Maritime Administration's Federal Ship Financing Program

GAO discussed the Maritime Administration's (MARAD) Federal Ship Financing Program, focusing on its: (1) financial condition; (2) program management data; and (3) reporting practices. GAO noted that the Federal Ship Financing Fund, which underwrites the program, continues to experience serious financial difficulty, with: (1) a loan portfolio of about $4.4 billion as of August 31, 1987; (2) fiscal year (FY) 1987 loan default payments of about $400 million; (3) 30 percent of its loan guarantees, valued at about $1 billion, which it estimates at risk of default; and (4) a reliance on supplemental appropriations to repay $400 million borrowed from the Treasury to repay debts. GAO also noted that the program: (1) reported inconsistent and incomplete financial and management data in its documents and reports; (2) has not clearly stated in its reports that the Fund is no longer self-supporting; and (3) did not routinely compile complete data on companies at risk of default.