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092456 1 (1972-01-25)

handle is hein.gao/gaobacwjn0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 CIVIL DIVISION JAN 2 5972 Dear Mr. Ruddock: Our eview of the Indemnity Benefit Plan of the Federal Employees Health Benefits Program revealed certain errors and questionable prac- tices in addition to the matters discussed in our draft report to the Congress, which was previously forwarded to the Chairman of the Commis- sion for comments on December 13, 1971. These additional errors and questionable practices involved (1) charges to the Plan by the Aetna Life Insurance Company (Aetna) for administrative expenses in 1969 and (2) Aetna's credits to the Plan in 1969 for interest income applicable to the Plan's Deposit Fund. ADMINISTRATIVE EXPENSES Indirect printing costs We found that Aetna had incorrectly coded certain printing invoices, resulting in an overstatement of about $21,000 in charges to the Plan for indirect printing costs for 1969. After we brought this matter to their attention, Aetna officials reduced the 1970 charges to the Plan to correct for the 1969 overstatement. Aetna also reviewed and adjusted its 1970 indirect printing charges, and an Aetna official informed us that Aetna would review the 1968 indirect printing charges. We did not review the propriety of the adjustments made by Aetna relating to the 1970 charges. The Commission may, therefore, wish to examine Aetna's adjustments to determine their propriety and review Aetna's indirect printing charges for prior years. Payroll taxes We found that, due to an administrative error, Aetna's charges to che Plan for 1969 payroll taxes were overstated by about $4,400. We discussed this matter with Aetna officials and noted that they had taken corrective action with respect to the overcharge.

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