Civil Service Fund: Improved Controls Needed Over Investments
AFMD-87-17
Published: May 07, 1987. Publicly Released: Jun 10, 1987.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of the Treasury's management of the Civil Service Retirement and Disability Trust Fund during debt ceiling crises in 1984 and 1985 to determine how much interest Treasury lost by not following its normal securities investment and redemption policies.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | The Secretary of the Treasury should direct the Financial Management Service to determine the amount of unrestored losses resulting from the 1984 and 1985 debt ceiling crises and seek the necessary legislative authority to fully restore those losses to the fund. |
Closed – Implemented
Treasury is reviewing an analysis of the losses, and when the amount is determined, Treasury will sponsor appropriate legislation to restore the losses.
|
| Department of the Treasury | The Secretary of the Treasury should direct the Financial Management Service to: (1) document properly all adjustments to the accounting records; (2) establish controls to ensure that the lowest-interest-rate securities are redeemed first; and (3) evaluate the fund's accounting operations for conformance with applicable accounting principles and standards. The Secretary should also seek legislative authority to fully reimburse the fund for losses resulting from future Treasury or OPM management of fund transactions. |
Closed – Implemented
Treasury controls adjustments and redemptions and, during the FIA review of the Public Debt Accounting System, will review internal controls over investment operations. Treasury noted that any legislation should include all trust funds and preserves equity between the trust funds and the general fund. Since such legislation would have broad impact, it may take 12 to 18 months for final passage.
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Topics
Accounting systemsCivil service pensionsDebt subject to statutory limitationFinancial managementInternal controlsInvestmentsTrust fundsSecuritiesCivil serviceDebt ceiling