text: additional expenditures wereforeseen, ithaddecided toeliminate thereserve. Custodial fees 15.Ourreviewoftheprocedures forthecalculation ofcustodial fees,whichuses themarketvalueofsecurities asthebasefigure, disclosed thatthecomputation isbasedoninformation sourced fromthecustodian. Forthisreason, wesuggested thatmarketinformation shouldbeobtained fromindependent sources andusedfor test-checking thecorrectness ofthebasefigures. TheAdministration informed us that,although nofilesweremaintained onthemarketvalueofsecurities, thisdid notmeanthatindependent evaluations werenotundertaken. However, our examination disclosed theabsence ofanaudittrailtoindicate thattheprocedure wasdone. 16.Werecommended andtheAdministration agreedthatanevidence thatthe procedure wasperformed shouldbeindicated onthesupporting document tothe payment voucher toenabletheapproving officer toverifyit.TheAdministration likewise informed usthathistorical pricesforequities wouldformpar.tofa computerized pricecharting systemthatwasnowinthefinalstagesofdevelopment. Contributions andbenefit entitlements 17.Ourexamination oftheparticipants' account revealed thattheyear-end balance in~theaccounts was$224,949.89 higherthanthetotalbalance ofthe participants' masterrecord. Further reviewdisclosed that$200,000 ofthe difference wasduetothefailure ofthecomputer application programme that processes participants' accounts toacceptamounts over$99,999.99. Although unabletoidentify thespecific transactions thatgaverisetothebalance ofthe difference, wewerenevertheless abletolocalize thedifferences asbeingdueto anerrorinthebeginning balance, differences intherecording ofreceipts and differences intherecording ofpayments. 18.Werecommended thatinthefuturethereconciliation ofthebalances shouldbe completed beforethepreparation oftheyear-end financial statements. Periodic reconciliation duringtheyearnotonlyfacilitates theworkandlocalizes errors butalsoavoidsaddingtotheusually heavyworkload atyear-end. Likewise, we recommended thatthecomputer programme bemod,ified andthattheparticipants' accounts beanalysed sothatthereasons fortheunreconciled difference canb~ identified andtherecords adjusted. 19.TheAdministration informed usthatsomeofthesources ofthedifference have already beenidentified andtherestweregoingthrough thesearchprocess. The Administration assured usthatin1985thereconciliation wouldbeundertaken on timetoensurethatadjustments werereflected intheyear-end accounts. -51-,, 22.Ourreviewof1984refunds madetomember organi~ations disclosed arefundof ;$17,183.67 onaccount ofseparations priorto31DecembeI 1982,whichcouldhave beenavoided hadtheapplicable rulesoftheFundbeenproperly applied. Wealso iobserved thatthiserrorpassedundetected through theFund'sauditandreview process, acritical control feature because errorsthatpassbeyondthisprocess cannot bedetected bythecomputer validation routine. fl ,I21.Although thepayroll systemautomatically detects andcorrects theseincorrect payments whenprocessing thenextquarter's payroll, theseerrorscouldhavebeen avoided hadthesystemprovided foranupdateoftheinitial payroll datasetjust priortoitsmergerwiththeexisting payroll. Inaddition, theman-hours spentin verifying complaints frombeneficiaries withreduced benefits andinpreparing communications toexplain theadjustments couldhavebeenputtobetteruse.The Administr?tion informed usthattheintroduction ofadifferent payment procedura in1985,fromthebeginning totheendofthemonth, wouldgoalongwayin minimizing therecurrence ofincorrect payments. -52-23.Werecommended andtheAdministration agreedontheneedforextracarein performing thereviewduetotheabsence ofcompensating controls.Refunds tomemberorganizations Benefits payable account 24.Ouranalysis ofthebenefits payable account disclosed thattheyear-end balance included $283,320.23 of193periodic benefitliabilities thathavebeen outstanding formorethanthreeyearsandadeferred retirement liability of $20,289.30 thathasremained outstanding sincethecloseof1980.Theschedule of bene~its payable generated attheendofeachoperating yeardoesnotinclude information oneithertheageoftheoutstanding itemorthedateswhentheseitems weresetup.Properimplementation oftheprovisions ofar~icl~ 46(£)ofthe Regulations andRulesoftheFundontheforfeiture ofbenefits requires an analysis andreviewofthisaccount, whichcanbegreatly facilitated bythe
analysis: The text appears to be an audit report or a financial review of a pension fund or a benefit scheme. It discusses various issues related to the calculation of custodial fees, reconciliation of balances, and refunds to member organizations. The language used is technical and financial, indicating a focus on the management and administration of a fund. The report highlights errors and discrepancies, suggesting that the primary concern is the accuracy and transparency of the financial transactions.