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GAO-01-39R 1 (2000-10-31)

handle is hein.gao/gaobaalna0001 and id is 1 raw text is: I AmA Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 October 31, 2000 The Honorable Bill Archer Chairman Committee on Ways and Means House of Representatives Subject: Medicare Financial Management: Clerical Errors in the Medicare Hospital Insurance and Supplementary Medical Insurance Trust Funds Dear Mr. Chairman: The Department of Health and Human Services (HHS) reported to Congress in its Accountability Report for fiscal year 1999 that the Health Care Financing Administration (HCFA) had made several clerical errors in accounting for the Medicare trust funds that caused the Hospital Insurance (HI) Trust Fund to be overinvested by approximately $14 billion and the Supplementary Medical Insurance (SMI) Trust Fund to be underinvested by approximately $18 billion. You asked us to determine (1) what errors were made and how they occurred, (2) what effect the errors had on the financial status of the General Fund, the HI Trust Fund, and the SMI Trust Fund, (3) whether similar errors have occurred in other trust funds, and (4) whether the Departments of HHS and Treasury have acted to ensure that similar errors will not occur in the future. This letter summarizes the results of our review to address your questions and provides recommendations to HCFA and Treasury to further ensure that similar errors do not occur in the future. Results in Brief During fiscal year 1999, an inexperienced HCFA staff person inadvertently submitted incorrect documentation to the Bureau of the Public Debt (BPD) for adjusting the HI and SMI Trust Funds and the noninterest-bearing accounts related to the HI and SMI Trust Funds. The clerical errors in the HI and SMI Trust Funds resulted in the HI Trust Fund being overinvested by approximately $14 billion and the SMI Trust Fund being underinvested by approximately $18 billion. The HCFA Office of the Actuary estimated that, as a result, the HI Trust Fund realized excess interest earnings of about $112 million and the SMI Trust Fund suffered a loss of about $232 million in interest earnings. The net interest lost by the Medicare trust funds was about $120 million. During the fiscal year, the general fund of the Treasury benefited from the error by not paying the $120 million of net lost interest earnings to the trust funds. GAO-01-39R Clerical Errors in the Medicare HI and SMI Trust Funds

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