Thrift Savings Plan: Delayed Allocation of Failed System Development Costs to Participant Accounts

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Correspondence issued by the General Accounting Office with an abstract that begins "The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees, governed by the Federal Retirement Thrift Investment Board (Board). The TSP is a defined contribution retirement plan available to eligible federal employees. The TSP had about 2.6 million participants and held about $100.6 billion in Net Assets Available for Benefits as of December 31, 2001, and about 3 million participants and $102.3 billion in Net Assets Available for Benefits as of December 31, 2002. In 1997, the Board awarded a contract to American ... continued below

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United States. General Accounting Office. July 22, 2003.

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Description

Correspondence issued by the General Accounting Office with an abstract that begins "The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees, governed by the Federal Retirement Thrift Investment Board (Board). The TSP is a defined contribution retirement plan available to eligible federal employees. The TSP had about 2.6 million participants and held about $100.6 billion in Net Assets Available for Benefits as of December 31, 2001, and about 3 million participants and $102.3 billion in Net Assets Available for Benefits as of December 31, 2002. In 1997, the Board awarded a contract to American Management Systems, Inc. (AMS) to develop and implement a new record-keeping system for the TSP. In 2001, after several implementation delays, the Board terminated the contract, and the Board's former Executive Director filed a lawsuit against the contractor on behalf of the TSP. On June 20, 2003, 2 days after we provided a draft of this report to the Board for its review, a settlement between the parties was reached. Then, on June 23, 2003, the net unrecovered cost from the system development failure was allocated to participant account balances as recommended in our draft report. While the loss has now been allocated to participant accounts, albeit on a belated basis, we believe there is value associated with issuing this product in response to the request to illustrate the operative principles and concepts that should govern allocation of costs in the future. Since the TSP is an important component of retirement income for many federal employees, participants must be assured of proper accounting of their funds. Therefore, Congress asked us to examine federal oversight of the TSP and the TSP's accounting for its failed system development costs. Our report on federal oversight of the TSP was issued in April 2003. This report addresses whether (1) the TSP's management followed U.S. generally accepted accounting principles (GAAP) in accounting for the costs associated with the failed development of the new record-keeping system and (2) the TSP should have allocated the costs to participants' accounts when the loss occurred."

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Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

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  • July 22, 2003

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  • June 12, 2014, 7:50 p.m.

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United States. General Accounting Office. Thrift Savings Plan: Delayed Allocation of Failed System Development Costs to Participant Accounts, text, July 22, 2003; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc302940/: accessed December 12, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.