Audit of Commodity Credit Corporation for Fiscal Year 1977

An examination of the financial statements of the Commodity Credit Corporation of the Department of Agriculture was directed primarily at their reliability and usefulness. Except as noted, the examination was made in accordance with generally accepted auditing standards and included tests of the accounting records and other auditing procedures that were considered practicable and reasonable. Because of the uniqueness and scope of the Corporation's operations, it was not practicable to perform all examination and verification steps necessary to reach an overall opinion on the accuracy and fairness of the Corporation's statements as of September 30, 1977, and the results of its operations for the year then ended.

The Corporation reported a total realized loss of $824 million for fiscal year (FY) 1977. This loss, reimbursable through appropriations, was $222 million more than that for FY 1976. The results of operations for FY 1977 did not include costs of $1.3 billion to be recovered through special appropriations and collections from foreign governments. At September 30, 1977, price-support and storage facility loans made to farmers at the county level totaled about $420 million; documentation lags resulted in a $45 million understatement of total assets and liabilities. Because of a problem with receiving prompt responses and reconciling differences, confirmation of accounts and notes receivable was omitted, as was an independent verification of commodities in the Corporation's inventory and those stored as collateral for loans. The reasonableness of the Corporation's allowances for losses on disposition of price-support inventories or loans was also not verified.