Examination of the Panama Canal Commission's Fiscal Year 1980 Financial Statements and Treaty-Related Issues
ID-81-49
Published: Jun 29, 1981. Publicly Released: Jun 29, 1981.
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Highlights
The Panama Canal Act of 1979 assigned GAO responsibility for: (1) auditing financial transactions of the Panama Canal Commission; (2) auditing the annual $10 million payment by the Commission to Panama for public services rendered; (3) certifying the estimated revenues in the Commission's annual budget at the time it is submitted to Congress; (4) approving the Commission's new accounting system; and (5) presenting annual statements of property transfers and all direct and indirect costs incurred by the United States in implementing the Panama Canal Treaty of 1977. Accordingly, an examination was made of the Commission's financial statements for fiscal year 1980.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| If it was the intent of Congress that interest be paid into the Miscellaneous Receipts Account of the Treasury, legislative action will be necessary. |
Closed
|
Please call 202/512-6100 for additional information. |
| Congress should make an explicit statement of intent because the Act is not clear whether there should be a distinction between interest-bearing and noninterest-bearing investment of the United States. If the Commission is incorrect, toll rates will need to be increased to assure recovery of the additional interest. |
Closed
|
Please call 202/512-6100 for additional information. |
| Congress should reconsider the requirement for an annual audit and, instead, provide for cost audits to coincide with opportunities to adjust the payments. |
Closed
|
Please call 202/512-6100 for additional information. |
| Congress should reconsider and amend the cost reporting requirements in the Panama Canal Act of 1979 to limit them to the Department of the Army. |
Closed
|
Please call 202/512-6100 for additional information. |
| GAO has been informed that the Panama Canal Commission plans to submit legislation seeking a change to a Government corporation rather than remaining an appropriated fund agency. If this proposal is favorably received, much of the inconsistency in accounting principles would be eliminated as the Corporation Control Act requires adherence to generally accepted accounting principles. In hearings preceding passage of the Panama Canal Act of 1979, GAO supported the corporate form of organization. GAO continues to prefer the corporate form because of its inherent flexibility as a revenue-producing, self-supporting operation. GAO sees no decrease in congressional control or oversight under the corporate form. Without some legislative changes, the inconsistency in accounting principles will remain. |
Closed
|
Please call 202/512-6100 for additional information. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Panama Canal Commission | The Administrator of the Panama Canal Commission should act to (1) develop and implement a procedure to assure fund availability prior to obligation; and (2) appoint and instruct, in the manner prescribed by law and regulation, the minimum number of authorized certifying officers. |
Closed
Please call 202/512-6100 for additional information.
|
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Accounting systemsBudgetsDamage claimsInternational economic relationsPaymentsProperty and supply managementService contractsTreatiesMilitary forcesFinancial statements