Audit of the U.S. Chemical Safety and Hazard Investigation Board's Fiscal Years 2016 and 2015 Financial Statements


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I® | U.S. ENVIRONMENTAL PROTECTION AGENCY
%%PR0^ OFFICE OF INSPECTOR GENERAL
U.S. Chemical Safety Board
Audit of the U.S. Chemical Safety
and Hazard Investigation Board's
Fiscal Years 2016 and 2015
Financial Statements
Report No. 17-F-0047
November 15, 2016

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U.S. Environmental Protection Agency	17-F-0047
' O, r| Office of Inspector General	November 15,2010
*32/ - -
At a Glance
Why We Did This Review
We performed this audit in
accordance with the
Accountability of Tax Dollars
Act of 2002, which requires the
U.S. Chemical Safety and
Hazard Investigation Board
(CSB) to prepare, and the
Office of Inspector General
(OIG) to audit, the board's
financial statements each year.
The U.S. Environmental
Protection Agency's OIG, which
also serves as the Inspector
General for CSB, contracted
with Allmond & Company, LLC,
to perform the audit of the
CSB's fiscal year 2016 financial
statements. CSB's fiscal year
2015 statements had
previously been audited by
Walker and Company, LLP.
This report addresses the
following CSB goal:
• Preserve the public trust
by maintaining and
improving organizational
excellence.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oiq.
Listing of OIG reports.
Audit of the U.S. Chemical Safety and Hazard
Investigation Board's Fiscal Years 2016 and 2015
Financial Statements
What Allmond & Company Found
Allmond & Company rendered an unmodified opinion on
the CSB's financial statements for fiscal year 2016,
meaning that the statements were fairly presented and
free of material misstatements. Walker and Company had
previously rendered an unmodified opinion on the CSB's
financial statements for fiscal year 2015.
The CSB received
an unmodified
opinion on its
fiscal year 2016
financial
statements.
In planning and performing its audit, Allmond & Company considered the CSB's
internal control over financial reporting. Allmond & Company noted no matters
involving the internal control and the CSB operation that it considered to be a
material weakness. However, Allmond & Company identified certain deficiencies
in internal control that it considered to be a significant deficiency, which is a
control deficiency or combination of control deficiencies that adversely affect
CSB's ability to reliably initiate, authorize, record, process or report financial data.
Allmond & Company found that CSB's internal controls over financial reporting
were not sufficiently designed to detect and correct material errors in its financial
statements. Specifically, Allmond & Company noted that CSB did not disclose in
a note a $1 million material difference in Net Outlays, did not prepare
explanations for other material differences, did not properly record calculated
imputed costs, and did not record an accrual for all liabilities owed by the agency.
Allmond & Company reported that CSB subsequently corrected all errors noted.
As part of obtaining reasonable assurance about whether the CSB's financial
statements are free of material misstatement, Allmond & Company performed
tests of the CSB's compliance with certain provisions of laws and regulations,
contracts, and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. Allmond
& Company's fiscal year 2016 audit disclosed no instances of noncompliance or
other matters that are required to be reported.
Allmond & Company is responsible for the enclosed auditor's report and the
conclusions expressed in the report. We do not express any opinion or
conclusions on the CSB's financial statements, internal control, or compliance
with laws and regulations.
Allmond & Company Recommendations and CSB Comments
Allmond & Company made various recommendations for CSB to implement and
enhance policies and procedures. CSB concurred with the recommendations.

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PRO**4,
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
November 15, 2016
The Honorable Vanessa Allen Sutherland
Chairperson and Board Member
U.S. Chemical Safety and Hazard Investigation Board
1750 Pennsylvania Avenue NW, Suite 910
Washington, D.C. 20006
RE: Report No. 17-F-0047, Audit of the U.S. Chemical Safety and Hazard Investigation Board's
Fiscal Years 2016 and 2015 Financial Statements
Dear Ms. Sutherland:
This letter transmits the audit report on the U.S. Chemical Safety and Hazard Investigation Board's
(CSB's) fiscal year 2016 financial statements. The audit is required by Public Law 107-289, the
Accountability of Tax Dollars Act of 2002. The fiscal year 2015 financial statements had previously
been audited.
The independent public accounting firm of Allmond & Company, LLC, performed the audit of the CSB
financial statements as of and for the fiscal year ended September 30, 2016. Allmond & Company is
reporting one significant deficiency. The audit was required to be done in accordance with Government
Auditing Standards, issued by the Comptroller General of the United States; Office of Management and
Budget Bulletin No. 15-02, Audit Requirements for Federal Financial Statements; and the Financial
Audit Manual of the Government Accountability Office/President's Council on Integrity and Efficiency.
The fiscal year 2015 financial statements as of and for the fiscal year ended September 30, 2015, had
previously been audited by the independent public accounting firm of Walker and Company, LLP.
Allmond & Company is responsible for the enclosed auditor's report dated November 14, 2016, and the
opinions and conclusions expressed in the report. We do not express any opinion or conclusions on the
CSB's financial statements, internal control, or compliance with laws and regulations.
Action Required
Please provide us a written response to this report within 60 calendar days of the final report date. For
corrective actions planned but not completed by the response date, reference to specific milestone dates
will assist us in deciding whether to close this report in our audit tracking system. Your response will be
posted on the Office of Inspector General's public website, along with our letter commenting on your
response. Your response should be provided as an Adobe PDF file that complies with the accessibility
requirements of Section 508 of the Rehabilitation Act of 1973, as amended. The final response should
not contain data that you do not want to be released to the public; if your response contains such data,
you should identify the data for redaction or removal along with corresponding justification.

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We will post this report to our website at www.epa.gov/oig.
Sincerely,
Paul C. Curtis
Director, Financial Statement Audits
Enclosure

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Allmond 5< Company, LLC
8 18 1 Professional Place:. Sunt: 250
Landover. Maryland 20785
Certified Public Accountants
C30 1)91 8-a 200
Facsimile C30i)9I8-a20 1
Independent Auditors' Report
Chairman and CEO U.S. Chemical Safety and Hazard Investigation Board
Inspector General, Environmental Protection Agency:
Report on the Financial Statements
We have audited the accompanying financial statements of the U.S. Chemical Safety and Hazard
Investigation Board (CSB), which comprise the balance sheet as of September 30, 2016 and the related
statement of net cost, changes in net position, and combined statement of budgetary resources for the year
ended, and the related notes to the financial statements (hereinafter referred to as the financial
statements). The financial statements of CSB as of September 30, 2015 were audited by other auditors
whose report, dated November 16, 2015, expressed an unmodified opinion on those statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with U.S. generally accepted accounting principles; this includes the design, implementation,
and maintenance of internal control relevant to the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on the fiscal year 2016 financial statements of CSB based on
our audit. We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and OMB Bulletin No. 15-02, Audit
Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 15-02 require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity' s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion.
1

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Independent Auditors' Report
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the U.S. Chemical Safety and Hazard Investigation Board as of September 30, 2016,
and its net costs, changes in net position, and budgetary resources for the year then ended in conformity
with generally accepted accounting principles in the United States of America.
Other Information
The information in the Message from the Chairperson and Management and Discussion Analysis section
of this report is not a required part of the basic financial statements, but is supplementary information
required by U.S. generally accepted accounting principles. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement and
presentation of this information. However we did not audit this information and, accordingly, we express
no opinion on it.
Other Reporting Required by Government Auditing Standards
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements as of and for the year ended September
30, 2016, we considered CSB's internal control over financial reporting by obtaining an understanding of
CSB's internal control, determining whether internal control had been placed in operation, assessing
control risk, and performing tests of control to determine auditing procedures for the purpose of
expressing our opinion on the financial statements, but not to provide an opinion on the effectiveness of
CSB internal control over financial reporting. Accordingly, we do not express an opinion on CSB's
internal controls over financial reporting. We limited internal control testing to those necessary to achieve
the objectives described in OMB Bulletin No. 15-02. We did not test all internal control relevant to
operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982.
Our consideration of internal control over financial reporting was for the limited purpose as described in
the paragraph above and was not designed to identify all deficiencies in internal control over financial
reporting that might be a control deficiency, significant deficiency, or material weakness.
A control deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatement on a timely basis.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected.
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Independent Auditors' Report
In our fiscal year 2016 audit, we did not identify any deficiencies in internal control over financial
reporting that we considered to be a material weakness, as defined above.
However, as described in Exhibit I, we identified certain deficiencies in internal control that we consider
to be a significant deficiency. A significant deficiency is a control deficiency or a combination of control
deficiencies, that adversely affects CSBs' ability to initiate, authorize, record, process, or report financial
data reliably in accordance with generally accepted accounting principles such that there is more than a
remote likelihood that a misstatement of the CSB's financial statements that is more than inconsequential
will not be prevented or detected.
Also, we noted certain additional matters that we will report to CSB management in a separate letter.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether CSBs' fiscal year 2016 financial statements are
free of material misstatements, we performed test of CSBs' compliance with certain provisions of laws
and regulations, which noncompliance with could have a direct and material effect on the determination
of the consolidated financial statement amounts, and certain provisions of other laws specified in OMB
Bulletin No. 15-02. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests of compliance as described in the preceding paragraph, disclosed no instances of
noncompliance or other matters that are required to be reported herein under Government Auditing
Standards or OMB Bulletin No. 15-02.
CSB's Response to Findings
CSB's responses to the findings identified in our engagement are described immediately following
Exhibit I. CSB's responses were not subjected to the auditing procedures applied in the engagement to
audit the financial statements and, accordingly, we express no opinion on the responses.
This report is intended solely for the information of the Office of Inspector General, CSB management,
OMB, and Congress. This report is not intended to be and should not be used by anyone other than these
specified parties.
November 14, 2016
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Independent Auditors' Report
Exhibit I
Significant Deficiency
CONDITION
CSB's internal controls over financial reporting are not sufficiently designed to detect and correct
material errors in its financial statements. Based on our review of the financial statements and note
disclosures, improvements are needed over reviewing the financial statements and note disclosures for
completeness, accuracy, and consistency. Specifically, we noted the following:
• CSB did not disclose in their draft financial statement Note 9 a material difference of $1 million
between Net Outlays reported on the SBR and the Budget of the U.S. Government in accordance with
OMB Circular A-136.
• CSB did not prepare the explanation of material differences between the SBR and the Budget of the
U.S. Government using comparable information. For example: (1) CSB used the actual amounts
reported on the SBR instead of rounding to the nearest millions; and (2) CSB used the incorrect
amount of $11 million for Budget of the U.S. Government budgetary resources instead of the $12
million indicated on line 1930 reported in the Appendix of the President's Budget.
• CSB did not properly record the calculated Office of Personnel Management (OPM) imputed costs of
$291,535.39 into the general ledger. Instead, CSB's service provider recorded an OPM imputed costs
of $144,488.68.
• CSB did not record an accrual for all liabilities owed by the agency as of September 30, 2016. We
identified one disbursement totaling $115,594.56 that was paid between 10/1/16 and 10/10/16, but
was not included in CSB Accounts Payable as of September 30, 2016.
CSB subsequently corrected all errors noted above.
CRITERIA
OMB Circular A-136, Federal Financial Reporting Requirements, (issued October 2016), section
II.4.9.35, Note 35 Explanation of Differences between the SBR and the Budget of the US Government,
states the following:
"Agencies should provide a schedule to display the material differences between the SBR and Budget. At
a minimum, agencies should display the material differences for comparable line items related to
budgetary resources, obligations, distributed offsetting receipts and outlays....Agencies can find
comparable information reported in the SBR to the President's Budget in...(b) the "Detailed Budget
Estimates by Agency" found in the Appendix for budgetary resources, net outlays and obligations
incurred included in the Budget of the United States Government."
Government Accountability Office (GAO), Standards for Internal Control in the Federal Government
(issued September 2014), Principle 10 - Design Control Activities, 10.03, Accurate and timely recording
of transactions, states, "Transactions are promptly recorded to maintain their relevance and value to
management in controlling operations and making decisions... .In addition, management designs control
4

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Independent Auditors' Report
Exhibit I
Significant Deficiency
activities so that all transactions are completely and accurately recorded."
Statement of Federal Financial Accounting Standards (SFFAS) Number (No.) 5, Accounting for
Liabilities of the Federal Government, provides the definition and general principle for the recognition of
a liability: A liability for federal accounting purposes is a probable future outflow or other sacrifice of
resources as a result of past transactions or events. General purpose federal financial reports should
recognize probable and measureable future outflows or other sacrifices of resources arising from (1) past
exchange transactions, (2) government-related events, (3) government-acknowledged events, or (4)
nonexchange transactions that, according to current law and applicable policy, are unpaid amounts due as
of the reporting date."
Federal accounting standards require financial statements and footnote disclosures of all agencies of the
federal government to be presented in accordance with U.S. Generally Accepted Accounting Principles
(GAAP), However, with regards to materiality, SFFAS No., Accounting for Selected Assets and
Liabilities, paragraph 12 and 13, respectively state: "Except as otherwise noted, the accounting and
reporting provisions of the accounting standards recommended in this Statement need not be applied to
items that are qualitatively and quantitatively immaterial. The determination of whether an item is
material depends on the degree to which omitting or misstating information about the item makes it
probable that the judgment of a reasonable person relying on the information would have been changed or
influenced by the omission or the misstatement."
CAUSE
The issues noted above were caused by the following:
CSB does not have policy or procedure designed to review the note disclosures prepared by service
organization to validate the completeness and accuracy of the information presented and that material
differences between the SBR and the Budget of the U.S. Government is explained.
CSB service provider prepared the imputed cost journal voucher for the incorrect accounting period
instead of the current accounting period. Furthermore, CSB does not have policy or procedure designed
to review financial information prepared by its service provider for completeness and accuracy.
The purchase order was not established in the general ledger until after CSB had completed its review of
open obligation to identify those obligations eligible for accrual. As a result the obligation was not
considered during the year-end accrual process. Also, CSB does not have a control procedure in place to
review the reasonableness of the accounts payable recorded by the service provider.
EFFECT
The issues noted above effect the following:
Continuing not to disclose the explanation for material differences between the SBR and President's
Budget increases the risk of including misleading or inaccurate explanations in the financial statement
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Independent Auditors' Report
Exhibit I
Significant Deficiency
note disclosures.
Imputed Financing Sources in the Statement of Net Position was understated by a known amount of
$147,047.
Intragovernmental Gross Cost in the Statement of Net Costs was understated by a known amount of
$147,047.
Imputed Financing Sources reported in Reconciliation of Net Cost of Operation to Budget Note in the
financial statements is understated by a known amount of $147,047.
Property Plant and Equipment (PP&E) Net and Accounts Payable was understated by approximately
$115,595.
Continuing not to properly review unpaid liabilities recorded by the service provider increases the risk of
potential misstatements reported on the Balance Sheet, Statement of Net Costs, and Statement of
Budgetary Resources.
RECOMMENDATION
We recommend that CSB management:
1. Update Note 9 Budgetary Resource Comparisons to the Budget of the United States Government to
include a schedule and explanation of the material difference of $ 1 million for Net Outlays between
the SBR and President's Budget.
2. Design and implement policy or procedure to review the note disclosures prepared by the service
organization to validate the completeness and accuracy of information presented in the financial
statements.
3. Design and implement a policy or procedure to review the computed imputed costs to validate the
completeness and accuracy of the amount recorded in the general ledger.
4. Enhance current policies and procedures over the review of the accruals recorded, by including in
their review a comparison between disbursements made in the subsequent fiscal year and the accruals
recorded by the service organization. If a significant difference exists, notify the service provider to
conduct research to determine the appropriate corrective action.
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U.S. Chemical Safety and
Hazard Investigation Board
1750 Pennsylvania Avenue NW, Suite 910 | Washington, DC 20006
Phone: (202) 261-7600 | Fax: (202) 261-7650
www.csb.gov
Honorable Vanessa Allen Sutherland
Chairperson and Member
Honorable Manny Ehrlich, Jr.
Board Member
Honorable Rick Engler
Board Member
Honorable Kristen M. Kulinowski
Board Member
November 14, 2016
Mr. Paul C. Curtis
Director, Financial Audits
Office of Inspector General
U.S. Environmental Protection Agency
1300 Pennsylvania Avenue, N.W., (2410T)
Washington, DC 20400
Dear Mr. Curtis:
Thank you for the opportunity to review your draft report on the U.S. Chemical Safety
and Hazard Investigation Board's (CSB's) fiscal years 2016 and 2015 financial
statements. We are pleased the independent public accounting firm, Allmond &
Company, LLC, will issue an Unmodified Opinion, the highest level of assurance on our
financial statements.
We also appreciate the recommendations to improve controls over internal reviews over
the financial statements and note disclosures for completeness, accuracy, and
consistency. The following are the specific audit recommendations and CSB corrective
actions.
Recommendation 1. Update Note 9 Budgetary Resource Comparisons to the Budget
of the United States Government to include a schedule and explanation of the
material difference of $1 million for Net Outlays between the SBR [Statement of
Budgetary Resources] and President's Budget.
Note 9 to the financial statements was updated in accordance with the
recommendation.
Recommendation 2. Design and implement policy or procedure to review the note
disclosures prepared by the service organization to validate the completeness and
accuracy of information presented in the financial statements.
For future reporting, the service organization (Bureau of the Fiscal Service or BFS)
will include a reconciliation table and narrative in the footnotes that will allow CSB

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U.S. Chemical Safety and
Hazard Investigation Board
to complete a proper review of the reconciliation prior to the presentation of the
statements.
Recommendation 3. Design and implement a policy or procedure to review the
computed imputed costs to validate the completeness and accuracy of the amount
recorded in the general ledger.
BFS will add an additional validation when calculating imputed costs to project the
ending balance in the impacted accounts to ensure the calculated entry will update the
balance. BFS will also generate a trial balance report after the entry is posted to
ensure the accuracy of the posted entry. Finally, BFS will add a quarterly validation
to review the reasonableness of imputed cost amounts.
Recommendation 4. Enhance current policies and procedures over the review of the
accruals recorded, by including in their review a comparison between
disbursements made in the subsequent fiscal year and the accruals recorded by the
service organization. If a significant difference exists, notify the service provider to
conduct research to determine the appropriate corrective action.
CSB will review all open orders and identified goods/services received/accepted and
request additional accruals above the unpaid invoices recorded in accounts payable.
CSB financial and procurement staff will coordinate to ensure all open orders are
reviewed and the unpaid obligations are accrued properly every quarter. After
accruals are submitted to BFS, CSB financial staff will follow up with BFS to ensure
accruals are entered to the financial system and will request corrections/updates if
accruals are not posted as expected.
Again, we appreciate the audit team's work and recommendations for improvement. If
you or your staff has any questions about this response, please feel free to contact me or
Anna Brown, Audit Liaison, at 202-261-7639.
Sincere J v.
/
/
Vanessa Alien Sutherland
Chairperson ami liowif Member
-2 -

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U.S. CHEMICAL SAFETY & HAZARD INVESTIGATION BOARD
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30,2016 AND 2015
,aO HA
SnTd^

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U.S. CHEMICAL SAFETY & HAZARD INVESTIGATION BOARD
BALANCE SHEET
AS OF SEPTEMBER 30, 2016 AND 2015
(In Dollars)

2016
2015
Assets:


Intragovernmental


Fund Balance With Treasury (Note 2)
$ 3,932,331 3
; 3,254,350
Total Intragovernmental
3,932,331
3,254,350
Accounts Receivable, Net (Note 2)
_
59,000
Property, Equipment, and Software, Net (Note 4)
513,638
437,879
Total Assets
$ 4,445,969 3
; 3,751,229
Liabilities:


Intragovernmental


Accounts Payable
$ 37,469 3
; 15,459
Other (note 6)
57,789
103,703
Total Intragovernmental
95,258
119,162
Accounts Payable
281,578
389,128
Federal Employee and Veterans' Benefits (Note 5)
3,908
3,908
Other (Note 6)
660,796
690,389
Total Liabilities (Note 5)
$ 1,041,540 a
> 1,202,587
Net Position:


Unexpended Appropriations - Other Funds
$ 3,281,832 3
> 2,571,752
Cumulative Results of Operations - Other Funds
122,597
(23,110)
Total Net Position
$ 3,404,429 3
> 2,548,642
Total Liabilities and Net Position
$ 4,445,969 3
> 3,751,229
The accompanying notes are an integral part of these financial statements.
1

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U.S. CHEMICAL SAFETY & HAZARD INVESTIGATION BOARD
STATEMENT OF NET COST
FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015
(In Dollars)

2016
2015 1
Program Costs:


Gross Costs (Note 8)
$ 10,234,456 3
5 11,130,123
Net Cost of Operations
$ 10,234,456 3
5 11,130,123
The accompanying notes are an integral part of these financial statements.
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U.S. CHEMICAL SAFETY & HAZARD INVESTIGATION BOARD
STATEMENT OF CHANGES IN NET POSITION
FOR THE YEARS ENDED SEPTEMBER 30,2016 AND 2015
(In Dollars)

2016
2015
Cumulative Results of Operations:
Beginning Balances
$ (23,110) $
: (418,912)
Budgetary Financing Sources:
Appropriations Used
10,088,628
11,167,085
Other Financing Sources (Non-Exchange):
Imputed Financing Sources
291,535
358,840
Total Financing Sources
Net Cost of Operations (Note 8)
10,380,163
(10,234,456)
11,525,925
(11,130,123)
Net Change
145,707
395,802
Cumulative Results of Operations
$ 122,597 $
: (23,110)
Unexpended Appropriations:
Beginning Balances
$ 2,571,752 $
: 3,365,173
Budgetary Financing Sources:
Appropriations Received
Other Adjustments
Appropriations Used
11,000,000
(201,292)
(10,088,628)
11,000,000
(626,336)
(11,167,085)
Total Budgetary Financing Sources
710,080
(793,421)
Total Unexpended Appropriations
$ 3,281,832 $
: 2,571,752
Net Position
$ 3,404,429 $
: 2,548,642
The accompanying notes are an integral part of these financial statements.
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U.S. CHEMICAL SAFETY & HAZARD INVESTIGATION BOARD
STATEMENT OF BUDGETARY RESOURCES
FOR THE YEARS ENDED SEPTEMBER 30,2016 AND 2015
(In Dollars)

2016
2015
Budgetary Resources:


Unobligated Balance Brought Forward, October 1
$ 1,491,716 $
1,891,083
Recoveries of Prior Year Unpaid Obligations
300,095
186,967
Other changes in unobligated balance
(196,568)
(618,952)
Unobligated balance fromprioryearbudget authority,net
1,595,243
1,459,098
Appropriations
11,000,000
11,000,000
Total Budgetary Resources
$ 12,595,243 $
12,459,098
Status ofBudgetaryResources:


New obligations and upward adjustments (total) (Note 10)
$ 10,904,144 $
10,967,382
Unobligated balance, end of year:


Apportioned, unexpired account (Note 2)
940,987
986,126
Expired unobligated balance, end of year (Note 2)
750,112
505,590
Unobligated balance, end of year (total)
1,691,099
1,491,716
Total Budgetary Resources
$ 12,595,243 $
12,459,098
Change in Obligated Balance


Unpaid Obligations:


Unpaid Obligations, Brought Forward, October 1
$ 1,762,634 $
2,128,521
New obligations and upward adjustments (Note 10)
10,904,144
10,967,382
Outlays (gross)
(10,125,451)
(11,146,302)
Recoveries of Prior Year Unpaid Obligations
(300,095)
(186,967)
Unpaid Obligations, End of Year (Gross)
2,241,232
1,762,634
Memorandum entries:


Obligated Balance, Start of Year
$ 1,762,634 $
2,128,521
Obligated Balance, End of Year
$ 2,241,232 $
1,762,634
Budget Authority and Outlays, Net:


Budget authority, gross
$ 11,000,000 $
11,000,000
Actual offsetting collections
(4,725)
(7,384)
Recoveries of prior year paid obligations
4,725
7,384
Budget Authority, net, (total)
$ 11,000,000 $
11,000,000
Outlays, gross
$ 10,125,451 $
11,146,302
Actual offsetting collections
(4,725)
(7,384)
Outlays, net, (total)
10,120,726
11,138,918
Distributed Offsetting Receipts
61,560
-
Agency outlays, net
$ 10,182,286 $
11,138,918
The accompanying notes are an integral part of these financial statements.
4

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CHEMICAL SAFETY AND HAZARD INVESTIGATION BOARD
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
A.	Reporting Entity
The United States Chemical Safety and Hazard
Investigation Board (CSB) is an independent
Federal agency with the mission of ensunng
the safety of workers and the public by
promoting chemical safety and accident
prevention. The CSB was established by the
Clean Air Act Amendments of 1990 and is
responsible for advising the President and
Congress on key issues related to chemical
safety and evaluating the effectiveness of other
Government agencies on safety requirements.
The CSB receives all of its funding through
appropriations. The CSB reporting entity is
comprised of General Funds and General
Miscellaneous Receipts.
General Funds are accounts used to record
financial transactions arising under
congressional appropriations or other
authorizations to spend general revenues. The
CSB manages Operations and Facilities,
Engineering and Development General Fund
accounts.
General Miscellaneous Receipts are accounts
established for receipts of non-recurring
activity, such as fines, penalties, fees and other
miscellaneous receipts for services and
benefits.
The CSB has rights and ownership of all assets
reported in these financial statements. The
CSB does not possess any non-entity assets.
B.	Basis of Presentation
The financial statements have been prepared to
report the financial position and results of
operations of the CSB. The Balance Sheet
presents the financial position of the agency.
The Statement of Net Cost presents the
agency's operating results; the Statement of
Changes in Net Position displays the changes
in the agency's equity accounts. The Statement
of Budgetary Resources presents the sources,
status, and uses of the agency's resources and
follows the rules for the Budget of the United
States Government.
The statements are a requirement of the Chief
Financial Officers Act of 1990, the
Government Management Reform Act of 1994
and the Accountability of Tax Dollars Act of
2002. They have been prepared from, and are
fully supported by. the books and records of
the CSB in accordance with the hierarchy of
accounting principles generally accepted in the
United States of America, standards issued by
the Federal Accounting Standards Advisory
Board (FASAB), Office of Management and
Budget (OMB) Circular A-136, Financial
Reporting Requirements, as amended, and the
CSB accounting policies which are
summarized in this note. These statements,
with the exception of the Statement of
Budgetary Resources, are different from
financial management reports, which are also
prepared pursuant to OMB directives that are
used to monitor and control the CSB's use of
budgetary resources. The financial statements
and associated notes are presented on a
comparative basis. Unless specified otherwise,
all amounts are presented in dollars.
C. Basis of Accounting
Transactions are recorded on both an accrual
accounting basis and a budgetary basis. Under
the accrual method, revenues are recognized
when earned, and expenses are recognized
when a liability is incurred, without regard to
receipt or payment of cash. Budgetary
accounting facilitates compliance with legal
requirements on the use of federal funds.
5

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D.	Fund Balance with Treasury
Fund Balance with Treasury is the aggregate
amount of the CSB's funds with Treasury in
expenditure, receipt, and deposit fund
accounts. Appropriated funds recorded in
expenditure accounts are available to pay
current liabilities and finance authorized
purchases.
The CSB does not maintain bank accounts of
its own, has no disbursing authority, and does
not maintain cash held outside of Treasury.
Treasury disburses funds for the agency on
demand. Foreign currency payments are made
either by Treasury or the Department of State
and are reported by the CSB in the U.S. dollar
equivalents.
E.	Accounts Receivable
Accounts receivable can consist of amounts
owed to the CSB by other Federal agencies
and the general public. Amounts due from
Federal agencies are considered fully
collectible. Accounts receivable from the
public include reimbursements from
employees and a security deposit prior to 2003
which was reclassified to a receivable. An
allowance for uncollectible accounts
receivable from the public is established when,
based upon a review of outstanding accounts
and the failure of all collection efforts,
management determines that collection is
unlikely to occur considering the debtor's
ability to pay.
F.	Property, Equipment, and Software
Property, equipment and software represent
furniture, fixtures, equipment, and information
technology hardware and software which are
recorded at original acquisition cost and are
depreciated or amortized using the straight-line
method over their estimated useful lives.
Major alterations and renovations are
capitalized, while maintenance and repair costs
are expensed as incurred. The CSB's
capitalization threshold is $10,000 for
individual purchases and $50,000 for bulk
purchases. Property, equipment, and software
acquisitions that do not meet the capitalization
criteria are expensed upon receipt. Applicable
standard governmental guidelines regulate the
disposal and convertibility of agency property,
equipment, and software. The useful life
classifications for capitalized assets are as
follows:
Description	Useful Life (years)
Leasehold Improvements	Lease Term
Office Furniture	7
Office Equipment	5
Computer Equipment	3
Software	3
G. Liabilities
Liabilities represent the amount of funds likely
to be paid by the CSB as a result of
transactions or events that have already
occurred.
The CSB reports its liabilities under two
categories, Intragovernmental and With the
Public. Intragovernmental liabilities represent
funds owed to another government agency.
Liabilities with the Public represent funds
owed to any entity or person that is not a
federal agency, including private sector firms
and federal employees. Each of these
categories may include liabilities that are
covered by budgetary resources and liabilities
not covered by budgetary resources.
Liabilities covered by budgetary resources are
liabilities funded by a current appropriation or
other funding source. These consist of
accounts payable and accrued payroll and
benefits. Accounts payable represent amounts
owed to another entity for goods ordered and
received and for services rendered except for
employees. Accrued payroll and benefits
represent payroll costs earned by employees
during the fiscal year which are not paid until
the next fiscal year.
Liabilities not covered by budgetary resources
are liabilities that are not funded by any
current appropriation or other funding source.
6

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These liabilities consist of accrued annual
leave, unfunded FECA, actuarial FECA and
the amounts due to Treasury for collection and
accounts receivable of civil penalties and
Freedom of Information Act (FOIA) request
fees.
H.	Annual, Sick, and Other Leave
Annual leave is accrued as it is earned, and the
accrual is reduced as leave is taken. The
balance in the accrued leave account is
adjusted to reflect current pay rates. Liabilities
associated with other types of vested leave,
including compensatory, restored leave, and
sick leave in certain circumstances, are accrued
at year-end, based on latest pay rates and
unused hours of leave. Funding will be
obtained from future financing sources to the
extent that current or prior year appropriations
are not available to fund annual and other
types of vested leave earned but not taken.
Non-vested leave is expensed when used. Any
liability for sick leave that is accrued but not
taken by a Civil Service Retirement System
(CSRS)-covered employee is transferred to the
Office of Personnel Management (OPM) upon
the retirement of that individual. Credit is
given for sick leave balances in the
computation of annuities upon the retirement
of Federal Employees Retirement System
(FERS)-covered employees effective at 100%.
I.	Accrued and Actuarial Workers'
Compensation
The Federal Employees' Compensation Act
(FECA) administered by the U.S. Department
of Labor (DOL) addresses all claims brought
by the CSB employees for on-the-job injuries.
The DOL bills each agency annually as its
claims are paid, but payment of these bills is
deferred for two years to allow for funding
through the budget process. Similarly,
employees that the CSB terminates without
cause may receive unemployment
compensation benefits under the
unemployment insurance program also
administered by the DOL, which bills each
agency quarterly for paid claims. Future
appropriations will be used for the
reimbursement to DOL. The liability consists
of the unreimbursed cost paid by DOL for
compensation to recipients under the FECA.
J. Retirement Plans
The CSB employees participate in either the
CSRS or the FERS. The employees who
participate in CSRS are beneficiaries of the
CSB matching contribution, equal to seven
percent of pay, distributed to their annuity
account in the Civil Service Retirement and
Disability Fund.
Prior to December 31, 1983, all employees
were covered under the CSRS program. From
January 1, 1984 through December 31, 1986,
employees had the option of remaining under
CSRS or joining FERS and Social Security.
Employees hired as of January 1, 1987 are
automatically covered by the FERS program.
Both CSRS and FERS employees may
participate in the federal Thrift Savings Plan
(TSP). FERS employees receive an automatic
agency contribution equal to one percent of
pay and the CSB matches any employee
contribution up to an additional four percent of
pay. For FERS participants, the CSB also
contributes the employer's matching share of
Social Security.
FERS employees and certain CSRS
reinstatement employees are eligible to
participate in the Social Security program after
retirement. In these instances, the CSB remits
the employer's share of the required
contribution.
The CSB recognizes the imputed cost of
pension and other retirement benefits during
the employees' active years of service. OPM
actuaries determine pension cost factors by
calculating the value of pension benefits
expected to be paid in the future and
communicate these factors to the CSB for
current period expense reporting. OPM also
provides information regarding the full cost of
health and life insurance benefits. The CSB
recognized the offsetting revenue as imputed
financing sources to the extent these expenses
will be paid by OPM.
7

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The CSB does not report on its financial
statements information pertaining to the
retirement plans covering its employees.
Reporting amounts such as plan assets,
accumulated plan benefits, and related
unfunded liabilities, if any, is the responsibility
of the OPM, as the administrator.
K. Other Post-Employment Benefits
The CSB employees eligible to participate in
the Federal Employees' Health Benefits Plan
(FEHBP) and the Federal Employees' Group
Life Insurance Program (FEGLIP) may
continue to participate in these programs after
their retirement. The OPM has provided the
CSB with certain cost factors that estimate the
true cost of providing the post-retirement
benefit to current employees. The CSB
recognizes a current cost for these and Other
Retirement Benefits (ORB) at the time the
employee's services are rendered. The ORB
expense is financed by OPM, and offset by the
CSB through the recognition of an imputed
financing source.
L. Use of Estimates
The preparation of the accompanying financial
statements in accordance with generally
accepted accounting principles requires
management to make certain estimates and
assumptions that affect the reported amounts
of assets, liabilities, revenues, and expenses.
Actual results could differ from those
estimates.
M. Imputed Costs/Financing Sources
Federal Government entities often receive
goods and services from other Federal
Government entities without reimbursing the
providing entity for all the related costs. In
addition, Federal Government entities also
incur costs that are paid in total or in part by
other entities. An imputed financing source is
recognized by the receiving entity for costs
that are paid by other entities. The CSB
recognized imputed costs and financing
sources in fiscal years 2016 and 2015 to the
extent directed by accounting standards.
N. Reclassification
Certain fiscal year 2015 balances have been
reclassified, retitled, or combined with other
financial statement line items for consistency
with the current year presentation.
8

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NOTE 2. FUND BALANCE WITH TREASURY
Fund balance with Treasury account balances as of September 30, 2016 and 2015 were as
follows:

2016

2015 1
Fund Balances:

Appropriated Funds
$
3,932,331
$
3,254,350
Total
$
3,932,331
$
3,254,350
Status of Fund Balance with Treasury:

Unobligated Balance

Available
$
940,987
$
986,126
Unavailable

750,112

505,590
Obligated Balance Not Yet Disbursed

2,241,232

1,762,634
Total
$
3,932,331
$_
3,254,350
No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances
in the Treasury accounts.
The available unobligated fund balances represent the current-period amount available for
obligation or commitment. At the start of the next fiscal year, this amount will become part of the
unavailable balance as described in the following paragraph.
The unavailable unobligated fund balances represent the amount of appropriations for which the
period of availability for obligation has expired. These balances are available for upward
adjustments of obligations incurred only during the period for which the appropriation was
available for obligation or for paying claims attributable to the appropriations.
The obligated balance not yet disbursed includes accounts payable, accrued expenses, and
undelivered orders that have reduced unexpended appropriations but have not yet decreased the
fund balance on hand (see Note 11).
NOTE 3. ACCOUNTS RECEIVABLE
Accounts receivable balances as of September 30, 2016 and 2015 were as follows:

2016

2015 1
With the Public

Accounts Receivable
$
$
59,000
Total Accounts Receivable
$
$
59,000
The accounts receivable was made up of a security deposit of $59,000 made prior to 2003, which
was reclassified to a receivable. This receivable was collected during 2016.
Historical experience has indicated that the majority of the receivables are collectible. There are
no material uncollectible accounts as of September 30, 2016 and 2015.
9

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NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE
Schedule of Property, Equipment, and Software as of September 30, 2016:
Accumulated
Acquisition	Amortization/	Net Book
Major Class	Cost	Depreciation	Value
Leasehold Improvements
Furniture & Equipment
Software
$
983,356
1,096,282
246,864
$
811,184
867,200
134,480
$
172,172
229,082
112,384
Total
$~
2,326,502
$
1,812,864
$
513,638
Schedule of Property, Equipment, and Software as of September 30, 2015:
Major Class
Acquisition
Cost
Accumulated
Amortization/
Depreciation

Net Book
Value
Leasehold Improvements
Furniture & Equipment
Software
$
983,356
1,669,364
131,270
$
756,814
1,458,027
131,270
$
226,542
211,337
Total
$
2,783,990
$
2,346,111
$
437,879
NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES
The liabilities for the CSB as of September 30, 2016 and 2015 include liabilities not covered by
budgetary resources. Congressional action is needed before budgetary resources can be provided.
Although future appropriations to fund these liabilities are likely and anticipated, it is not certain
that appropriations will be enacted to fund these liabilities.


2016

2015 1
Intragovernmental - FECA
Unfunded Leave
Actuarial FECA
$
1,020
386,113
3,908
$
1,020
456,061
3,908
Total Liabilities Not Covered by Budgetary Resources
Total Liabilities Covered by Budgetary Resources
$
391,041
650,499
$
460,989
741,598
Total Liabilities
~
1,041,540
$
1,202,587
Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The
balance in the accrued annual leave account is reviewed quarterly and adjusted as needed to
accurately reflect the liability at current pay rates and leave balances. Accrued annual leave is
paid from future funding sources and, accordingly, is reflected as a liability not covered by
budgetary resources. Sick and other leave is expensed as taken.
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NOTE 6. OTHER LIABILITIES
Other liabilities account balances as of September 30, 2016 were as follows:

Current Non Current
Total
Intragovenmieiital
FECA Liability
Payroll Taxes Payable
$ 1,020 $
56,769
$ 1,020
56,769
Total Intragovenmieiital Other Liabilities
$ 57,789 $
$ 57,7891
With the Public
Payroll Taxes Payable
Accrued Funded Payroll and Leave
Unfunded Leave
$ 32,153 $
242,530
386,113
$ 32,153
242,530
386,113
Total Public Other Liabilities
$ 660,796 $
$ 660,7961
Other liabilities account balances as of September 30, 2015 were as follows:

Current Non Current
Total
Intragovernmental
FECA Liability
Payroll Taxes Payable
Custodial Liability
$ 1,020 $
43,683
59,000
$ 1,020
43,683
59,000
Total Intragovernmental Other Liabilities
$ 103,703 $
$ 103,703 |
With the Public
Payroll Taxes Payable
Accrued Funded Payroll and Leave
Unfunded Leave
$ 30,854 $
203,474
456,061
$ 30,854
203,474
456,061
Total Public Other Liabilities
$ 690,389 $
$ 690,389 1
NOTE 7. LEASES
Operating Leases
The CSB occupies offices in Washington, DC and Denver, CO under lease agreements. The total
operating lease expenses for the years ended September 30, 2016 and 2015 were $674,401 and
$1,199,842, respectively. Lease expenses dropped significantly in FY 2016 because CSB moved
to lower cost office space in Washington, DC in September 2015.
The lease agreement for office space in Washington, DC is accounted for as an operating lease.
The lease agreement has a ten-year term commencing on October 1, 2015 and ending on
September 30, 2025. According to Section 1.03 of this agreement, beginning in the 4th year of
the lease and continuing through the 10th year of the lease, the first two (2) months of rent in each
year (totaling 14 months of free rent) shall be entirely abated. Below is a schedule of future
11

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payments for the term of the lease, excluding annual adjustments to real estate taxes and
operating expenses.
Washington, DC	
2017	$	657,461
2018	674,961
2019	545,997
2020	545,997
2021	545,997
Net Future Payments	$	5,154,403
The lease agreement for office space in Denver, CO is accounted for as an operating lease. The
lease agreement is for a period of 60 months commencing on or about December 1, 2014.
Lease payments are increased annually based on the adjustments for operating cost. The CSB
may relinquish space upon four (4) months" notice. Thus, at any future time, the CSB's financial
obligation can be reduced to four (4) months of rent, plus the unamortized balance of any tenant
improvements financed through Public Buildings Service (PBS) plus any rent concessions not yet
earned. Below is a schedule of future payments for the Denver lease.
Denver, CO
1 Fiscal Year
Building 1
2017
$ 96,737
2018
97,729
2019
98,742
2020 (2 months)
16,511
Total Future Payments
$ 309,719
NOTE 8. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE
Intragovernmental costs and revenue represent exchange transactions between the CSB and other
federal government entities, and are in contrast to those with non-federal entities (the public).
Such costs and revenue are summarized as follows:

2016
2015 1
Program A


Intragovernmental C osts
$ 2,347,903
$ 2,122,713
Public Costs
7,886,553
9,007,410
Net Program Costs
$ 10,234,456
$ 11,130,1231
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NOTE 9. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE
UNITED STATES GOVERNMENT
The President's Budget that will include fiscal year 2016 actual budgetary execution information
has not yet been published. The President's Budget is scheduled for publication in February 2017
and can be found at the OMB Web site: http:/Avww.whitehouse. gov/omb/. The Chemical Safety
and Hazard Investigation Board Budget Appendix can be found on the OMB website:
http://www.whitehouse.sov/omb/budset. The 2017 Budget of the United States Government, with
the "Actual" column completed for 2015, has been reconciled to the fiscal year 2015 Statement of
Budgetary Resources as shown below.
For the Fiscal Year Ended September 30, 2015 (In millions)

Distributed

Budge tary
Obligations
Offsetting
Net
FY2015
Resources
Incurre d
Re ce ipts
Outlays
Statement of Budgetary Resource
$12,000,000
$11,000,000
$
$11,000,000
Difference - Due to Rounding

1,000,000
Budget of the U.S. Government
$12,000,000
$11,000,000
$
$12,000,000
NOTE 10. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED
Obligations incurred and reported in the Statement of Budgetary Resources for 2016 and 2015
consisted of the following:

2016
2015 1
Direct Obligations, Category B $
10,904,144
$ 10,967,382
Total New Obligations and Upward Adjustments $
10,904,144
$ 10,967,3 82|
Category B apportionments typically distribute budgetary resources by activities, projects, objects
or a combination of these categories.
NOTE 11. UNDELIVERED ORDERS AT THE END OF THE PERIOD
As of September 30, 2016 and 2015, budgetary resources obligated for undelivered orders
amounted to $1,590,733 and $1,080,036, respectively.
NOTE 12. CUSTODIAL ACTIVITY
The CSB's custodial collection primarily consists of Freedom of Information Act requests
typically. For 2016, they collected a $59,000 rent deposit from a lease agreement prior to 2003.
While these collections are considered custodial, they are neither primary to the mission of the
CSB nor material to the overall financial statements. The CSB's total custodial collections are
$61,560 and $1,237 for the years ended September 30, 2016, and 2015, respectively.
13

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NOTE 13. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET
The CSB has reconciled its budgetary obligations and non-budgetary resources available to its net
cost of operations.

2016
2015 1
Resources Used to Finance Activities


Budgetary Resources Obligated


New Obligations and Upward Adjustements !
B 10,904,144 3
6 10,967,382
Spending Authority from Offsetting Collections and Recoveries
(304,820)
(194,351)
Obligations Net of Offsetting Collections and Recoveries
10,599,324
10,773,031
Other Resources


Imputed Financing from Costs Absorbed by Others
291,535
358,840
Total Resources Used to Finance Activities
10,890,859
11,131,871
Total Resources Used to Finance Items Not Part of the Net Cost of Operations
(753,062)
(84,354)
Total Resources Used to Finance the Net Cost of Operations
10,137,797
11,047,517
Total Components of Net Cost of Operations That will not Require or


Generate Resources in the Current Period
96,659
82,606
Net Cost of Operations 1
B 10,234,456 3
6 11,130,123
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