United States Government Accountability Office GAO November 2011 _part5 docx

Management’s Discussion and Analysis
Page 45 GAO-12-219 SEC’s Financial Statements for Fiscal Years 2011 and 2010




Financial Highlights
This section provides an analysis of the  nancial position, results of operations, and the underlying causes for signi cant changes
in balances presented in the SEC’s FY 2011  nancial statements.
Overview of Financial Position
Assets. The SEC’s total assets were $8,517 million at
September 30, 2011, an increase of $355 million or 4 percent
over FY 2010.
Investments, Net increased by $278 million due to a $453
million increase in Investor Protection Fund investments, and
a $175 million decrease in Disgorgement and Penalty related
investments. Investor Protection Fund resources were invested
in Treasury securities during the  rst quarter of FY 2011. The
decrease in Disgorgement and Penalty investments is related
to the SEC’s continued efforts to accelerate distributions to
harmed investors during FY 2011.
The increase in Accounts Receivable, Net of $53 million is
mainly comprised of a $43 million increase in Section 31 fees
receivable and a $9 million increase in disgorgement and
penalty accounts receivable (net) designated as payable to
the U.S. Treasury General Fund upon collection.
Section 31 fees are payable to SEC twice a year: in March for
the period September through December and in September
for the period January through August. Thus, the year-end
Section 31 accounts receivable balance is for securities
transactions occurring during the month of September. The

increase in Section 31 accounts receivable during FY 2011
is attributable to the increase in the fee rate from $16.90 to
$19.20 and a 37 percent transaction volume increase when
comparing September 2010 to September 2011.
TABLE 1.2
ASSETS AS OF SEPTEMBER 30, 2011 AND 2010
(DOLLARS IN MILLIONS)
FY 2011 FY 2010
Fund Balance with Treasury $ 6,996 $ 6,989
Investments – Disgorgement and Penalties 750 925
Investments – Investor Protection Fund 453 -
Accounts Receivable, Net 214 161
Property and Equipment, Net 94 80
Other Assets 10 7
Total Assets $ 8,517 $ 8,162
Fund Balance with
Treasury
Investments -
Disgorgement and
Penalties
Investments - Investor
Protection Fund
Accounts
Receivable, Net
Property and Other
Assets
82%
9%
5%
3%

1%
CHART 1.3
ASSETS BY TYPE
32 2011 PERFORMANCE AND ACCOUNTABILITY REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Financial Hi
g
hli
g
hts
Thi
s sect
i
on prov
id
es an ana
l
ys
i
s o
f
t
h
e

nanc
i
a
l
pos

i
t
i
on, resu
l
ts o
f
operat
i
ons, an
d
t
h
e un
d
er
l
y
i
n
g
causes
f
or s
ig
n
i
cant c
h
an

g
es
in balances
p
resented in the
S
E
C
’s FY 2011  nancial statements
.
O
verview of Financial Position
Asse
t
s
. The SEC’s total assets were $8
,
517 million at
September 30, 2011, an increase of $355 million or 4 percent
o
v
e
r
FY
2
0
1
0
.
I

nvestments, Net increased b
y

$
278 million due to a
$
453
million increase in Investor Protection Fund investments, and
a

$
175 million decrease in Dis
g
or
g
ement and Penalty related
investments. Investor Protection Fund resources were invested
in Treasury securities durin
g
the  rst quarter of FY 2011. The
d
ecrease in Dis
g
or
g
ement and Penalty investments is related
to the SEC’s continued efforts to accelerate distributions to
harmed investors durin
g
FY 2011.

T
he increase in Accounts Receivable
,
Net of $53 million is
mainly comprised of a $43 million increase in Section 31 fees
receivable and a $9 million increase in disgorgement and
penalty accounts receivable
(
net
)
designated as payable to
the U.
S
. Treasury
G
eneral Fund upon collection.
Section 31 fees are payable to SEC twice a year: in March fo
r
the period September through December and in Septembe
r
for the period January through August. Thus, the year-end
Section 31 accounts receivable balance is for securities
transactions occurring during the month of September. The
increase in Section 31 accounts receivable during FY 2011
is attributable to the increase in the fee rate from
$
16.90 to
$
19.20 and a 37 percent transaction volume increase when
c

omparing September 2010 to September 2011
.
TABLE 1.2
ASSETS AS OF SEPTEMBER 30
,
2011 AND 2010
(
D
O
LLAR
S
IN MILLI
O
N
S)
FY
2011
FY
201
0
Fund Balance with Treasur
y
$
6,99
6
$
6,989
I
nvestments –
Di

sgorgement an
d

P
ena
l
t
i
e
s
7
5
0
925
I
nv
es
tm
e
nt
s
– Inv
es
t
o
r Pr
o
t
ec
ti

o
n F
u
n
d
4
53
-
Accounts Receivable
,
Net
2
14
1
61
P
ro
p
ert
y
an
d

Eq
u
ip
ment,
N
e
t

9
4
80
O
th
e
r A
sse
t
s
1
0
7
T
ota
l

A
ssets
$
8,517
$
8,16
2
Fund Balance with
T
reasur
T
T
y

I
nv
es
tm
e
nt
s
-
Di
sgorgement an
d
Penaltie
s
I
nvestments - Investor
Pr
o
t
ec
ti
o
n F
u
n
d
Accou
nt
s

R

ece
i
va
bl
e
,

Net
Property and Other
A
sset
s
82
%
9
%
5%
3%
1
%
C
HA
R
T
1
.
3
A
SS
ET

S
BY TYP
E
3
2 2
0
11 PERF
O
RMAN
C
E AND A
CCOU
NTABILITY REP
O
R
T
M
ANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
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