This report was prepared in accordance with the Consolidated Federal Funds Report Act of 1982 (P.L. 97-326), which requires "The Director of the Office of Management and Budget to prepare an annual report consolidating the available data on the geographic distribution of Federal funds..." The report reflects Federal Government expenditures by State and territory.

Coverage includes Federal Government expenditures for grants to State and local governments, salaries and wages, procurement, direct payments to individuals, and selected other major programs for which data were available by State and territory. For fiscal year 1981, the statistics compiled amount to $562 billion. An additional $15 billion in U.S. Postal Service salaries and wages are reported in appendix B on a State-by-State basis. The data reported represent approximately 94 percent of the Federal Government expenditures (exclusive of interest paid on debt) made in the United States in fiscal year 1981.

Federal Government expenditure amounts not included in this report reflect data that could not be distributed by State and territory, or that were not available. Such amounts include net interest on Federal Government debt, international payments and foreign aid, current operational expenses not included under salaries or procurement (tables 3 and 5), expenditures for selected Federal agencies (such as the Central Intelligence Agency and National Security Agency) and foreign outlays within each of the categories in table 2 through 6.