Audit of the Pension Benefit Guaranty Corporation’s Fiscal Year 2017 and 2016 Financial Statements

The Office of Inspector General issued the audit of the financial statements of the Single-Employer and Multiemployer Program Funds administered by the Pension Benefit Guaranty Corporation (PBGC) as of and for the years ended September 30, 2017 and 2016 finding: 1. The financial statements were presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. This is the 25th consecutive unmodified financial statement audit opinion. 2. PBGC maintained, in all material respects, effective internal control over financial reporting as of September 30, 2017. Specifically: (a) Serious internal control weaknesses in PBGC’s programs and operations include three significant deficiencies: (i) Controls over the Present Value of Future Benefit (PVFB) Liability, (ii) Present Value of Nonrecoverable Future Financial Assistance (PV NFFA), and (iii) Access Controls and Configuration Management). (b) PBGC strengthened its control environment by implementing management practices to mitigate control deficiencies reported in previous years. Further, management improved its current business processes to address specific financial reporting and information technology control deficiencies. 3. Instances of noncompliance or other matters that are required to be reported in accordance with Government Auditing Standards. (a) Potential Antideficiency Violation: PBGC maintains operating leases for all office site locations and its COOP site. However, PBGC did not record its full contractual obligation under all of the multiyear lease arrangements. We reported this as a potential violation in our FY 2016 Independent Auditor’s Report. In FY 2017, PBGC general counsel reported the violation to the Office of Management and Budget and is currently awaiting a decision.