Export-Import Bank's 1988 and 1987 Financial Statements
AFMD-89-94: Published: Jul 25, 1989. Publicly Released: Jul 25, 1989.
- Full Report:
GAO examined the financial records and internal accounting controls of the Export-Import Bank of the United States as of September 30, 1988 and 1987, and statements of loss and reserve for contingencies and defaults, and statements of cash flow, for the years then ended.
GAO found that the Bank's statements did not present fairly its financial position as of September 30, 1988 and 1987, or the results of its operations or its cash flows for the years then ended, in conformity with generally accepted accounting principles, since its statements failed to note: (1) anticipated losses of about $11.6 billion due to uncollectibility of foreign loans, accrued interest receivable, and estimated recoveries on rescheduled claims it paid because of defaults; (2) that the interest rate it paid on its debt to the Federal Financing Bank exceeded its loans portfolio interest rate by 4.4 percent; and (3) cumulative losses ranged from $3.7 billion to $6.2 billion. GAO also found that: (1) the Bank's statements reflected a negative reserve for defaults and contingencies for the first time; and (2) although the Bank acted to improve the yield on its new loans by assessing a one-time exposure fee, the fee did not compensate for losses arising from the negative interest rate spread or loan delinquencies.