Office of Inspector General
U.S. Department of Labor
Office of Audit
May 14, 1998
MEMORANDUM FOR:
BERNARD ANDERSON
Assistant Secretary
for Employment Standards
FROM:
JOHN J. GETEK
Assistant Inspector General
for Audit
SUBJECT:
Final Audit Report No. 12-98-004-04-432
Longshore and Harbor Workers' Compensation Act
Special Fund Financial Statements and Related
Reports;
and
Final Audit Report No. 12-98-005-04-432
District of Columbia Workmen's Compensation Act
Special Fund Financial Statements and Related Reports
September 30, 1997 and 1996
Attached are copies of the referenced audit reports which cover Fiscal Years 1997 and 1996 financial statements of each Special Fund.
The Assistant Inspector General's Reports on these two special funds state that the financial statements present fairly, in all material respects, the financial position of the Longshore and Harbor Workers' Compensation Act Special Fund and the District of Columbia Workmen's Compensation Act Special Fund.
The Longshore report includes a single recommendation that ESA strengthen internal controls over rehabilitation service costs by automating the rehabilitation payment system. This recommendation was brought to management's attention in the report on the audit of the Department of Labor's FY 1997 Consolidated Financial Statements (12-98-002-13-001) and will be tracked for audit resolution under that report. Therefore, a response to this report is not necessary.
The District of Columbia report does not contain any recommendations.
We appreciate the cooperation of all ESA staff involved in this year's audit. If you have any questions, please contact Elliot Lewis, Director, Office of Financial Management Audits, at 219-5906.
Attachments
PAGE
ASSISTANT INSPECTOR GENERAL'S REPORT 1.1
DISTRICT
OF COLUMBIA WORKMEN'S COMPENSATION ACT
SPECIAL FUND
FINANCIAL STATEMENTS
2.1
Introduction 2.5Limitations on financial statements 2.5
Statements of financial position 2.8
DCCA District of Columbia Workmen's Compensation Act Special Fund
DOL Department of Labor
ESA Employment Standards Administration
FASAB Federal Accounting Standards Advisory Board
FMFIA Federal Managers' Financial Integrity Act
FY Fiscal Year
JFMIP Joint Financial Management Improvement Program
OMB Office of Management and Budget
OWCP
Office of Workers' Compensation Programs
U.S. Department of Labor
Office of Inspector General
Washington, D.C. 20210
| Mr. Bernard Anderson Assistant Secretary for Employment Standards U.S. Department of Labor The Chief Financial Officers Act of 1990 (CFO Act) requires agencies to report annually to Congress on their financial status and any other information needed to fairly present the agencies' financial position and results of operations. The District of Columbia Workmen's Compensation Act Special Fund (Fund) is included in the United States Department of Labor (DOL) annual financial statements issued to meet the CFO Act reporting requirements. The objective of our audit is to express an opinion on the fair presentation of the Fund's Fiscal Years (FYs) 1997 and 1996 financial statements. Our objective also is to obtain an understanding of the Fund's internal control and test its compliance with laws and regulations that could have a material effect on the financial statements. We conducted our audit in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Bulletin 93-06, Audit Requirements for Federal Financial Statements, as amended. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, |
on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
As required by OMB Bulletin 94-01, Form and Content of Agency Financial Statements, Note 1 to the financial statements describes the accounting policies used by the Fund to prepare the financial statements, which is a comprehensive basis of accounting other than generally accepted accounting principles. Opinion on We have audited the accompanying statements of financial position of the District of Columbia Workmen's Compensation Act Special Fund as of September 30, 1997 and 1996, and the related statements of operations and changes in net position, and cash flows for the years then ended. In our opinion, the financial statements referred to above present fairly, in all material respects, in conformity with the accounting policies described in Note 1:
|
| Overview of the Reporting Entity
Our audit was conducted for the purpose of forming an opinion on the 1997 and 1996 financial statements of the Fund taken as a whole. The information in the Overview of the Reporting Entity is presented for purposes of additional analysis and is not a required part of the principal financial statements. This additional information has not been subjected to the auditing procedures applied in the audit of the Fund's financial statements and, accordingly, we express no opinion on it. Report on In planning and performing our audit of the aforementioned financial statements, we obtained an understanding of the internal control over financial reporting, compliance with laws and regulations, and the existence and completeness assertions over performance reporting. The objective was to determine our auditing procedures for the purpose of expressing an opinion on the financial statements, and not to provide assurance on internal control over financial and performance reporting. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses(1). Report on Compliance With Laws and Regulations As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed 1. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements or performance measurement information being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. |
tests of the Fund's compliance with certain provisions of laws and
regulations, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts and certain
other laws and regulations specified in OMB Bulletin 93-06, as amended,
including the requirements referred to in the Federal Financial
Management Improvement Act of 1996 (FFMIA). However, the objective
of our audit of the financial statements was not to provide an opinion
on overall compliance with such provisions. Accordingly, we do not
express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Under FFMIA, we are required to report whether the Fund's financial management systems substantially comply with the Federal financial management systems requirements, applicable accounting standards, and the United States Standard General Ledger at the transaction level. To meet this requirement, we performed tests of compliance using the implementation guidance for FFMIA issued by OMB on September 9, 1997. The results of our tests disclosed no instances in which the Fund's financial management systems did not substantially comply with the three requirements discussed above. Management's Responsibilities Management is responsible for:
|
The objectives of internal control are to provide management with reasonable, but not absolute, assurance that:
Our responsibilities are to:
|
considered to be reportable conditions, as defined above.
To fulfill these responsibilities, we:
|
/ s / JOHN J. GETEK Assistant Inspector General for Audit February 6, 1998 2. Control risk assesses the likelihood that a material misstatement would occur (inherent risk) and not be prevented or detected on a timely basis by the Department's internal controls. |
PAGE
ACRONYMS ii
OVERVIEW OF THE REPORTING ENTITY
Introduction I - 1
Financial highlights I - 1
Program performance I - 1
Limitations on financial statements I - 1
FINANCIAL STATEMENTS
Statements of financial position II - 1
Statements of operations and changes in net position II - 2
Statements of cash flows II - 3
NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies III - 1
Note 2 - Fund Balances With U.S. Treasury III - 3
Note 3 - Investments III - 4
Note 4 - Accounts Receivable, Net III - 4
Note 5 - Liabilities Not covered By Budgetary Resources III - 5
Note 6 - Net Position III - 5
Note 7 - Program Operating Expenses III - 6
This report has been prepared pursuant to the Chief
Financial Officers Act of 1990 (P.L. 101-576) for the Director of the
Office of Management and Budget (OMB) under the direction of OMB Bulletin
94-01 and pursuant to the Longshore and Harbor Workers' Compensation Act
Amendments of 1984 (P.L. 98-426)
CFO Chief Financial Officer
DCCA District of Columbia Workmens' Compensation Act Special Fund
DLHWC Division of Longshore and Harbor Workers Compensation
DOL Department of Labor
ESA Employment Standards Administration
FASAB Federal Accounting Standards Advisory Board
FMFIA Federal Managers' Financial Integrity Act
FUND District of Columbia Workmen's Compensation Act Special Fund
FY Fiscal Year
JFMIP Joint Financial Management Improvement Project
OCFO Office of the Chief Financial Officer
OMB Office of Management and Budget
OWCP
Office of Workers' Compensation Programs
The reporting entity is the District of Columbia Workmen's Compensation Act Special Fund (Fund) for injury cases with dates prior to July 26, 1982. The Fund is administered by the Employment Standards Administration (ESA) which is an agency within the United States Department of Labor. Within ESA, the Division of Longshore and Harbor Workers' Compensation has direct responsibility for administration of the Fund. The Fund offers compensation, and in certain cases, medical care payments to District of Columbia employees for work related injuries or death. Effective July 26, 1982, the District of Columbia became responsible for administration and operation of a separate special fund to cover post July 26, 1982, injury cases.
Administrative services for operating the Fund are provided by the Division of Longshore and Harbor Workers' Compensation through direct Federal Appropriations. Appropriated funding for administrative services is not reflected in the accompanying financial statements.
Additionally, the District of Columbia Workmen's Compensation Act [Section 10(h)] provides annual wage increase compensation (cost of living adjustments). Fifty percent of this annual wage increase for pre-1972 compensation cases is paid by Federal appropriated funds, and fifty percent is paid by the Fund through the annual assessment. Appropriated funding for 10(h) is not reflected in the accompanying financial statements.
Approximately 98 percent of the revenue of the Fund during FY 1997 ($11.2 million out of a total of $11.4 million) is generated through annual recurring assessments paid by self-insured employers and insurance carriers. This compares with 96 percent ($11.6 million out of a total of $12.0 million) for FY 1996.
Investment income into the Fund decreased to $157,359 for FY 1997 from $166,496 for FY 1996. The main reasons for the change are due to a decrease in investments of 5.4 percent during FY 1997 and the falling yield on investments which decreased approximately 0.04 percent during FY 1997. The average interest rate earned during FY 1997 was 4.99 percent compared to 5.03 percent for FY 1996. Total revenues of the fund decreased to 11.4 million for FY 1997 from 12.0 million for FY 1996.
The primary annual expenditures of the Fund are for benefit payments under sections 8(f), second injury compensation, and 10(h), annual wage cost of living adjustments. There was essentially no change in 8(f) expenditures for FY 1997 and FY 1996. Total 8(f) expenditures for FY 1997 and FY 1996 were $10.4 million. Fund expenditures for 8(f) compensation accounted for 87 percent of FY 1997 and 90 percent of FY 1996 total expenses. The 10(h) expenditures remained relatively stable at $0.8 million each year. The Fund's bad debt expense was $0.6 million for FY 1997, compared to none for FY 1996.
The District of Columbia Workmen's Compensation Act Special Fund does not currently record any measures relating to program performance.
LIMITATIONS ON FINANCIAL STATEMENTS
The following statements of limitations on the financial statements are a required part of the accompanying overview.
- The financial statements have been prepared to report the financial position and results of operations of the entity, pursuant to the requirements of the Chief Financial Officers Act of 1990.
- While the statements have been prepared from the books and records of the entity in accordance with the formats prescribed by OMB, the statements are different from the financial reports used to monitor and control budgetary resources which are prepared from the same books and records.I - 1
LIMITATIONS ON FINANCIAL STATEMENTS - Continued
- The statements should be read with the realization that they are for a component of a sovereign entity, that liabilities not covered by budgetary resources cannot be liquidated without the enactment of an appropriation, and that the payment of all liabilities other than for contracts can be abrogated by the sovereign entity.
1997 1996
ASSETS
Entity assets
IntragovernmentalFund balance with Treasury (Note 2) $ 55,354 $ 147,242Governmental assets
Investments (Note 3) 5,262,153 5,562,367Accounts receivable, net (Note 4) 409,036 43,864
Total assets $ 5,726,543 $ 5,753,473
LIABILITIES
Liabilities covered by budgetary resources
Governmental liabilities
Accrued benefits payable $ 392,416 $ 367,542
Liabilities not covered by budgetary resources (Note 5)
Governmental liabilities
Deferred revenue 2,805,873 2,811,395
Other governmental liabilities 892,774 360,668
Total
liabilities not covered by
budgetary resources
3,698,647 3,172,063
Total liabilities
4,091,063 3,539,605
NET POSITION (Note 6)
Cumulative results of operations 4,905,054 5,322,448
Future funding sources 429,073 63,483
Future funding requirements (3,698,647) (3,172,063)
Total net position 1,635,480 2,213,868
Total liabilities and net position
$ 5,726,543 $ 5,753,473
The Notes to Financial Statements are an integral part
of these statements.
1997 1996
REVENUES AND FINANCING SOURCES
Interest and penalties, non-Federal $ ---- $ 600
Interest, Federal 157,359 166,496
Assessment recoveries ---- 277,000
Other revenue and financing sources - assessments 11,229,015 11,579,716
Total
revenues and financing sources
11,386,374
12,023,812
EXPENSES
Program operating expenses (Note 7) 11,964,762 11,561,637
Excess (shortage) of
revenues and financing
sources over expenses
$ (578,388)
$ 462,175
NET POSITION
Beginning balance $ 2,213,868 $ 1,751,693
Excess (shortage) of revenues
and financing
sources over expenses (578,388) 462,175
Ending balance
$ 1,635,480
$ 2,213,868
The Notes to Financial Statements are an integral part
of these statements.
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES
Excess (shortage) of revenues and financing sources
over expenses
$ (578,388)
$ 462,175
ADJUSTMENTS AFFECTING CASH FLOW
Decrease (increase) in accounts receivable (365,172) 2,548
Increase in accrued benefits payable 24,874 69,351
Other liabilities:
Increase in defaulted employer liability 1,226 1,779
Increase (decrease) in other governmental liabilities 530,880 (344,595)
Decrease in deferred revenue (5,522) (190,384)
Total adjustments 186,286 (461,301)
Net
cash provided (used) by operating activities
(392,102) 874
CASH FLOWS FROM NON-OPERATING ACTIVITIES
Proceeds from sale of investments 12,956,415 13,390,896
Purchase of investments (12,656,201) (13,457,526)
Net cash provided (used) by non-operating activities 300,214 (66,630)
Net
cash used by operating and
non-operating activities
(91,888)
(65,756)
Fund balance with Treasury, beginning 147,242 212,998
Fund balance with Treasury, ending $ 55,354 $ 147,242
The Notes to Financial Statements are an integral part
of these statements.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies which have been followed by the Fund in preparing the accompanying financial statements are set forth below.
A. Basis of Presentation
These financial statements have been prepared to report the financial position and results of operations of the District of Columbia Workmen's Compensation Fund (Fund), as required by the CFO Act of 1990, and the Government Management Reform Act of 1994. They have been prepared from the books and records of the Fund in accordance with the form and content for entity financial statements specified by the Office of Management and Budget (OMB) in OMB Bulletin 94-01, certain supplemental provisions of OMB Bulletin 97-01 applicable to 1997 and 1996, and Department of Labor accounting policies as summarized in Note 1. These statements are, therefore, different from the financial reports, also prepared by DOL pursuant to OMB directives, that are used to monitor and control the Funds' use of budgetary resources.
OMB Bulletin 94-01 requires that assets and liabilities be classified on the Statement of Financial Position as follows:
o Assets should be classified and aggregated as entity and non-entity, based upon whether or not DOL has the authority to use the assets in its operations.
o Liabilities should be classified and aggregated as covered by budgetary resources and not covered by budgetary resources, based upon whether or not budget authority or other resources have been made available to cover the liabilities. Liabilities covered by budgetary resources represent obligations of the government against available appropriations or other funds.
o Assets and liabilities should be further distinguished as intragovernmental and governmental. Intragovernmental assets and liabilities arise from transactions among entities within the Federal government. Governmental assets and liabilities arise from transactions with entities outside the Federal government.
OMB Bulletin 94-01 requires that agencies include in their principal financial statements a Statement of Budgetary Resources and Actual Expenses. DOL management requested and OMB granted a waiver of this requirement for 1997 and 1996.
B. Basis of Accounting
Under the authority of the CFO Act of 1990, the Federal Accounting
Standards Advisory Board (FASAB) was established to recommend Federal
accounting standards to the Secretary of the Treasury, the Director of the
Office of Management and Budget and the Comptroller General, co-principals
of the Joint Financial Management Improvement Project (JFMIP). Specific
standards agreed upon by the three principals will be issued by the
Director of OMB and the Comptroller General. Pending issuance of final
accounting standards, FASAB has recommended and the JFMIP principals have
agreed that agencies adopt for use in preparing financial statements an
other comprehensive basis of accounting constituted by (1) individual
standards agreed to and published by the JFMIP principals, (2) form and
content requirements in OMB Bulletin 94-01 and certain provisions of OMB
Bulletin 97-01 applicable to 1997 and 1996, (3) accounting standards
contained in agency accounting policy, procedures manuals or related
guidance, and (4) accounting principles published by authoritative
standard setting bodies and other authoritative sources, (a) in the
absence of other guidance in the first three parts of this hierarchy, and
(b) if the use of such accounting standards improves the meaningfulness of
the financial statements. ESA has adopted this other comprehensive basis
of accounting for preparation of these financial statements.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B. Basis of Accounting - Continued
Transactions are recorded on an accrual accounting basis and a budgetary basis. Under the accrual method, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash. Budgetary accounting facilitates compliance with legal constraints and controls over the use of federal funds. All interfund balances and transactions have been eliminated.
C. Reporting Entity
The reporting entity is the District of Columbia Workmen's Compensation Act Special Fund (Fund) for injury cases with dates prior to July 26, 1982. The Fund is administered by the Employment Standards Administration (ESA) which is an agency within the United States Department of Labor. Within ESA, the Division of Longshore and Harbor Workers' Compensation has direct responsibility for administration of the Fund. The Fund offers compensation, and in certain cases, medical care payments to District of Columbia employees for work related injuries or death. Effective July 26, 1982, the District of Columbia Workmen's Compensation Act was amended whereby the Mayor of the District of Columbia became responsible for administration and operation of a separate special fund to cover post July 26, 1982, injury cases.
Additionally, the District of Columbia Workmen's Compensation Act [Section 10(h)] provides annual wage increase compensation (cost of living adjustments). Fifty percent of this annual wage increase for pre-1972 compensation cases is paid by Federal appropriated funds and fifty percent is paid by the Fund through the annual assessment. Appropriated funding for 10(h) is not reflected in the accompanying financial statements. Also, these financial statements do not include the Special Fund administered by the Mayor of the District of Columbia for injury cases occurring after July 26, 1982.
The financial statements of the Fund do not include the salaries and expenses associated with operating the Fund. Administrative services for operating the Fund are provided by the Division of Longshore and Harbor Workers' Compensation at no cost to the Fund as these expenses are paid by Federal appropriation.
D. Budgets and Budgetary Accounting
Budgetary accounting measures the appropriation and consumption of budget authority and other budgetary resources and facilitates compliance with legal constraints and controls over the use of Federal funds including those held in trust.
A fundamental principal of budgetary accounting is that budgetary resources are consumed at the time of purchase. Additionally, assets and liabilities which do not produce or consume current budgetary resources are not reported, and those liabilities for which a valid obligation has been established are considered to consume budgetary resources.
The Fund is maintained through fines and penalties levied under the Act, payments by employers for each death case when it is determined that there is no person entitled under the Act to the compensation for death, payment of certain permanent partial disability benefits and payment of annual assessments by authorized insurance carriers and self-insures. The largest single source of money for the Fund is the annual assessment.
E. Revenues and Other Financing Sources
The Fund's primary source of revenues is annual assessments of insurance carriers and self-insured employers. Included in revenues are recoveries of amounts reassessed to carriers relating to prior years. These reassessments primarily result from corrections made by carriers to prior year payment data. The Fund recognizes these recoveries as revenue when the parties agree to the settlement. Other sources of revenues are interest income, fines and penalties, and death benefit proceeds. Revenues are recognized when earned, i.e., goods have been delivered or services rendered.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
F. Funds with the U.S. Treasury and Cash
The Fund does not maintain cash in commercial bank accounts. Cash receipts and disbursements are processed by the U.S. Treasury. The Funds with U.S. Treasury are trust funds that are available to pay current liabilities and finance authorized purchase commitments.
G. Investments in U.S. Government Securities
Investments in U.S. Government securities are reported at cost, net of unamortized premiums or discounts, which approximates market value. Premiums or discounts are amortized into interest income over the term of the investment. The Fund's intent is to hold investments to maturity, unless they are needed to finance claims or otherwise sustain the operations of the Fund. No provision is made for unrealized gains or losses on these securities because, in the majority of cases, they are held to maturity.
H. Liabilities
Liabilities represent the amount of monies or other resources that are likely to be paid by the Fund as the result of a transaction or event that has already occurred.
I. Reclassification
Certain amounts for 1996 have been reclassified to conform with the 1997
presentation of those amounts.
NOTE 2 - FUND BALANCE WITH TREASURY
The detail of fund balance with Treasury, for the Fund at September 30,
1997 and 1996, is as follows:
September 30, 1997
Obligated Unobligated
Available Restricted Total
Trust Funds $ -- $ 55,354 $ -- $ 55,354
September
30, 1996
Obligated Unobligated
Available Restricted Total
Trust Funds
$ --
$ 147,242
$ --
$ 147,242
Funds with the U.S. Treasury at September 30, 1997 and 1996, include
$17,377 and $16,088 respectively, which is being held as security by
authority of Section 32 of the Longshore and Harbor Workers' Compensation
Act. These funds relate to the default of self-insured employers. These
funds are available for payment of compensation and medical benefits to
covered employees of the defaulted companies.
NOTE 3 - INVESTMENTS
The detail of investments, for the Fund at September 30, 1997 and 1996,
is as follows:
September 30, 1997
Market
Face
Value
Discount
Net
Intragovernmental securities
Marketable
$ 5,315,000 $ 5,262,153
$ ( 52,847) $ 5,262,153
September 30, 1996
Market
Face
Value
Discount
Net
Intragovernmental securities
Marketable
$ 5,615,000 $ 5,562,367
$ ( 52,633) $ 5,562,367
Investments of $ 24,349 and $ 24,412 for 1997 and 1996, respectively,
are being held as security by authority of Section 32 of the Longshore and
Harbor Workers' Compensation Act. These held investments relate to the
default of self-insured employers and are restricted. These investments
are available for payment of compensation and medical benefits to covered
employees of the defaulted companies. Management estimates that the
investments held will be sufficient to cover the future benefit associated
with these covered employees. Investments at September 30, 1997 and 1996,
consist of short-term U.S. Treasury Bills and are stated at amortized cost
which approximates market. Investments at September 30, 1997, bear
interest rates varying from 4.47% to 5.15% compared to rates varying from
4.79% to 5.19% for 1996.
NOTE 4 - ACCOUNTS RECEIVABLE, NET
The detail of accounts receivable for the Fund at September 30, 1997 and 1996, is as follows:
1997 1996
Entity
Governmental
Assessments receivable
$ 976,868
$ 40,990
Claimant overpayments 36,575 22,618
Less: allowance for doubtful accounts 604,407 19,744
Total accounts receivable, net $ 409,036 $ 43,864
Assessments receivable represent the unpaid annual assessments from the
current and prior years. Accounts receivable from overpayments to
claimants arise primarily from amended compensation orders and corrections
of payment computations. These receivables are being primarily recovered
by partial and total withholding of benefit payments.
NOTE 5 - LIABILITIES NOT COVERED BY BUDGETARY RESOURCES
The detail of liabilities not covered by budgetary resources, for the Fund at September 30, 1997 and 1996, is as follows:
1997 1996
Current
Current
Liabilities Liabilities
Governmental liabilities
Deferred revenue
$ 2,805,873
$ 2,811,395
Other liabilities
Assessment overpayments by
carriers
851,048
320,168
Defaulted employer liability
Held
in investments
24,349
24,412
Held in cash 17,377 16,088
41,726 40,500
Total other liabilities 892,774 360,668
Total liabilities not covered
by budgetary resources $
3,698,647 $
3,172,063
Assessment overpayments are to be refunded upon request or applied to reduce future assessments.
Defaulted employer liability relates to funds and investments held by the District of Columbia Special Fund which are being held as security by authority of Section 32 of the Act. These funds and investments are available for compensation and medical benefits to covered employees of the defaulted companies. Management estimates that these funds and investments held will be sufficient to cover the future benefits associated with the covered employees.
Deferred revenues represent the unearned assessment revenues as of
September 30, the Fund's accounting year end. The annual assessments cover
a calendar year and, accordingly, the portion extending beyond September
30 has been deferred.
NOTE 6 - NET POSITION
The detail of net position, for the Fund at September 30, 1997 and 1996, is as follows:
1997 1996
Cumulative results of operations
$ 4,905,054 $
5,322,448
Future funding sources
Accounts receivable 409,036 43,864Accumulated accretion of discount
on investments 20,037 19,619
Total future funding sources 429,073 63,483
Future funding requirements
Deferred revenue and other
governmental liabilities (3,698,647) (3,172,063)
Total net position
$ 1,635,480
$ 2,213,868
NOTE 7 - PROGRAM OPERATING EXPENSES
The detail of program operating expenses, for the Fund at September 30, 1997 and 1996, is as follows:
1997 1996
Operating Expenses by Object Classification:
Insurance claims, indemnities,
and other benefits
Second injury compensation, Section 8(f) $ 10,384,517 $ 10,353,106
Wage increase compensation, Section 10(h) 807,814 824,705
Compensation
payment for self-insurer in
default, Section 18(b)
187,167
383,718
Tuition
39(c) 600 108
11,380,098
11,561,637
Bad debts and write-offs 584,664 --
Total program operating expenses $
11,964,762 $
11,561,637
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