Budget Issues:

USDA's Commodity Certificates Should Be Recognized in Budget Totals

AFMD-88-27: Published: Aug 16, 1988. Publicly Released: Aug 16, 1988.

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In response to a congressional request, GAO examined the current budget treatment of the Commodity Credit Corporation's (CCC) commodity certificates to: (1) determine if CCC should treat the certificates as cash for budget purposes; and (2) develop alternative budget reporting methods.

GAO evaluated three budget reporting methods for commodity certificates, and found that: (1) continuing to treat certificate issuances as noncash transactions, excluding them from the budget authority and outlay totals, and including a supplementary table would involve no change, but would not ensure systematic congressional review; (2) treating the certificates as cash transactions and including them in the total budget authority and outlay totals would ensure congressional review of their use, but would add noncash amounts to a cash-based total; and (3) establishing new terms and totals for the use of noncash assets to finance government programs would provide Congress with more information regarding the use of commodity certificates, but could initially reduce understanding of budget information.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: OMB concluded that this recommendation was unworkable. Beginning with the fiscal year 1989 budget, OMB listed the value of commodity certificates by program in budget documents.

    Recommendation: The Director of the Office of Management and Budget (OMB) should include the use of commodity certificates in budget totals reviewed by Congress by developing a new set of noncash-based terms and totals, or by treating the issuance of commodity certificates as if they were cash. The Director should also consider these approaches for applicability to the other programs with authority to use noncash asset financing and should consult on the matter with congressional budget and appropriations committees.

    Agency Affected: Executive Office of the President: Office of Management and Budget


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