More Can Be Done To Protect Depositors at Federally Examined Grain Warehouses
CED-81-112
Published: Jun 19, 1981. Publicly Released: Jun 19, 1981.
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Highlights
The Department of Agriculture (USDA) administers a voluntary licensing and examination program under the Warehouse Act. In addition, USDA sets requirements for and examines contract warehouses storing commodities owned by the Commodity Credit Corporation (CCC) or pledged to CCC as loan collateral. GAO reviewed the USDA grain warehouse examination programs. To avoid duplication of other ongoing studies, GAO limited the examination to the magnitude of the bankruptcy problem to date, the number of warehouses in financial difficulty, ways the current Federal programs could be strengthened, and issues that should be considered in evaluating certain possible program and legislative changes.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to develop and implement a predictive formula for grain warehouse bankruptcies. This formula would be useful in determining the magnitude of the potential bankruptcy problem and in establishing priorities and frequencies for Federal examinations. It should be developed before USDA decides what actions to take on threatened insolvencies. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to require that it provide warehouse operators with specific written instructions on how to complete required financial forms. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrators of the Agricultural Marketing Service and the Agricultural Stabilization and Conservation Service to require that all federally licensed and the Commodity Credit Corporation contract grain warehouses give depositors warehouse receipts for all storage grain as soon as is practicable after delivery is completed. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Stabilization and Conservation Service to ensure that all Commodity Credit Corporation contract grain warehouses use warehouse receipts that can be accounted for during Federal warehouse examinations. Ways of doing this include: (1) encouraging States with insufficient controls over the printing and distribution of warehouse receipts to upgrade their requirements; and (2) requiring adequate controls as a prerequisite for obtaining a storage contract. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to require that grain storage obligations reflected on warehouse customer account records be verified with a statistical sample of depositors as part of normal subsequent examination procedures employed at federally licensed and CCC contract grain warehouses. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to require that it value fixed assets according to generally accepted accounting principles--cost less accumulated depreciation on depreciable assets. Warehouse operators should then be required to follow generally accepted accounting principles in filling out financial data forms submitted to the Agricultural Marketing Service. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to require federally examined warehouses to submit the financial data necessary to compute commonly used ratios indicative of financial health. The Administrator should then require Agricultural Marketing Service personnel to compute and determine the trend of these ratios as part of their routine financial reviews. |
Closed
Please call 202/512-6100 for additional information.
|
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Topics
Agricultural productsAgricultural programsFarm income stabilization programsFederal facilitiesFinancial managementGrain and grain productsWarehouse facilitiesOperating licenseBankruptcyAgricultural commodities