International Trade:

Export Enhancement Program Bonus Overpayments

NSIAD-90-83: Published: Feb 7, 1990. Publicly Released: Feb 7, 1990.

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Pursuant to a congressional request, GAO assessed the adequacy of the Foreign Agricultural Service's (FAS) controls over the Export Enhancement Program's (EEP) bonus payments to U.S. exporters of surplus government-owned agricultural commodities.

GAO found that: (1) from EEP program inception in 1985 through October 1989, FAS made over $2.6 billion worth of surplus U.S. agricultural commodities available to U.S. exporters through 2,145 commodity sales agreements; (2) FAS did not establish adequate controls to alert the Agricultural Stabilization and Conservation Service (ASCS), which awarded the bonus certificates, that exporters had reached bonus payment ceilings or to verify that ASCS made payments in accordance with agreements; (3) FAS did not provide ASCS with written guidelines or procedures for making EEP bonus payments; (4) ASCS did not consistently or accurately tally the amount it shipped under any particular contract; (5) neither FAS nor ASCS provided for independent reviews of bonus payment calculations; (6) FAS did not implement its proposal for establishing stronger internal controls over EEP bonus payments; and (7) a review of the 2,145 agreements identified 65 apparent overpayments, with 8 of those amounting to $634,926.

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