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Highlights

Pursuant to a legislative requirement, GAO studied federal agencies' authority to borrow from the Department of the Treasury or the public to obtain funds in advance of appropriations, focusing on: (1) agencies' use of that authority between fiscal years (FY) 1978 through 1987; (2) guidelines for future provision of such authority; and (3) the appropriateness of such authority.

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Recommendations

Matter for Congressional Consideration

Matter Status
Congress should provide authority to borrow only for accounts that will probably be able to repay their debt with collections.
Closed - Not Implemented
Congress should: (1) require accounts to repay their debt with collections; (2) limit the number of years the accounts can use authority to borrow without renewed congressional approval; and (3) limit the amount of debt they can accumulate.
Closed - Not Implemented
Congress should repeal the Saint Lawrence Seaway Development Corporation's (SLSDC) remaining $3.2 million in authority to borrow in view of Congress' recent action to fund SLSDC operation and maintenance with annual appropriations.
Closed - Not Implemented
Congress should replace authority to borrow with another form of financing, such as a contingency reserve or permanent appropriation for the following accounts that cannot repay their borrowings with collections: (1) Office of the Administrator in the Federal Railroad Administration (FRA); (2) the Ocean Freight Differential in the Maritime Administration; and (3) the National Flood Insurance Fund in the Federal Emergency Management Agency.
Closed - Not Implemented
Congress should enact legislation requiring annual appropriations of credit subsidy costs for new direct and guaranteed loans and restricting the use of authority to borrow to the unsubsidized portion of direct loans for the following credit accounts: (1) the Federal Housing Administration Fund in the Department of Housing and Urban Development; (2) the Agricultural Credit Insurance Fund in the Farmers Home Administration, Department of Agriculture; (3) the Federal Ship Financing Fund in the Maritime Administration, Department of Transportation; and (4) the Export-Import Bank. If Congress chooses not to enact such legislation for these four accounts, an alternative would be to repeal the accounts' authority to borrow and replace it with another form of financing, such as contingency reserve or a permanent appropriation.
Closed - Implemented
Congress should place a limit on the amount of debt the Government National Mortgage Association's Guarantees of Mortgage-Backed Securities can have with Treasury.
Closed - Implemented

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget 1. The Director, Office of Management and Budget (OMB), should review accounts with authority to borrow that were not included in this study to determine if they are likely to have sufficient collections to repay their debt and if their authority to borrow should be replaced with another form of financing. The Director should report his findings to Congress.
Closed - Implemented
The OMB credit reform bill was included in the Omnibus Budget Reconciliation Act of 1990.

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