Experience of Federal Agencies: Under the Program of Self-insuringfidelity Losses Pursuant to Public Law 92-310, for Fiscal Year Ended June 30, 1974 |
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Page 1 - Pursuant to instructions promulgated by the Treasury Department, reports containing specific information concerning fidelity losses were submitted to the Treasury by the various executive branch agencies (except the Postal Service) and certain offices of the legislative and judicial ' branches which had reported the results of their bonding operations in the past. The Postal Service discontinued fidelity bonding in 1971
Page 3 - all Government agencies eliminated the fidelity bonding of Federal personnel and adopted a self-insurance program for fidelity losses, as authorized by Public Law 92-310. However, since the new law stipulated that bonds in force could be permitted to run their respective terms,
Page 2 - program represents the estimated savings to the Government, as shown in the following table. However, allowance would have to be made for additional losses which may be charged off later and for related recoveries of funds from defaulting employees. A major part
Page 1 - agencies continued to report activity under both the new self-insurance program and the old bonding program, since the above law stipulated that bonds in force at the time of enactment of the Act would remain in effect for their full terms, subject to cancellation and other provisions in such bonds. Some of the bonds did not expire until December 31, 1973-
Page 1 - Accordingly, the operating results for the new program and the old program are presented below in separate sections. Experience Under Self-Insurance Program Some 20 agencies adopted the self-insurance concept during fiscal year 1973. During fiscal year
Page 3 - that, while claims paid by surety companies may exceed premium charges for a year or two, this situation could not be expected to prevail over a period of time. Based upon the companies' loss experience and other factors, bond premium rates are established at a level that will cover not only the cost of the loss payments, but the administrative expenses of the companies and an allowance for profits. During fiscal year
Page 2 - Less : Losses charged to agencies' appropriations under self-insurance program (including losses which would have been in excess of bond coverage under old program) Estimated
Page 3 - However, as indicated above, allowance must be made for additional losses and recoveries which may be reported later by the agencies.
Page 2 - The case involved the processing of forged documents in support of five local currency check payments covering the purchase of food for a foreign aid program in Southeast Asia. The Agency