Financial Audit

Resolution Funding Corporation's 1989 Financial Statements Gao ID: AFMD-91-49 April 2, 1991

GAO examined the Resolution Funding Corporation's financial statements for the fiscal year December 31, 1989.

GAO found that: (1) the Funding Corporation's $4 billion deficit represented the difference between the actual cost and ultimate maturity value of its investment in certain Department of the Treasury securities; (2) the deficit would be eliminated over time as the securities matured; (3) as of January 15, 1991, the Funding Corporation sold the $30 billion in bonds it was authorized to issue; (4) the Funding Corporation would be paying approximately $3 billion less in interest if it had sold the bonds at rates equal to the Treasury's; and (5) the statement of financial position presented fairly the Funding Corporation's financial position as of December 31, 1989, in conformity with generally accepted accounting principles.

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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