Foreign Currency Purchases Can Be Reduced Through Greater Use of Currency Use Payments Under Public Law 480 Commodity Sales Agreements

GAO examined the U.S. collections of local currencies payable under provisions in certain commodity sales agreements to see whether they are being collected in a timely manner.

GAO found that amounts owed remained uncollected while needed local currencies were purchased with dollars from commercial sources. Purchases of local currencies could have been reduced by $29 million between October 1981 and September 1983 by collecting the amounts payable. Since the dollar equivalent of collections is credited to the Commodity Credit Corporation, the Corporation may have to reduce its program level or obtain necessary funds from other sources, if receipts are less than projected. If amounts uncollected as of September 1983 are collected, they may reduce further dollar purchases; if they remain uncollected, their equivalent amounts are payable in dollars when the credit installments become due. GAO found that no system has been established to ensure timely currency-use payments collections. The collections are the responsibility of individual State Department missions. However, the missions do not directly benefit from the collection efforts. Agreements for fiscal year 1982 with seven countries where local currencies were purchased contained no currency-use payment provisions because of political reasons or oversight. In addition, greater use of these provisions may be constrained by the conflicting interests of the agencies involved.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Joseph E. Kelley Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 512-4128