Semiannual Report to Congress (SARC 50)
October 31, 2013 through March 31, 2014

This Semiannual Report to Congress summarizes the activities and accomplishments of our office for the period October 31, 2013 through March 31, 2014. During this reporting period, we issued 10 audit and evaluation reports, completed 6 investigations, resolved 39 complaints, and referred 5 cases for prosecution. Our work addressed a wide range of issues within the Corporation, including:

• We concurred with the closure of 62 audit recommendations from October 1 through December 31, 2013, an unprecedented number of closures. As of March 31, 2014, there were 163 open recommendations.
• We issued the 21st consecutive unmodified opinion on PBGC's financial statements. For the fifth consecutive year, we reported an adverse opinion on internal controls based on three material weaknesses: entity-wide security program planning and management; access controls and configuration management; and Benefit Administration and Payment Department operations.
• We issued an audit report of the effectiveness of PBGC's processes for monitoring, enforcing and modifying negotiated funding agreements that PBGC enters into with plan sponsors. We found that PBGC operated its negotiated funding agreement activity without clearly defined objectives or documented operating procedures.
• We issued audit and evaluation reports assessing PBGC's information technology and concluding security weaknesses continue to pose serious risks.
• We issued three Management Advisory Memoranda alerting PBGC to internal control weaknesses uncovered during investigations that identified (1) $213,000 in overpaid pension benefits; (2) lax controls contributed to theft of a participant's benefits; and (3) passwords for encrypted procurement documents were unknown.
• We initiated a partnership with Department of Labor Employee Benefits Security Administration to share information about possible wrongdoing in defined benefit plans and to jointly conduct investigations, and seek prosecution and financial remedies.