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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Blue Cross Blue Shield of Florida's Unfunded Pension Costs for 1994 Through 2003," (A-07-04-00179)

February 8, 2005


Complete Text of Report is available in PDF format (226 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

The objectives of our review were to:  (1) determine if the accumulated unfunded pension costs identified in our prior review were accounted for properly; (2) determine if pension costs were funded in accordance with the Federal Acquisition Regulations (FAR) and the Cost Accounting Standards (CAS); and (3) identify and properly account for any additional accumulated unfunded pension costs.  We found that Blue Cross Blue Shield of Florida (Florida) did not properly account for the accumulated unfunded pension costs identified in our prior review.  Florida understated the accumulated unallowable pension costs by $2,346,492.  We also found that Florida funded pension costs in accordance with FAR and CAS.  As such, there were no additional unfunded pension costs to identify and update.  We recommended that Florida increase the accumulated unallowable pension costs by $2,346,492 and implement controls to identify and properly account for unfunded unallowable pension costs.  Florida agreed with our findings.