Maritime Administration

Efforts To Improve Data on the Federal Ship Financing Program Gao ID: RCED-87-58 August 28, 1987

In response to a congressional request, GAO examined the Maritime Administration's (MARAD) Federal Ship Financing Program and its estimated $5-billion portfolio of loan guarantees.

GAO found that: (1) MARAD considered 20 percent of the program loans to be at risk of default; (2) in 1986, default payments exceeded $1.2 billion; and (3) since the fund was not self-supporting, it needed approximately $1.4 billion in supplemental appropriations to repay outstanding loans. GAO also found that: (1) MARAD borrowed from the Treasury to cover the bulk of its 1987 program expenses; (2) improper and inadequate cost accounting procedures and underestimation of 1986 default payments caused the program's financial problems; and (3) MARAD plans to take corrective action to minimize its data problem.

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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