International Trade:

Commodity Credit Corporation's Export Credit Guarantee Programs

NSIAD-88-194: Published: Jun 10, 1988. Publicly Released: Jun 17, 1988.

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In response to a congressional request, GAO reviewed the Foreign Agricultural Service's (FAS) management of the Commodity Credit Corporation's (CCC) export credit guarantee programs, focusing on the programs' efficiency and effectiveness.

GAO found that CCC: (1) failed to adequately enforce program regulations requiring exporters to include payment schedules with their export reports; (2) submitted inaccurate reports to Congress and rescheduled foreign debt guarantees without knowledge of the actual amounts outstanding; (3) lacked sufficient controls to ensure the purchase of U.S. agricultural commodities through its export guarantee programs; and (4) did not establish a procedure to verify that agricultural products arrived at the specified countries.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: ASCS now estimates the repayment schedule using data supplied by FAS and current interest rates paid by Treasury. The estimates have been proven to be very close to the actual amounts due and meets the intent of this recommendation to better account for outstanding guarantees.

    Recommendation: The Secretary of Agriculture should direct the General Sales Manager, FAS, to enforce compliance with the requirement that exporters must submit complete reports of exports to ensure the accurate accounting of outstanding guarantees.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: FAS has allocated two additional staff years to its compliance review staff, specifically for reviewing the loan guarantee programs. Reviews have already begun and internal controls, therefore, have been improved.

    Recommendation: The Secretary of Agriculture should direct the General Sales Manager, FAS, to design, develop, test, and implement internal controls, including random on-site verifications, to ensure that loan guarantees are used to obtain U.S. agricultural commodities.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: FAS program regulations have been changed so that only U.S. agricultural commodities are eligible for program coverage. The newly passed 1990 farm bill contains language defining a U.S. agricultural commodity. The legislation does what FAS refused to do.

    Recommendation: The Secretary of Agriculture should direct the General Sales Manager, FAS, to clarify program regulations with specific definitions for a U.S. agricultural commodity and a firm sale and require acknowledgement of these requirements on guarantee applications.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: FAS officials are overburdened with transactions and are responding to exporters requests for document revisions as quickly as possible. Additional FAS staffing is not expected and, therefore, improvements in FAS response time is unrealistic at this time.

    Recommendation: The Secretary of Agriculture should direct the General Sales Manager, FAS, to provide timely and accurate decisions on document revisions requested by exporters or their assignees.

    Agency Affected: Department of Agriculture

 

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