Review of Unfunded Pension Costs of Blue Cross and Blue Shield of North Dakota

This report provides the results of our review titled, "Review of Unfunded Pension Costs of Blue Cross and Blue Shield of North Dakota." The purpose of our review was to compute interest on the January 1, 1992 accumulated unfunded pension costs and to determine if pension costs allocable to the Medicare contracts for plan years 1992 through 1995 were funded in accordance with the Federal Acquisition Regulations (FAR). During our previous review of Blue Cross and Blue Shield of North Dakota (North Dakota) (CIN: A-08-94-00740), we determined that the Medicare segment accumulated $671,198 in unfunded pension costs as of January 1, 1992. We recommended that North Dakota identify those unfunded pension costs as an unallowable component of subsequent years' pension cost calculations. We also recommended that North Dakota update the accumulated unfunded pension costs, and identify and track similar costs occurring in later years.