Panama Canal Commission--Certification of Revenue Estimate for Fiscal Year 1981

The Panama Canal Act of 1979 requires the Comptroller General to certify the estimated revenues to be deposited in the Panama Canal Commission's fund as estimated by the Secretary of Defense at the time the budget for the fiscal year is submitted to Congress. Since the Act does not provide any criteria for GAO to use in certifying the revenues to be deposited in the Panama Canal Commission Fund in the Treasury, the review of fiscal year 1981 estimates consisted of testing the computations and reviewing the method of compiling the estimates and forecasts.

The revenue estimated for fiscal year 1981 from all sources to be deposited in the Panama Canal Commission fund totaled $410.1 million. It is also estimated that the Fund will have an unexpected balance of $463.9 million at the close of fiscal year 1981, which represents the total revenue deposits and cash deposits from the former Panama Canal Company made by the Commission during fiscal year 1980. To develop the forecast of Canal traffic and toll revenues for fiscal 1981, aggregative economic forecasting techniques were combined with statistical analysis and economic judgment. Disaggregative techniques were used for commodities for which economic changes are expected. During fiscal year 1980, changes in oil traffic flow will impact on projected 1980 revenues and could affect current 1981 projections. Because the forecast of toll revenues for a given year is based on assumptions and estimates, the reliability of which depends on future events beyond the control of the Commission, there could a significant variance from actual results. Nontoll revenue estimates were developed by the Commission beginning with the latest estimates of such revenues for fiscal year 1980 and adjusting these amounts with the revenue variations expected during the upcoming fiscal year. Actual nontoll revenues may fall short of the original projected levels for fiscal year 1980 due to a decrease in revenues from utilities and technical assistance to Panama. It is the opinion of GAO that the revenues projected by the Commission for fiscal 1981 appear to be reasonable.