FY 2001 Performance and Accounting Report Homepage The Inspector General's Top Management Challenges As of December 1, 2000 As of January 28, 2002

 

Inspector General's Top Management Challenges

as of December 1, 2000

 

December 1, 2000 Honorable Fred Thompson Chairman Senate Committee on Governmental Affairs Washington, D.C. 20510-6250 Dear Mr. Chairman: This is in response to the letter of October 12, 2000, signed by you and four other congressional leaders, requesting me to provide my assessment of the most serious management challenges facing the Office of Personnel Management (OPM). Like lists I have done in previous years, this year's submission has changed from what I reported on December 1, 1999. Specifically, I now feel that the agency's controls over investments have been properly addressed by management and the issue is no longer a serious challenge to the agency. While all of the challenges identified below and summarized in the enclosures are critical to the mission of OPM, it should be noted that human resource management is a government wide challenge for which the agency has a leadership role. The challenges covered in my report are: Revolving Fund and Salaries and Expenses Accounts OPM's Financial Management Oversight of the FEHBP Retirement Systems Modernization Implementation of the Government Performance and Results Act Human Resources Management Health Care Fraud in the FEHBP The first enclosure to this letter includes written summaries of each challenge I have cited above. These write-ups include a description of the efforts of management to resolve each challenge. This is followed by two other enclosures that: summarize all open issues (Enclosure 1a) and detail all resolved issues from previous submissions (Enclosure 1b). Thank you for again allowing me to report to you the management challenges facing the Office of Personnel Management. I believe that agency management with sufficient time and resources can overcome these challenges and the result will be better government for the American people. I want to assure you that OPM management continues to work with my staff to resolve the underlying issues. If there are any questions, please feel free to call me at (202) 606-1200 or have your staff contact Gary Acker, Congressional Liaison, at (202) 606-2444. Sincerely, Patrick E. McFarland Inspector General 3 Enclosures cc: Joseph I. Lieberman, Ranking Minority Member Senate Committee on Governmental Affairs

 

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Enclosure 1 MOST SERIOUS MANAGEMENT CHALLENGES OFFICE OF PERSONNEL MANAGEMENT   REVOLVING FUND AND SALARIES AND EXPENSES ACCOUNTS Correcting material deficiencies in the Office of Personnel Management's (OPM) financial management systems for the Revolving Fund (RF) and Salaries and Expenses (S&E) accounts remains a significant agency challenge. Since the start of full scope audits of the agency's RF and S&E in 1996, OPM has received a disclaimer of opinion on those financial statements. As a result of material weaknesses within the financial accounting system, the RF and S&E have not been auditable. While the agency is making progress in correcting both short term and long term problems, full resolution is not expected within the next fiscal year. The following material issues have contributed to the problem: Reconciliation of OPM's Fund Balance With Treasury Account The OPM Office of the Chief Financial Officer's (OCFO) reconciliations of Fund Balance with Treasury for the RF and S&E accounts have been reported as a material weakness since 1993 in OPM's annual Federal Managers Financial Integrity Act (FMFIA) letter to the President. Also, as reported in the FY 1996 through FY 1999 financial statement audit reports by our office, unreconciled differences between Treasury records and the RF and S&E general ledgers have consistently been in the range of $20 to $60 million for the RF, and up to $35 million for the S&E. These differences have been attributed to timing differences, inaccurate information and errors, unsupported and erroneous manual adjustments, and other unknown factors. The OCFO has expended significant resources during the last three years in attempting to identify and reconcile these differences. During this time they have made strides in improving monthly reconciliation procedures by including more detailed worksheets of collections and disbursements, and documentation supporting these worksheets. They have also identified and corrected many errors in the recording of transactions. However, reconciliation procedures are still weak, and supervisory review, while increased, still needs improvement. In addition, there is a lack of sufficient trained personnel devoted to the reconciliation process. For example, SF-224s (Statement of Transactions) and supporting documentation for April and May 2000 were not readily available when we requested to review them in October. Differences as of September 30, 2000 between the RF and S&E and Treasury balances were approximately $40 million, which is determined by netting and adding approximately $40 million of old disbursements in transit transactions that have not been completely resolved or validated. Data Reconciliation and Control In our financial statement audit reports of the RF and S&E from FY 1997 through FY 1999, we reported that controls over transactions entered into the RF and S&E general ledgers were inadequate. For substantially all material accounts and line items, we found subledgers or other detailed records were not reconciled to general ledger control accounts. Supervisory and analytical reviews of general ledger transactions and balances were also inadequate. Transaction codes, which are used to record general ledger entries, were defined incorrectly in some cases due to inadequate management review and approval over their development and implementation. This resulted in erroneous entries to the general ledger. The absence of these standard accounting procedures and controls was a primary cause of the disclaimers of opinion issued for the financial statement audits of the RF and S&E the last three years. Program areas or line items that we attempted to audit for which the OCFO had not performed reconciliations of detail to general ledger control accounts included Investigations Service transactions, Training Management Assistance (TMA) transactions, Fund Balance with Treasury (noted above), Accounts Receivable, and Accounts Payable. The OCFO has made a concerted effort over the last couple of years to correct this situation. They have developed detailed reports and procedures for reconciliation and analysis of account transactions and balances, and have begun to implement them. The OCFO has indicated that adjustments totaling approximately $50 million related to Investigations Service transactions have been recorded and are subject to validation. However, significant work remains to resolve longstanding differences that exist between many general ledger control accounts and the supporting detail. For example, differences in TMA project account balances with the general ledger totaling approximately $43 million go back several years, making information needed to resolve differences possibly irretrievable. The OCFO has also devoted resources to correcting erroneous transaction codes and implementing new ones as necessary. A senior level manager has been assigned responsibility for reviewing and approving all transaction code work. In addition, an extensive review of the financial management function by a systems contractor found a significant gap exists between the capabilities of the current system and the user needs and requirements. As a result, the OCFO plans to revise accounting processes and acquire and implement a new integrated accounting system by the end of FY 2002. Financial Statement Preparation Over the last few years, the OCFO has experienced difficulties in the timely preparation of adjusted trial balances and financial statements for the RF and S&E. For FY 2000, OPM is initiating consolidated financial statements for the RF, S&E, and three benefit programs. Preparing the first consolidated financial statements will be a significant challenge, and combined with the difficulties of consolidating very different programs and activities, some of which have a poor history of preparing financial statements, increases the risk of error within the financial statements. OPM'S FINANCIAL MANAGEMENT OVERSIGHT OF THE FEHBP OPM's financial management of the Federal Employees Health Benefits Program (FEHBP) has been enhanced to provide more effective oversight of its operations. OPM is responsible for oversight of carrier operations, negotiating and administering contracts with insurance carriers, and developing health insurance legislative initiatives. To strengthen its financial management oversight responsibilities, OPM issued an Audit Guide. This guide requires experienced rated carriers to obtain an annual audit of FEHBP activities and to report on their internal control structures. OPM also collaborated with the IG and the Office of Management and Budget (OMB) to require CFO Act agencies to engage an auditor to perform certain agreed upon procedures designed to test the accuracy of employee withholdings and agency contributions for the Retirement, Health and Life Insurance Programs on an annual basis. Transactions, such as an employees health insurance decisions, are tested from the process of electing a health plan to confirming that the right amount of monies were remitted to the Earned Benefit Funds. However, OPM's oversight and monitoring of enrollment and premium reconciliations with community-rated carriers (CRCs) need to be strengthened. OPM remits premiums to CRCs based on amounts it receives from federal agencies on a bi-weekly basis. OPM's existing systems were not designed to centrally reconcile the monies paid as premiums to participating carriers with the enrollees for whom they are being paid. Consequently, the potential exists for carriers to provide benefits to employees who are not covered by their plan at the time the services are rendered. As a result of enrollment discrepancies, carriers alleging underpayment filed several lawsuits. They resulted in a one percent premium surcharge paid to the carriers to cover any losses incurred as a result of this situation. To reinforce the need for effective enrollment reconciliations, OPM issued a payroll letter requiring agency payroll offices to provide carriers on a quarterly basis with the names of their enrollees and the amounts withheld from pay for health benefits. However, OPM does not have a regular monitoring program to determine whether payroll offices are complying with these requirements and whether carriers are reconciling their enrollment records regularly. To address this weakness, OPM is working with a contractor to implement a centralized enrollment system that would greatly facilitate the carrier/agency reconciliation process. The system requirements are being defined, and a pilot process is expected to be completed in the next year. In addition, OPM has developed an Agency Payroll Office Control Monitoring Plan. This Plan includes procedures to review Agency Payroll Office policies and procedures relating to FEHBP carrier and other types of reconciliations. RETIREMENT SYSTEMS MODERNIZATION While not appropriately characterized as a current problem, one of the agency's most significant, high-risk challenges continues to be the modernization of the systems used to administer the Federal Retirement Program. The Federal Retirement Program includes the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). For OPM to maintain and improve service levels to keep pace with customer expectations and to manage the workload associated with significant increases in the FERS retirement annuitant population, the retirement systems must be modernized. The present computerized systems that support the processing of both CSRS and FERS retirement information are inadequate in their processing and programming capabilities. In 1997, the OPM Retirement and Insurance Service's (RIS) Retirement System Modernization (RSM) project documented both the CSRS and FERS retirement business requirements and also selected a long-term concept of operations. Through 1998/1999, RIS completed work on reengineering its business processes using a dedicated OPM project team, subject matter experts, and a contractor with business process reengineering experience. The RSM project team has identified six core business functions that the future system will utilize to accurately and efficiently process retirement information. These core processes were outlined and presented to senior OPM management and OPM system users, as well as critical stakeholders from several other government agencies. During FY 2000, the RSM project team has completed process blueprints for four of the six core processes. These blueprints include detailed process flows, functional requirements, business logic, and data needed to perform each process. The final two core process blueprints are scheduled to be completed by the spring 2001. In addition, through a contract with a nationally known information technology firm with excellent credentials in the systems development arena, the completed process blueprints are currently being translated into the technical requirements necessary to design the retirement system of the future. Assuming full funding, RSM project managers estimate the project to be completed in 2007. The OIG agrees with OPM and OMB that only through the reengineering of the various processes that support and provide services to all Federal Retirement Program participants, can OPM ensure the accuracy, consistency, and timeliness of the services that are provided to all stakeholders. However, because of the uncertainty of success for reengineering its business processes, the development and implementation of entirely new computerized systems to support these business processes, and the long-term nature of RSM, the OIG has initiated a systems development life cycle audit of RSM. This audit will attempt to validate the entire process and provide information and advice to RSM project managers, as appropriate, during the system development process. OPM'S IMPLEMENTATION OF THE GOVERNMENT PERFORMANCE AND RESULTS ACT The Government Performance and Results Act (Results Act) was intended to create a management process by which Federal agencies could more effectively plan, budget, execute, evaluate, and account for their programs and activities. The Results Act specifically requires agencies to develop strategic plans that establish what an agency's programs and operations will accomplish over a five-year period. Supplementing the agency's strategic plan are annual performance plans that establish annual goals and objective target levels for each program activity, and annual program performance reports that compare actual performance with the annual goals. Implementation of the Results Act remains a management challenge, even as OPM continues to improve their plans and reports, because of the significant amount of time and resources involved in the effort, including involvement of the agency's top level managers. In addition, many of OPM's functions are policy-oriented making it more difficult to define measurable goals and indicators or to define achievable outcomes. This task is further complicated because OPM has decentralized many human resource management functions to other federal agencies. OPM reported results of its initial efforts to implement the Results Act in the first annual performance report submitted to the President and Congress covering FY 1999. This submission culminated OPM's first strategic planning cycle, providing information on actual performance and progress toward the goals and objectives iterated in its strategic and annual performance plans. Overall, the reviews of the FY 1999 annual performance report and FY 2001 annual performance plan found that OPM is making progress in developing more results-oriented goals and performance measures but also identified some areas for improvement. For example, OPM can improve maintenance of documentation that supports reported results. The agency can also clarify the relationship between management challenges and their respective goals and measures in the performance plan. While OPM's efforts have shown the agency's commitment to results-oriented performance and accountability, it will probably take several more planning cycles to perfect a successful system for performance-based management. Still, we believe OPM's process for strategic planning and performance measurement is moving in the right direction. The OIG continues to work with the agency in the development of its strategic and annual performance plans, providing review, commentary, and recommendations for improvement. We have also initiated reviews to verify and validate performance results. We will continue to work with the agency to help ensure that government leaders will be able to rely on OPM's performance information for decision making and for evaluating OPM's operations. HUMAN RESOURCES MANAGEMENT Human resource management includes recruiting, developing and maintaining a qualified workforce, as well as, assessing performance of these functions. It has been and continues to become a more demanding government-wide challenge as (1) a large number of employees become eligible to retire, (2) the job market becomes more competitive, (3) the need for better skills in technological positions increases, and (4) the awareness of performance management increases. This challenge is more than an OPM issue. Though OPM has the lead role in ensuring that accountability exists, the actual issue of good human resource management practices is government-wide and each individual agency must be held responsible to OPM and the Congress for its individual roles. It is clear that OPM, the federal human resource management agency, has a key role in directing, assisting, and reviewing human resource efforts, including promoting broader application of human capital principles. As OPM has delegated human resource management authorities to agencies, it becomes more important that OPM's key responsibility is to lead and support agencies. OPM's leadership role includes working with agencies to better prepare the government to meet future challenges, deal with performance improvement efforts, and ensure more effective oversight of the government's key human resource concerns. The National Partnership for Reinventing Government, formerly the National Performance Review, mandated many initiatives that changed the focus of human resources management from just compliance to results. The human resources function has been downsized, regulations reduced and simplified, and human resources authority delegated to line managers. With all these changes, human resources managers must adapt to decentralized systems, and learn to take advantage of the flexibility given them. It also becomes increasingly important to hold managers and supervisors accountable for their human capital decisions. In addition, the Government Performance and Results Act has played a large part in the government's current focus on accountability and results. The Results Act was intended to create a strategic planning and management process to improve federal program effectiveness, accountability, service delivery, and decision-making. This process focuses on results-oriented goal setting and performance measurement. Recognizing the importance of human capital strategies to improving the performance of government and holding federal agencies accountable for their programs, President Clinton issued a memorandum addressing this issue on June 9, 2000. The memorandum directed federal agencies to fully integrate human resources management into agency planning, budgeting, and mission evaluation processes, and clearly state specific human resources management goals and objectives in strategic and annual performance plans. For the first time, the President's fiscal year 2001 budget includes a Priority Management Objective to "align Federal human resources to support agency goals." In undertaking the strategic approach to human resources management, this priority management objective states that OPM is to help agencies strategically assess their human resources to ensure a quality federal work force in the 21st Century. Leading the federal government's efforts is a demanding challenge facing OPM and will require good planning and participation of all other agencies. OPM has a number of on-going initiatives to address these priorities that should have a significant impact on federal human resources management operations. However, human resources management and accountability will continue to be a management challenge for the foreseeable future. HEALTH CARE FRAUD AND ABUSE IN THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM Health care fraud continues to be recognized as a nationwide problem. The OIG continues to be in the forefront of the federal government's national initiative to combat health care fraud and abuse in partnership with the OIGs at the Department of Health and Human Services and the Department of Defense. Most instances of health care fraud and abuse at the federal level not only affects Medicare/Medicaid and TRICARE, but also the FEHBP. OPM administers over 250 FEHBP health insurance contracts, and the OIG is tasked with providing audit and investigative responsibilities to ensure protection of this $18 billion trust fund. In addition to working with the OIGs involved in oversight of federal health care programs, the OIG at OPM also works with the OPM's Retirement Insurance Service, the FEHBP health care carriers' special investigative units, and the FBI in fighting fraud and abuse against health care programs. The OIG will continue to cope with the many dimensions involved in health care fraud and abuse by focusing its limited investigative resources to the problem and working with other OIG's, the FBI, and the health care carriers. The OIG's ability to investigate and prosecute health care fraud and abuse continues to be adversely affected by the exclusion of the FEHBP from certain civil enforcement provisions of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 (Public Law 104-191), which apply to all other federal health care programs. This is particularly egregious since the FEHBP is the largest employer-sponsored health care program in the United States. This exclusion has made it more difficult for us to participate with prosecutors and other agencies' law enforcement officials in cases involving fraud against multiple health care programs. Further, we are unaware of any basis for treating the FEHBP differently than other Government health care programs. By excluding the FEHBP from HIPAA, investigators from our Office of the Inspector General are denied the following tools that would help in the investigation and prosecution of health care fraud: Enhanced sanctions provisions including mandatory exclusion for felony convictions relating to health care fraud or controlled substances and new minimum exclusion periods for certain permissive exclusions. This deters our ability to rapidly remove felons from the FEHBP under our new, independent debarment authority, which will save taxpayers federal dollars and protect the safety of patients. Expanded anti-kickback provisions, which would help us prevent FEHBP health care providers from receiving improper gratuities for referrals or related services. Enhanced civil monetary penalties (CMPs). HIPAA lowers the standard of proof for fraudulent claims and increases the penalty per false claim from $2,000 to $10,000. In addition, HIPAA allows CMPs to be assessed for incorrect coding, medically unnecessary services and offering remuneration to induce business (e.g. waving coinsurance or deductible). These additional penalties will allow us to contribute additional funding to the Health Care Fraud and Abuse Control Account. To address this challenge, the OIG, in conjunction with OPM's Office of Congressional Relations, has been working over the last year and half to amend the HIPAA to include the FEHBP in its definition of a "federal benefit program." The Department of Justice and the Department of Health and Human Service's OIG have supported us in these efforts. These efforts have succeeded in including the language that would allow the FEHBP to utilize the sanctions section of HIPAA in the following bills: S 751 - Seniors Safety Act of 1999 - Senator Leahy S 899 - 21st Century Justice Act of 1999 - Senator Hatch S 1451 - Medicare Waste Tax Reduction Act of 1999 - Senator Harkin HR 1862 Seniors Safety Act of 1999 - Representative Conyers However, to date, none of these bills have been reported out of their respective subcommittees. More recently we have been in contact with staff of select congressional committees who have expressed an interest in supporting our efforts to amend HIPAA to include the FEHBP as a full participating member in the health care fraud provisions of the Act. If we are unsuccessful in obtaining approval of legislation in the 106th Congress, we are prepared to renew our efforts after the new Congress is convened.

 

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Enclosure 1a	SUMMARY OF OPEN ISSUES
Issue Reported	Previously Included in Top Management Challenges	OIG's Recommendation	Audit & Date Recognized or Other Source of Information	Agency Actions
OPM's Financial Management Oversight of the FEHBP (CRC enrollment reconciliations)	December 1999 March 1999 December 1998 August 1998 January 1998	* OPM should continue its efforts to develop a system that will allow for a central control point to reconcile and resolve enrollment issues between APOs and Carriers. In addition, OPM should continue to monitor the agencies and carriers to ensure proper reconciliation procedures are performed until an effective enrollment system can be implemented.	Most Recent: FY 99 Health Benefits Financial Statements Audit First time cited: 1991	* OPM is taking steps to address CRC enrollment reconciliations issues through the development of a centralized enrollment system, which is ongoing.
Reconciliation of OPM's Fund Balance with the Treasury Account	December 1999 March 1999 December 1998 August 1998	* The OCFO should resolve the differences between the general ledger and Treasury cash balances related to transactions prior to FY98. * The OCFO should continue to reconcile new differences within 30 days and should strive to resolve differences within three months on an ongoing basis.	Most Recent: FY 99 RF and S&E Financial Statement Audit First time cited: FY 92	* OCFO has improved cash reconciliation procedures, and devoted significant resources in the last three years to resolving this issue. Large differences continue to exist between RF and S&E cash balances as of September 30, 2000, and the resolution of this issue is not expected in the short-term.
Data Reconciliation and Control	December 1999 August 1998	Note: The following recommendations apply to the RF and S&E financial statements: * The OCFO should maintain complete and accurate subledgers, compositions, or other detailed support for general ledger accounts. Reconciliations of this detail to general ledger control accounts should be performed on a monthly basis, with reconciling items identified and resolved within 30 days. * The OCFO should establish procedures for supervisory review and approval of all material transactions recorded in the general ledger. * The OCFO should implement periodic analytical reviews of general ledger balances, research any unusual activity, make any corrections necessary, and document the results. * The OCFO should ensure that transaction codes are defined properly so that transactions are recorded to the general ledger in accordance with the SGL.	Most Recent: FY 99 RF and S&E Financial Statement Audit First time cited: FY 96	* The OCFO has developed detail reports supporting general ledger balances to be used in reconciliations. * The OCFO has increased the level of contractor support in assisting with creating and revising transaction codes, and implemented several critical transaction codes recently. *The OCFO has assigned responsibility for all transaction code work to a senior level manager.
Financial Statement Preparation	New	*The OCFO should continue the development and implementation of transaction codes necessary to properly record transactions in the general ledger. *The OCFO should record all year-end adjusting entries in the general ledger to maintain a complete audit trail. *The OCFO review and revise the financial statement preparation plan based on lessons learned in previous years. *The OCFO should prepare a Statement of Financing, as required by OMB Bulletin 97-01.	Most Recent: FY 99 RF and S&E Financial Statement Audit First time cited: FY 96	*OCFO has contracted for help with development of needed transaction codes, improved the audit trail for year-end adjusting entries, and is planning to prepare all required financial statements for FY 2000, as OPM will be consolidating their statements for the first time.
Retirement Systems Modernization	December 1999	OIG has recently initiated a systems development life cycle audit	Contractor (AMS, IBM) deliverables and briefings; RSM stakeholder meetings; briefings and presentations by contractors and RSM project team	*OPM has put in place a Retirement Systems Modernization (RSM) project team for the reengineering of the retirement business processes.
OPM's Implementation of GPRA	December 1999	*The agency should ensure that all results have supporting documentation that has been subjected to internal controls, such as supervisory review, and saved for independent review. *For goals that are not met, the performance report should explain why each goal was not met and include a plan for achieving the goal. *The relationship between management challenges and the respective goals and measures needs to be more direct in the performance plans. * OPM should implement, maintain, and monitor control activities, such as mid-year assessments, to ensure that the control activities are working as designed.	First cited: Review of OPM's FY 1999 Annual Performance Report and FY 2001 Annual Performance Plan per Senator Thompson's request. Review of OPM's FY 2000 mid-year assessment process	OPM is planning to strengthen its data validation and verification procedures, will ensure that the next performance report more clearly describes the link between each performance measure and overall strategic goals and more clearly explain how continuing goals and objectives address the agency's management challenges.
		* That OPM-OERM should establish an improved methodology for verifying performance measure results and documenting data, and implement a data control process. We suggest that the procedures specifically address: 1) who performs the review, 2) steps on how to complete the review, 3) document how results are obtained, and 4) who approves the review. Someone should review all data other than the preparer.	First Cited: Verification and Validation review of OPM-OERM FY 1999 Performance Data	OPM-OERM will have numerical data checked by more than one person to ensure accuracy. However, OPM-OERM does not have the resources, nor do they see the benefit of establishing a complex data control process to track and analyze this information.
Human Resources Management	December 1999	We have made no specific recommendations to the agency in this area. However, OPM should continue to monitor and oversee human resource management in federal agencies.	Presidential memorandum and executive orders on human resources management and human capital training; National Partnership for Reinventing Government (previously known as the National Performance Review) mandates; OMB priority management objectives and OMB Circular A-11; OPM OMSOE efforts; Merit Systems Protection Board reports; and GAO testimony and reports on human capital.	OPM has designed a work force planning model that will allow line managers to analyze their current work force. Also, OPM performs oversight reviews in federal agencies covering human resource management areas, including reviews of agency adherence to merit system principles.
Health Care Fraud And Abuse in The Federal Employees Health Benefits Program	December 1999	The HIPPA should be amended to allow the FEHBP to participate in the health care fraud sanctions of the act.	A review of the Health Insurance Portability and Accountability Act of 1996 after its passage.	The agency and the OIG have worked together to have the legislation amended. Though an amendment has been included in at least four bills introduced in the 106th Congress, none have passed to date.

 

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Enclosure 1b	SUMMARY OF RESOLVED ISSUES
Issue Reported	Previously Included in Top Management Challenges	Agency Actions
Controls over the Accuracy of Annuity Payments (RP)	March 1999 December 1998 August 1998 January 1998	RIS, OIG, and the IPA performed an audit of the annuity roll in early 1998. Although the IPA recommended that RIS establish additional controls to ensure the accuracy of payments made to annuitants, they issued unqualified opinions on the FY98 and FY99 RP financial statements.
Internal Controls Related to the Accuracy and Completeness of Payroll Withholdings and Information Provided by Other Agencies (BPs)	December 1998 August 1998 January 1998	OPM relies on the accuracy and completeness of the data employing agencies provide. OPM made significant progress in their oversight of other agencies by working jointly with OMB on the issuance of OMB Bulletin 98-08, which required agencies' Inspectors General to review their procedures and report the results to OPM.
Controls over the Accuracy of FEHBP Claim Payments	March 1999 December 1998 August 1998 January 1998	In 1998 we fully implemented the FEHB Plan Audit Guide, which requires experience-rated carriers (ERCs) to have their FEHB-related financial statements audited and to submit the results of other agreed-upon procedures. RIS, the OCFO, and OIG jointly developed this guide and coordinated it with OMB and GAO for government-wide application.
Audit Cycles (OIG)	August 1998	The implementation of the audit guide for ERCs has brought about better financial accountability and increased oversight to the FEHBP carriers. The use of the IPA audits; combined with OIG audit staff has eliminated the audit cycle material weakness.
Financial Management Policies and Procedures (OCFO)	December 1999 March 1999 December 1998 August 1998 January 1998	* OPM contracted with the Department of Treasury to assist in the development and documentation of accounting manuals in several areas. This work began in August 1997 and is completed. The OCFO continued to document accounting policies for other remaining areas, in some cases with the assistance of Treasury. As of September 2000, documentation was substantially completed in all material areas. In addition, the OCFO assigned a senior manager to be responsible for the development, documentation, and update of policies and procedures.
Debt Collection and Accounts Receivable Processing (OCFO)	December 1999 March 1999 December 1998 August 1998 January 1998	* The OCFO has decided not to send past due notices to all customers until they have cleaned up old A/R records. However, OCFO has established debt collection teams to work with delinquent customers, e.g., DOD and the U.S. Postal Service, and collections have increased. * OCFO has developed a series of A/R reports, including an aging schedule, which classifies the receivables and reconciles to the general ledger. The OCFO is still working on eliminating erroneous data from these reports.
Financial control environment (a component of OPM's Financial Management Oversight of the FEHBP)	December 1999 March 1999 December 1998 August 1998 January 1998	Weaknesses of the financial control environment were resolved through the implementation of a new financial accounting system and the reengineering of the process for recording ERC activity.
Controls over Investments	December 1999 March 1999 December 1998 August 1998	* OPM is installing a new core financial management system, which includes a separate investment module. In the interim, weaknesses over investments were resolved.
Accounts Payable	December 1999 March 1999 December 1998 August 1998	* The OCFO has completed documentation of policies and procedures for A/P, developed an A/P aging schedule which agrees to detail records supporting the general ledger, and implemented an invoice control log.

 

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