Export-Import Bank's 1987 and 1986 Financial Statements
AFMD-88-48, May 19, 1988
GAO examined the financial records and internal accounting controls of the Export-Import Bank of the United States (Eximbank) for the years ended September 30, 1987, and 1986.
GAO found that Eximbank's statements did not present fairly its financial position as September 30, 1987, and 1986, or the results of its operations and changes in its financial position for the years then ended, in conformity with generally accepted accounting principles, since its statements failed to note: (1) anticipated losses of between $2.7 billion and $5 billion due to loan payment defaults; (2) that the interest rate of its Federal Financing Bank (FFB) debt was higher than its loan portfolio's interest rate; (3) that its debtor prepayment program helped it to retire $670 million of its FFB debt but caused it to pay a $121 million prepayment penalty and to hold a higher percentage of problem loans with reduced future interest earnings; and (4) that it may be unable to repay its current debt or additional borrowings and may have to shift its losses to FFB or the Treasury. GAO also found that Eximbank: (1) took appropriate measures to correct material internal accounting control weaknesses GAO identified in 1986; and (2) failed to comply with regulations requiring it to report when its equity level fell below 50 percent of its capital and retained earnings.