Magazine article The CPA Journal

GAO Issues Report on 1994 PBGC Financials

Magazine article The CPA Journal

GAO Issues Report on 1994 PBGC Financials

Article excerpt

The last time we reported on the GAO's audits of the Pension Benefit Guaranty Corporation (PBGC), the period covered was the two years ended September 30, 1992. At the time, the GAO had concerns in the following areas:

* Reporting on the statement of operations for the 1992 fiscal year.

* Material weaknesses in internal control.

* Long-term viability of the Single-Employer Fund.

* Weaknesses in employee plan audits.

Since that time, the GAO has issued two reports. The first covered the 1993 financial statements and was issued in May 1994. The latest was issued in March 1995 and covered 1994. Let's look at the status of the GAO's problems with the PBGC.

* Reporting on financial statements. The problem with reporting on the 1992 financial statements related to scope Limitations in the 1991 audit. The GAO was able to issue "clean" opinions on all the financial statements for both 1993 and 1994.

* Material weaknesses on internal control Although noting improvements in both years, the same weaknesses reported in 1992 still exist. These relate to financial systems and internal control implementation, an inadequate assessment of the Multiemployer Fund's liability for future financial assistance, and inadequate controls over nonfinancial participant data. While a number of reportable conditions were indicated for 1992, in 1994 they we reduced to one.

An interesting aspect of the 1994 report is that, for the first time, GAO is reporting about management's assertions concerning such controls. The material weaknesses are described in Management's Report on Internal Controls, a copy of which is included as an appendix to the report. As readers of The CPA Journal are well aware, the GAO has been an advocate of this type of reporting for both the public and private sector.

* Long-term viability of the Single-Employer Fund. …

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