OPM Congressional Budget Justification and Annual Performance Plan

U.S. Office of Personnel Management

FY 2000
Budget Justification/Performance Plan

(Transfers From The Trust Funds - continued)
*Additional Information Available on the Next Page*

OPM STRATEGIC PLAN GOAL II: protect and promote the merit-based civil service and the employee earned benefit programs through an effective oversight and evaluation program.
FY 2000 Resource Summary:	Obligations (000): $11,563	Full-Time Equivalents:130

By the year 1999, resolve material weaknesses and improve financial systems and internal controls to maintain the integrity of the benefit trust funds totaling more than $60 billion in annual benefit payments and OPM’s appropriated and reimbursable funds.

Ensure Federal Employees’ Health Benefits and Federal Employees’ Group Life Insurance contract compliance through financial and performance audits and quality assurance standards.

RIS Goal 5 FY 1999/2000:	The financial oversight of the employee benefit trust funds is strengthened in that (a) the FY 2000 Trust Fund annual financial statements receive unqualified opinions from an independent auditor, (b) the earned benefit financial sub-systems are integrated with the new general ledger installed in early FY 1999, and (c) financial policies and procedures supporting the earned benefit financial systems are properly documented and comply with applicable requirements and standards.

RIS Goal 5
FY 1999/2000:

The financial oversight of the employee benefit trust funds is strengthened in that (a) the FY 2000 Trust Fund annual financial statements receive unqualified opinions from an independent auditor, (b) the earned benefit financial sub-systems are integrated with the new general ledger installed in early FY 1999, and (c) financial policies and procedures supporting the earned benefit financial systems are properly documented and comply with applicable requirements and standards.

		In FY 1998, RIS made its most significant stride toward resolving weaknesses in its earned benefit program financial management systems by installing a new General Ledger that meets the requirements of the Federal Financial Management Improvement Act. In FY 1999, the RIS’ financial management staff will complement this effort by installing new Investment Management and Accounts Receivable modules, and focus on integrating these new systems with the remaining legacy financial management and benefits record keeping and processing systems.
		RIS will expand overall system capabilities to include functions currently performed by stand-alone systems, including modernizing the Accounting Control File System (reclamation of post-death retirement payments), check cancellation, and recertification systems.
		RIS will build on carrier financial reporting requirements implemented in FYs 1998 and 1999 so that all FEHBP Experienced-rated Carriers submit audited annual financial statements in accordance with contract requirements.
		OPM’s Federal payroll office oversight and monitoring program will be expanded by RIS through on-site visits to payroll offices, including reviews of payroll records and audit findings that pertain to the administration of the employee benefit programs.
		RIS financial policy and management staff will establish adequate cost accounting standards and continue working with carriers participating in the health benefits and life insurance programs and require that their annual financial statements are audited.
		RIS financial policy staff will continue to document accounting policies and procedures and produce needed procedural manuals for financial management staff to ensure that these policies and procedures are followed.

		The FY 1997 annual financial statements, audited in FY 1998, for the Retirement and Life Insurance programs receive "unqualified opinions" from the independent auditing firm. RIS made excellent progress in its oversight of the employee benefit trust funds by receiving "unqualified" opinions on two of the three the Trust Fund annual financial statements. This year, an Independent Public Accounting firm certified that the FY 1997 statements for the Civil Service Retirement and Disability and Federal Employees Group Life Insurance Funds met this standard. A critical part in securing these opinions was the extensive review of the entire annuity roll conducted by RIS staff, in conjunction with staff from the independent auditor, KPMG Peat Marwick, OPM’s IG, and the General Accounting Office. This review validated the internal controls we have in place for retirement trust fund disbursements and demonstrated that these disbursements are 94% accurate.
		The FY 2000 annual financial statements for all of the three benefit programs, published in FY 2001, receive "unqualified opinions" from the independent auditor firm.
		Financial policies and procedures are documented as planned. In pursuit of resolving other weaknesses in its financial management systems, RIS began the task to develop an internal Financial Management Manual that documents the many policies and desk procedures used by our accounting staff in processing and recording financial transactions. Consequently, OPM contracted with the Department of the Treasury's Center for Applied Financial Management to develop an Accounting manual. This project and its associated contract will extend at least through Fiscal Year 1999. To date, the Center has delivered documentation for ten systems and/or processes.
		Financial Management Manual is completed and distributed to RIS accounting staff by mid-FY 2000.
		The OPM FMFIA assurance letter for FY 2000, published in FY 2001, shows that identified material weaknesses in benefit program’s internal and management controls are resolved. This will be measured in FY 2001.
		The audit reports of the benefit programs’ FY 2000 annual financial statements, published in FY 2001, describe no new material weaknesses in internal controls.

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Web Page Created 14 May 1999