USPTO Performance and Accountability Report - U.S. Patent and ...

Fund Balance with Treasury is the single largest asset
on the Balance Sheet and represents 87.1 percent of
total assets at the end of FY 2012. Over half of the
Fund Balance with Treasury represents fees the USPTO
has collected, but has not been authorized to spend
through the annual appropriation process – this
includes temporarily unavailable fees of $790.1 million
and unavailable special fund receipts under OBRA
of $233.5 million, which total $1,023.6 million in
unavailable fees. This asset is also comprised of
unpaid obligated funds of $344.8 million, other funds
held on deposit for customers of $120.7 million, and
unobligated funds carried over from one year to the
next (operating reserve) of $237.9 million.
The unavailable special fund receipts and the temporarily
unavailable funds require Congressional appropriation
before they will be available for USPTO’s use.
These funds, together with amounts obligated and
held on deposit, represent 86.2 percent of the Fund
Balance with Treasury.
The operating reserve is available for use without
further Congressional appropriation and is maintained
to permit the USPTO to plan for long-term
financial stability, as well as temporary changes in our
cash flow. As such, the operating reserve is not tied
to a specific event and enables the USPTO to address
fluctuations in revenues or unexpected demands on
resources. In addition, the operating reserve is used
to manage cash flow at the beginning of the fiscal
year to ensure the agency has adequate resources
to sustain current operations. Total fee collections are
lower than operating requirements early in the year,
and do not fully cover the necessary expenses such
as payroll and contractual obligations that occur
close to the fiscal year start. The operating reserve is
intended to provide sufficient resources to continue
current operations until the collection of fees builds
over the subsequent months.
As required by 35 U.S.C. 42(c)(3), the USPTO maintains
and tracks two separate and distinct operating
reserve balances – one for Patent operations and one
for Trademark operations. At the end of FY 2012, the
Patent operating reserve was $111.8 million and the
Trademark operating reserve was $126.1 million, 0.6
and 7.5 months of operating expenses, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS
The other major asset is property, plant, and equipment.
The net balance of this asset has increased by
$32.8 million during the past four years, with the acquisition
values of property, plant, and equipment
increasing by $194.0 million. Investments in IT software
and software in development from FY 2008 to FY 2009
increased $12.7 million, in conjunction with enhancing
the existing e-government capabilities in areas such
as e-filing, application information retrieval, data and
image capture, and web-based search systems.
This increase slowed to only $6.8 million in FY 2010 as
the USPTO chose to stop modifications to existing,
outdated systems. Instead, the USPTO is beginning to
completely re-invent our IT systems from end-to-end,
which will lead to future increases in IT hardware,
software, and software in development values. This was
evidenced by increases in FY 2011 and FY 2012 of
$76.1 million and $55.4 million, respectively, for IT
hardware, software, and software in development.
Total liabilities increased from $1,251.2 million at the
end of FY 2011 to $1,255.2 million at the end of
FY 2012, representing an increase of $4.0 million, or
0.3 percent. The following graph shows the composition
of liabilities during the past five years.
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