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089448 1 (1969-04-07)

handle is hein.gao/gaobacvle0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 c) CIVIL DIVISION 09 Mr. A. W. Stratton 0 as Deputy Administrator (-( ( Veterans Administration Dear Nr. Stratton: We have reviewed selected aspects of the Veterans Mdministra- tion's (VA) management of the Servicemen's GrouATHETntUrance hr g am.0U review performed at the VA Contral fic, Vashington, D. C., was directed toward examining into the reaconable- ness of the VA's determination of its administrative costs chargcd against the program. The SGLI program is administered by a commercial primary insurer. The Veterans Administration is responsible for supervicing the program and for determining the VA's administrative costs. Dur- ing fiscal year 1968 the VA charged $170,157 in administrative costs against the program. Premiums are collected from servicemen and, along with the Government's extra-hazard contribution, are remitted by the uniformed services to the VA each month. The VA, in turn, remits these payments to the primary insurer and charges the program annually for its administrative costs. Based on the results of our review, we believe that improve- ments are needed in certain areas of the VA's management of the SGLI program. These areas are discussed below. The VA estimated that certain of its personal services costs of supervising the SGLI program for fiscal year 1968 amounted to about $47,500. These costs were charged against the program. Band on our review of the available documentation cupporting this estimate, we believe that the basis used to estimate this cost is questionable. We found that the $47,500 charged against the program primarily represented personal services costs of work performed by the Program Administration staff of the Insurance Service. in discussing the basis used to estimate this charge, VA officials informed us that it was based on their judgment, considering certain supporting data, of (1) the amount of time spent on the SGLI program and (2) the average . 7 .. .....