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Inter-American Development Bank: Questions Concerning Payment to Nicaragua

NSIAD-89-167 Published: Jul 05, 1989. Publicly Released: Jul 10, 1989.
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Highlights

Pursuant to a congressional request, GAO reviewed the Inter-American Development Bank's (IDB) loan disbursements to Nicaragua in November 1987, focusing on: (1) whether the payments complied with IDB regulations or violated U.S. law; (2) whether IDB should recover the funds; and (3) an audit memorandum the IDB Auditor General prepared concerning the transaction.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury The Secretary of the Treasury should request, through the IDB U.S. Executive Director, the IDB Auditor General to determine whether the: (1) revised procedures issued in 1988 for clearing arrears have been implemented by IDB and whether they satisfy the recommendations of the Auditor General; and (2) funds disbursed in November 1987 as advances have been actually used for loan purposes.
Closed – Implemented
Treasury requested the U.S. Executive Director to initiate action on this recommendation. IDB auditors completed their work concerning the use of loan funds and reported that revised procedures were implemented that satisfied the Auditor General's recommendations. In 1991, it was determined that about $3.4 million in advances could not be justified.
Department of the Treasury If it is found that these funds, or equivalent funds of the government of Nicaragua, have not been used for valid loan purposes, the Secretary of the Treasury should request IDB to recover these amounts from the government of Nicaragua.
Closed – Implemented
In 1991, Nicaragua repaid IDB $3.4 million which represented advances that could not be justified.

Full Report

Full Report (26 pages)

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Topics

International Affairs
Debt collectionDelinquent loansEconomic developmentFederal agency accounting systemsForeign loansInternal controlsInternational economic relationsLoan defaultsLoan repaymentsNoncompliance