[Request for Opinion on Government Losses in Shipment Act]
B-214326: Oct 19, 1984
- Full Report:
A GAO opinion was requested as to whether the Government Losses in Shipment Act (GLISA) affords coverage for losses of Department of the Treasury securities transported by commercial carriers when the amount lost exceeds the carriers' insurance coverage. The Bureau of the Public Debt regularly ships unissued marketable bonds and notes to Federal Reserve Banks by way of registered mail and commercial carriers at the government's risk and expense. To save expenses and reduce the risk of loss, the Bureau would like to make single shipments of a value which might exceed the carriers' insurance coverage. The GLISA was enacted to enable the government to insure itself against the loss of the valuables it ships rather than purchasing private insurance. The GLISA prohibits government agencies from purchasing insurance against the loss of shipments of valuables; however, it establishes a revolving fund for replacing valuables which have been lost during shipment. The private carriers assume the risk of loss up to their limit of liability insurance coverage, and any losses exceeding these amounts are covered by the GLISA. Accordingly, GAO concluded that, under the GLISA, the Bureau may sanction single shipments of securities by carriers when the value of the shipment exceeds the amount of the carriers' liability insurance. In the event of loss, the private carrier shall assume the risk of loss up to the amount of its contractual liability but does not assume the risk beyond the maximum liability provided for in the shipping contract. A revolving fund is available to replace the excess loss.