The Results of Initial Review of the Financial and Actuarial Statements Submitted Pursuant to Public Law 95-595
AFMD-82-67: Published: May 21, 1982. Publicly Released: May 21, 1982.
- Full Report:
GAO reviewed the Department of Defense (DOD) fiscal year 1980 financial and actuarial statements relating to the military retirement system, a noncontributory, pay-as-you-go, and unfunded system that pays benefits to retired military personnel and certain retirees' survivors.
Because the military retirement system is unfunded, DOD contended that a required financial statement and other information need not be prepared. GAO found that the financial statements did not disclose the existence of valid accounts receivable and unpaid obligations, which were reported to the Department of Treasury as part of the yearend closing process but were omitted from the pension statements required by law. Over $1 million in receivables and $23 million in obligations were not reported. More recognition should be given to adhering to generally accepted accounting principles, which require disclosure of accrued receivables and payables. Future reports should disclose these items either in the financial statements or in the footnotes. Such information would enhance the usefulness and fair presentation of the reports. The analysis of the techniques, formulas, assumptions, and computer program logic showed that the methodology employed in the actuarial valuation process is satisfactory to produce reasonable actuarial projections on the future of the military retirement systems.