Disclaimer of Opinion on the Financial Statements of the Pension Benefit Guaranty Corporation for FY 1980
AFMD-82-42: Published: Jun 23, 1982. Publicly Released: Jun 23, 1982.
- Full Report:
GAO examined the combined statement of the financial condition of the Pension Benefit Guaranty Corporation (PBGC) as of September 30, 1980, the related combined statements of operations and changes in the deficiency in net assets, and the changes in financial condition for the year then ended.
GAO found material accounting and estimating problems, internal control weaknesses, and major uncertainties that significantly reduce the reliability of important account balances. Because of the matters discussed in the report, GAO was not able to express an opinion on whether PBGC statements presented fairly its financial condition and the results of its operations and changes in financial condition for fiscal year 1980.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: Although PBGC has taken several actions, it needs legislation to provide authority for it to require information from companies to assess the financial condition of private pension plans and verify the liability for pension plans turned over to PBGC. The information is needed to audit PBGC financial statements. These issues will be considered in future audits.
Recommendation: The Executive Director, PBGC, should: (1) develop a system for financial statement reporting that values benefits on a current, individual-participant basis; (2) substantiate the reasonableness of actuarial assumptions, estimation techniques, and models; (3) determine reasons for changes in the pension plan inventory and establish allowances in the financial statements for expected variances; (4) establish accounting controls and procedures to reconcile financial data maintained by separate computer systems; and (5) develop policies and procedures for substantiating information provided by external organizations.
Agency Affected: Pension Benefit Guaranty Corporation