Examination of Fiscal Year 1979 Financial Statements of the Panama Canal Organization and Treaty-Related Issues

ID-81-14: Published: Jan 12, 1981. Publicly Released: Jan 12, 1981.

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GAO examined the Panama Canal organization's financial statements for fiscal year 1979, the last year before the Panama Canal Treaty of 1977 entered into force, and Treaty-related issues. The Panama Canal Act of 1979, the legislation implementing the Panama Canal Treaty, requires GAO to assume additional responsibilities in its future audits of the Canal organization, as follows: (1) audit the annual $10-million payment by the Panama Canal Commission to Panama for public services rendered; (2) certify the estimated revenues into the Commission's budget at the time it is submitted to Congress; and (3) audit the financial transactions of the Panama Canal Commission pursuant to the Accounting and Auditing Act and submit to Congress a report of the audit not later than 6 months after the end of each fiscal year.

In the opinion of GAO, the financial statements present fairly the financial position of the Panama Canal Company and the results of its operations, changes in the investment of the United States, and changes in financial position for the fiscal year then ended in conformity with generally accepted accounting principles which have been applied on a consistent basis.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should establish and chair a steering committee at the department level, consisting of representatives from agencies incurring Treaty-related costs and savings, to coordinate agencies' efforts to define, identify, and account for Treaty costs. The committee could develop a standard definition of Treaty costs and savings and a rate for inflation adjustments and be a focal point for consolidating and reporting Treaty costs.

    Agency Affected: Department of Defense

 

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