REPORT OF AUDIT, GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC., 1 JANUARY 1982 - 31 DECEMBER 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00964R000200070011-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: July 22, 2005
• Sequence Number: 11
• Publication Date: September 13, 1983
• Content Type: MF

CONL 11)) i4'J.'.IAL
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13 September 1983
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NiI,P~IORANDU.; FOR: Di.rector of Personnel
VIA: Inspector General =~\
C 11. c_ , 775771v- S777.17
SUBJECT: Report of Audit, Government Employees Health
Association, Inc., 1 January 1982 - 31 December
1. Subject report is attached. Please advise Me of the action
taken on the recommendation contained in the report.
2. We appreciate the cooperation and assistance provided by
your staff during the audit.
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Attachment:
As stated
Dis ibution:
trig. - D/Pers
I - C/Board of Directors
I - D/OF
1 -? O/Compt/FBIaG
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REPORT OF AUDIT
Government Employees Health Association, Inc.
For the Period
1 January 1982 - 31 DeG:ember 1982
SUMMARY
1. Controls and procedures governing the custody and use
of Government Employees Health Association, Inc. (GEHA) assets
were generally. effective and in accordance with applicable
requirements. This report contains a recommendation concerning
the reconciliation of certain general ledger accounts with
their subsidiaries. Minor administrative matters were
discussed with responsible officials and resolved during the
audit.
SCOPE AND OPINION
2. The audit included an examination of the GEHA statement
of financial position as of 31 December 1982 and 1981 and the
related statement of changes in reserve fund balances for
1982. Our examination was made in accordance with generally
accepted auditing standards and, accordingly, included such
tests of the accounting records and other auditing procedures,
including a review of claim settlement procedures, as we
considered necessary under the circumstances.
3. In our opinion, the accompanying financial statements,
Exhibits A and B, present fairly the financial position of GEHA
at 31 December 1982 and 1981 and the results of its operations
for the year ended 31 December 1982, in conformity with
generally accepted accounting principles applied on a
consistent basis.
BACKGROUND
4. GEHA is a tax-exempt organization incorporated in the
District of Columbia to administer employee insurance programs
in accordance with Agency operational and security
requirements. An elected Board of Directors prescribes GEHA
operating policies. The daily business is conducted by the
Insurance Branch of the Benefits and Services Division in the
Office of Pqrsonn 1. A reimburses the Agency for the
25X1 services of employees in the Insurance Branch.
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25X1 5. GEHA maintains insurance accounts for active and
retired employees. The following plans are in effect:
PLANS
Life Insurance:
United Benefit Life Insurance Company
Active
Retired
Worldwide Assurance for Employees
of Public Agencies
Health Insurance:
Association Benefit Plan
Active
Retired
Contract Hospitalization
Specified Diseases
Disability Insurance:
Income Replacement
Accidental Death and Dismemberment
Insurance:
Flight and Accident
Travel Insurance:
Air Flight
Military Air Flight
ACCOUNTS
6. The Association Benefit Plan received premiums of $20.8
million, paid out benefits of $21.9 million, and incurred net
operating expenses of $1.7 million for a net underwriting loss
of $2.8 million.- This loss was offset from reserves held by
Mutual of Omaha and the Office of Personnel Management.
DETAILED COMMENTS
Reconciliation of General Ledger Accounts
7. The general ledger accounts recording advance premiums
for certain employees have not been reconciled with supporting
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records. As a result, the balance of Account 217 which records
premiums from Foreign Broadcast Information Service foreign
national employees is $1,300 less than the total of supporting
subsidiary records. And the balance of Account 218 which
records premiums from contract employees is $200 more than
supporting subsidiary records. We were unable to resolve these
differences. Periodic reconciliation of these accounts would
help to identify such differences and aid in their timely r
resolution.
Recommendation:
a. Adjust the general ledger
account balances to agree with
supporting subsidiary records.
b. Reconcile the accounts with
subsidiary records quarterly.
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Government Employees Health Association, Inc.
Statement of Financial Position
31 December 1982 and'1981
ASSETS
Cash ..
Investments (Note 1)
Claims Receivable
Contingent Assets:
Funds Withheld by Underwriter
for Specified Policyholders
Less: Reserves
Equipment (Net of Depreciation)
$ 400,712
5,503,390
37,761
139,666
(139,666)
1,156
$5,943,019
LIABILITIES AND RESERVES
Accounts Payable
Prepaid Premiums
Accrued Salaries
Accrued Dependent Premiums
Total Liabilities
Reserves (Exhibit B)
Total Liabilities and Reserves
$ 32,128
137,009
33,034
17,388
219,559
5,723,460
$5,943,019
$ 241,902
4,782,454
244,836
13~', 666
(139,666)
1,734
$5,270,926
$ 27,389
181,205
49,951
17,941
276,486
4f994,440
$5,270,926??
Note 1: Investments are recorded at cost; market value at
31 December 1982 was $5,860,000 and at 31 December
1981 was $4,373,300.
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Government Employees Health Association, Inc.
Statement of Changes in Reserie Fund Balances
For the Year Ended 31 December 1982
Total
UBLIC Investment
in Common Stock
UBLIC
General
Association
Benefit Plan
Air
Flight
Plan
Contract
Hospital-
ization
General
Fund
440
$4994
$560,427
$3,993,893
$279,272
$28,.465
$74,333
$58,050
Balance, 1 January 1982
Increases:
,
L
Premiums Withheld'from or Returned
249
626
52,763
559,592
13,894
by Underwriter
,
803
623
122,639
.481,719
3,458
8,971
7,016
Investment Income
,
4
39
153
41,940
106,841
767
1,990
1,856
Gain on Sale of Investments
,
J810
81
810
Miscellaneous
256
579
164
641,323
559,592
4,225
24,855
9,682
eases
l I
1,404,
,
ncr
Tota
Salaries
565,806
19,644
528,674
3,498
13,990
Premiums for UBLIC Dependent
218
42
42 218
Coverage
,
17,479
39,355
251
651
509
Investment Fees and Expenses
,967
6,816
2,151
s ?
l
8
aneou
Miscel
236
479
17
101,217
535,490
3,749
14,641
2,660
l Decreases
T
675,
,
ota
460
$5,723
$707,527
$4,533,999
$303,374
$28,941
$84,547
$65,072
Balance, 31 December 1982
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