Interest Earned on Letter of Credit Funds

NSIAD-97-241R: Published: Aug 13, 1997. Publicly Released: Aug 13, 1997.

Additional Materials:


Louis J. Rodrigues
(202) 512-4841


Office of Public Affairs
(202) 512-4800

As part of its ongoing work on budget issues, GAO assisted in resolving a disagreement between the National Aeronautics and Space Administration (NASA) and the California Institute of Technology (Caltech).

GAO noted that: (1) Caltech, a nonprofit private university, operates the Jet Propulsion Laboratory for NASA under a 5-year cost-type research and development contract with an annual value of about $1 billion; (2) the contract is funded by a letter of credit, managed by the Department of Health and Human Services; (3) the disagreement related to Caltech's retention of interest earned on letter of credit funds after the funds were deposited in its bank account but before Caltech's checks were paid by the bank; (4) GAO discussed the disagreement with NASA Management Office, Caltech, and Defense Contract Audit Agency representatives and reviewed the NASA/Caltech contract and the regulations governing the use and disposition of funds withdrawn from letters of credit; (5) GAO also arranged and attended a series of meetings between Caltech and NASA Management Office personnel to help resolve this matter; (6) Caltech notified NASA in a July 9, 1997, letter that, in consideration of its relationship with NASA, it would remit to the Treasury $389,540 in interest earned through June 1997; (7) Caltech also stated that it would continue to remit interest earnings on a quarterly basis; (8) Caltech's check dated July 29, 1997, has been received; and (9) these actions satisfactorily resolved GAO's interest in this matter.

Nov 16, 2020

Nov 10, 2020

Nov 9, 2020

Nov 6, 2020

Oct 13, 2020

Sep 30, 2020

Sep 9, 2020

Looking for more? Browse all our products here