Review of Financial Statements of Commodity Credit Corporation

A review was conducted of the statement of financial condition of the Commodity Credit Corporation as of September 30, 1980, and its related statements of income and expense, analysis of deficit, and source and application of funds for the year then ended.

GAO found that certain accounting policies and practices of the Corporation depart from generally accepted accounting principles. These departures, which affect the presentation of information in the financial statements, included: (1) interest income and accrued interest receivable of a least $200 million were not recognized in the proper accounting period on nonrecourse loans; (2) significant accounting transactions were not adequately shown on the financial statements; (3) inventory of about $1.7 billion may have been substantially overvalued; (4) accrued interest receivable of about $144 million on Public Law 83-480 sales were not separately shown in the statement of financial condition; and (5) the footnote to the financial statements did not adequately describe accounting treatment of the deferred credit account for Public Law 83-480 sales. The total effect of these departures on the Corporation's financial statements has not been determined. Because of these departures and because its review was limited principally to inquiries of Corporation personnel and analytical procedures applied to financial data, GAO did not express an opinion on the Corporation's financial statements.