FY2007 EFAST2 Development Costs (2006-12/PA-0026)

In October 2005, OIG expressed concern about the Department of Labor (DOL) directing PBGC to include $7M in its FY2007 budget request to fund a disproportionate share of the ERISA Filing Acceptance System (EFAST2) development costs. DOL's Employee Benefits Security Administration is developing EFAST2 with two partnering agencies, the Internal Revenue Service (IRS) and PBGC. IRS is a significant user of EFAST information (the current system), but they are not funding any of the EFAST2 development costs. This review was conducted to determine if PBGC's funding for EFAST2 is disproportionate.

We concluded that PBGC's share of EFAST2 development costs for FY2007 is not proportionate to the percentage that DOL and IRS, the partnering agencies, are paying for current EFAST operational costs. This $7M budget request results in PBGC paying 48 percent of the EFAST2 development costs. Historically, PBGC's share of the EFAST operational costs has only been about 2 percent. We were concerned that policy makers (Congress, the PBGC Board of Directors, and in particular the Department of Treasury) were not fully aware of this issue.

We confirmed that Congressional appropriations and oversight committees and PBGC's Board of Directors were not fully informed of the issues we raised, including the risks of disproportionate funding. We issued this report to fully disclose our findings and conclusions to decision-makers before Congress approved PBGC's FY2007 budget request.