Financial Audit:

Panama Canal Commission's Financial Statements for 1985 and 1984

AFMD-87-4: Published: Jun 10, 1987. Publicly Released: Jun 10, 1987.

Additional Materials:

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GAO examined the Panama Canal Commission's (PCC) statement of its financial position as of September 30, 1985 and 1984, and the related statements of operations and non-interest bearing investment, the changes in the government's investment, the changes in financial position, and the status of appropriations for the years then ended.

GAO found that: (1) an amendment to the Panama Canal Act of 1979 required PCC to deposit, as miscellaneous receipts, that portion of toll revenues that covered interest on the U.S. investment collected on or after the date of the amendment, and eliminated the PCC practice of reducing the U.S. interest-bearing investment base by the amount of interest each year; and (2) PCC did not obtain regulatory approval in advance of establishing a floating equipment reserve to provide for future repairs. GAO also found that, except for the establishment of the reserve, the financial statements presented fairly the PCC financial position, the results of its operations, the changes in its financial position, and the status of appropriations for the years then ended, in conformity with generally accepted accounting principles applied consistently.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: PCC included the reserve in its fiscal year (FY) 1990 toll rate submission which was approved by the President on August 15, 1989, which resolves the issue.

    Recommendation: The Chairman of the Board of Directors, PCC, should direct the Administrator, PCC, to obtain approval from the regulator to establish and fund the reserve for floating equipment.

    Agency Affected: Panama Canal Commission

 

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