Financial Audit

Military Retirement System's Financial Statements for Fiscal Year 1985 Gao ID: AFMD-87-35 September 30, 1987

Pursuant to a congressional request, GAO audited the financial statements of the U.S. Military Retirement System for fiscal year 1985.

GAO found that, except for an understatement and a lack of disclosure of about $75 million in accounts payable, the financial statements presented fairly the System's financial position for the fiscal year then ended, and the results of its operations, in conformity with generally accepted accounting principles applied on a consistent basis. GAO also found that: (1) internal controls were adequate for proper benefit claims processing and payment, actuarial data collection and processing, accounting for appropriations and monthly contributions, and investment and cash transactions; (2) there were internal accounting control weaknesses in the recording and reporting of financial information at finance centers regarding accounts receivable; (3) the Department of Defense (DOD) did not charge interest on accounts receivable for overpayments of benefits; (4) DOD managed the Defense Military Retirement Fund properly and in conformity with legal requirements; (5) the System will be self-sufficient by the end of its 75-year capitalization period; and (6) except for the omission of interest charges on certain accounts receivable, the System complied with the terms and provisions of laws and regulations for transactions that could have had a material effect on the financial statements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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