Financial Audit:

VA Housing Credit Assistance Program Financial Statements for Fiscal Years 1989 and 1988

AFMD-92-2: Published: Oct 24, 1991. Publicly Released: Oct 24, 1991.

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Pursuant to a congressional request, GAO reviewed the Department of Veterans Affairs' (VA) housing assistance program financial statements for the fiscal years ended September 30, 1989 and 1988.

GAO found that: (1) the VA housing assistance program financial statements presented fairly the financial position of the program as of September 30, 1989 and 1988, and the results of its operations for the years then ended; (2) VA housing assistance program operations for fiscal year (FY) 1989 reported a net operating income of $200 million, as compared to a $1.8-billion loss the preceding year; (3) the program's success was attributable to a decline in guaranteed home loan foreclosures and a refinement in the way VA estimates its liability for losses on loans currently guaranteed; (4) as of September 30, 1989, the value of estimated liability for accrued loan losses payable in the future was $2.7 billion, but most of the actual loan loss payments will be made over the next 5 years and could amount to $3.6 billion; (5) other factors that could affect the VA housing assistance program's financial position include the method chosen to resolve the program's $1.7-billion liability for borrowings from the Department of the Treasury, the elimination, in 1990, of most loan origination fees as a source of revenue for the Loan Guaranty Revolving Fund, and VA response to prior GAO recommendations; and (6) although federal accounting requirements call for reconciliations to ensure the accuracy of the data included in accounting systems and the reliability of financial reports, VA did not reconcile discrepancies in financial data included in various systems which support the housing assistance program.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: VA submitted proposed legislation in the FY 1993 Office of Management and Budget legislative program and included it again in the FY 1994 program.

    Recommendation: The Secretary of Veterans Affairs should resubmit proposed legislation in future VA budget submissions seeking a waiver of the Direct Loan Revolving Fund's $1.7 billion liability for appropriations advanced by the Department of the Treasury.

    Agency Affected: Department of Veterans Affairs

 

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