Review of Financial Statements of Commodity Credit Corporation

The financial statements of the Commodity Credit Corporation were reviewed. The Corporation determines its cash requirements on a daily basis and, on the basis of these determinations, either borrows from or repays the Department of the Treasury. The Agricultural Stabilization and Conservation Service (ASCS), a part of the Corporation, was specifically reviewed.

Several weaknesses that prevent prompt cash deposits were disclosed, including: (1) requiring the deposit of all remittances with the designated depository the morning of the next business day following the day of receipt; (2) having cash receipts delivered to the designated depositories between the hours of 11:00 a.m. and 12:00 p.m., although deposits may be credited up to 2:00 p.m.; (3) the delivery of cash receipts by the ASCS mail room to the Claims and Collections Branch after the special messenger has taken the receipts to designated depositories; and (4) mailing the deposit of Government checks to the Baltimore Federal Reserve Bank, requiring 2 or more days for the Bank to receive them and credit the Corporation's account. To correct these problems, GAO believes that procedures should require that all remittances be deposited the same day that they are received. Written instructions for the receipt and deposit of cash by the Claims and Collections Branch are set forth in an informal handbook. Numerous revisions are filed, and there are no signatures to indicate that these are the approved procedures to be followed by operating personnel. Even though the Corporation's Controller directed that the handbook be updated, not much progess has been made.

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.

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