 4.0\n FY 2008 Met 4.2 > 4.0\n FY 2007 Met 4.3 > 4.0\n FY 2006 Met 4.2 > 4.0\n FY 2005 Met 4.4 > 4.0\n FY 2004 Met 4.3 > 4.0\n FY 2003 Met 4.4 > 4.0\n FY 2002 Met 4.3 > 4.0\n FY 2001 N/A N/A1 > 4.0\n 1\tDue to budget constraints, the FY 2001 survey was postponed until FY 2002.\n\n\n\n\n 314 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n ESA/BEA Performance measure\n MEASURE: Accuracy: Percent of GDP estimates correct\n Year Status Actual Target\n FY 2010 Met 88% > 85%\n FY 2009 Met 88% > 85%\n FY 2008 Met 94% > 85%\n FY 2007 Met 93% > 85%\n FY 2006 Met 96% > 85%\n FY 2005 Met 96% > 85%\n FY 2004 Met 88% > 85%\n FY 2003 Met 88% > 85%\n\n\n ESA/BEA Performance measure\n MEASURE: Improving GDP and the economic accounts1\n Year Status Actual Target\n FY 2010 Met All strategic plan milestones completed Completion of strategic plan milestones\n FY 2009 Met Completed all major milestones Completion of strategic plan milestones\n FY 2008 Met Completed all major milestones Completion of strategic plan milestones\n FY 2007 Met Completed all major milestones Completion of strategic plan milestones\n FY 2006 Met Completed all major milestones Completion of strategic plan milestones\n FY 2005 Met Completed all major milestones Completion of strategic plan milestones\n FY 2004 Met Completed all major milestones Completion of strategic plan milestones\n FY 2003 Met Completed all major milestones Completion of strategic plan milestones\n 1\tThe BEA Strategic Plan and a report card of completed milestones are available in \xe2\x80\x9cAbout BEA\xe2\x80\x9d on www.bea.gov.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 315\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 1 . 4\nPosition manufacturers to compete in a global economy\n OBJECTIVE 1.4 RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding2 $106.4 $108.5 $111.3 $46.9 $102.7 $111.9 $107.3 $91.2 $112.6 $126.7\n FTE 87 89 89 68 71 67 67 68 70 79\n 1\tThereis only one outcome for this objective, so a separate Performance Outcome Resources table does not appear.\n 2\tPerformance actuals for this outcome lagged at least six months. Therefore, beginning with the FY 2005 PAR, NIST shifted to a format in which\n NIST reports actuals one year later. This data lag, coupled with the timeline for producing the PAR, precludes the reporting of actual FY 2010 data.\n With the exception of the number of clients, the data reported in the current year PAR are an estimate based on three-quarters of actual client\n reported impacts and one-quarter estimated client impacts.\n\n\nPerformance OUTCOME: Increase the productivity, profitability, and competitiveness of manufacturers (NIST)\n\n NIST Performance measure\n MEASURE: Number of clients served by MEP centers receiving federal funding\n Year Status Actual Target\n FY 2010 Exceeded 32,926 from FY 2009 funding 25,500 from FY 2009 funding\n FY 2009 Exceeded 31,961 from FY 2008 funding 14,500 from FY 2008 funding\n FY 2008 Exceeded 28,004 from FY 2007 funding 21,237 from FY 2007 funding\n FY 2007 Exceeded 24,722 from FY 2006 funding 16,440 from FY 2006 funding\n FY 2006 Slightly Below 16,448 from FY 2005 funding 16,640 from FY 2005 funding\n FY 2005 Exceeded 16,090 from FY 2004 funding 6,517 from FY 2004 funding\n FY 2004 Met 18,422 from FY 2003 funding 16,684 from FY 2003 funding\n FY 2003 Not Met 18,748 from FY 2002 funding 21,543 from FY 2002 funding\n\n\n NIST Performance measure\n MEASURE: Increased sales attributed to MEP centers receiving federal funding\n Year Status Actual Target\n FY 2010 Met $2,085M from FY 2009 funding1 $2,000M from FY 2009 funding\n FY 2009 Exceeded $3,610M from FY 2008 funding $630M from FY 2008 funding\n FY 2008 Exceeded $5,600M from FY 2007 funding $630M from FY 2007 funding\n FY 2007 Exceeded $3,100M from FY 2006 funding $591M from FY 2006 funding\n FY 2006 Exceeded $2,842M from FY 2005 funding $591M from FY 2005 funding\n FY 2005 Exceeded $1,889M from FY 2004 funding $228M from FY 2004 funding\n FY 2004 Exceeded $1,483M from FY 2003 funding $522M from FY 2003 funding\n FY 2003 Exceeded $953M from FY 2002 funding $728M from FY 2002 funding\n FY 2002 Not Met $636M from FY 2001 funding $708M from FY 2001 funding\n FY 2001 Met $698M from FY 2000 funding $670M from FY 2000 funding\n 1\tEstimate.\n\n\n\n\n 316 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NIST Performance measure\n MEASURE: Capital investment attributed to MEP centers receiving federal funding\n Year Status Actual Target\n FY 2010 Exceeded $1,565M from FY 2009 funding1 $1,000M from FY 2009 funding\n FY 2009 Exceeded $1,710M from FY 2008 funding $485M from FY 2008 funding\n FY 2008 Exceeded $2,190M from FY 2007 funding $955M from FY 2007 funding\n FY 2007 Exceeded $1,650M from FY 2006 funding $740M from FY 2006 funding\n FY 2006 Exceeded $2,248M from FY 2005 funding $740M from FY 2005 funding\n FY 2005 Exceeded $941M from FY 2004 funding $285M from FY 2004 funding\n FY 2004 Exceeded $912M from FY 2003 funding $559M from FY 2003 funding\n FY 2003 Met $940M from FY 2002 funding $910M from FY 2002 funding\n FY 2002 Not Met $680M from FY 2001 funding $913M from FY 2001 funding\n FY 2001 Met $873M from FY 2000 funding $864M from FY 2000 funding\n 1\tEstimate.\n\n\n\n\n NIST Performance measure\n MEASURE: Cost savings attributed to MEP centers receiving federal funding\n Year Status Actual Target\n FY 2010 Met $1,149M from FY 2009 funding1 $1,000M from FY 2009 funding\n FY 2009 Exceeded $1,410M from FY 2008 funding $330M from FY 2008 funding\n FY 2008 Exceeded $1,440M from FY 2007 funding $521M from FY 2007 funding\n FY 2007 Exceeded $1,100M from FY 2006 funding $405M from FY 2006 funding\n FY 2006 Exceeded $1,304M from FY 2005 funding $405M from FY 2005 funding\n FY 2005 Exceeded $721M from FY 2004 funding $156M from FY 2004 funding\n FY 2004 Exceeded $586M from FY 2003 funding $353M from FY 2003 funding\n FY 2003 Exceeded $681M from FY 2002 funding $497M from FY 2002 funding\n FY 2002 Not Met $442M from FY 2001 funding $576M from FY 2001 funding\n FY 2001 Not Met $482M from FY 2000 funding $545M from FY 2000 funding\n 1\tEstimate.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 317\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nStrategic Goal 2\nPromote U.S. innovation and industrial competitiveness\n STRATEGIC GOAL 2 TOTAL RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $1,837.6 $2,000.7 $2,130.0 $2,100.9 $2,354.1 $2,607.6 $3,698.3 $3,701.2 $3,912.1 $7,334.2\nFTE 9,597 9,979 9,985 10,004 9,951 10,523 11,358 12,096 12,768 12,664\n1\tPrior\n year amounts differ from previous PARs because the Department and NIST shifted the outcome, \xe2\x80\x9cRaise the productivity and competitive-\n ness of small manufacturers (NIST)\xe2\x80\x9d from Strategic Goal 2 to Strategic Goal 1 beginning in FY 2008.\n\n\nstrategic O bjective 2 . 1\nAdvance measurement science and standards that drive technological change\n OBJECTIVE 2.1 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $712.6 $805.0 $841.5 $783.2 $775.8 $862.3 $783.7 $836.3 $894.5 $973.4\nFTE 3,120 3,142 3,153 3,041 2,867 2,829 2,824 2,866 2,912 2,935\n\n\nPerformance OUTCOME: Promote innovation, facilitate trade, and ensure public safety and security by strengthening the\nNation\xe2\x80\x99s measurement and standards infrastructure (NIST)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $502.1 $579.2 $614.1 $576.8 $621.6 $762.4 $662.4 $759.3 $812.4 $850.1\nFTE 2,685 2,707 2,725 2,672 2,503 2,550 2,566 2,673 2,721 2,734\n\n\n NIST Performance measure\n MEASURE: Qualitative assessment and review of technical quality and merit using peer review\n Year Status Actual Target\n FY 2010 Met Completed Complete annual peer review\n FY 2009 Met Completed Complete annual peer review\n FY 2008 Met Completed Complete annual peer review\n FY 2007 Met Completed Complete annual peer review\n FY 2006 Met Completed Complete annual peer review\n FY 2005 Met Completed Complete annual peer review\n FY 2004 Met Completed Complete annual peer review\n FY 2003 Met Completed Complete annual peer review\n FY 2002 Met Completed Complete annual peer review\n FY 2001 Met Completed Complete annual peer review\n\n\n\n\n 318 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NIST Performance measure\n MEASURE: Citation impact of NIST-authored publications\n Year Status Actual Target\n FY 2010 Met > 1.11 > 1.1\n FY 2009 Met > 1.1 > 1.1\n FY 2008 Met > 1.1 > 1.1\n FY 2007 Met >1.1 >1.1\n 1\tActual for this measure lags nine months. The actual shown here is based on FY 2009 data.\n\n\n NIST Performance measure\n MEASURE: Peer-reviewed technical publications produced\n Year Status Actual Target\n FY 2010 Slightly Below 1,243 1,300\n FY 2009 Met 1,463 1,275\n FY 2008 Met 1,271 1,100\n FY 2007 Met 1,272 1,100\n FY 2006 Met 1,163 1,100\n FY 2005 Met 1,148 1,100\n FY 2004 Not Met 1,070 1,300\n\n\n NIST Performance measure\n MEASURE: Standard Reference Materials (SRM) sold1\n Year Status Actual Target\n FY 2010 Met 31,667 31,000\n FY 2009 Slightly Below 29,769 31,000\n FY 2008 Met 33,373 31,000\n FY 2007 Met 32,614 30,000\n FY 2006 Met 31,195 30,000\n FY 2005 Met 32,163 29,500\n FY 2004 Met 30,490 29,500\n FY 2003 Not Met 1,214 1,360\n FY 2002 Met 1,353 1,350\n FY 2001 Met 1,335 1,315\n 1\tFrom FY 2000-FY 2003 this was SRMs available.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 319\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NIST Performance measure\n MEASURE: NIST-maintained datasets downloaded\n Year Status Actual Target\n FY 2010 Met 24,956,000 24,500,0001\n FY 2009 Met 226,000,000 200,000,000\n FY 2008 Exceeded 195,500,000 130,000,000\n FY 2007 Exceeded 130,000,000 80,000,000\n FY 2006 Met 94,371,001 80,000,000\n FY 2005 Met 93,305,136 80,000,000\n FY 2004 Exceeded 73,601,352 56,000,000\n1\tBeginning\n in FY 2010, NIST has revised the methodology for this measure by excluding the hundreds of millions of annual downloads associated\n with Web-based, time-related services which dominated the total number of downloads in previous years. This adjusted measure will more clearly\n demonstrate the use of NIST\xe2\x80\x99s other online datasets covering scientific and technical databases throughout the NIST laboratories.\n\n\n NIST Performance measure\n MEASURE: Number of calibration tests performed1\n Year Status Actual Target\n FY 2010 Met 17,697 15,000\n FY 2009 Met 18,609 15,000\n FY 2008 Exceeded 25,944 12,000\n FY 2007 Exceeded 27,489 12,000\n FY 2006 Met 3,026 2,700\n FY 2005 Met 3,145 2,700\n FY 2004 Met 3,376 2,800\n FY 2003 Met 3,194 2,900\n FY 2002 Met 2,924 2,900\n FY 2001 Met 3,192 3,100\n1\tFrom FY 2000-FY 2006, this measure reflected the number of items tested, an amount considerably lower than the number of items performed.\n\n\n\n\n 320 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Promote U.S. competitiveness by directing federal investment and R&D into areas of critical\nnational need that support, promote, and accelerate high-risk, high-reward research and innovation in the United States\n(NIST)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding N/A N/A N/A N/A N/A N/A N/A $54.5 $50.2 $77.3\n FTE N/A N/A N/A N/A N/A N/A N/A 71 72 80\n\n\n NIST Performance measure\n MEASURE: Cumulative number of TIP projects funded\n Year Status Actual Target\n FY 2010 Met 29 25\n FY 2009 Met 9 9\n\n\nPerformance OUTCOME: Increase public access to worldwide scientific and technical information through improved\nacquisition and dissemination activities (NTIS)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $34.7 $27.7 $27.7 $19.2 $15.9 $27.2 $27.9 $22.5 $31.9 $46.0\n FTE 196 186 181 165 157 144 131 122 119 121\n\n\n NTIS Performance measure\n MEASURE: Number of updated items available (annual)\n Year Status Actual Target\n FY 2010 Exceeded 969,473 765,000\n FY 2009 Met 893,138 745,000\n FY 2008 Met 813,775 725,000\n FY 2007 Met 744,322 665,000\n FY 2006 Met 673,807 660,000\n FY 2005 Met 658,138 530,000\n FY 2004 Met 553,235 525,000\n FY 2003 Met 530,910 520,000\n FY 2002 Met 514,129 510,000\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 321\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NTIS Performance measure\n MEASURE: Number of information products disseminated (annual)\n Year Status Actual Target\n FY 2010 Exceeded 50,333,206 33,000,000\n FY 2009 Exceeded 49,430,840 32,850,000\n FY 2008 Met 32,267,167 32,100,000\n FY 2007 Met 32,027,113 27,100,000\n FY 2006 Met 30,616,338 27,000,000\n FY 2005 Met 26,772,015 25,800,000\n FY 2004 Exceeded 25,476,424 18,000,000\n FY 2003 Exceeded 29,134,050 17,000,000\n FY 2002 Met 16,074,862 16,000,000\n\n\n NTIS Performance measure\n MEASURE: Customer satisfaction\n Year Status Actual Target\n FY 2010 Met 98% 95-98%\n FY 2009 Met 98% 95-98%\n FY 2008 Met 96% 95-98%\n FY 2007 Met 98% 95-98%\n FY 2006 Met 98% 95-98%\n FY 2005 Met 98% 98%\n FY 2004 Slightly Below 96% 98%\n FY 2003 Slightly Below 97% 98%\n FY 2002 Met 98% 97%\n\nThe Department discontinued the following outcome (and its corresponding measures) in FY 2007. However, since the funding amounts\nfactor into the total for this objective and strategic goal, this PAR shows those amounts for informational purposes. Measures and targets\nfor previous years appear in the FY 2007 PAR.\n\n\nPerformance OUTCOME: Accelerate private investment in and development of high-risk, broad-impact technologies (NIST)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $175.8 $198.1 $199.7 $187.2 $138.3 $72.7 $93.4 N/A N/A N/A\n FTE 239 249 247 204 207 135 127 N/A N/A N/A\n\n\n\n\n 322 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 2 . 2\nProtect intellectual property and improve the patent and trademark system\n OBJECTIVE 2.2 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $1,007.5 $1,099.5 $1,190.9 $1,233.3 $1,508.4 $1,674.4 $1,766.4 $1,852.5 $1,856.4 $1,939.0\n FTE 6,258 6,593 6,581 6,694 6,825 7,446 8,291 8,962 9,594 9,431\n\n\nPerformance OUTCOME: Optimize patent quality and timeliness (USPTO)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $887.3 $976.6 $1,019.6 $1,059.3 $1,245.8 $1,347.9 $1,506.8 1,616.1 1,629.2 $1,702.2\n FTE 5,316 5,720 5,815 5,899 6,021 5,994 7,073 7,934 8,565 8,446\n\n\n USPTO Performance measure\n MEASURE: Final rejection/allowance compliance rate\n Year Status Actual Target\n FY 2010 Met 96.3% 94.5%1\n FY 2009 Met 94.4% N/A\n 1\tTheUSPTO is seeking input from stakeholders on how quality should be measured. A Federal Register Notice has been published, asking for\n stakeholders\xe2\x80\x99 comments on quality. New quality measures will be introduced based on this feedback. In the meantime, the Agency shifted\n resources from end-process review to place more emphasis on front-end quality and reviewing non-final actions in order to prevent unnecessary\n re-work. This approach also allows the Agency to focus on final disposition of applications including final rejections.\n\n\n USPTO Performance measure\n MEASURE: Non-final in-process examination compliance rate\n Year Status Actual Target\n FY 2010 Met 94.9% 94.0%1\n FY 2009 Met 93.6% N/A\n 1\tTheUSPTO is seeking input from stakeholders on how quality should be measured. A Federal Register Notice has been published, asking for\n stakeholders\xe2\x80\x99 comments on quality. New quality measures will be introduced based on this feedback. In the meantime, the Agency shifted\n resources from end-process review to place more emphasis on front-end quality and reviewing non-final actions in order to prevent unnecessary\n re-work. This approach also allows the Agency to focus on final disposition of applications including final rejections.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 323\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n USPTO Performance measure\n MEASURE: Patent average first action pendency (months)\n Year Status Actual Target\n FY 2010 Slightly Below 25.7 25.4\n FY 2009 Met 25.8 27.5\n FY 2008 Met 25.6 26.9\n FY 2007 Not Met 25.3 23.7\n FY 2006 Slightly Below 22.6 22.0\n FY 2005 Met 21.1 21.3\n FY 2004 Met 20.2 20.2\n FY 2003 Met 18.3 18.4\n FY 2002 Not Met 16.7 14.7\n FY 2001 Not Met 14.4 13.9\n\n\n USPTO Performance measure\n MEASURE: Patent average total pendency (months)\n Year Status Actual Target\n FY 2010 Slightly Below 35.3 34.8\n FY 2009 Met 34.6 37.9\n FY 2008 Met 32.2 34.7\n FY 2007 Met 31.9 33.0\n FY 2006 Met 31.1 31.3\n FY 2005 Met 29.1 31.0\n FY 2004 Met 27.6 29.8\n FY 2003 Met 26.7 27.7\n FY 2002 Met 24.0 26.5\n FY 2001 Met 24.7 26.2\n\n\n USPTO Performance measure\n MEASURE: Patent applications filed electronically\n Year Status Actual Target\n FY 2010 Slightly Below 89.5% 90.0%\n FY 2009 Met 82.4% 80.0%\n FY 2008 Met 71.7% 69.0%\n FY 2007 Met 49.3% 40.0%\n FY 2006 Exceeded 14.2% 10.0%\n Improved\n FY 2005 But Not Met 2.2% 4.0%\n\n Improved\n FY 2004 But Not Met 1.5% 2.0%\n\n FY 2003 Not Met 1.3% 2.0%\n\n\n\n\n 324 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance OUTCOME: Optimize trademark quality and timeliness (USPTO)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $120.2 $122.9 $119.4 $112.0 $144.9 $149.6 $191.2 $190.7 $184.0 $183.1\n FTE 942 873 719 693 730 665 897 887 890 840\n\n\n USPTO Performance measure\n MEASURE: Trademark first action compliance rate\n Year Status Actual Target\n FY 2010 Met 96.6% 95.5%\n FY 2009 Met 96.4% 95.5%\n FY 2008 Met 95.8% 95.5%\n FY 2007 Met 95.9% 95.5%\n FY 2006 Met 95.7% 93.5%\n FY 2005 Met 95.3% 92.5%\n FY 2004 Met 92.1% 91.7%\n\n\n USPTO Performance measure\n MEASURE: Trademark final compliance rate\n Year Status Actual Target\n FY 2010 Slightly Below 96.8% 97.0%\n FY 2009 Met 97.6% 97.0%\n\n\n USPTO Performance measure\n MEASURE: Trademark first action pendency (months)\n Year Status Actual Target\n FY 2010 Met 3.0 2.5\xe2\x80\x933.5\n FY 2009 Met 2.7 2.5-3.5\n FY 2008 Met 3.0 2.5-3.5\n FY 2007 Met 2.9 3.7\n FY 2006 Met 4.8 5.3\n FY 2005 Met 6.3 6.4\n FY 2004 Not Met 6.6 5.4\n FY 2003 Not Met 5.4 3.0\n FY 2002 Not Met 4.3 3.0\n FY 2001 Exceeded 2.7 6.6\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 325\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n USPTO Performance measure\n MEASURE: Trademark average total pendency excluding suspended and inter partes proceedings (months)\n Year Status Actual Target\n FY 2010 Met 10.5 13.0\n FY 2009 Met 11.2 13.0\n FY 2008 Met 11.8 14.3\n\n\n USPTO Performance measure\n MEASURE: Trademark applications processed electronically\n Year Status Actual Target\n FY 2010 Met 68.1% 65.0%\n FY 2009 Met 62.0% 62.0%\n\n\nPerformance OUTCOME: Provide domestic and global leadership to improve intellectual property policy, protection, and\nenforcement worldwide (USPTO)*\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding N/A N/A $51.9 $62.0 $117.7 $176.9 $68.4 $45.7 $43.2 $48.7\n FTE N/A N/A 47 102 74 787 321 141 139 145\n\n\n USPTO Performance measure\n MEASURE: Percentage of prioritized countries that have implemented at least 75% of action steps in the country-specific\n action plans toward progress along following dimensions:\n 1.\t Institutional improvements of IP office administration for advancing IPR\n 2.\t Institutional improvements of IP enforcement entities\n 3.\t Improvements in IP laws and regulations\n 4.\t Establishment of government-to-government cooperative mechanisms\n Year Status Actual Target\n FY 2010 Exceeded 75% 50%\n\n\n\n\n*\t Prior to FY 2010, this outcome was known as \xe2\x80\x9cImprove intellectual property and enforcement domestically and abroad.\xe2\x80\x9d\n\n\n\n\n 326 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 2 . 3\nAdvance global e-commerce as well as telecommunications and information services\n OBJECTIVE 2.3 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual1 Actual Actual Actual\n Funding $117.5 $96.2 $97.6 $84.4 $69.9 $70.9 $1,148.2 $1,012.4 $1,161.2 $4,421.8\n FTE 219 244 251 269 259 248 243 268 262 298\n 1\tIn FY 2007, $1,070.3 was provided to the newly formed Digital Television and Public Safety Program.\n\n\nPerformance OUTCOME: Ensure that the allocation of radio spectrum provides the greatest benefit to all people (NTIA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $21.5 $23.4 $24.5 $28.5 $30.4 $36.8 $38.9 $35.8 $37.3 $35.8\n FTE 133 141 147 159 169 162 154 168 162 1711\n 1\tEstimate.\n\n\n\n NTIA Performance measure\n MEASURE: Frequency assignment processing time (days)\n Year Status Actual Target\n FY 2010 Met 9 9 or fewer\n FY 2009 Met 9 9 or fewer\n FY 2008 Met 9 9 or fewer\n FY 2007 Met 9 9 or fewer\n FY 2006 Met 9 9 or fewer\n FY 2005 Met 10 12\n FY 2004 Met <12 12\n FY 2003 Met 15 15\n\n\n NTIA Performance measure\n MEASURE: Certification request processing time (months)\n Year Status Actual Target\n FY 2010 Exceeded .9 2 or fewer\n FY 2009 Met 2 2 or fewer\n FY 2008 Met 2 2 or fewer\n FY 2007 Met 4 4 or fewer\n FY 2006 Met 4 4 or fewer\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 327\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NTIA Performance measure\n MEASURE: Space system coordination request processing time\n Year Status Actual Target\n FY 2010 Exceeded 100% 90% in 14 days or fewer\n FY 2009 Met 98% 90% in 14 days or fewer\n FY 2008 Met 95% 90% in 14 days or fewer\n FY 2007 Met 97% 80% in 14 days or fewer\n FY 2006 Met 95% 80% in 14 days or fewer\n\n\n NTIA Performance measure\n MEASURE: Spectrum plans and policies processing time\n Year Status Actual Target\n FY 2010 Exceeded 11.6 days Comments in 15 days or fewer\n FY 2009 Exceeded 11 days Comments in 15 days or fewer\n FY 2008 Met 13.3 days Comments in 15 days or fewer\n FY 2007 Met 13.3 days Comments in 15 days or fewer\n FY 2006 Met 13 days Comments in 15 days or fewer\n\n\n NTIA Performance measure\n MEASURE: Milestones completed from the implementation plan of the President\xe2\x80\x99s Spectrum Policy Initiative\n Year Status Actual Target\n FY 2010 Exceeded 16 milestones 11 milestones\n FY 2009 Met 14 milestones 14 milestones\n FY 2008 Met 22 milestones 22 milestones\n FY 2007 Met 23 out of 29 milestones 23 out of 29 milestones\n FY 2006 Met 18 out of 22 milestones 18 out of 22 milestones\n\n\nPerformance OUTCOME: Promote the availability, and support new sources, of advanced telecommunications and\ninformation services (NTIA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual1 Actual1 Actual1 Actual Actual Actual Actual Actual Actual\nFunding $96.0 $72.8 $73.1 $55.9 $39.5 $34.1 $1,109.3 $976.6 $1,046.7 $97.9\nFTE 86 103 104 110 90 86 89 100 93 722\n1\tAmounts for FYs 2002-2004 include those for the discontinued outcome \xe2\x80\x9cIncrease competition within the telecommunications sector and promote\n universal access to telecommunications services for all Americans.\xe2\x80\x9d\n2 \tEstimate.\n\n\n\n\n 328 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NTIA Performance measure\n MEASURE: Support new telecom and information technology by advocating Administration views\n in number of FCC docket filings, and Congressional and other proceedings\n Year Status Actual Target\n FY 2010 Exceeded 17 dockets and proceedings 5 dockets and proceedings\n FY 2009 Exceeded 12 dockets and proceedings 5 dockets and proceedings\n FY 2008 Exceeded 11 dockets and proceedings 5 dockets and proceedings\n FY 2007 Exceeded 8 dockets and proceedings 5 dockets and proceedings\n FY 2006 Exceeded 12 dockets and proceedings 5 dockets and proceedings\n FY 2005 Met 5 dockets and proceedings 5 dockets and proceedings\n\n\n NTIA Performance measure\n measure: Number of Web site views for research publications1\n Year Status Actual Target\n FY 2010 Exceeded 928,000/quarter 240,000/quarter\n FY 2009 Met 225,000/quarter 225,000/quarter\n FY 2008 Exceeded 127,000/month 75,000/month\n FY 2007 Exceeded 105,000/month 75,000/month\n FY 2006 Exceeded 94,000/month 75,000/month\n 1\tIn\n FY 2009, data collection was changed from monthly to quarterly. There was no change in the measure and the amounts are comparable to\n previous years.\n\nThe Department added the following outcome in FY 2009 as a result of the influx of Recovery Act funding. Targets and actuals will not\nappear until FY 2011, however, funding began in FY 2009 and continued through FY 2010. Therefore the funding and FTE amounts are\nshown here while targets and actuals will appear in the FY 2011 PAR.\n\n\nPerformance OUTCOME: Ensure the effective implementation of the Broadband Technology Opportunities Program (NTIA)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding N/A N/A N/A N/A N/A N/A N/A N/A $77.2 $4,288.1\n FTE N/A N/A N/A N/A N/A N/A N/A N/A 7 55\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 329\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nStrategic Goal 3\nPromote environmental stewardship\n STRATEGIC GOAL 3 TOTAL RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $3,254.8 $3,398.4 $3,458.6 $3,802.0 $4,064.0 $4,306.5 $4,187.8 $4,234.4 $5,158.0 $5,781.7\nFTE 11,473 11,585 11,898 11,868 11,918 12,896 11,933 12,637 12,031 11,709\n\n\nstrategic O bjective 3 . 1\nProtect, restore, and manage the use of coastal and ocean resources\n OBJECTIVE 3.1 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $1,504.0 $1,334.2 $1,314.9 $1,268.5 $1,379.5 $1,363.2 $1,295.1 $1,354.1 $1,603.1 $1,778.4\nFTE 3,913 3,042 3,361 3,611 3,479 3,670 3,029 3,068 3,426 3,243\n\n NOAA Performance measure\n MEASURE: Fish stock sustainability index (FSSI)\n Year Status Actual Target\n FY 2010 Met 582.5 580\n FY 2009 Met 565.5 548.5\n FY 2008 Met 535 530.5\n FY 2007 Met 524 505\n\n\n NOAA Performance measure\n MEASURE: Percentage of living marine resources with adequate population assessments and forecasts\n Year Status Actual Target\n FY 2010 Met 34.7% 34.3%1\n FY 2009 Met 43.9% 42.1%\n FY 2008 Slightly Below 40.3% 41.1%\n FY 2007 Met 40.8% 40.0%\n FY 2006 Not Met 38.8% 41.3%\n1\t The drop in the target percentage is due to an increase of 125 protected living marine resource stocks, raising the total number of stocks from 478 to 603.\n\n\n\n\n 330 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Number of protected species designated as threatened, endangered, or depleted with stable or increasing population levels\n Year Status Actual Target\n FY 2010 Met 29 25\n FY 2009 Met 25 22\n FY 2008 Met 24 22\n FY 2007 Met 26 26\n FY 2006 Met 26 24\n\n\n NOAA Performance measure\n MEASURE: Number of habitat acres restored (annual/cumulative)1\n Year Status Actual Target\n FY 2010 Not Met 6,907/65,881 8,875 /67,849\n FY 2009 Met 9,232/58,974 9,000/58,742\n FY 2008 Exceeded 11,254/49,742 9,000/47,488\n FY 2007 Met 5,974/38,488 5,000/37,514\n FY 2006 Exceeded 7,598/32,514 4,500/29,416\n FY 2005 Exceeded 8,333/24,916 4,500/21,083\n FY 2004 Exceeded 5,563/16,583 3,700/14,780\n FY 2003 Exceeded 5,200/11,020 2,829\n 1\tDetermination of whether target was met or exceeded is based on annual amount, since that is what was done in that year.\n\n\n NOAA Performance measure\n MEASURE: Annual number of coastal, marine, and Great Lakes ecological characterizations that meet management needs\n Year Status Actual Target\n FY 2010 Slightly Below 48 50\n FY 2009 Met 50 50\n FY 2008 Met 45 45\n FY 2007 Met 27 27\n FY 2006 Met 62 53\n\n\n NOAA Performance measure\n MEASURE: Cumulative number of coastal, marine, and Great Lakes issue-based forecasting\n capabilities developed and used for management\n Year Status Actual Target\n FY 2010 Met 42 42\n FY 2009 Met 41 41\n FY 2008 Met 38 38\n FY 2007 Met 35 35\n FY 2006 Met 31 31\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 331\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Percentage of tools, technologies, and information services that are used by NOAA partners/customers\n to improve ecosystem-based management\n Year Status Actual Target\n FY 2010 Met 88% 86%\n FY 2009 Met 86% 86%\n FY 2008 Met 86% 86%\n FY 2007 Met 85% 85%\n\n\n NOAA Performance measure\n MEASURE: Annual number of coastal, marine, and Great Lakes habitat acres acquired or designated for long-term protection\n Year Status Actual Target\n FY 2010 Met 2,0001 2,000\n FY 2009 Met 2,247 2,000\n FY 2008 Exceeded 6,219 2,000\n FY 2007 Exceeded 3,020 2,000\n FY 2006 Exceeded > 86,000,0002 200,137\n1\tEstimate.\n2\tThe large FY 2006 actual reflects the new Northwest Hawaiian Islands Marine National Monument.\n\n\n\n\n 332 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 3 . 2\nAdvance understanding of climate variability and change\n OBJECTIVE 3.2 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $238.8 $312.0 $347.5 $239.5 $256.9 $236.1 $244.5 $271.8 $370.0 $343.3\n FTE 693 785 625 603 599 665 457 523 556 544\n\n NOAA Performance measure\n MEASURE: U.S. temperature forecasts (cumulative skill score computed over the regions where predictions are made)\n Year Status Actual Target\n FY 2010 Not Met 18 24\n FY 2009 Exceeded 27.5 20\n FY 2008 Exceeded 26 19\n FY 2007 Exceeded 29 19\n FY 2006 Exceeded 25 18\n FY 2005 Met 19 18\n FY 2004 Not Met 17 21\n FY 2003 Not Met 17 20\n FY 2002 Not Met 18 20\n FY 2001 Met 20 20\n\n\n NOAA Performance measure\n MEASURE: Uncertainty in the magnitude of the North American carbon uptake\n Year Status Actual Target\n FY 2010 Not Met 0.45 GtC/year1 0.40 GtC/year\n FY 2009 Met 0.40 GtC/year 0.30 GtC/year\n FY 2008 Met 0.40 GtC/year 0.40 GtC/year\n FY 2007 Met 0.40 GtC/year 0.40 GtC/year\n FY 2006 Met 0.40 GtC/year 0.40 GtC/year\n FY 2005 Met 0.40 GtC/year 0.48 GtC/year\n FY 2004 Met 0.50 GtC/year 0.70 GtC/year\n FY 2003 Not Met 0.80 GtC/year 0.50 GtC/year\n 1\tEstimate.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 333\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Uncertainty in model simulations of the influence of aerosols on climate\n Year Status Actual Target\n FY 2010 Met 18% improvement 15% improvement\n FY 2009 Met 20% improvement 20% improvement\n FY 2008 Met 15% improvement 15% improvement\n FY 2007 Met 10% improvement 10% improvement\n FY 2006 Met 10% improvement Establish 10% improvement\n\n\n NOAA Performance measure\n MEASURE: Error in global measurement of sea surface temperature\n Year Status Actual Target\n FY 2010 Met 0.50\xc2\xbaC 0.53\xc2\xbaC\n FY 2009 Met 0.50\xc2\xbaC 0.50\xc2\xbaC\n FY 2008 Met 0.50\xc2\xbaC 0.50\xc2\xbaC\n FY 2007 Not Met 0.53\xc2\xbaC 0.50\xc2\xbaC\n FY 2006 Not Met 0.53\xc2\xbaC 0.50\xc2\xbaC\n\n\n NOAA Performance measure\n MEASURE: Regionally focused climate impacts and adaptation studies communicated to decisionmakers\n Year Status Actual Target\n FY 2010 Met 41 assessments/evaluations 41 assessments/evaluations\n FY 2009 Met 37 assessments/evaluations 37 assessments/evaluations\n FY 2008 Met 37 assessments/evaluations 35 assessments/evaluations\n FY 2007 Met 32 assessments/evaluations 32 assessments/evaluations\n FY 2006 Met 33 assessments/evaluations 32 assessments/evaluations\n\n\n\n\n 334 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 3 . 3\nProvide accurate and timely weather and water information\n OBJECTIVE 3.3 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $1,376.0 $1,188.8 $1,284.1 $883.6 $898.1 $926.8 $946.7 $927.6 $1,010.8 $1,213.3\n FTE 5,997 5,100 4,912 4,760 4,654 4,907 4,708 5,241 4,687 4,627\n\n\n NOAA Performance measure\n MEASURE: Percentage of U.S. coastal states and territories demonstrating 20% or more annual improvement\n in resilience capacity to weather and climate hazards (%/year)\n Year Status Actual Target\n FY 2010 Met 29% 29%\n\n\n NOAA Performance measure\n MEASURE: Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93 Lead time (minutes)1\n Year Status Actual Target\n FY 2010 Met 142 12\n FY 2009 Met 12 12\n FY 2008 Exceeded 14 11\n FY 2007 Met 14 13\n FY 2006 Met 13 13\n FY 2005 Met 13 13\n FY 2004 Met 13 12\n FY 2003 Met 13 12\n FY 2002 Met 12 11\n FY 2001 Not Met 10 13\n 1\tPrior to FY 2008, these warnings were county-based rather than storm-based.\n 2\tEstimate.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 335\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93 Accuracy (%)1\n Year Status Actual Target\n FY 2010 Met 74%2 70%\n FY 2009 Slightly Below 66% 69%\n FY 2008 Met 72% 67%\n FY 2007 Met 80% 76%\n FY 2006 Slightly Below 75% 76%\n FY 2005 Met 76% 73%\n FY 2004 Met 75% 72%\n FY 2003 Met 79% 72%\n FY 2002 Met 76% 69%\n FY 2001 Slightly Below 67% 68%\n1\tPrior to FY 2008, these warnings were county-based rather than storm-based.\n2\tEstimate.\n\n\n\n\n NOAA Performance measure\n MEASURE: Severe weather warnings for tornadoes (storm-based) \xe2\x80\x93 False alarm rate (%)1\n Year Status Actual Target\n FY 2010 Slightly Below 74%2 72%\n FY 2009 Not Met 77% 72%\n FY 2008 Met 75% 74%\n FY 2007 Met 75% 75%\n FY 2006 Slightly Below 79% 75%\n FY 2005 Slightly Below 77% 73%\n Improved But\n FY 2004 Not Met 74% 70%\n\n FY 2003 Not Met 76% 72%\n FY 2002 Slightly Below 73% 71%\n FY 2001 Met 73% 73%\n1\tPrior to FY 2008, these warnings were county-based rather than storm-based.\n2\tEstimate.\n\n\n\n\n 336 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Severe weather warnings for flash floods (storm-based) \xe2\x80\x93 Lead time (minutes)\n Year Status Actual Target\n FY 2010 Exceeded 76 381\n FY 2009 Exceeded 73 49\n FY 2008 Exceeded 77 48\n FY 2007 Exceeded 61 48\n FY 2006 Met 49 48\n FY 2005 Met 54 48\n Improved But\n FY 2004 Not Met 47 50\n\n FY 2003 Not Met 41 47\n FY 2002 Met 52 45\n FY 2001 Met 46 45\n 1\tBeginning in FY 2008, NOAA shifted to a storm-based method of forecast as opposed to a county-based method. The reason for this change was\n to reduce the area warned to provide more specific information to emergency responders and the public. By reducing the areal coverage of our\n flash flood warnings, the emergency management community can more effectively target mitigation and response efforts. This new storm-based\n verification methodology is more stringent and results in lower metric scores for lead time and accuracy for flash floods. Flash flood performance\n data using this new verification methodology was computed beginning in FY 2008 with actuals and targets being reported from FY 2010 onward.\n\n\n NOAA Performance measure\n MEASURE: Severe weather warnings for flash floods (storm-based) \xe2\x80\x93 Accuracy (%)\n Year Status Actual Target\n FY 2010 Met 82% 72%1\n FY 2009 Met 91% 90%\n FY 2008 Met 91% 90%\n FY 2007 Met 91% 89%\n FY 2006 Met 89% 89%\n FY 2005 Met 89% 89%\n FY 2004 Met 89% 88%\n FY 2003 Met 89% 87%\n FY 2002 Met 89% 86%\n FY 2001 Met 86% 86%\n 1\tBeginning in FY 2008, NOAA shifted to a storm-based method of forecast as opposed to a county-based method. The reason for this change was\n to reduce the area warned to provide more specific information to emergency responders and the public. By reducing the areal coverage of our\n flash flood warnings, the emergency management community can more effectively target mitigation and response efforts. This new storm-based\n verification methodology is more stringent and results in lower metric scores for lead time and accuracy for flash floods. Flash flood performance\n data using this new verification methodology was computed beginning in FY 2008 with actuals and targets being reported from FY 2010 onward.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 337\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Hurricane forecast track error (48 hours) (nautical miles)1\n Year Status Actual Target\n FY 2010 Exceeded 702 107\n FY 2009 Met 86 108\n FY 2008 Exceeded 86 110\n FY 2007 Met 97 110\n FY 2006 Met 97 111\n FY 2005 Met 101 128\n FY 2004 Exceeded 94 129\n FY 2003 Met 107 130\n FY 2002 Met 122 142\n1\tBeginning in FY 2007, NOAA reported the previous year\xe2\x80\x99s results because data is not available until February and good estimates cannot be\n determined.\n2\tReflects FY 2009 target and actual results. FY 2010 results not available until February 2011.\n\n\n\n\n NOAA Performance measure\n MEASURE: Hurricane forecast intensity error (48 hours) (difference in knots)1\n Year Status Actual Target\n FY 2010 Not Met 182 13\n FY 2009 Slightly Below 14 13\n1\tNOAA reports the previous year\xe2\x80\x99s results because data is not available until February and good estimates cannot be determined.\n2\tReflects FY 2009 target and actual results. FY 2010 results not available until February 2011.\n\n\n NOAA Performance measure\n MEASURE: Accuracy (%) (threat score) of day 1 precipitation forecasts\n Year Status Actual Target\n FY 2010 Met 35% 30%\n FY 2009 Met 30% 29%\n FY 2008 Met 33% 29%\n FY 2007 Met 31% 29%\n FY 2006 Met 30% 28%\n FY 2005 Met 29% 27%\n FY 2004 Met 29% 25%\n FY 2003 Met 29% 25%\n FY 2002 Exceeded 26% 17%\n FY 2001 Not Met 19% 22%\n\n\n\n\n 338 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Winter storm warnings \xe2\x80\x93 Lead time (hours)\n Year Status Actual Target\n FY 2010 Exceeded 21 15\n FY 2009 Met 18 16\n FY 2008 Met 17 15\n FY 2007 Exceeded 19 15\n FY 2006 Met 17 15\n FY 2005 Met 17 15\n FY 2004 Met 15 14\n FY 2003 Met 14 13\n FY 2002 Met 13 13\n FY 2001 Met 13 13\n\n\n NOAA Performance measure\n MEASURE: Winter storm warnings \xe2\x80\x93 Accuracy (%)\n Year Status Actual Target\n FY 2010 Met 90% 90%\n FY 2009 Slightly Below 90% 91%\n FY 2008 Slightly Below 89% 90%\n FY 2007 Met 92% 90%\n FY 2006 Slightly Below 89% 90%\n FY 2005 Met 91% 90%\n FY 2004 Met 91% 89%\n FY 2003 Met 90% 88%\n FY 2002 Met 89% 86%\n FY 2001 Met 90% 86%\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 339\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nstrategic O bjective 3 . 4\nSupport safe, efficient, and environmentally sound commercial navigation\n OBJECTIVE 3.4 RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding $136.0 $249.9 $261.6 $192.8 $175.0 $198.7 $189.4 $195.0 $240.2 254.3\nFTE 870 942 1,004 716 749 774 691 774 738 710\n\n\n NOAA Performance measure\n MEASURE: Reduce the hydrographic survey backlog within navigationally significant areas (square nautical miles surveyed per year)\n Year Status Actual Target\n FY 2010 Not Met 4,395 5,160\n FY 2009 Met 3,219 3,000\n FY 2008 Not Met 2,127 2,500\n FY 2007 Exceeded 3,198 1,350\n FY 2006 Met 2,851 2,500\n FY 2005 Met 3,079 2,700\n Improved But\n FY 2004 Not Met 2,070 2,290\n\n FY 2003 Not Met 1,762 2,100\n\n\n NOAA Performance measure\n MEASURE: Percentage of U.S. counties rated as fully enabled or substantially enabled with accurate positioning capacity\n Year Status Actual Target\n FY 2010 Met 79.0% 74.0%\n FY 2009 Met 72.0% 69.0%\n FY 2008 Met 60.2% 60.0%\n FY 2007 Met 51.6% 49.0%\n FY 2006 Met 43.3% 39.0%\n FY 2005 Met 32.2% 28.0%\n\n\n\n\n 340 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Marine wind speed accuracy (%)\n Year Status Actual Target\n FY 2010 Met 74% 69%\n FY 2009 Met 73% 69%\n FY 2008 Met 72% 68%\n FY 2007 Met 73% 68%\n FY 2006 Not Met 55% 58%\n FY 2005 Met 57% 57%\n FY 2004 Met 57% 57%\n FY 2003 Met 57% 54%\n\n\n NOAA Performance measure\n MEASURE: Marine wave height accuracy (%)\n Year Status Actual Target\n FY 2010 Met 75% 74%\n FY 2009 Met 77% 74%\n FY 2008 Met 77% 73%\n FY 2007 Met 78% 73%\n FY 2006 Met 70% 68%\n FY 2005 Met 67% 67%\n FY 2004 Not Met 67% 69%\n FY 2003 Met 71% 66%\n\n\n NOAA Performance measure\n MEASURE: Aviation forecast accuracy for ceiling/visibility (3 mile/1,000 feet or less) (%)1,2\n Year Status Actual Target\n FY 2010 Met 66% 65%\n FY 2009 Slightly Below 63% 64%\n FY 2008 Slightly Below 62% 63%\n FY 2007 Met 62% 62%\n FY 2006 Not Met 43% 47%\n FY 2005 Met 46% 46%\n FY 2004 Slightly Below 45% 46%\n FY 2003 Met 48% 45%\n FY 2002 Not Met 13% 18%\n FY 2001 Not Met 18% 21%\n 1\tFrom FY 2000-FY 2002, NOAA used a different method to calculate accuracy\xe2\x80\x94targets were significantly lower than the current method.\n 2\tFrom FY 2007 on, the aviation measures were redefined to cover the IFR (Instrument Flight Rule) airspace instead of the limited IFR range of 5,000\n feet to three miles. This change was to increase the usefulness of the measure to the general and commercial aviation communities. This change\n required the measures to be re-baselined. While the numbers for accuracy and FAR appear to be reversed when comparing earlier years, they\n are actually measuring different things.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 341\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n NOAA Performance measure\n MEASURE: Aviation forecast FAR for ceiling/visibility (3 miles/1,000 feet or less) (%)1,2\n Year Status Actual Target\n FY 2010 Met 36% 42%\n FY 2009 Met 38% 43%\n FY 2008 Met 39% 44%\n FY 2007 Met 40% 45%\n FY 2006 Met 64% 65%\n FY 2005 Met 63% 68%\n FY 2004 Met 65% 70%\n FY 2003 Met 64% 71%\n FY 2002 Met 58% 52%\n FY 2001 Met 51% 51%\n 1\tFrom FY 2000-FY 2002, NOAA used a different method to calculate false alarm rate\xe2\x80\x94targets were significantly lower than the current method.\n 2\tFrom FY 2007 on, the aviation measures were redefined to cover the IFR (Instrument Flight Rule) airspace instead of the limited IFR range of 5,000\n feet to three miles. This change was to increase the usefulness of the measure to the general and commercial aviation communities. This change\n required the measures to be re-baselined. While the numbers for accuracy and FAR appear to be reversed when comparing earlier years, they\n are actually measuring different things.\n\n\nMission Support objective: Provide critical support for NOAA\xe2\x80\x99s mission (NOAA)*\n\n Performance OBJECTIVE RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding N/A $313.5 $250.5 $1,217.6 $1,354.5 $1,581.7 $1,512.1 $1,485.9 $1,933.9 $2,192.4\n FTE N/A 1,716 1,996 2,178 2,437 2,880 3,048 3,031 2,624 2,585\n\n\n\n\n*\t There are no GPRA measures for the Mission Support objective, since the activities of this objective support the outcomes of the four other NOAA\n objectives.\n\n\n 342 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nManagement Integration Goal\nAchieve organizational and management excellence\n MANAGEMENT INTEGRATION GOAL RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $60.6 $70.1 $71.2 $72.8 $70.9 $71.8 $72.2 $67.7 $80.9 $94.0\n FTE 310 319 326 309 292 315 302 297 294 341\n\n\nPerformance outcome: Ensure effective resource stewardship in support of the Department\xe2\x80\x99s programs (DM)\n\n Performance OUTCOME RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $40.7 $49.2 $49.2 $51.8 $49.5 $49.3 $49.6 $36.9 $43.1 $46.6\n FTE 171 183 186 181 177 177 178 173 164 188\n 1\tIn\n FY 2008, DM split its one performance outcome into three separate outcomes. All funding for FY 2001-FY 2007 is shown in this outcome. FTE is\n not split among the three outcomes.\n\n\n DM Performance measure\n MEASURE: Provide accurate and timely financial information and conform to federal standards, laws,\n and regulations governing accounting and financial management\n Year Status Actual Target\n \xe2\x97\x8f\xe2\x97\x8f One significant deficiency was not eliminated \xe2\x97\x8f\xe2\x97\x8f Eliminate any significant deficiency within 1 year of\n FY 2010 Not Met \xe2\x97\x8f\xe2\x97\x8f Completed FY 2010 A-123 assessment determination\n of internal controls \xe2\x97\x8f\xe2\x97\x8f Complete FY 2010 A-123 assessment of internal controls\n \xe2\x97\x8f\xe2\x97\x8f Eliminate any significant deficiency within 1 year of\n \xe2\x97\x8f\xe2\x97\x8f Completed FY 2009 A-123 assessment of internal\n FY 2009 Not Met determination\n controls for financial reporting \xe2\x97\x8f\xe2\x97\x8f Complete FY 2009 A-123 assessment of internal controls\n \xe2\x97\x8f\xe2\x97\x8f The Department closed 70% of prior year financial \xe2\x97\x8f\xe2\x97\x8f Eliminate any significant deficiency within 1 year of\n systems audit findings determination\n FY 2008 Not Met \xe2\x97\x8f\xe2\x97\x8f Significant deficiency was not eliminated \xe2\x97\x8f\xe2\x97\x8f Complete FY 2008 A-123 assessment of internal controls\n \xe2\x97\x8f\xe2\x97\x8f Completed FY 2008 A-123 assessment of internal\n controls for financial reporting\n \xe2\x97\x8f\xe2\x97\x8f Significant deficiency was not eliminated \xe2\x97\x8f\xe2\x97\x8f Eliminate any significant deficiency within 1 year of\n \xe2\x97\x8f\xe2\x97\x8f Completed assessment of internal controls determination\n \xe2\x97\x8f\xe2\x97\x8f Completed migration of Commerce Business System \xe2\x97\x8f\xe2\x97\x8f Complete internal control and document review\n FY 2007 Not Met\n \xe2\x97\x8f\xe2\x97\x8f Complete FY 2007 A-123 assessment of internal controls\n \xe2\x97\x8f\xe2\x97\x8f Migrate Commerce Business System (CBS) to an all\n Web-based architecture\n Reportable condition not eliminated \xe2\x97\x8f\xe2\x97\x8f Eliminate any reportable condition within 1 year of\n determination\n FY 2006 Not Met\n \xe2\x97\x8f\xe2\x97\x8f 95% of management with access to the CRS have\n financial data/reports by the 15th of month\n FY 2005 Not Met Reportable condition not eliminated Eliminate any reportable condition\n FY 2004 Met 100% 100%\n FY 2003 Met 100% 100%\n FY 2002 Met 100% 100%\n FY 2001 Met 100% 100%\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 343\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\n DM Performance measure\n MEASURE: Effectively use commercial services management\n Year Status Actual Target\n \xe2\x97\x8f\xe2\x97\x8f Maintained and monitored existing activities, \xe2\x97\x8f\xe2\x97\x8f Increase use of competition by 2%, measured by\n however, no new cost comparisons were permitted procurement dollars awarded\n FY 2010 N/A under this year\xe2\x80\x99s appropriation language, therefore \xe2\x97\x8f\xe2\x97\x8f Decrease procurement dollars awarded on a cost-\n the result is considered not applicable reimbursement, time and materials, and labor hours\n contracts by 10%\n \xe2\x97\x8f\xe2\x97\x8f Due to change in Administration, all new competitive Use business process re-engineering or similar\n sourcing comparisons have been placed on hold. initiatives to identify operational efficiency and\n FY 2009 Met\n The same is true for the Green Plan. effectiveness opportunities\n \xe2\x97\x8f\xe2\x97\x8f 2009 FAIR Act Inventory filed timely with OMB\n Completed several feasibility studies in FY 2008 and Use business process re-engineering, feasibility\n FY 2008 Met planned several more for FY 2009 studies, and/or similar initiatives to identify operational\n efficiency and effectiveness opportunities\n Bureaus identified FY 2008 feasibility studies which Update and/or continue to implement FY 2006 plan to\n were submitted as part of the Green Plan1 conduct feasibility studies of Department commercial\n FY 2007 Met\n functions to determine potential new competitions/\n studies in the outyears\n Green Plan1 submitted to OMB on 9/28/2006 Finalize new green competition plan based on 08/2005\n FY 2006 Met\n CFO council outcome\n Complete feasibility studies for 168 FTE to determine\n FY 2005 Met Feasibility studies nominated for 168 FTE\n 2005-2006 studies\n FY 2004 Met New FAIR inventory guidance developed Multi-year plan under development\n FY 2003 Not Met Completed competitions on 6.6% Complete competitions on 10%\n FY 2002 Not Met Completed competitions on 1% Complete competitions on 5%\n FY 2001 Met Commercial inventory \xe2\x80\x93 submitted 6/30/2001 Commercial inventory \xe2\x80\x93 completed by 6/30/2001\n1\tGreen Plan will lay out the Departmental short and long-range plans to conduct feasibility studies of all major commercial (and available) functions\n\n and will identify approved FY 2006-2007 competitions.\n\n\n DM Performance measure\n MEASURE: Obligate funds through performance-based contracting (% of eligible service contracting $)\n Year Status Actual Target\n FY 2010 Not Met 37% 50%\n Improved But\n FY 2009 Not Met 45% 50%\n\n FY 2008 Not Met 28% 50%\n FY 2007 Not Met 28% 40%\n FY 2006 Not Met 30% 50%\n FY 2005 Not Met < 50% 50%\n FY 2004 Met 42% 40%\n FY 2003 Not Met 24% 30%\n FY 2002 Met 31% 25%\n FY 2001 Met 25% 10%\n\n\n\n\n 344 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance outcome: Ensure retention of highly qualified staff in mission-critical positions (DM)\n\n Performance OUTCOME RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding N/A N/A N/A N/A N/A N/A N/A $2.1 $2.1 $2.1\n FTE N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A\n 1\tIn\n FY 2008, DM split its one performance outcome into three separate outcomes. All funding for FY 2002-FY 2007 is shown in the first outcome\n \xe2\x80\x9cEnsure effective resource stewardship in support of the Department\xe2\x80\x99s programs.\xe2\x80\x9d All FTE is shown in the first outcome.\n\n\n DM Performance measure\n MEASURE: Acquire and maintain diverse and highly qualified staff in mission-critical occupations\n Year Status Actual Target\n \xe2\x97\x8f\xe2\x97\x8f Produced competency models for four mission- \xe2\x97\x8f\xe2\x97\x8f Have new competency models in place for three\n critical occupations mission-critical occupations for use in workforce\n \xe2\x97\x8f\xe2\x97\x8f Established hiring process baseline at 133 days recruitment, training, and development activities\n \xe2\x97\x8f\xe2\x97\x8f Trained 98 ALDP, ELDP, and APCP participants via \xe2\x97\x8f\xe2\x97\x8f Meet or exceed the 80-day hiring goals mandated\n leadership development programs, and 181 employ- by OPM\n FY 2010 Met ees via the Careers in Motion Program \xe2\x97\x8f\xe2\x97\x8f Train up to 50-70 participants on leadership develop-\n \xe2\x97\x8f\xe2\x97\x8f Integrated Commerce Learning Center in program ment programs via ALDP, ELDP, and APCP, and 180-\n administration to enhance measurement of results 200 participants via Careers in Motion\n \xe2\x97\x8f\xe2\x97\x8f Integrate Commerce Learning Center in program\n administration to enhance tracking and progress\n monitoring\n \xe2\x97\x8f\xe2\x97\x8f Competency models in place for four series includ- \xe2\x97\x8f\xe2\x97\x8f Have new competency models in place for three\n ing budget analyst, meteorologist, oceanographer, mission-critical occupations for use in workforce\n and hydrologist recruitment, training, and development activities\n \xe2\x97\x8f\xe2\x97\x8f Average time to fill of 31 days for non-SES candi- \xe2\x97\x8f\xe2\x97\x8f Meet or exceed the 45-day hiring goals mandated\n FY 2009 Exceeded\n dates by OPM\n \xe2\x97\x8f\xe2\x97\x8f 100 trainees graduated from leadership development \xe2\x97\x8f\xe2\x97\x8f Train up to 50-60 participants on leadership develop-\n programs ment programs via ALDP, ELDP, and APCP\n \xe2\x97\x8f\xe2\x97\x8f Department employees nationwide applied to ALDP \xe2\x97\x8f\xe2\x97\x8f Open ALDP to Department employees nationwide\n \xe2\x97\x8f\xe2\x97\x8f Delivered a total of four competency models for the \xe2\x97\x8f\xe2\x97\x8f Have new competency models in place for three\n economist, acquisition, mathematical statistician, mission-critical occupations for use in applicant\n and chemist series selections and training and development decisions\n FY 2008 Exceeded\n \xe2\x97\x8f\xe2\x97\x8f Exceeded the OPM 45-day-time-to-hire standard \xe2\x97\x8f\xe2\x97\x8f Meet or exceed the 45-day hiring goals mandated\n with an average fill time of 31 days for non-SES by OPM\n vacancies\n \xe2\x97\x8f\xe2\x97\x8f Trained post-secondary internship program appli- \xe2\x97\x8f\xe2\x97\x8f Improve recruitment strategies via targeted activi-\n cants to increase applicant pools ties\n FY 2007 Met \xe2\x97\x8f\xe2\x97\x8f Trained managers to make better hiring decisions \xe2\x97\x8f\xe2\x97\x8f Assist managers in making better selections\n \xe2\x97\x8f\xe2\x97\x8f Trained employees in project management to close \xe2\x97\x8f\xe2\x97\x8f Close skill gaps\n skill gaps\n \xe2\x97\x8f\xe2\x97\x8f Marketed job vacancies to organizations via auto- \xe2\x97\x8f\xe2\x97\x8f Improve recruitment strategies via targeted activi-\n mated hiring system ties\n FY 2006 Met\n \xe2\x97\x8f\xe2\x97\x8f Participated in career fairs and special programs \xe2\x97\x8f\xe2\x97\x8f Assist managers in making better selections\n \xe2\x97\x8f\xe2\x97\x8f Conducted training of managers and employees \xe2\x97\x8f\xe2\x97\x8f Close skill gaps\n \xe2\x97\x8f\xe2\x97\x8f Improved from 28 to 29% \xe2\x97\x8f\xe2\x97\x8f Improve representation in underrepresented groups\n FY 2005 Met\n \xe2\x97\x8f\xe2\x97\x8f Maintained 30 day fill-time \xe2\x97\x8f\xe2\x97\x8f Maintain 30 day fill-time\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 345\n\x0cA P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance outcome: Acquire and manage technology resources to support program goals (DM)\n\n Performance OUTCOME RESOURCES1\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\nFunding N/A N/A N/A N/A N/A N/A N/A $3.7 $7.6 $9.1\nFTE N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A\n1\tIn\n FY 2008, DM split its one performance outcome into three separate outcomes. All funding for FY 2002-FY 2007 is shown in the first outcome\n \xe2\x80\x9cEnsure effective resource stewardship in support of the Department\xe2\x80\x99s programs.\xe2\x80\x9d All FTE is shown in the first outcome.\n\n\n DM Performance measure\n MEASURE: Improve the management of information technology\n Year Status Actual Target\n \xe2\x97\x8f\xe2\x97\x8f For the year, IT investments had cost/schedule \xe2\x97\x8f\xe2\x97\x8f IT investments have cost/schedule overruns and\n overruns and performance shortfalls averaging less performance shortfalls averaging less than 10%\n than 10% \xe2\x97\x8f\xe2\x97\x8f Perform IT security compliance review of all\n \xe2\x97\x8f\xe2\x97\x8f Completed security assessments and vulnerability operating units, and 10 FISMA systems in CSAM\n assessments for all operating units. Submitted \xe2\x97\x8f\xe2\x97\x8f Deploy an enterprise-wide role-based cybersecurity\n findings and recommendations to operating units and training program\n OCIO for review \xe2\x97\x8f\xe2\x97\x8f Deploy national security and emergency network\n FY 2009 Met \xe2\x97\x8f\xe2\x97\x8f Implemented cybersecurity development program and initial operating capability\n graduated 20 candidates from the Department\xe2\x80\x99s first\n class. Enrolled candidates in the program\xe2\x80\x99s second\n class. More than eight candidates have obtained or\n are planning to obtain security-related certifications.\n \xe2\x97\x8f\xe2\x97\x8f Deployed national security and emergency network\n in the development environment. Received official\n approval to connect from Defense Intelligence Agency.\n \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less\n averaged under 10% than 10%\n FY 2009 Met \xe2\x97\x8f\xe2\x97\x8f CSAM C&A enhancements were deployed \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems\n \xe2\x97\x8f\xe2\x97\x8f IT security compliance in all operating units and five certified and accredited with acceptable, quality\n FISMA systems in CSAM were reviewed documentation in place\n \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less\n than 10% than 10%\n FY 2008 Met \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems\n certified and accredited with acceptable, quality certified and accredited with acceptable, quality\n documentation in place documentation in place\n \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less\n than 10%. than 10%\n FY 2007 Met\n \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems\n certified and accredited certified and accredited\n \xe2\x97\x8f\xe2\x97\x8f Cost overruns and performance shortfalls less \xe2\x97\x8f\xe2\x97\x8f Cost/schedule overruns/performance shortfalls less\n than 10% than 10%\n FY 2006 Met\n \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems \xe2\x97\x8f\xe2\x97\x8f All national-critical and mission-critical systems\n certified and accredited certified and accredited\n \xe2\x97\x8f\xe2\x97\x8f Cost overruns and performance shortfalls less \xe2\x97\x8f\xe2\x97\x8f Cost overruns and performance shortfalls less\n FY 2005 Met\n than 10% than 10%\n\n\n\n\n 346 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A P P E N D I X A : P E R F O R M A N C E A N D R E S O U R C E TA B L E S\n\n\n\n\nPerformance outcome: Promote improvements to Department programs and operations by identifying and completing work\nthat (1) promotes integrity, efficiency, and effectiveness; and (2) prevents and detects fraud, waste, and abuse (OIG)\n\n Performance OUTCOME RESOURCES\n (Dollars in Millions)\n FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010\n Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual\n Funding $19.9 $20.9 $22.0 $21.0 $21.4 $22.5 $22.6 $25.0 $28.1 $36.2\n FTE 139 136 140 128 115 138 124 124 114 161\n\n\n OIG Performance measure\n MEASURE: Percentage of OIG recommendations accepted by Departmental and bureau management\n Year Status Actual Target\n FY 2010 Met 95% 95%\n FY 2009 Met 97% 95%\n FY 2008 Met 100% 95%\n FY 2007 Met 96% 95%\n FY 2006 Met 96% 95%\n FY 2005 Met 99% 90%\n FY 2004 Met 98% 90%\n FY 2003 Met 97% 90%\n\n\n OIG Performance measure\n MEASURE: Dollar value of financial benefits identified by the OIG\n Year Status Actual Target\n FY 2010 Exceeded $47.8M $38.0M\n FY 2009 Exceeded $126.9M $32.0M\n FY 2008 Exceeded $113.0M $28.0M\n FY 2007 Exceeded $51.7M $29.6M\n FY 2006 Met $34.2M $30.0M\n FY 2005 Exceeded $32.0M $23.0M\n FY 2004 Exceeded $26.0M $20.0M\n FY 2003 Exceeded $43.3M $20.0M\n\n\n OIG Performance measure\n MEASURE: Percentage of criminal and civil matters that are accepted for prosecution\n Year Status Actual Target\n FY 2010 Not Met 42% 75%\n FY 2009 Met 78% 63%\n FY 2008 Met 73% 63%\n FY 2007 Met 73% 63%\n FY 2006 Exceeded 91% 63%\n FY 2005 Exceeded 81% 62%\n FY 2004 Exceeded 67% 50%\n FY 2003 Met 50% 50%\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 347\n\x0cA P P E N D I X B : S TA K E H O L D E R S A N D C R O S S C U T T I N G P R O G R A M S\n\n\n\n\n S ta k e h olders and crosscutting programs\n\n\n\n\nT\xe2\x80\x8a\n he Department has numerous crosscutting programs involving multiple bureaus: other federal, state, and local agencies;\n\n\xe2\x80\x8a\n foreign government; and private enterprise. Federal programs dealing with economic and technological development,\n the natural environment, international trade, and demographic and economic statistics play a major role in advancing the\nwelfare of all Americans. The Department continues to work with other government agencies in furthering efforts in these areas for the\nAmerican public. Examples of crosscutting programs external to the Department\xe2\x80\x99s bureaus include the following federal, state, local, and\ninternational agencies:\n\n\n DEPARTMENT OF COMMERCE BUREAU OTHER FEDERAL AGENCIES\n ACTIVITIES And organizations1\n\n Chemical Weapons Convention compliance Department of Agriculture National Science Foundation\n\n Defense industrial base activities Department of Defense Small Business Administration\n\n Economic development Department of Education U.S. Postal Service\n\n Economic distress and recovery efforts Department of Energy Agency for Health Care Research and\n Quality\n Environmental programs Department of Health and Human\n Services Customs/Border and Transportation\n Export controls\n Security/Homeland Security\n Department of Homeland Security\n Homeland security\n Federal Aviation Administration\n Department of Housing and Urban\n Improvements to the environment\n Development Federal Bureau of Investigation\n Market access/improvements\n Department of Justice Food and Drug Administration\n Measurements and standards\n Department of Labor Bureau of Justice Statistics\n Minority-owned business development\n Department of State National Institutes of Health\n Patents and trademarks and intellectual property\n Department of Transportation Bureau of Transportation Statistics\n Research\n Department of the Treasury U.S. Coast Guard\n Telecommunications\n Agency for International Development Delta Regional Authority\n Technology transfer\n Appalachian Regional Commission Indian Tribes\n Tracking the U.S. economy through GDP and\n Central Intelligence Agency States\n other statistics\n Environmental Protection Agency Other Countries and Organizations\n Trade policies\n Federal Communications Commission European Patent Office\n\n National Aeronautics and Space\n Administration\n 1 Note: This is not an all-inclusive listing.\n\n\n\n\n 348 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c APPENDIX C: A ppendix C : M anagement C h allenges\n\n\n\n\n T H E I N S P E C T O R G E N E R A L\xe2\x80\x99 S S TAT E M E N T O F M A N AG E M E N T C H A L L E N G E S\n\n\n\n\n \xe2\x80\x8aA\xe2\x80\x8a\n s FY 2011 begins, advancing economic growth and creating job opportunities remain two of the Department of\n Commerce\xe2\x80\x99s overarching goals. For the upcoming fiscal year, the Department plans to spend about $9 billion\n on a wide range of programs and initiatives to meet these objectives, and the Office of Inspector General (OIG)\n continues to support its efforts through our audits, evaluations, and investigations. In late November 2010, we will issue our\n annual report on the Department\xe2\x80\x99s top management challenges which will be addressed in the FY 2011 PAR. The purpose of\n the report is to identify what we consider, from our oversight perspective, the most significant management and performance\n issues facing the Department in the coming fiscal year.\n\n In the November 2010 report, we will identify eight management challenges. Several of these challenges are longstanding\n concerns. They include strengthening Department-wide information security, managing the cost and technical performance\n of the National Oceanic and Atmospheric Administration\xe2\x80\x99s (NOAA) environmental satellite acquisition programs, and\n reducing patent and trademark application backlogs. At the same time, the Department must address new concerns, such\n as overseeing the rapid disbursement of billions of dollars to stimulate the economy as a result of the American Recovery\n and Reinvestment Act (ARRA) of 2009. We are performing an ongoing body of work, and planning additional efforts, to help\n the Department effectively manage these and other emerging issues. The table on the following page compares the FY 2011\n management challenges with those identified in FY 2010.\n\n Additionally, as required by the Office of Management and Budget (OMB) Circular A-136, our top management challenges\n report from FY 2010 briefly assessed the Department\xe2\x80\x99s progress in addressing the challenges identified. This appendix\n contains a summary of the challenges from FY 2010 along with the Department\xe2\x80\x99s response describing the actions it has\n taken. Our FY 2010 management challenge report is available on our Web site at www.oig.doc.gov.\n\n The management challenges are not easily resolved; they may require the Department or its operating units to invest in new\n technologies or substantially change such areas as procedures, program activities, or organizational culture. To completely\n address a management challenge typically takes several fiscal years. The Department has been proactive in its efforts to\n address several challenges we have identified in previous years. For example, we recognize the commitment of the Secretary\n and his staff to the Office of the Secretary\xe2\x80\x99s restructuring initiatives, including establishing new leadership positions for\n performance management and program evaluation. Additionally, the Secretary recently began a comprehensive review of\n Department-wide acquisition processes to identify ways to strengthen and improve the quality of its acquisitions. While\n these initiatives should help to improve performance accountability, sustained leadership attention is needed to ensure\n desired results are achieved.\n\n We welcome the opportunity to discuss these challenges and any comments you might have.\n\n Inspector General\n Todd J. Zinser\n\n Continued on next page\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 349\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n Comparison of FY 2011 and FY 2010 Top Management Challenges\n Challenge FY 2011 FY 2010\n Department-wide: Strengthening Information Security 3 3\n NOAA: Development and Acquisition of Environmental Satellite Programs 3 3\n Department-wide: Managing Acquisition and Contract Operations1 3 3\n ARRA: Enhancing Accountability and Transparency 3 3\n USPTO: Improving the Efficiency of the Patent Office and Mitigating Financial Vulnerabilities 3 3\n NOAA: Protecting Environment while Promoting Fishing Industry 3\n Department-wide: Commerce Headquarters Renovation 3 3\n Census: 2020 Decennial Planning 3 3\n Census: Mitigate Issues with the 2010 Decennial 3\n Department-wide: Centralized Management and Oversight 3\n NOAA: Headquarters Leadership Structure 3\n Department-wide: Major Systems Acquisitions 3\n Department-wide: Grant and Contract Management Workforce 3\n 1\t This FY 2011 challenge combines elements from two FY 2010 challenges: Major Systems Acquisitions and Grant and Contract Management\n Workforce.\n\n\n\n T O P M anagement C H A L L E N G E S F O R F Y 2 0 1 0\n\n\n Challenge 1: Decennial Census \xe2\x80\x93 Mitigate Issues with the\n 2010 Decennial While Addressing Future Census Challenges\n\n The mission of the 2010 Census\xe2\x80\x94to succeed in counting each of the over 300 million people in more than 130 million households\n in the United States once, only once, and in the right place\xe2\x80\x94is a massive undertaking with many moving parts. With a projected\n life-cycle cost estimate of $14.7 billion, the Bureau must integrate 44 separate operations (with a total of some 9,400 program- and\n project-level activities).\n\n U.S. residents have by now received their forms, and the Census Bureau has built an extensive communications campaign and\n partnership program to encourage a prompt and accurate decennial response. The rate at which responses are returned will be\n critical in determining the overall cost of the census. Households that do not mail back forms will be visited by an enumerator during\n nonresponse follow-up (NRFU) operations. The most expensive decennial operation, NRFU is now estimated to cost $2.3 billion.\n The Bureau cannot predict with certainty the public\xe2\x80\x99s response rate and thus the total number of housing units that will have to be\n visited during this phase. Census estimates that costs will increase by about $85 million for every percentage point of addresses that\n census takers have to visit.\n\n While much of the Bureau\xe2\x80\x99s plan appears to be on schedule, the efficiency and accuracy of NRFU are at some risk, and final decennial\n costs remain uncertain. The Bureau\xe2\x80\x99s ability to manage NRFU effectively, and thus control its cost, hinges on two systems: the paper-\n based operations control system (PBOCS) and the Decennial Applicant, Personnel, and Payroll System (DAPPS). Described by the Bureau\n as the \xe2\x80\x9cnerve center\xe2\x80\x9d of its field offices, PBOCS manages enumerator assignments and provides current information on enumerator\n productivity. DAPPS supports recruiting, applicant, personnel, and payroll processing and is therefore also critical to the smooth\n functioning of NRFU. Both systems support smaller early field operations such as those in rural areas where Census leaves a form\n\n\n\n 350 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nfor households to mail back (known as update/leave), doorstep interviews occurring in places such as Native American reservations\n(update/enumerate), and counting residents living in group situations and nontraditional households (group quarters enumeration,\nservice-based enumeration, and enumeration of transitory locations). Both systems have experienced problems in testing and, more\nimportantly, during field operations.\n\nCensus is on a very tight schedule to complete the PBOCS capabilities needed for NRFU and to resolve existing problems. Once NRFU\nbegins, the system has no margin for error. Yet PBOCS development and testing remain behind schedule, and frequent outages and\nslow performance are impacting early operations. If not revamped for NRFU, these problems place the schedule and cost of this\nmassive operation at serious risk. As a core requirement with a high level of uncertainty late in the decennial life cycle, PBOCS is one\nof the most significant decennial challenges facing the Department. While DAPPS also experienced outages and slow performance in\nearly operations, a recent hardware upgrade appears to have significantly improved performance.\n\nTo contain decennial costs, better management of census fieldwork is essential. We found inefficiencies in wages, travel, and training\nduring the address canvassing operation. Given the significantly larger scale of NRFU, Census must have effective internal controls in\nplace and ensure that managers meticulously follow them during this operation.\n\nCalendar year 2010 is also a critical time for the 2020 Census. The Bureau must begin to develop its 2020 decennial Census plans even\nthough its workforce is already stretched thin by 2010 operations. Our work throughout the decade demonstrates that Census needs\nto identify more cost-effective approaches to the decennial and seriously consider using such alternatives as administrative records,\nthe Internet, and targeted address canvassing. These and other possible approaches could contain costs while increasing accuracy\nand efficiency.\n\nChallenge 2: IT Security \xe2\x80\x93 Continue Enhancing the Department\xe2\x80\x99s Ability\nto Defend its Systems and Data Against Increasing Cyber Security Threats\n\nCyber attacks and other security threats persistently challenge the Department in ensuring information confidentiality, integrity, and\navailability. Commerce continues to invest in and otherwise enhance IT security, but more work is needed. The annual Performance\nand Accountability Report has reported IT security as a material weakness since FY 2001. Based on our FY 2009 FISMA assessments,\nwe again recommended\xe2\x80\x94and the Department agreed\xe2\x80\x94that the material weakness remain until more improvements are made.\n\nWe completed two United States Patent and Trademark Office (USPTO) assessments during this reporting period. While both\nrevealed improvements, we did not have sufficient evidence of consistent, effective security practices to support removing USPTO\xe2\x80\x99s\nIT security material weakness. However, USPTO\xe2\x80\x99s management concluded that IT security issues had been resolved and did not\nreport the material weakness in its FY 2009 PAR.\n\nOur evaluations have focused on the Department\xe2\x80\x99s process for planning, implementing, and assessing security controls, including\ncontinuous monitoring, for the more than 300 systems employed by various operating units (including USPTO), each with its own\nmanagement structure. We found deficiencies in security planning (including defining security requirements and implementing\ncontrols), assessments (leaving risks inadequately understood), vulnerability remediation (through required plans of action and\nmilestones), and continuous monitoring. In recent years we have increased our efforts to independently assess technical security\ncontrols and have consistently found vulnerabilities requiring remediation.\n\nWe also found, in an FY 2009 audit, that the Department needs to improve the development, guidance, and performance management\nof its IT security workforce. The Department has taken positive steps in response, including plans to enhance employee development\nand training as well as to require professional certifications for employees with significant IT security responsibilities.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 351\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n Challenge 3: NOAA Environmental Satellites \xe2\x80\x93 Effectively Manage Technical, Budgetary, and\n Governance Issues Surrounding the Acquisition of NOAA\xe2\x80\x99s Two Environmental Satellite Systems\n\n The National Oceanic and Atmospheric Administration (NOAA) is modernizing its environmental monitoring capabilities, in part by\n spending an estimated total of nearly $20 billion on two critical satellite systems: the Joint Polar Satellite System (JPSS) and the\n Geostationary Operational Environmental Satellite-R Series (GOES-R). Both JPSS\xe2\x80\x99 predecessor program, the National Polar-orbiting\n Operational Environmental Satellite System (NPOESS), and GOES-R have a history of cost overruns, schedule delays, and reduced\n performance capabilities.\n\n As a result of the fall 2009 decision to significantly restructure the NPOESS program, JPSS was established as NOAA\xe2\x80\x99s component\n of the polar environmental satellite system, which is designed to provide global environmental data to monitor Earth, support the\n Nation\xe2\x80\x99s economy, and protect lives and property. JPSS is intended to meet a portion of the requirements originally established\n under the NPOESS program. NPOESS was managed jointly by NOAA, the National Aeronautics and Space Administration (NASA),\n and the Department of Defense, with NOAA and Defense equally sharing NPOESS costs. Under the restructuring, NOAA/NASA and\n Defense will acquire satellites separately. The life-cycle cost estimate for JPSS is $11.9 billion.\n\n At its 1995 inception, NPOESS planned to purchase six satellites at a $6.5 billion cost, with a first launch in 2008. But problems\n with a key sensor raised costs and delayed the date of the first launch, even as the number of satellites in the system was reduced to\n four. In March 2009, with estimated life-cycle costs totaling $14 billion, the first launch was delayed to 2014 because of continuing\n sensor problems; the NASA-led NPOESS Preparatory Project (NPP) launch date was also delayed, from 2010 to 2011. NPP was\n planned as a risk-reduction effort to test NPOESS\xe2\x80\x99 new instruments in flight, but will now be used operationally as a gap-filler\n between the current NOAA polar-orbiting operational environmental satellite and the first JPSS satellite.\n\n The transition to the restructured program will continue into FY 2011. The JPSS program will continue to develop instruments\n needed to fulfill NOAA\xe2\x80\x99s responsibilities. The JPSS management structure will be similar to GOES-R, in which NOAA manages the\n overall program with assistance from NASA. NOAA will acquire two JPSS satellites and will continue climate sensor acquisitions\n under the NOAA climate program. Defense is evaluating the best approach for maintaining continuity of its polar satellites. It is\n critical that NOAA and Defense implement their satellite programs on schedule to reduce the risk of gaps in coverage.\n\n Budget increases, capability reductions, and delays have also plagued the GOES-R program. The projected cost has increased\n from $6.2 billion to $7.7 billion; a major sensor was removed; the number of satellites to be purchased was reduced from four\n to two; and the launch readiness dates for the first two satellites have slipped by 6 months to October 2015 and February 2017.\n The GOES-R system is intended to offer an uninterrupted flow of high-quality data for short-range weather forecasting and\n warning, as well as provide climate research data through 2028. Working with NASA, NOAA is responsible for managing the\n entire program and for acquiring the ground segment, which is used to control satellite operations and to generate and distribute\n instrument data products.\n\n According to program documentation, overall GOES-R program acquisition is on track and within budget to meet the revised launch\n schedule. However, any further delays in the satellite\xe2\x80\x99s launch readiness will increase NOAA\xe2\x80\x99s risk of not meeting its requirement to\n have an on-orbit spare and two operational GOES satellites available to monitor the Pacific and Atlantic basins in 2015.\n\n Both the JPSS and GOES-R programs will continue to require close oversight to minimize further disruption to programs and\n prevent any satellite coverage gaps, which could compromise the United States\xe2\x80\x99 ability to forecast weather and monitor climate.\n Such a compromise would have serious consequences for the Nation\xe2\x80\x99s safety and security.\n\n\n\n\n 352 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nChallenge 4: American Recovery and Reinvestment Act \xe2\x80\x93 Meet the Challenges of\nAccountability and Transparency with Effective Oversight of Program Performance,\nCompliance, Spending, and Reporting\n\nThe Department continues to implement programs under the American Recovery and Reinvestment Act (ARRA) of 2009, which\nprovided Commerce with $7.9 billion. The Office of Inspector General (OIG) ARRA oversight priorities include agency and recipient\nreporting, the Broadband Technology Opportunities Program (BTOP), and National Institute of Standards and Technology (NIST)\nand NOAA construction contracts and grants.\n\nThe sheer amount of ARRA money received by the Department, coupled with the act\xe2\x80\x99s unique requirements, makes ensuring\nappropriate spending\xe2\x80\x94while also providing economic stimulus as quickly as possible\xe2\x80\x94a particular challenge. The Department\xe2\x80\x99s\noperating units must spend funds appropriately with little time to prepare for the many new and expanded programs, grants, and\ncontracts established under the act.\n\nAs of March 31, 2010, the Department had obligated approximately $2.8 billion and spent approximately $890 million. Although\nspending volumes are relatively low, all funds must be obligated by September 30, 2010. The need to distribute funds quickly to\ncommunities and businesses increases the risks of fraud, waste, and abuse in both ARRA-funded activities and those Department\noperations with more traditional funding mechanisms. ARRA operating units need sufficient resources to ensure that programs\ndeliver as intended, while providing oversight to guard against misuse of funds.\n\nThe ARRA substantially increases the Department\xe2\x80\x99s contracting and grants workload, particularly at NIST and NOAA, whose grants\nand contracts offices must manage not only the more than $1.4 billion they received under ARRA, but the $4.7-billion BTOP\nprogram as well. NTIA relies on NIST and NOAA for grants administration because it does not have its own staff and systems for\nthis purpose. Such increases place added pressure on these operating units to hire and retain qualified personnel.\n\nThe ARRA provided a relatively significant funding increase for NIST and NOAA construction projects. To complete them\nsuccessfully, NIST and NOAA need to dedicate construction managers across ARRA grants, contracts, and regular appropriation-\nfunded projects. Our oversight will focus on this high-risk area, including assessments of compliance with contract and grant\nrequirements and project results.\n\nWe recently reviewed the adequacy of key IT and operational controls of the primary (source) grants, contracts, and/or financial\nsystems for Census, the Economic Development Administration (EDA), NIST, NOAA, and NTIA to determine whether their controls\nensure that the Department reports posted on Recovery.gov are complete, accurate, and reliable. Generally, the Department\nsystems we reviewed had adequate data input/edit controls. However, the lack of automated data transmission or interfaces from\nthe grants systems to the Department\xe2\x80\x99s financial system could lead to errors.\n\nWithout additional automation, it will be more difficult for Department operating units to effectively manage their own reporting\nwith the increased volume of grants and contracts. Ensuring complete and accurate recipient reporting will also be difficult.\nAdditional automation would add reporting process efficiencies and would decrease the risks of reporting errors and delays.\n\nWe identified several concerns in the BTOP pre-award process and expressed concern with whether NTIA has identified and\nobtained needed resources to execute a grant program of BTOP\xe2\x80\x99s magnitude in the ARRA\xe2\x80\x99s timeframe. According to the act, BTOP\nmust spend all of its $4.7 billion in grant funding by September 30, 2010. Over the next 6 months, NTIA must address several\nchallenges as it concurrently monitors first-round grant awards and issues new awards. Challenges include (1) coordinating with\nother federal organizations supporting contract and grants management and (2) overseeing contractors implementing BTOP. In the\nnext semiannual period, we will issue a report detailing our concerns with BTOP\xe2\x80\x99s program management and pre-award process.\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 353\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n Challenge 5: USPTO \xe2\x80\x93 Address the Patent Office\xe2\x80\x99s Resource and Process Issues\n\n With an enacted budget of $1.7 billion in FY 2010 and a $2 billion FY 2011 budget request for patent operations, USPTO continues\n to struggle with increasing patent backlogs and the need to improve patent examination efficiency and quality.\n\n Since FY 2000, the number of patent examiners has more than doubled, from 2,900 to 6,200. But the length of time to process a\n patent has increased 40 percent from 25 to 35 months. Further, the backlog of applications awaiting review increased 139 percent,\n from 308,000 to 736,000.\n\n Over the years, USTPO has increased the number of patent examiners to address the growing backlog; however, simply adding to\n the workforce will not suffice. USPTO must consider how to reform and reengineer various components of the patent application\n process and must update its IT systems to ensure timely and high-quality application review.\n\n USPTO must also address funding mechanisms and fee structure challenges. USPTO is now funded entirely by application,\n maintenance, and other fees paid by patent and trademark applicants and owners. Congress sets many of the fees legislatively\n and establishes a ceiling, through the appropriations process, for the maximum amount of fees USTPO can spend in a given year.\n For FY 2011, the Administration proposes a 15-percent increase in certain patent fees to generate additional revenue to cover\n operating expenses. It also proposes that USTPO have authority to set fees and to establish an operating reserve to manage\n operations on a multiyear basis.\n\n In November 2008, our Top Management Challenges report suggested that USTPO\xe2\x80\x99s unique financing structure could become\n increasingly risky. Subsequent downturns in the U.S. and global economies quickly showed the structure\xe2\x80\x99s vulnerabilities. In the\n President\xe2\x80\x99s FY 2009 budget, USPTO estimated that it would collect over $1.8 billion in patent fees. However, by the end of that\n year, patent fee collections totaled just over $1.6 billion. Multiple factors contributed to the difference, including a reduction in the\n number of patent applications filed and a decline in maintenance fees collected for existing patents. To align expenses with actual\n patent fee collections, USTPO deferred hiring patent examiners and curtailed or suspended overtime and training. USPTO currently\n projects a FY 2010 surplus, but does not have authority to spend above its legislatively mandated appropriation ceiling.\n\n Potential fee shortfalls and fluctuations introduce inherent instability to the funding structure. This unstable structure increases\n the risk to USTPO\xe2\x80\x99s ability to operate effectively in current and future years, and its capacity to ensure that America\xe2\x80\x99s intellectual\n property (IP) system encourages investment in innovation and contributes to a strong global economy. More immediately, USTPO\n may not be able to process as many patent applications, which will add to the backlog instead of working toward reducing it.\n In effect, fewer maintenance fees will be available to collect in the future because fewer patents are being issued today.\n\n The Under Secretary of Commerce for IP, who is also the Director of USPTO, has publicly acknowledged these and other difficulties.\n A 5-year plan in the President\xe2\x80\x99s FY 2011 budget sets forth bold goals, such as reducing the time it takes for initial patent\n application review to 10 months (from the present 26 months) by FY 2013. Similarly, by FY 2014, USPTO\xe2\x80\x99s goal to decide a patent\n application is 20 months, down from the present 35.\n\n\n\n\n 354 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\n O t h er I ssues R e q uiring S ignificant M anagement A ttention\n\n\nCentralized Management and Oversight\n\nIt will be a complex, but necessary, organizational challenge for the Department to establish consistent internal operations to\nsupport all of its operating units. However, by doing so, it will be better positioned to provide efficient and reliable support to\nthe Secretary\xe2\x80\x99s priorities. The Department needs to continue its efforts to centralize management and oversight in order to make\nthe whole organization more efficient, consistent, and productive. The Department\xe2\x80\x99s operating units have long-standing and\nindependent business models, cultures, and practices. This decentralized structure has created obstacles to Department efforts to\nintegrate and administer internal processes like financial services, human resources, grant and contract management, and major\nacquisitions.\n\nFor example, the administrative management structure of the Department gives its Chief Information Officer (CIO) little authority\nover the IT security operations of the Department\xe2\x80\x99s operating units, making the cyber security challenge (Challenge 2, above) even\nmore difficult to manage. In addition, prior to the ARRA, the Department awarded an average of $1.5 billion in grants to over\n1,600 recipients annually and approximately $2 billion in contracts to nearly 6,000 contractors annually. Yet the Department\xe2\x80\x99s\nOffice of Acquisition Management has similarly limited authority over the various operating units\xe2\x80\x99 grants and procurement offices,\nresulting in inconsistent approaches to grant and contract management across the Department and adding to the difficulty in\noverseeing the effectiveness of these operations and programs.\n\nEfforts to achieve greater consistency have been slow. To illustrate, grants are managed by three of the Department\xe2\x80\x99s seven\ngrant-making agencies, which cross-service the other grant agencies using three different IT systems. The Department has been\nworking since 2003 to migrate all Department grants management operations to NOAA\xe2\x80\x99s Grants Online system, but this effort is\nnot projected to be completed until 2011.\n\nMajor Systems Acquisition\n\nIn a related challenge, the Department and its operating units must develop effective processes for planning, managing, and\noverseeing major system acquisitions. In FY 2010, the Department plans to spend $3 billion on IT investments (excluding grants).\nThe lack of cohesive policies and procedures for program and project management and oversight has contributed to many of these\nacquisitions\xe2\x80\x94such as the decennial handheld computers, as well as the NPOESS and GOES-R environmental satellite programs\xe2\x80\x94\nbecoming mired in cost overruns and developmental delays. This weakness also leaves the Department without adequate visibility\ninto progress and risks on major system acquisitions, which results in costly delays in identifying and correcting problems.\n\nThe Department has not been successful in updating its policies and oversight approach for major systems acquisition. The effort\nwas begun in 2006 in response to OIG and GAO recommendations, and while some improvements in Departmental oversight\nhave been made, formal policies and governance have yet to be established. The Deputy Secretary recently convened a steering\ncommittee to develop a Department-wide major investment oversight policy. Developing formal, unified policies and procedures\nfor complicated acquisitions will ultimately save time, money, and effort for all the Department\xe2\x80\x99s operating units. The Department\nmust exercise effective oversight to ensure system acquisitions are adequately planned and conducted according to best practices,\nand that they meet their cost, schedule and performance goals.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 355\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n Contracts and Grants Management Workforce\n\n Sufficient contracts and grants management workforce staffing has been a long-standing issue for the Department. Now, primarily\n as a result of the ARRA, the Department and its operating units issue more grants and contracts than ever.\n\n According to Department data, more than 1,500 Commerce employees hold certifications in various acquisition positions. While the\n Department does not track the number of grants personnel, we recently conducted a survey of the sufficiency and qualifications of\n the Recovery Act acquisition and grants workforce. Based on our survey, the grants workforce for the five Department operating\n units receiving ARRA funding totaled over 800 employees. This includes grant officers, grants program managers, and grants\n specialists.\n\n Despite these numbers, however, a serious shortage of skilled, specially trained staff hampers the Department\xe2\x80\x99s ability to\n appropriately issue and oversee grants and contracts. To ensure that grants and contracts are issued effectively and funds are\n properly spent, the Department must build up the size and skill of this workforce and improve its oversight processes.\n\n NOAA Headquarters Leadership Structure\n\n NOAA continues to face the challenge of carrying out its multifaceted mission to understand and predict changes in Earth\xe2\x80\x99s\n environment and to conserve and manage coastal and marine resources to meet our Nation\xe2\x80\x99s economic, environmental, and\n recreational needs. NOAA is realigning its headquarters leadership structure to streamline decision making and provide greater\n policy-level attention to day-to-day management and oversight of its programs. The realignment is intended to provide additional\n strategic guidance and leadership direction for NOAA\xe2\x80\x99s stewardship responsibilities, including fisheries.\n\n One of the key mission components is management, research, and services related to the protection and rational use of living\n marine resources. Our 2008 Top Management Challenges report discussed NOAA\xe2\x80\x99s need to balance conservation and commercial\n fishing. Over the past 18 months, we have issued several reports that demonstrate, in particular, the difficulty of achieving this\n balance. In a 2009 report, we evaluated a series of issues regarding the work and scientific methods of the National Marine\n Fisheries Service\xe2\x80\x99s (NMFS) Northeast Fisheries Science Center. In 2010, we issued three reports on the programs and operations of\n the Office of Law Enforcement within NMFS and NOAA\xe2\x80\x99s Office of General Counsel for Enforcement and Litigation.\n\n Department Headquarters Renovation\n\n The Department\xe2\x80\x99s headquarters, the General Services Administration (GSA)-owned Herbert C. Hoover Building in Washington,\n D.C., is undergoing an extensive renovation. The renovation will take about 13 years and is estimated to cost almost $960 million.\n The project is being funded mostly by GSA and the ARRA. Because of its scale, the renovation has the potential to disrupt\n Commerce operations and affect its workforce. Accordingly, the Department has a primary interest in ensuring that the renovation\n is completed on time, within budget, and free of fraud. To meet this goal, Commerce and GSA need to provide comprehensive\n oversight throughout the project\xe2\x80\x99s life cycle.\n\n\n\n\n 356 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\n T h e D epartment \xe2\x80\x99 s S tatement on A C T I O N S TA K E N\n\n to A D D R E S S T H E F Y 2 0 1 0 T O P M A N AG E M E N T C H A L L E N G E S\n\n\n\nEach year, the OIG reviews the Department\xe2\x80\x99s and its component bureaus\xe2\x80\x99 program activities to ensure that the management,\nfinancial, and operational activities are sound and meet the requirements of the Chief Financial Officers (CFO) Act and the\nGovernment Performance and Results Act (GPRA).\n\nThe emphasis by the President, the Office of Management and Budget (OMB), and Congress on improved government accountability\nunderscores the Department\xe2\x80\x99s resolve to enhance transparency within the Department while promoting improved efficiency and\neffectiveness. Progress in these endeavors requires strong commitment from the Department\xe2\x80\x99s senior leadership and staff at\nall levels.\n\nThe following are descriptions of Departmental and bureau actions to address the management challenges identified by the IG.\n\n\n\n T O P M anagement C H A L L E N G E S F O R F Y 2 0 1 0\n\n\nChallenge 1: Decennial Census \xe2\x80\x93 Mitigate Issues with the\n2010 Decennial While Addressing Future Census Challenges\n\nThe PBOCS received daily executive-level attention and review via the Application Readiness and Infrastructure Stability group\nas well as constant attention from the development team and technical contractors. In April, the Census Bureau implemented a\nnumber of fixes focusing on system stability with the help of high-level technical engineers from the vendors whose hardware and\nsoftware comprise the PBOCS. The Census Bureau also developed and implemented a contingency system outside of the PBOCS to\ntrack the shipping of questionnaires from the local census offices to the Paper Data Capture Centers.\n\nSince late May, the PBOCS was generally stable and highly productive for NRFU, NRFU re-interview, and the Vacant Delete Check\n(VDC) Operation. The Census Bureau checked in and data captured a total of more than 165 million questionnaires. The PBOCS\nVDC software was successfully used during field operations. VDC material printing and assignment preparation went smoothly,\nwith many offices completing material printing on the first day. VDC production completed over 8.7 million VDC cases.\n\nOn June 18, after careful consideration of the risks and costs, the decision was made to move Field Verification to the contingency\napplication developed in parallel with PBOCS. The contingency application was built on the control system that supported the\nCensus Coverage Measurement Independent Listing operation and made use of specific modules of the Census 2000 Operations\nControl System that supported the Field Verification. This decision allowed PBOCS developers to concentrate on VDC. The Field\nVerification contingency was used successfully for the field operation.\n\nThough the PBOCS system fell short in some areas, the Census Bureau completed the NRFU operation on time and under budget.\nAdditionally, initial quality indicators from the re-interview program were all positive compared to Census 2000. The Census\nBureau also would like to note that PBOCS was used quite successfully to assign and manage the work for a number of operations\nearlier this year: Enumeration of Remote Alaska, Group Quarters Advance Visit, Group Quarters Enumeration, Update/Leave, and\nUpdate/Enumerate. PBOCS reached a state of stability that allowed us to complete 2010 field operations successfully.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 357\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n Challenge 2: IT Security \xe2\x80\x93 Continue Enhancing the Department\xe2\x80\x99s Ability\n to Defend Its Systems and Data Against Increasing Cyber Security Threats\n\n The Department has continuously made strides in improving its IT security program over the years. In 2010, the Department\n developed an IT security strategic plan to strengthen its IT security infrastructure as an effort to institute a sustainable and\n consistent security practice to guard against the ever increasing cyber security threats. The following are some of the most\n significant IT security accomplishments achieved this year:\n\n \xe2\x97\x8f\xe2\x97\x8f Conducted rigorous IT security compliance reviews based on federal standards and guidelines, and previous OIG certification\n and accreditation recommendations; 90 percent of the Department\xe2\x80\x99s 280 information systems have authority to operate\n status.\n\n \xe2\x97\x8f\xe2\x97\x8f Implemented monthly reviews of Departmental information systems utilizing information within the automated IT\n security tool, Cyber Security Assessment and Management (CSAM). CSAM tracks progress in authority to operate status,\n contingency plans and tests, and privacy threshold analysis. Used scorecards to develop quarterly trend analysis, and\n provided them to the Department\xe2\x80\x99s CIO Council. Also implemented a Department-wide plans of action and milestones\n (POA&M) management monitoring program using CSAM. Dashboards are sent to operating unit CIOs tracking POA&M\n status. The implementation of this monitoring program has improved operating unit POA&M management.\n\n \xe2\x97\x8f\xe2\x97\x8f Worked with the Office of Financial Management to create the IT audit working group to address and resolve financial\n statements audit IT findings, develop enterprise-wide solutions, and prepare for future financial statements audits.\n The group developed and implemented a tracking and management procedure to provide monthly progress reports on\n the resolution of audit findings. By July 2010, the group reported nearly 84 percent of the 70 FY 2009 IT findings as\n closed.\n\n \xe2\x97\x8f\xe2\x97\x8f Addressed the findings and recommendations issued by the OIG in the Commerce Should Take Steps to Strengthen Its\n IT Workforce1, by developing and implementing a cyber security development program, a security role-based training\n program offered to candidates throughout the Department.\n\n \xe2\x97\x8f\xe2\x97\x8f Updated the IT security program policy by implementing a number of interim policies relating to areas such as remote\n access, password requirements, and peer-to-peer technology. Provided additional guidance on IT security roles and\n responsibilities in terms of the security authorization process and IT investment security authorization responsibilities.\n\n \xe2\x97\x8f\xe2\x97\x8f Coordinated with the Federation of Computer Incident Response Team (CIRT) and the U.S. Computer Emergency Readiness\n Team (US-CERT) at the Department of Homeland Security (DHS) to receive timely security alerts and notifications. As\n a result, the Department detected malicious cyber attacks against its network and developed plans to remediate and\n prevent potential threats and vulnerabilities.\n\n \xe2\x97\x8f\xe2\x97\x8f Signed a memorandum of agreement with DHS to begin implementing trusted Internet connections. The Department\n completed the compliance validation assessment for NOAA\xe2\x80\x99s efforts. The majority of the Department\xe2\x80\x99s operating units\n have completed a statement of work for the Managed Trusted Internet Protocol Service (MTIPS). MTIPS orders are\n expected to begin in FY 2011.\n\n USPTO continues to work diligently with the OIG and the Department to improve the Agency\xe2\x80\x99s overall IT security program.\n The OCIO revised IT Security policies and procedures to comply with new OMB FISMA guidance.\n\n\n\n\n 1 Commerce Should Take Steps to Strengthen Its IT Workforce Final Audit Report No. 19569-1, September 2009.\n\n\n\n\n 358 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nChallenge 3: NOAA Environmental Satellites \xe2\x80\x93 Effectively Manage Technical, Budgetary, and\nGovernance Issues Surrounding the Acquisition of NOAA\xe2\x80\x99s Two Environmental Satellite Systems\n\nNOAA and NASA are developing a Management Control Plan for JPSS, modeled on the GOES-R plan, to ensure that the appropriate\nmanagement and engineering oversight are applied to both. NOAA believes that both JPSS and GOES-R are on the path to achieve\nmission success through the following actions:\n\n\xe2\x97\x8f\xe2\x97\x8f Alignment with a proven acquisition center.JPSS and GOES-R are aligned with NASA\xe2\x80\x99s Goddard Space Flight Center as\n its acquisition center. By having NASA as NOAA\xe2\x80\x99s acquisition agent, NOAA will be implementing the satellite systems\n using the rigorous framework of NASA\xe2\x80\x99s disciplined, comprehensive strategic acquisition and program management\n process. NOAA structured acquisitions with significantly more direct government control with the government team\n supported by the depth and breadth of the technical and business resources of the NASA Goddard Space Flight Center.\n This construct builds upon the decades-long, successful partnership between NOAA and NASA.\n\n JPSS and GOES-R are budgeted with sufficient resources to\n\xe2\x97\x8f\xe2\x97\x8f Realistic budget at a cost confidence level of 80 percent.\n address known challenges as well as to address issues that may arise during development.\n\n Both JPSS and GOES-R are\n\xe2\x97\x8f\xe2\x97\x8f Clear lines of authority and responsibility (NOAA as lead with NASA as the acquisition agent).\n structured with clear lines of authority and accountability. Decision-making lies with the NOAA Deputy Under Secretary\n who receives technical and management input from NOAA and NASA. The JPSS programmatic decision-making has been\n streamlined to the NOAA Program Management Council which includes participation from senior executives at NASA\n Goddard Space Flight Center and NASA headquarters. The programs are structured so that technical and engineering\n decisions are dealt with by the technical experts at NASA Goddard Space Flight Center and the strategic direction is\n provided by a single organization\xe2\x80\x94NOAA. Therefore decision-making is not stymied because of conflicting priorities and/\n or budgeting strategies.\n\n\xe2\x97\x8f\xe2\x97\x8f Frequent independent reviews by technical teams. The NPOESS Independent Review Team lead by Tom Young will\n continue to provide frequent and in-depth reviews of the JPSS and GOES-R programs. The teams will provide input at\n all significant stages of the programs and provide their assessments so that cost, schedule, and technical issues are\n addressed as efficiently as possible and communicated to all appropriate levels of authority.\n\nChallenge 4: American Recovery and Reinvestment Act \xe2\x80\x93 Meet the Challenges of\nAccountability and Transparency with Effective Oversight of Program Performance,\nCompliance, Spending, and Reporting\n\nNIST supports the Department as it determines and implements the appropriate solutions for the automated transfer of data from\nthe bureaus to Department headquarters. NIST implemented an automated script to generate the Financial Activity Report data\nand to provide it to the NIST Budget Division, which must submit it manually to the Department. NIST has also implemented an\nautomated reconciliation process for ARRA reporting.\n\nNIST Business Systems Division began to repair a previously existing automated interface between NIST\xe2\x80\x99s Grants Management\nInformation System (GMIS) and the NIST Core Financial System in the third quarter of FY 2009. The fix was fully deployed in\nearly July 2010.\n\nIn addition, NIST implemented an automated data exchange for grants information between the NIST instance of its Core Financial\nSystem and NOAA\xe2\x80\x99s Grants Online system. This data exchange, which went live in early November 2009, is used for EDA and NTIA\ngrants for which NOAA performs grants administration and NIST performs financial accounting functions.\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 359\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n The NIST Grants and Agreements Management Division (GAMD) implemented the ARRA Recipient Reporting Standard Operating\n Procedures (Procedures) on September 12, 2009. These Procedures were created prior to the first reporting cycle in www.\n federalreporting.gov. Among other ARRA reporting requirements, the Procedures define material omissions and significant\n reporting errors, including the necessary actions GAMD staff need to take when confronted with these issues. In addition, the\n Acquisition Management Division (AMD) at NIST, in response to ARRA, issued seven Standard Operating Procedures (SOP) in May\n and June 2009 to ensure AMD\xe2\x80\x99s compliance with the review and reporting requirements in ARRA. The SOPs have been reviewed\n and revised as needed when new guidance is issued by the Department or OMB. AMD\xe2\x80\x99s SOPs also include the definition of\n material omissions and significant reporting errors and the necessary action to be taken by AMD staff.\n\n In order to ensure that the recipient\xe2\x80\x99s primary place of performance is captured for usaspending.gov, NIST has added the primary\n place of performance data field in its GMIS. This will mitigate any risk of inconsistencies between the data in federalreporting.\n gov and the data in usaspending.gov.\n\n Due to the small size of the workload related to BTOP grants, NIST is not pursuing an automated means of reviewing the data\n at this time. NIST had hired seven contractors to work solely on ARRA awards. With this additional staff, the data review in\n federalreporting.gov will be more accurate since there is a small workload per staff member. If it is determined that subsequent\n rounds of BTOP awards will increase the workload to a point where there could be a risk of failure to validate the data, then an\n automated system will be considered. Currently, an automated system other than federalreporting.gov is not needed.\n\n AMD also supports EDA and the National Technical Information Service (NTIS) with contracting services increasing the workload\n for AMD staff. Neither EDA nor NTIS has its own contracting staff. Due to the tremendous workload in FY 2010, AMD has awarded\n a contract for contract support for ARRA projects.\n\n NTIA is in the process of finalizing integrated and responsive systems, tools, and technical assistance resources that will assist the\n recipients, BTOP staff, and NOAA/NIST to report and track projects. These systems include Grants Online, GMIS, the Management\n Dashboard Tool (MDT), the Correspondence Tracker, and the Post Award Monitoring System (PAM). NTIA also established a\n link on each grant Web page to post performance reports. The Grants Online and GMIS systems, used by NOAA and NIST\n respectively, allow NOAA and NIST to manage and administer grants and will be accessible by recipients and program staff\n through a PAM interface. PAM, launched in July 2010, serves as a workspace and database that houses document libraries for\n most recipient data and will enable the transfer of files between recipients and the BTOP Program Office. MDT was delivered in\n March 2010 and provides recipient-specific program and portfolio views of grant status for use by BTOP senior leadership and\n program management. Program staff will also be able to use MDT as a monitoring tool that synthesizes information from various\n databases into a single user interface. The Correspondence Tracker was used in pre-award and will be leveraged for tracking\n post-award communications as well. During final development and implementation, manual procedures are in place to support\n staff in fulfilling post award responsibilities.\n\n Challenge 5: USPTO \xe2\x80\x93 Address the Patent Office\xe2\x80\x99s Resource and Process Issues\n\n One of USPTO\xe2\x80\x99s strategic goals and USPTO\xe2\x80\x99s High Priority Performance Goal identifies USPTO\xe2\x80\x99s commitment to reducing the backlog\n of unexamined patent applications. USPTO must reduce the time it takes for first action and final action on a patent application\n below the respective FY 2009 levels of 25.8 months and 34.6 months by the end of FY 2011. More importantly, USPTO will reduce\n the backlog of unexamined patents below the FY 2009 level of 735,961 by the end of FY 2011. There are a number of challenges\n involved, including application filings which may be largely driven by the economy, improvements in process efficiencies, and the\n hiring of new examiners.\n\n\n\n\n 360 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nThe following activities either have been or will be implemented to meet the management challenges to reform the patent\napplication process, update IT systems, and reduce pendency:\n\n\xe2\x97\x8f\xe2\x97\x8f USPTO and its patent professional employee union have agreed to a new production crediting system that places its\n emphasis on complete and thorough initial examination, decreases redundancy, and encourages quicker resolution of\n issues in the patent application process. This fundamental design is aimed at improving quality and reducing rework,\n thereby resulting in a decrease in the application backlog and pendency.\n\n\xe2\x97\x8f\xe2\x97\x8f USPTO proposed a new patent examination initiative that will provide applicants greater control over the speed with\n which their applications are examined and promote greater efficiency in the patent examination process, thus allowing\n USPTO to deploy its resources to better meet the needs of innovators. Under the Three-Track initiative, an applicant may\n request: Track I: prioritized examination within12 months; Track II: traditional examination under current procedures; or\n Track III: an applicant-controlled delay for up to 30 months prior to docketing for examination.\n\n\xe2\x97\x8f\xe2\x97\x8f USPTO is re-engineering its quality management program from top to bottom to focus on improving the process for\n obtaining the best prior art, as well as on improving the quality of the initial application and the entire examination and\n prosecution process. USPTO published requests for comments and conducted two public roundtable meetings soliciting\n input from the public with respect to methods that may be employed by applicants and USPTO to enhance the quality\n of issued patents, to identify appropriate indicia of quality, and to establish metrics for the measurement of the indicia.\n Based upon the inputs gathered, USPTO, in conjunction with Patent Policy Advisory Committee is now in the process of\n developing new quality metrics to be implemented in FY 2011. A key objective in the design of these new metrics is to\n place emphasis on monitoring quality at each major step in the prosecution and examination processes in order to reduce\n duplication of work and to increase examination efficiency and quality, and thereby reduce pendency.\n\n\xe2\x97\x8f\xe2\x97\x8f USPTO plans to hire, train, and retain highly skilled and diverse examiners. While continuing to draw candidates from\n traditional sources, it is expected that including IP experienced hires will assist in developing a balanced workforce, a\n lower attrition rate, and a faster transition to productivity for new hires. Recruiting candidates having significant IP\n experience will lead to a reduced training burden and increased ability to examine applications much sooner than a\n traditional hire.\n\nAdditional management challenges include funding authority that sustains operations on a multi-year basis and takes into\naccount revenue fluctuations and the need to better align fees to costs. USPTO strategic goals cannot be achieved without a\nreliable and sustainable source of funding. To accomplish these goals USPTO must have the authority to set the fees necessary to\nrecover the cost of operations, to spend fees collected on requirements-based operations, and to adapt and manage its funding\nrequirements as changes occur in internal and external conditions.\n\nUSPTO does not have sufficient resources to reduce the patent application backlog and achieve the stated pendency goals without\nan increase in funding. The Agency is seeking legislative authority to implement an interim increase in patent fees to recover\nthe cost of operations as defined in its requirements-based budgets. The interim fee increase is a bridge to provide the required\nresources until USPTO obtains fee-setting authority and develops a fee structure in cooperation with its stakeholders that will\nprovide sufficient financial resources to support its multi-year performance goals and objectives. USPTO must have a means to\nensure a sufficient and predictable revenue stream year over year. A temporary interim fee increase will not accomplish that goal\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 361\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n O t h er I ssues R e q uiring S ignificant M anagement A ttention\n\n\n Centralized Management and Oversight\n\n NOTE: This Management Challenge crosses multiple functional boundaries within the Office of the Secretary. It would be\n inappropriate for OAM to answer on behalf of other offices within the Office of the Secretary, or for the CFO/Assistant Secretary for\n Administration (ASA).\n\n Provided below is a discussion of efforts to address this challenge within the context of the Acquisition and Grants functional areas.\n\n Stakeholder Perspective\n\n \xe2\x97\x8f\xe2\x97\x8f Some acquisition customers are often confused by differing process requirements imposed by different Department\n Acquisition offices.\n\n \xe2\x97\x8f\xe2\x97\x8f Some acquisition customers are perplexed by differing customer service levels provided by differing Department Acquisition\n offices.\n\n \xe2\x97\x8f\xe2\x97\x8f Senior Departmental managers have differing perspectives on the roles and responsibilities of OAM.\n\n\n Background\n\n While the Department Senior Procurement Executive has responsibility for Departmental acquisitions and grants, she has extremely\n limited authority over the offices or employees who conduct these actions. This makes it difficult to implement Departmental\n initiatives desired by senior management. Bureau Acquisition and Grant offices report to bureau managers, not to the Department\n Senior Procurement Executive.\n\n Acquisition service delivery and related customer service standards are similarly difficult to manage from a Departmental\n perspective. Because of her lack of authority over Department Acquisition and Grant offices, Bureau Acquisition and Grant office\n managers operate autonomously.\n\n Actions Taken\n\n OAM has contracted with the Logistics Management Institute to perform an acquisition improvement study to evaluate all aspects\n of the Department acquisition system and make appropriate recommendations. Part of their task is to evaluate and recommend\n an appropriate organizational and functional structure that can better meet Department needs.\n\n Major Systems Acquisitions\n\n On June 18, 2010 Secretary Locke directed then Deputy Secretary Hightower and General Counsel Cameron Kerry to spearhead\n an immediate and comprehensive review of the acquisition processes across the Department. In his directive, he requested an\n evaluation of the current acquisition process to determine lessons learned, identify problems and inefficiencies with the current\n processes and implement best practices to ensure that effective processes are in place.\n\n The Acquisition Council, chaired by Scott Quehl, CFO and Assistant Secretary for Administration, is leading this effort. In July 2010,\n the Department engaged LMI, a government consulting firm, to undertake an Acquisition Improvement Study. As part of the study\n\n\n\n 362 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nand overall improvement effort, the Department is focused on improvements in several critical areas, including but not limited to,\nrequirements development, planning, workforce, and leveraging of spending across the Department.\n\nContracts and Grants Management Workforce\n\nAcquisition and contract management has been a consistent watch list item for IGs and the Government Accountability Office\n(GAO), as related government spending has ballooned in recent years. Spending on contracts government-wide, for example, has\nmore than doubled since 2000, from $208 billion to $538 billion in FY 2009, while the federal acquisition workforce has remained\nfairly constant. Roughly the same number of skilled professionals now oversees more than twice as many federal contract dollars\nas they did nine years ago, and the projects they support have greatly increased in complexity and risk. Shortfalls and failures in\nmajor systems acquisitions are all too common in federal programs. Contracts of all sizes and complexity are at risk for fraud and\nwaste because of poor oversight and lax controls.\n\nIn FY 2009, implementation of the ARRA significantly increased the workload of the Department Acquisition and Grants workforces,\nstraining an already over-burdened workforce to the breaking point.\n\nFY 2010 has seen even further increases in both the amount and complexity of work required of the Acquisition and Grants\nworkforces. OMB and Congressional requests for data, the submission of new reports, and other measures intended to increase\ntransparency all consume available time and resources. Little of the data required to respond to these requests is available within\nexisting information management systems. Without additional management support and resources, it is likely that the quality\nand timeliness of support provided to the Department by its operational contracting and grants offices will decline.\n\nActions Taken\n\nDepartment Acquisition and Grants offices have worked closely with the Office of Human Resources Management (OHRM) to\nattract and hire additional employees, employing a variety of hiring authorities. All appropriate authorities (Direct Hire, Rehired\nAnnuitants, Veteran Rehabilitation Act, etc.) are being utilized to bring contract specialists on board. The Department continues\nto struggle, as do other federal agencies, to identify and bring on board qualified candidates.\n\nWith the assistance of OHRM, OAM completed actions establishing a Department Federal Acquisition Intern program to attract\nand hire new employees into the Department acquisition workforce. The program developed was modeled after the Department\xe2\x80\x99s\nhighly successful Financial Management Intern program, administered by the Office of Financial Management. This initiative is\ndeemed essential to building the future acquisition workforce of the Department. Implementation of this initiative was planned\nfor FY 2010; however, funding constraints precluded participation in this program by any Department bureaus. If additional\nfunding is provided in FY 2011, OAM will again attempt to initiate a Federal Acquisition Intern program at the Department. OAM\nalso completed the following actions:\n\n\xe2\x97\x8f\xe2\x97\x8f Updated and published the Commerce Acquisition Regulation, which establishes uniform acquisition policies and guidance\n that implement and supplement the Federal Acquisition Regulation;\n\n\xe2\x97\x8f\xe2\x97\x8f Prepared and disseminated acquisition guidance to enhance processes to more effectively execute and administer contracts\n such as Procurement Memoranda, Commerce Acquisition Manual (CAM) Chapters and a Department Administrative Order;\n\n\xe2\x97\x8f\xe2\x97\x8f Revised the Acquisition Career Management program to update training and certification requirements of the Federal\n Acquisition Certification programs for Contracting Officer Representatives (COR) to include the role of Task Manager and to\n emphasize the need to appoint CORs during the first stage of the acquisition planning process as they are key members of the\n acquisition team;\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 363\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n \xe2\x97\x8f\xe2\x97\x8f Provided classroom and online training opportunities to the acquisition workforce for 21 different competency areas;\n\n\n \xe2\x97\x8f\xe2\x97\x8f Established guidance to define requirements and processes for certification under the Federal Acquisition Certification program\n for program/project managers, including those managing ARRA-funded projects;\n\n \xe2\x97\x8f\xe2\x97\x8f Provided policy and guidance for planning, awarding, and administering contractual actions and/or processing or administering\n interagency acquisitions involving funding provided in whole or in part under the ARRA;\n\n \xe2\x97\x8f\xe2\x97\x8f Provided guidance to ensure contracting offices conducted appropriate outreach activities and offered assistance to recipients\n of ARRA-funded contracts in meeting their reporting requirements, and tools to help contractors reduce the risk of miscoding\n or omitting required ARRA data;\n\n \xe2\x97\x8f\xe2\x97\x8f Developed an Acquisition Human Capital Plan which identifies the long-term recruitment, retention, and development needs\n of the acquisition workforce and a strategic action plan to address them;\n\n \xe2\x97\x8f\xe2\x97\x8f Revised the CAM chapter on the Purchase Card program to reflect best practices in oversight, including limiting card limits\n in excess of the micro-purchase limit to those individuals holding a Level I Contracting Officer warrant, establishing a formal\n oversight process, conducting oversight reviews, and utilizing the automated oversight tools available under the SmartPay2\n contract and task order. Enhanced purchase card oversight to enable automated notifications to purchase card holders and\n their supervisors of any duplicate or split purchases. Awarded a task order to have a contractor conduct regular purchase card\n oversight reviews; and\n\n \xe2\x97\x8f\xe2\x97\x8f Conducted Acquisition Management Reviews to evaluate the effectiveness and efficiency of the contracting offices and provided\n suggestions to improve any noted weaknesses or deficiencies. These are the first such reviews performed in over 10 years.\n\n As of August 26, 2010, a total of 1508 CORs, and 47 program/project managers have completed the requirements established\n in CAM chapter 1301.670 Contracting Officer Representative Certification Program, and CAM chapter 1301.671 Program/Project\n Manager Certification Program and have received Federal Acquisition Certification.\n\n But success in these efforts will not be enough to improve the Department\xe2\x80\x99s overall acquisition operations without commensurate\n success in hiring and retaining a qualified acquisition workforce. The pool of applicants for these jobs is not large, and the looming\n retirement of some 50 percent of the current federal acquisition workforce over the next 10 years may well push shortages beyond the\n critical point. Working jointly, OAM and OHRM have developed a comprehensive human capital strategy that (1) taps into all available\n recruiting initiatives, (2) explicitly defines what acquisition skills and competencies are needed and how they will evolve over the short\n and long-term, and (3) offers professional development and other incentives to attract and keep qualified candidates.\n\n But even if all of these measures succeed in attracting qualified candidates, the Department\xe2\x80\x99s Acquisition and Grants offices are limited\n in the number of employees they can hire by budgetary restrictions, and in NOAA\xe2\x80\x99s case, a statutory cap on overhead. While acquisition\n and grants processes can be continually improved, and current employees trained to acquire additional knowledge, the simple fact\n remains that the workforce has reached the point of workload saturation, and additional employees are required if the Department is\n to meet presidential mandates to improve the quality and effectiveness of the acquisitions and grants it awards and administers.\n\n An important clarification that merits discussion is the OIG\xe2\x80\x99s statement that more than 1,500 Department employees hold\n certification in various acquisition positions, and more than 800 employees are included in the grants workforce. It must be\n noted that this number includes Department employees who work in program offices, developing requirements, and overseeing\n contract and grant performance. It does not reflect the true size of the workforce challenged to prepare, award, and administer\n\n\n\n 364 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\ncontracts and grants valued in billions of dollars annually. This much smaller workforce consists of only 263 employees working\nin Department Acquisition offices and 172 employees working in Department Grants offices.\n\nNOAA Headquarters Leadership Structure\n\nNOAA headquarters proposed a reorganization of senior leadership to: (1) streamline decision-making and increase accountability,\nand (2) to clearly delineate authority and responsibilities. Under the proposed reorganization, the three key functions of the\nAgency\xe2\x80\x94conservation and management, environmental observation and prediction, and research and education\xe2\x80\x94align directly\nto the two Assistant Secretaries and the Chief Scientist to ensure comprehensive policy development around these mission\nrequirements. On December 11, 2009, Congress approved the reorganization proposal, and on July 14, 2010, the Department\napproved the Department Organization Order, the final step in the reorganization process.\n\nThe reorganization created the Principal Deputy Under Secretary for Oceans and Atmosphere, who focuses on implementing\npriorities across NOAA. NOAA now has two Assistant Secretaries: the Assistant Secretary for Conservation and Management who\ndrives policy and programs related to stewardship responsibilities, and the Assistant Secretary for Environmental Observations and\nPredictions who will drive policy and programs related to observation capabilities and environmental data. In addition, the Chief\nScientist position, which existed in past Administrations, has been recreated. Two additional key positions were also created:\n(1) the Director of Policy who will ensure better integration of the Under Secretary\xe2\x80\x99s policy and budget priorities, and (2) the\nDeputy Assistant Secretary for International Fisheries who will bridge the offices of NMFS and International Affairs and who will\nlead international fishery negotiations. Finally, the Deputy Under Secretary for Oceans and Atmosphere has been renamed as\nDeputy Under Secretary for Operations and will have authority to oversee NOAA operations critical to the Agency\xe2\x80\x99s management\nresponsibilities and mission execution. The new structure allows for greater leadership-level attention on policy priorities and\nreduces the number of direct reports to the Under Secretary from 28 to 6, vastly improving efficiency at the highest levels.\n\nAs a result of these changes, NOAA has already experienced improved strategic guidance and leadership direction. The Assistant\nSecretary for Conservation and Management has played a key role in the Deepwater Horizon Spill Response, particularly related to\ngathering and communicating scientific information\xe2\x80\x94one of NOAA Administrator Dr. Lubchenco\xe2\x80\x99s priorities for the Agency. In addition,\nthe Ocean Policy Task Force is about to release its final recommendations. The Director of Policy, Assistant Secretaries, Chief Scientist,\nand others will be critical for ensuring NOAA engages fully in interagency coordination and coastal and marine spatial planning\nnationwide. Another strategic priority for NOAA\xe2\x80\x94strengthening science across the Agency\xe2\x80\x94will be overseen by the Chief Scientist.\n\nNOAA also recently hired a new Assistant Administrator for NMFS. The Assistant Administrator has been instrumental in taking\nsteps to improve NOAA enforcement efforts and relations with fishermen, particularly in the Northeast Region\xe2\x80\x94the focus of the\ntwo recent OIG reports.\n\nScientific Methods of the Northeast Fisheries Science Center. The first report examined the quality of the science used to\ndetermine catch limits for New England commercial fisheries. Overall the Northeast Fisheries Science Center (NEFSC) was found\nto meet the \xe2\x80\x9cbest available science\xe2\x80\x9d requirements of the Magnuson-Stevens Fishery Conservation and Management Act, but\nthe report noted the industry\xe2\x80\x99s underlying lack of confidence in NOAA science in the Northeast Region. Therefore, the report\nrecommendations focused on what NOAA can do to improve its relationship with the fishing industry.\n\nTo enhance the participation of the Northeast groundfish industry in the fisheries management process, the OIG recommended\nNMFS incorporate data from scientifically rigorous industry-based surveys into fishery management. In response, NEFSC assisted\nwith the peer review of one such survey, the Northeast Area Monitoring and Assessment Program, conducted by the Atlantic\nStates Marine Fisheries Commission. NEFSC is working with the survey managers to ensure that these data are available for stock\nassessments and to find permanent, secure funding for this work. NEFSC also continues to expand the use of electronic logbooks\nand to pilot electronic trip reporting to improve submission efficiency and timeliness of fishermen\xe2\x80\x99s catch data used by managers.\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 365\n\x0cA ppendix C : M anagement C h allenges\n\n\n\n\n The OIG also saw the benefits of NEFSC\xe2\x80\x99s cooperative research program to the fishing industry and recommended that this effort\n be enhanced. Since that time, NEFSC has developed a five-year strategic plan with industry. The program\xe2\x80\x99s current focus is\n creating a gear technology network involving both academic scientists and industry to develop ways of fishing more efficiently\n and selectively.\n\n In addition, the OIG recommended improved communication with industry through formal education, a better Web site, and\n improved outreach. NEFSC continues to provide instructors and speakers for the region\xe2\x80\x99s Marine Research Education Program. This\n is a classroom-based project for fishing professionals intended to foster leadership, break down historical barriers to cooperation,\n forge new areas of involvement for fishermen in the regulatory system, and fully engage the industry in the development of best\n available science.\n\n Review of NOAA Fisheries Enforcement Programs and Operations. The second report on NOAA enforcement activities\xe2\x80\x94requested\n by the Under Secretary\xe2\x80\x94echoed the message of NOAA needing better communication and fair engagement with the fishing\n community. As a result of the OIG finding, NOAA has taken decisive action to control enforcement funds, create new regulations\n to justify penalty assessments, and freeze hiring until a detailed workforce analysis is completed, all in an effort to restore trust\n in this region. In addition, the Office of External Affairs Director\xe2\x80\x94another new position in NOAA headquarters\xe2\x80\x94has created a\n communications plan that aims to increase NOAA\xe2\x80\x99s transparency and rapport with fishermen, increase the frequency and improve\n the quality of interactions among fishermen and NOAA enforcement officers, increase public knowledge and understanding of\n fisheries and other regulations, and promote the biological and financial benefits of sustainable fishing. Of note, NOAA will hold\n a summit on law enforcement practices on August 3, 2010, to openly discuss these issues with the community.\n\n NOAA is committed to improving relationships with fishermen, particularly in the Northeast Region, as a means to achieving a\n balance between conservation and commercial fishing. The improved management structure at NOAA headquarters has already\n allowed the Agency to promptly address the issues raised in the two IG reports and to engage with the fishery to address current\n issues. NOAA staff at all levels will continue to take steps to improve transparency and build trust with fishermen nationwide as\n an important component of sound fisheries management.\n\n Specific actions related to the report on the Scientific Methods of the Northeast Fisheries Science Center:\n\n \xe2\x97\x8f\xe2\x97\x8f Both the Northeast Area Monitoring and Assessment Program survey and the Maine-New Hampshire survey are now\n conducted twice per year, complementing the NEFSC bottom trawl surveys by collecting data in coastal areas too shallow for\n the FSV HENRY B. BIGELOW\xe2\x80\x94one of NMFS\xe2\x80\x99s primary fishery research vessels in the region.\n\n \xe2\x97\x8f\xe2\x97\x8f Cooperative research efforts, following successful development of a haddock excluder trawl for larger vessels through the\n program, field tested two smaller excluder trawls and a 500 horsepower-scaled excluder net built and made available for trial\n aboard southern New England vessels.\n\n \xe2\x97\x8f\xe2\x97\x8f In a project designed to address industry interest in better survey data for flatfish species, four southern New England vessels\n are testing survey nets designed to fish on rocky habitats. Three cruises were conducted in 2009, and two more are set for\n 2010. The results will help determine whether a regular, specialized survey for flatfishes is needed to improve data used for\n stock assessments.\n\n \xe2\x97\x8f\xe2\x97\x8f To improve education and outreach, NOAA has created a specialized Web site for groundfishermen and a newsletter for that\n industry sector; held telephone and in-person town meetings; appeared on local seafood-oriented radio programs; and conducted\n an extensive educational effort using small group instruction, hotlines, webinars, and conference calls to ensure understanding of\n new reporting and monitoring requirements. A revamped NEFSC Web site is expected to deploy in the fall of 2010.\n\n\n\n 366 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c A ppendix C : M anagement C h allenges\n\n\n\n\nHighlights of progress made related to the Review of NOAA Fisheries Enforcement Programs and Operations:\n\n\xe2\x97\x8f\xe2\x97\x8f The process for setting enforcement priorities will be completed in summer 2010 as scheduled and will be discussed during the\n August Enforcement Summit. The Enforcement Summit will provide a venue to gather stakeholder recommendations related\n to priority setting and approaches to enforcement services.\n\n\xe2\x97\x8f\xe2\x97\x8f On February 3, 2010, NOAA implemented a hiring freeze imposed on Special Agent positions, which remains in place. The\n workforce analysis team has been created and has completed their analysis phase. The team has prepared draft recommendations\n that continue to undergo refinement and internal review.\n\n\xe2\x97\x8f\xe2\x97\x8f In updating the National Enforcement Operation Manual, the NMFS Office of Law Enforcement is reviewing other agencies\xe2\x80\x99\n approach to regulatory enforcement and has initiated initial document collection.\n\n\xe2\x97\x8f\xe2\x97\x8f The Office of General Counsel for Enforcement and Litigation is integrating their new electronic information system with\n the Office of Law Enforcement\xe2\x80\x99s electronic law enforcement information system. The interim combined monthly report was\n completed by July 7, 2010 on schedule. Going forward, the Office of Law Enforcement has contracted services to create the\n interface between the two systems.\n\nDepartment Headquarters Renovation\n\nBecause of the scale of the Herbert C. Hoover Building (HCHB) Renovation Project, the renovation has the potential to disrupt\nDepartment operations and affect its workforce. Accordingly, the Department is working with the GSA to ensure the renovation\nis completed on time, within budget, and free of fraud.\n\nAs the renovation progresses, the OIG will continue oversight of the project management including coordination with GSA National\nCapital Region\xe2\x80\x99s IG and Public Buildings Services, Commerce\xe2\x80\x99s Office of Administrative Services, and the primary construction\ncontractor (Gilbane-Grunley Joint Venture). The OIG completed its initial report and findings on the management of the HCHB\nRenovation Project on August 5, 2010. The Office of Administrative Services is working on a remediation plan to the OIG\xe2\x80\x99s\nrecommendations regarding GSA Reimbursable Work Authorizations tracking process and a formal HCHB rent agreement between\nGSA and the Department.\n\nThe Department has instituted a balanced scorecard as a strategic and management system. The HCHB renovation is part of\nthis scorecard. This will align the renovation project to the Department\xe2\x80\x99s vision and strategy, improve internal and external\ncommunications, and monitor performance against its strategic goals. The balance scorecard will view the HCHB Renovation\nProject from four perspectives:\n\n\xe2\x97\x8f\xe2\x97\x8f Financial;\n\n\xe2\x97\x8f\xe2\x97\x8f Schedule;\n\n\xe2\x97\x8f\xe2\x97\x8f Scope \xe2\x80\x93 changes from the baseline; and\n\n\xe2\x97\x8f\xe2\x97\x8f Customer \xe2\x80\x93 disruptive incident.\n\nContinued interactions with the Department and GSA will continue throughout the project.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 367\n\x0cAPPENDIX D: A P P E N D I x D : I mproper Payments I nformation Act ( I P I A ) , A s A mended , R eporting D etails\n\n\n\n\n I mproper payments information act ( I P I A ) of 2 0 0 2 ,\n\n A S A M E N D E D , R eporting D etails\n\n\n\n\n I\n PIA of 2002, as amended by the Improper Payments Elimination and Recovery Act of 2010, was enacted to provide\n for estimates and reports of improper payments by federal agencies. The act requires that federal agencies estimate\n \xe2\x80\x89improper payments and report on actions to reduce them. A review of all programs and activities that the Department\n administers is required annually to assist in identifying and reporting improper payments. The Department has not identified\n any significant problems with improper payments; however, the Department recognizes the importance of maintaining\n adequate internal controls to ensure proper payments, and the Department\xe2\x80\x99s commitment to continuous improvement\n in the overall disbursement management process remains very strong. Each of the Department\xe2\x80\x99s payment offices has\n implemented procedures to detect and prevent improper payments. For FY 2011 and beyond, the Department will continue\n its efforts to ensure the integrity of its disbursements.\n\n I. Briefly describe the risk assessment(s) performed subsequent to completing its full program inventory.\n List the risk-susceptible programs (i.e., programs that have a significant risk of improper payments based on\n Office of Management and Budget (OMB) guidance thresholds) identified through its risk assessments. Be sure\n to include the programs previously identified in the former Section 57 of OMB Circular A-11, Preparation,\n Submission, and Execution of the Budget (now located in OMB Circular A-123, Appendix C, Requirements\n for Effective Measurement and Remediation of Improper Payments). Please highlight any changes to its risk\n assessment or its risk assessment results that occurred since its last report.\n\n The Department annually conducts an assessment of the effectiveness of internal control over financial reporting, in\n compliance with OMB Circular A-123, Management\xe2\x80\x99s Responsibility for Internal Control. The FY 2010 assessment included\n a review of internal controls over disbursement processes, which indicated that current internal controls over disbursement\n processes are sound.\n\n Each of the Department\xe2\x80\x99s bureaus/reporting entities have completed or are performing, over a one to three-year period\n (depending on the size of the entity), improper payments risk assessments covering all of its programs/activities as required\n by OMB Circular A-123, Appendix C. These improper payments risk assessments of the entity\xe2\x80\x99s programs/activities also\n include assessments of the corporate control, procurement, and grants management environments, and will thereafter\n be updated or revised on a periodic basis. The improper payments program/activity risk assessments performed thus far\n revealed no risk-susceptible programs.\n\n The results of Departmental assessments revealed no risk-susceptible programs, and demonstrated that, overall, the\n Department has strong internal controls over disbursement processes, the amount of improper payments by the Department\n is immaterial, and the risk of improper payments is low.\n\n\n\n\n 368 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cA P P E N D I x D : I mproper Payments I nformation Act ( I P I A ) , A s A mended , R eporting D etails\n\n\n\n\nII. Briefly describe the statistical sampling process conducted to estimate the improper payment rate for each\nprogram identified. Please highlight any changes to its statistical sampling process that have occurred since\nthe last report in this section.\n\nIn FY 2010, the Department conducted a sampling process to draw and review random samples of disbursements greater\nthan $100 thousand from a Department-wide universe of disbursements. Grants, travel payments, bankcards/purchase cards,\nall procurement vehicles with other federal agencies, government bills of lading, and gifts and bequests were excluded from\nreview. Each selected sample item was then subjected to a review of original invoices and supporting documentation to\ndetermine that the disbursement was accurate, made only once, and that the correct vendor was compensated. The results\nof the Department\xe2\x80\x99s review did not reveal any significant improper payments. The same results were achieved following a\nsimilar review in FY 2009. An estimated improper payment rate, accordingly, was deemed not necessary.\n\n\nIII. Describe the Corrective Action Plans (CAP) for reducing the estimated rate and amount of improper\npayments for each type of root cause of error. Include in this discussion the corrective action(s) most likely\nto significantly reduce future improper payments due to each type of error an agency identifies. If efforts are\nongoing, it is appropriate to include that information in this section, and to highlight current efforts, including\nkey milestones.\n\nThe results of Departmental assessments demonstrate that, overall, the Department has strong internal controls over\ndisbursement processes, the amount of improper payments by the Department is immaterial, and the risk of improper\npayments is low. While the Department, accordingly, does not have a need for CAPs for improper payments, the Department\nhas, nevertheless, further enhanced its processes and is actively working with each of the Department\xe2\x80\x99s payment offices\nto identify and implement additional procedures to prevent and detect improper payments. In FY 2010, the Department\ncontinued with the bureaus\xe2\x80\x99 quarterly reporting of any improper payments to the Deputy Chief Financial Officer (CFO),\nalong with identifying the nature and magnitude of any improper payments and identifying any necessary control\nenhancements.\n\nThe Department has additionally reviewed all financial statement audit findings/comments, and results of any other\npayment reviews, for indications of breaches of disbursement controls. None of these audit findings/comments or reviews\nhave uncovered any significant problems with improper payments or the internal controls that surround disbursements.\n\n\nIV. Discuss payment recapture audit efforts, if applicable, including any contract types excluded from review\nand the justification for doing so; actions taken to recoup improper payments; and the business process changes\nand internal controls instituted and/or strengthened to prevent further occurrences.\n\nIn May 2010 and October 2010, payment recapture audits were completed for the Bureau of Industry and Security (BIS),\nand for the National Technical Information Service (NTIS). Contracts/obligations closed after September 30, 2005 greater\nthan $100 thousand were reviewed. Grants, travel payments, bankcards/purchase cards, all procurement vehicles with other\nfederal agencies, government bills of lading, and gifts and bequests were excluded from review. The Department determined\nthat, for the above categories of closed contracts/obligations that were excluded from review, the Department\xe2\x80\x99s costs for\nthe payment recapture audit activities would likely exceed the benefits of a payment recapture audit. Vendor inquiries were\nperformed for a sample of vendors to determine if the reporting entities had any open credits or debts with vendors. Of the\n$11.6 million reviewed, $6 thousand was identified for payment recapture. The following table presents a summary of the\nresults of the Department\xe2\x80\x99s current year (CY) and prior years (PY) payment recapture audits.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 369\n\x0cA P P E N D I x D : I mproper Payments I nformation Act ( I P I A ) , A s A mended , R eporting D etails\n\n\n\n\n (In Thousands)\n\n Cumulative\n Amounts Amounts\n Identified Amounts Identified\n Amount Actual for Identified for Cumulative\n Subject to Amount Payment Amounts for Amounts Recapture Amounts\n Review for Reviewed Recapture Recaptured Recapture Recaptured (CY and Recaptured\n CY for CY for CY for CY in PYs in PYs PYs (CY and PYs\n Reporting Entity(s) Reporting Reporting Reporting Reporting Reporting Reporting Reporting) Reporting)\n BIS $\t 3,746 $\t 3,181 $\t - $\t - \t N/A \t N/A $\t - $\t -\n NTIS $\t 9,603 $\t 8,402 $\t 6 $\t - \t N/A \t N/A $\t 6 $\t -\n EDA/S&E, and ITA \t N/A \t N/A \t N/A \t N/A $\t - $\t - $\t - $\t -\n DM/S&E, DM/WCF, \t N/A \t N/A \t N/A \t N/A $\t - $\t - $\t - $\t -\n and ESA/BEA\n Census Bureau, \t N/A \t N/A \t N/A \t N/A $\t 96 $\t 96 $\t 96 $\t 96\n NIST, NOAA, and\n USPTO\n\n\n\n V. Describe the steps the agency has taken and plans to take (including time line) to ensure that agency\n managers (including the agency head) are held accountable for reducing and recovering improper payments.\n\n The Department has not identified any significant problems with improper payments; however, the Department recognizes\n the importance of maintaining adequate internal controls to ensure proper payments, and its commitment to continuous\n improvement in disbursement management processes remains very strong. The Department\xe2\x80\x99s CFO has responsibility for\n establishing policies and procedures for assessing Departmental and program risks of improper payments, taking actions\n to reduce those payments, and reporting the results of the actions to Departmental management for oversight and other\n actions as deemed appropriate. The CFO has designated the Deputy CFO to oversee initiatives related to reducing improper\n payments within the Department, and to work closely with the bureau CFOs in this area.\n\n In FY 2010, the Department continued its reporting procedures that required quarterly reporting to the Department by\n its bureaus on any improper payments, identifying the nature and magnitude of any improper payments along with\n any necessary control enhancements to prevent further occurrences of the types of improper payments identified. The\n Department\xe2\x80\x99s analysis of the data collected from the bureaus shows that Department-wide improper payments were at\n or below two-tenths of one percent in FY 2010 and FY 2009. The bureau CFOs are accountable for internal controls over\n improper payments, and for monitoring and minimizing improper payments.\n\n For FY 2011 and beyond, the Department will continue its efforts to ensure the integrity of its disbursements.\n\n\n VI. Describe whether the agency has the information systems and other infrastructure it needs to reduce\n improper payments to the levels the agency has targeted.\n\n The Department has ensured that internal controls, manual, as well as financial system, relating to payments are in place\n throughout the Department, and has reviewed all financial statement audit findings/comments and results of any other\n payment reviews for indications of breaches of disbursement controls. None of these audit findings/comments or reviews\n have uncovered any significant problems with improper payments or the internal controls that surround disbursements.\n\n\n\n 370 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0cA P P E N D I x D : I mproper Payments I nformation Act ( I P I A ) , A s A mended , R eporting D etails\n\n\n\n\nVII. Describe any statutory or regulatory barriers which may limit agency corrective actions in reducing\nimproper payments and actions taken by the agency to mitigate the barriers\xe2\x80\x99 effects.\n\nThe Department has not identified any significant barriers to-date, but will notify OMB and Congress of any barriers that\ninhibit actions to reduce improper payments if they occur.\n\n\nVIII. Additional comments, if any, on overall agency efforts, specific programs, best practices, or common\nchallenges identified, as a result of IPIA implementation.\n\nThe Department\xe2\x80\x99s Disbursement Best Practices. The following are some examples of internal control procedures used by the\nDepartment\xe2\x80\x99s payment offices:\n\n\xe2\x97\x8f\xe2\x97\x8f Limited/controlled access to vendor files\xe2\x80\x94access to basic vendor information (e.g., name, address, business size, etc.)\n is available to financial system users; access to banking information, however, is strictly limited by system security to\n certain Office of Finance staff.\n\xe2\x97\x8f\xe2\x97\x8f Controlled access to financial system accounts payable screens\xe2\x80\x94authority to create, edit, approve, process, and amend\n payment records is limited to certain Office of Finance financial system users. Also, authority to add or revise records\n in the vendor database is limited to separate Office of Finance system users.\n\xe2\x97\x8f\xe2\x97\x8f Segregation of duties for financial system data entry and review prior to transmitting disbursement files to Treasury\xe2\x80\x94\n data entry duties are assigned to technicians in the Office of Finance who do not have authority to review and process\n payments. Authority to approve and process payments is assigned to accountants in the Office of Finance. Both data\n entry and approval/processing of payments are separate functions from transmitting disbursement files to Treasury.\n\xe2\x97\x8f\xe2\x97\x8f Financial system edit reports highlight potential items that may result in improper payments (e.g., invoice amount and accrual\n amount are not the same). There is a daily Invoice Workload Report that displays open amounts (not closed by a payment) on\n all invoices. This report is reviewed and action is taken to resolve partially open invoices. Furthermore, system settings prevent\n a payment in excess of the amount of the invoice.\n\n\xe2\x97\x8f\xe2\x97\x8f Daily pre-payment audit of invoices for accuracy, and corrective actions prior to disbursement, thereby preventing improper\n payments from occurring.\n\n\xe2\x97\x8f\xe2\x97\x8f Financial system edit checks if the vendor\xe2\x80\x99s name on the payment does not agree with that on the obligation, or if the payment\n amount is greater than the obligation or accrual amount.\n\n\xe2\x97\x8f\xe2\x97\x8f The monthly vendor statement for purchase cards is interfaced into the financial system, thereby reducing data entry error.\n\n\xe2\x97\x8f\xe2\x97\x8f An accountant or supervisor reviews individual payments before releasing for payment, to help ensure that the correct banking\n information or payment addresses are used, and that the correct amount will be paid.\n\n\xe2\x97\x8f\xe2\x97\x8f Monthly post-payment random sample audits are performed for detection purposes.\n\n\xe2\x97\x8f\xe2\x97\x8f Contracts include a clause requiring the contractor to notify the contracting officer if the government overpays when making\n an invoice payment or a contract financing payment.\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 371\n\x0cAPPENDIX E: A P P E N D I x E : S ummary of financial statement audit and management assurances\n\n\n\n\n S ummary of F inancial S tatement A udit\n\n and M anagement A ssurances\n\n\n\n\n P\n resented below is a summary of financial statement audit and management assurances for FY 2010. Table 1 relates\n to the Department\xe2\x80\x99s FY 2010 financial statement audit, which resulted in an unqualified opinion with no material\n \xe2\x80\x89weaknesses. Table 2 presents the number of material weaknesses reported by the Department under Section 2 of the\n Federal Managers\xe2\x80\x99 Financial Integrity Act (FMFIA)\xe2\x80\x94either with regard to internal controls over operations or financial reporting\xe2\x80\x94\n and Section 4, which relates to internal controls over financial management systems; as well as the Department\xe2\x80\x99s compliance with\n the Federal Financial Management Improvement Act (FFMIA).\n\n The Department had one recurring material weakness under FMFIA, Section 2 relating to information technology (IT) certification\n and accreditation (C&A). Because of the significant progress that has been made in this area, this material weakness is considered\n resolved. IT security will, however, continue to receive focused attention internally due to its importance to the Department and\n its operating units.\n\n\n Table 1. Summary of Financial Statement Audit\n \xe2\x97\x8f\xe2\x97\x8f Audit Opinion: \xe2\x97\x8f\xe2\x97\x8f Unqualified\n \xe2\x97\x8f\xe2\x97\x8f Restatement: \xe2\x97\x8f\xe2\x97\x8f No\n Material Weaknesses Beginning Balance New Resolved Consolidated Ending Balance\n No Material Weaknesses 0 0 0 0 0\n Total Material Weaknesses 0 0 0 0 0\n\n\n Table 2. Summary of Management Assurances\n\n Effectiveness of Internal Control over Financial Reporting (FMFIA \xc2\xa7 2)\n Statement of Assurance: Unqualified\n Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance\n No Material Weaknesses 0 0 0 0 0 0\n Total Material Weaknesses 0 0 0 0 0 0\n Effectiveness of Internal Control over Operations (FMFIA \xc2\xa7 2)\n Statement of Assurance: Qualified\n Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance\n IT Certification and Accreditation 1 0 1 0 0 0\n Total Material Weaknesses 1 0 1 0 0 0\n Conformance with Financial Management System Requirements (FMFIA \xc2\xa7 4)\n Statement of Assurance: Systems conform with financial management system requirements\n Non-Conformances Beginning Balance New Resolved Consolidated Reassessed Ending Balance\n No Non-Conformance Issues 0 0 0 0 0 0\n Total Non-Conformances 0 0 0 0 0 0\n Compliance with Federal Financial Management Improvement Act (FFMIA)\n Agency Auditor\n Overall Substantial Compliance Yes Yes\n 1. System Requirements Yes\n 2. Accounting Standards Yes\n 3. USSGL at Transaction Level Yes\n\n\n\n 372 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c APPENDIX G: GLOSSARY OF KEY ACRONYMS\n\n\n\n\n GLOSSARY OF KEY ACRONYMS\n\n\n Abbreviation Title Abbreviation Title\n\n\n A\t ACS\t American Community Survey COOP\t Continuity of Operations Plan\n\n ACSI\t American Customer Satisfaction Index COTR\t Contracting Officer Technical Representative\n\n AD\t Antidumping CPD\t Coastal Programs Division\n\n ADP\t Automated Data Processing CPI\t Consumer Price Index\n\n AHS\t American Housing Survey CPS\t Current Population Survey\n\n AML\t Advanced Measurement Laboratory (NIST) CRADA\t Cooperative Research and Development\n Agreements\n APP\t Annual Performance Plan\n CSRS\t Civil Service Retirement System\n ARRA\t American Recovery and Reinvestment Act\n of 2009 CSTL\t Chemical Science and Technology\n Laboratory (NIST)\n ASAP\t Automated Standard Application for\n Payments CVD\t Countervailing Duty\n\n ATP\t Advanced Technology Program (NIST) CWC\t Chemical Weapons Convention\n\n ATS\t Annual Trade Survey CWCIA\t CWC Implementation Act\n\n AWIPS\t Advanced Weather Interactive Processing CZM\t Coastal Zone Management (NOAA)\n System CZMA\t CZM Act\n CZMP\t CZM Program\n B\t BAS\t Boundary and Annexation Survey\n BDC\t Business Development Centers (MBDA) D\t DFI\t Digital Freedom Initiative\n BEA\t Bureau of Economic Analysis DHS\t U.S. Department of Homeland Security\n BIS\t Bureau of Industry and Security DM\t Departmental Management\n BLS\t Bureau of Labor Statistics DOJ\t U.S. Department of Justice\n BNQP\t Baldrige National Quality Program DOL\t U.S. Department of Labor\n DOL/OLMS\t DOL Online Labor Management System\n C\t CAMS\t Commerce Administrative Management DPAS\t Defense Priorities and Allocations System\n System\n DSSR \t Demographic Surveys Sample Redesign\n CBP\t U.S. Customs and Border Protection\n CCSPS\t Climate Change Science Program Strategic\n Plan E\t EAA\t Export Administration Act\n\n CEDS\t Comprehensive Economic Development EAR\t Export Administration Regulations\n Strategies ECASS\t Export Control Automated Support System\n CEIP\t Coastal Energy Impact Program (NOAA) EDA\t Economic Development Administration\n CFO \t Chief Financial Officer EDD\t Economic Development Districts\n CFO/ASA\t Chief Financial Officer and Assistant EEEL\t Electronics and Electrical Engineering\n Secretary for Administration (OS) Laboratory (NIST)\n CIO\t Chief Information Officer EFT\t Electronic Funds Transfer\n CIRT\t Computer Incident Response Team ELGP\t Emergency Oil and Gas and Steel Loan\n CNST\t Center for Nanoscale Science and Guarantee Programs\n Technology (NIST) ENC\t Electronic Navigational Chart\n COOL\t Commerce Opportunities Online ENSO\t El Ni\xc3\xb1o/Southern Oscillation\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 373\n\x0cAPPENDIX G: GLOSSARY OF KEY ACRONYMS\n\n\n\n\n Abbreviation Title Abbreviation Title\n\n\n EPO\t European Patent Office GSP\t Gross State Product\n ESA\t Economics and Statistics Administration GSS\t Geographic Support System\n\n\n F\t FAIR\t Federal Activities Inventory Reform H\t HR\t Human Resources\n FAR\t False Alarm Rate HSS\t Heidke Skill Scores\n FCC\t Federal Communications Commission\n FECA\t Federal Employees Compensation Act I\t IA\t Import Administration (ITA)\n FEGLI\t Federal Employees Group Life Insurance ICANN\t Internet Corporation for Assigned Names\n Program and Numbers\n FEHB\t Federal Employees Health Benefit Program ICEP\t International Catalog Exhibition Program\n FEMA\t Federal Emergency Management Agency (ITA)\n\n FERS\t Federal Employees Retirement System ICT\t Information and Communication Technology\n\n FFMIA\t Federal Financial Management Improvement IDS\t Intrusion Detection Software\n Act of 1996 IFQ\t Individual Fishing Quota Direct Loans\n FICA\t Federal Insurance Contributions Act (NOAA)\n\n FISMA\t Federal Information Security Management IFW\t Image File Wrapper\n Act IP\t Intellectual Property\n FMFIA\t Federal Managers\xe2\x80\x99 Financial Integrity Act of IP\t Internet Protocol\n 1982\n IRAC\t Interdepartmental Radio Advisory\n FMP\t Fishery Management Plan Committee\n FR\t Field Representative IRC\t Investment Review Committees\n FTA\t Free Trade Agreement IRS\t Internal Revenue Service\n FTAA\t Free Trade Area of the Americas ISI\t Institute for Scientific Information\n FTE\t Full-Time Equivalent IT\t Information Technology\n FVOG\t Fishing Vessel Obligation Guarantee ITA\t International Trade Administration\n Program (NOAA)\n ITL\t Information Technology Laboratory (NIST)\n FWC\t Future Workers\xe2\x80\x99 Compensation\n ITS\t Institute for Telecommunication Sciences\n FY\t Fiscal-year (NTIA)\n ITU\t International Telecommunication Union\n G\t G&B\t Gifts and Bequests\n (a fund that is part of DM)\n K\t KSA\t Knowledge, Skills, and Abilities\n GAAP\t Generally Accepted Accounting Principles\n GAO\t U.S. Government Accountability Office\n L\t LMS\t Learning Management System\n GDP\t Gross Domestic Product\n GFDL\t Geophysical Fluid Dynamics Laboratory\n (NOAA) M\t MAF\t Master Address File\n GLERL\t Great Lakes Environmental Research MBDA\t Minority Business Development Agency\n Laboratory MBEC\t Minority Business Enterprise Centers\n GPRA\t Government Performance and Results Act of (MBDA)\n 1993 MBE\t Minority Business Enterprise\n GPS\t Global Positioning System MBOC\t Minority Business Opportunity Center\n GSA\t U.S. General Services Administration (MBDA)\n\n\n\n\n 374 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c APPENDIX G: GLOSSARY OF KEY ACRONYMS\n\n\n\n\n Abbreviation Title Abbreviation Title\n\n\n MDCP\t Market Development Cooperator Program OCS\t Office of Computer Services (Franchise\n (ITA) Fund)\n MED\t Minority Enterprise Development OECD\t Organization for Economic Cooperation and\n Development\n MEP\t Manufacturing Extension Partnership (NIST)\n OFM\t Office of Financial Management (OS)\n MOU\t Memorandum of Understanding\n OFPP\t Office of Federal Procurement Policy\n MTS\t U.S. Marine Transportation System\n OHRM\t Office of Human Resources Management (OS)\n OI\t Office of Investigations (OIG)\n N\t NABEC\t Native American Business Enterprise\n Center (MBDA) OIG\t Office of Inspector General (DM)\n NAICS\t North American Industry Classification OIPE\t Office of Inspections and Program\n System Evaluations (OIG)\n NAO\t North Atlantic Oscillation OMB\t Office of Management and Budget\n NAPA\t National Academy of Public Administration OPEM\t Office of Planning, Evaluation and\n Management (BIS)\n NASA\t National Aeronautics and Space\n Administration OPM\t U.S. Office of Personnel Management\n NBS\t National Bureau of Standards OS\t Office of the Secretary (DM)\n NCDC\t National Climatic Data Center (NOAA) OSDBU\t Office of Small and Disadvantaged Business\n Utilization (OS)\n NCNR\t NIST Center for Neutron Research (NIST)\n OSE\t Office of Systems Evaluation (OIG)\n NERR\t National Estuarine Research Reserve\n OSM\t Office of Spectrum Management (NTIA)\n NIH\t National Institutes for Health\n OSY\t Office of Security (OS)\n NIPA\t National Income and Product Accounts\n OTE\t Office of Technology Evaluation\n NIPC\t National Intellectual Property Law\n Enforcement Coordination Council OTP\t Office of Technology Policy (TA)\n NIST\t National Institute of Standards and\n Technology\n P\t PALM\t Patent Application Location and Monitoring\n NM\t Nautical Miles System\n NMFS \t National Marine Fisheries Service (NOAA) PAR\t Performance and Accountability Report\n NOAA\t National Oceanic and Atmospheric PART\t Program Assessment Rating Tool\n Administration\n PBSA\t Performance-based Service Acquisitions\n NOS \t National Ocean Service (NOAA)\n PBSC\t Performance-based Service Contracting\n NPV\t Net Present Value\n PBViews\t Panorama Business Views\n NRC\t National Research Council\n PKI\t Public Key Infrastructure\n NSRS\t National Spatial Reference System\n PMA\t President\xe2\x80\x99s Management Agenda\n NTIA\t National Telecommunications and\n PNA\t Pacific North America\n Information Administration\n PORTS\xc2\xae\t Physical Oceanographic Real-time System\n NTIS\t National Technical Information Service\n PP&E\t Property, Plant, and Equipment, Net\n NWLON\t National Water Level Observation Network\n PPS\t Post-project Survey\n PRT\t Program Review Team (NOAA)\n O\t OA\t Office of Audits (OIG)\n PSV\t Post-shipment Verification\n OAM\t Office of Acquisition Management (OS)\n PTFP\t Public Telecommunications Facilities\n OCAD\t Office of Compliance and Administration Program (NTIA)\n (OIG)\n\n\n\n\nF Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n 375\n\x0cAPPENDIX G: GLOSSARY OF KEY ACRONYMS\n\n\n\n\n Abbreviation Title Abbreviation Title\n\n\n Q\t QFR\t Quarterly Financial Report TIP\t Technology Innovation Program (NIST)\n\n QPF\t Quantitative Precipitation Forecasts TIS\t Trademark Information System\n\n QSS\t Quarterly Services Survey TPA\t Trade Promotion Authority\n TPC\t Tropical Prediction Center (NOAA)\n TPCC\t Trade Promotion Coordinating Committee\n R\t R&D\t Research and Development\n RLF\t Revolving Loan Fund (EDA) TRAM\t Trademark Reporting and Monitoring System\n\n ROP\t Reserve\xe2\x80\x99s Operations Plan (NOAA) Treasury\t U.S. Department of the Treasury\n TROR\t Treasury Report on Receivables\n TRP\t Take Reduction Plan\n S\t S&E\t Salaries and Expenses\n TRT\t Take Reduction Team\n S&T\t Science and Technology\n TSP\t Thrift Savings Plan\n SAS\t Services Annual Survey\n TVA\t Tennessee Valley Authority\n SAV\t Site Assistance Visits\n SBA\t U.S. Small Business Administration\n SBR\t Combined Statement of Budgetary U\t UAE\t United Arab Emirates\n Resources UC\t University Center\n SCNP\t Consolidated Statement of Changes in Net US&FCS\t U.S. and Foreign Commercial Service\n Position\n US/OTP\t Office of the Under Secretary/Office of\n SDDS\t Special Data Dissemination Standards Technology Policy (TA)\n SES\t Senior Executive Service USCRN\t U.S. Climate Reference Network\n SIPP\t Survey of Income and Program Participation USDA\t U.S. Department of Agriculture\n SME\t Small and Medium-sized Enterprise USPTO\t U.S. Patent and Trademark Office\n SNM\t Square Nautical Miles USTR\t Office of the U.S. Trade Representative\n SPD\t Survey of Program Dynamics USWRP\t U.S. Weather Research Program\n SRD\t Standard Reference Data UWB\t Ultra-wideband\n SRM\t Standard Reference Materials\n STEP\t Standard for the Exchange of Product Model V\t VCAT\t Visiting Committee on Advanced\n Data Technology\n VoIP\t Voice over Internet Protocol\n T\t 3G\t Third Generation\n TA\t Technology Administration W\t WCF\t Working Capital Fund (DM)\n TAA\t Trade Adjustment Assistance Program (EDA) WMD\t Weapons of Mass Destruction\n TAAC\t Trade Adjustment Assistance Center WTO\t World Trade Organization\n TABD\t Trans-Atlantic Business Dialogue\n TCC\t Trade Compliance Center (ITA)\n TECI\t Transshipment Country Export Control\n Initiative\n TIC\t Trade Information Center (ITA)\n TIGER\t Topologically Integrated Geographic\n Encoding and Referencing System\n\n\n\n\n 376 F Y \xe2\x80\xaf 2 0 1 0 P E R F O R M A N C E A N D A C C O U N T A B I L I T Y R E P O R T\n\x0c OW LEDGEM\n KN EN\n TS\n AC\n\n\n\n\nThis Performance and Accountability Report was produced with the\nenergies and talents of the Department of Commerce staff. To these individuals\nwe would like to offer our sincerest thanks and acknowledgement.\n\n\n In particular, we would like to recognize the following\n organizations and individuals for their contributions:\n\n\n Kerstin Millius, Hillary Sherman, Bryan Borlik, and Jim\n LeDuc of EDA, Camelia Carter and Sheryl Williams of\n Census, Joanne Buenzli-Crane and Doug Follansbee\n of BEA, Matthew Bright and Dondi Staunton of ITA,\n Brad Burke of BIS, Ron Marin and Holden Hoofnagle\nof MBDA, Mary Choi and Heidi Keller of NOAA,\nAlexandria Emgushov of USPTO, Gail Ehrlich of\nNIST, Teresa Grant of NTIS, Charles Franz of NTIA,\nJohn Webb of OIG, Tanya Smith of DM, Bill Tatter,\nNatasha Mills, and Steve Shapiro of the Office of\nBudget, Systems, Policy and Performance Division,\nand the many other bureau and Departmental staff,\nparticularly of the Office of Financial Management\nwho contributed to this report.\n\n\n We offer special thanks to Michael James, Sheri Beauregard, and\n Don James of The DesignPond for their outstanding contributions in\n the design and production of this report.\n\n\n To send comments or obtain additional information about this\n report, please email Bill Tatter at btatter@doc.gov.\n\x0c N AT I O N A L T E L E C O M M U N I C AT I O N S & I N F O R M AT I O N A D M I N I S T R AT I O N N AT I O N A L O C E A N I C & AT M O S P H E R I C A D M I N I S T R AT I O N\n\n\n\n\n E C O N O M I C D E V E L O P M E N T A D M I N I S T R AT I O N\nADMINISTRATION\nSTATISTICS\n\n\n\n\n STRATEGIC GOALS\nAND\nE CONOMICS\n\n\n\n\n GOAL 1\n\n\n\n\n BUREAU OF INDUSTRY & SECURITY\n Maximize U.S. Competitiveness and Enable Economic Growth\n for American Industries, Workers, and Consumers\nADMINISTRATION\n\n\n\n\n GOAL 2\n\n\n Promote U.S. Innovation and Industrial Competitiveness\nTRADE\n\n\n\n\n MINORITY BUSINESS DEVELOPMENT AGENCY\n GOAL 3\nINTERNATIONAL\n\n\n\n\n Promote Environmental Stewardship\n\n\n\n MANAGEMENT INTEGRATION GOAL\nS ERVIC E\n\n\n\n\n Achieve Organizational and Management Excellence\nINFOR MAT ION\n\n\n\n\n U . S . PAT E N T A N D T R A D E M A R K O F F I C E\nT EC HNI CA L\nNATI ONA L\n\n\n\n\n N AT I O N A L I N S T I T U T E O F S TA N D A R D S A N D T E C H N O L O G Y B U R E A U O F E C O N O M I C A N A LY S I S CENSUS BUREAU\n\x0c'