GAO examined the Panama Canal Commission's (PCC) statement of its financial position as of September 30, 1987 and 1986, and the related statements of operations and non-interest-bearing investment, the changes in the U.S. government's investment, the changes in financial position, and the status of appropriations for the years then ended.

GAO found that 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: (1) 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; and (2) PCC complied with the terms and provisions of laws and regulations for transactions that could have materially affected its financial statements.