REPORT OF AUDIT, GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC., FOR THE PERIOD 1 JANUARY 1980 - 31 DECEMBER 1980

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00964R000200070024-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 16, 2016
• Document Release Date: July 5, 2005
• Sequence Number: 24
• Publication Date: September 23, 1981
• Content Type: MF

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2 3 SEP 1931
MEMORANDUM FOR- Chief, Audit Staff
VIA: Inspector General
FROM: James N. Glerum
Director of Personnel
SUBJECT: Report of Audit, Government Employees Health
Association, Inc., for the Period 1 January 1980 -
31 December 1980
1. This memorandum describes actions taken in response to
your four recommendations in subject report.
2. Recommendation #1
"That the GEHA Board of Directors reevaluate and document
GEHA's investment objectives."
Recommendation #2
"That the GEHA Board of Directors consider whether dealing
through other investment broker(s), or adopting an
alternate means of handling investments, might be more
advantageous than current arrangements, and that it
document both. the. decisions and. the basis. on which they
are made."
Recommendation #3
"That the GEHA Board of. Directors establish a written
policy concerning the holding of fixed income securities
which have declined in current market value but are
yielding a high rate of return, and that the policy
determined be issued as mandatory guidance to any entity
executing investment decisions on behalf of GEHA."
While these recommendations are not yet fully resolved, the
GERk Board of Directors has been actively involved in the resolution
of these issues. The following is a brief synopsis of Board actions
taken to date:
a. An ad hoc Investment Committee was appointed on 20 March
1981 by the GEHA Board to determine the appropriate action to be
taken.
Approved For Release 2005/07/12 : CIA-RDP86-00964R000200070024-3
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b. On 20 April 19811 was engaged by
GEHA as an independent contractor to conduct an indepth
review of the GEHA investment portfolio.
C. Extensive research regarding bond transactions for 1980
through May of 1981 was prepared by the GEHA staff for
I nalyses.
d. A reort analyzing the investment portfolio was prepared
byl for an initial review by the GEHA Investment
Committee. This was completed in May 1981 and was followed
.-by discussions with the Investment Committee and
on 1 June 1981.
Messrs. Hurford and Howard of BEA were invited to Headquarters
on 17 June 1981 to present their investment strategy in
managing-the GEHA portfolio to the Investment Committee.
A meeting of the Investment Committee was held on 14 August
1981 to discuss further. courses of action in resolving the
BEA issues.
Recommendation #4
"Establish records to assure that bond interest is
received when due."
Internal procedures have been established by Chief, Insurance
Branch with GEHA's Custodial Account Representatives at American
Security Bank to provide interest due information with each bond
transaction. This information will be maintained by accounting
technicians in the Insurance Branch to assure that interest payments
on investments are received when due.
4. In conclusion, I wish to take this opportunity to commend
the audit.team.for their efforts on behalf of GEI-IA. I an told that
the audit was accomplished in a most professional manner and with
a min -num of distractions. Please convey my thanks to your staff
for a job well done.
/S1 'James N. Glerurr
James N. Glerum
Distribution:
Original - Addressee
1 - !G
1 = D/Pers
l - BSD
1 - IB Chrono
1 - Audit File
Action File (9/15/81)
IB/B`~~Wo1'd : CIA-R0P86-00964R000200070024-3
 ROUTING AND RECORD SHEET
STA
Chief, Insurance Branch
926 Ames
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FORM 61 0 USE PREVIOUS
I-79 EDITIONS
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OFFICER'S
INITIALS
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DATE
10 September 1981
COMMENTS (Number each comment to show from whom
to whom. Draw a line across column after each comment.)
Attached is our draft response
to GEHA's 1980 audit report. T`hav
a so enc ose a copy of the 1980
audit report for your reference.
Approved For Release 2005/07/12 : CIA-RDP86-00964R000200070024-3