Financial Audit

GAO reported on the Commodity Credit Corporation's (CCC): (1) financial statements for the years ended September 30, 1987 and 1986; and (2) system of internal accounting controls and compliance with laws and regulations.

GAO found that CCC: (1) did not include in its financial statements an allowance for the uncollectible portion of $15 billion in outstanding loans to countries experiencing financial difficulties; (2) had estimated cumulative losses ranging from $5 billion to $8 billion on those loans as of September 30, 1987; (3) did not have a reserve for losses associated with $5 billion in outstanding guaranteed loans to foreign countries; (4) during 1987, instituted a new automated system which transferred the responsibility for recording and reconciling loan disbursements and repayment receipts from its Kansas City Management Office to local county offices; and (5) did not adequately control conversion to that system, resulting in unreconciled differences in receipts and disbursements. GAO also found that: (1) except for their failure to establish an allowance for estimated loan losses and a reserve for guaranteed loan losses, the financial statements presented fairly the financial position of CCC as of September 30, 1987 and 1986, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis; and (2) internal accounting controls and procedures had several weaknesses that were not material to the CCC financial statements.

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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