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.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FAS acted to recoup six bonus overpayments; the other two were resolved and found not to be overpaid. An intermediate phase of a new automated bonus payment system is in place and is being used.

    Recommendation: The Administrator, FAS, should complete the review of the eight apparent overpayments and recover any actual overpayments from the exporters.

    Agency Affected: Department of Agriculture: Farm and Foreign Agricultural Service

  2. Status: Closed - Implemented

    Comments: FAS developed and implemented an automated computer database program to administer the agreements entered into under the EEP. An intermediate phase of this system is in place and is being used. This phase sets up the necessary internal controls to safeguard against bonus overpayments.

    Recommendation: The Administrator, FAS, should develop sufficient internal controls over the bonus payment process to safeguard against future overpayments.

    Agency Affected: Department of Agriculture: Farm and Foreign Agricultural Service

 

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