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HRD-78-165 1 (1978-09-08)

handle is hein.gao/gaobaaxyz0001 and id is 1 raw text is: WJA ,iNSYC:', D.C. 20754,3 B-If4032i) SEPTEMISR 3 1973 The Honorable IIIIlIIIIIIIIIIIIIllIII The Secr tarv of Health, Edicaticn, an d f _. 12a LM107114 Dear M4r. Secretary: The Comptroller General is reouired by the Hicher Educatin Act of 1965, as amarded, to examine annually the financial state,.ents of the Student Loan Insurance Fund. The Fund is used to finance Federal insurance and reinsur- ance of loans made under the Guaranteed Student Loan program (GSL)o Specifically, payments on defaulted loans are made from the Fund while insurance premiums and proceeds from collections on Jefaulte'd loans are deFosited in it. As of the end of fiscal year 1977, over $700 million had been paid out of the Fund for defaulted loans since inception of the program. Since 1968 we have issued seven reports to the Coicress on the financial aspects of the Fund, in which we discussed the inabilitv of the Office of Education'3 (OE) accounLing system and computer system to provide accurate infornation for the Fund's financial statements and operation of the program. The deticiencies noted in our reports for fiscal years 1963 through 1975 .-,ere of such severity that we either (1) issued an advcrse opinion on the financial statuients because they nid not fairly present the firnanci.l ,ositicn of the Fund or (2) did not express an opinion o.-i tie Fund's financial statements becaus- of inadeouate records. Some of the more snifican-t nronlems found in our annual audits were that (1) rajor accou!nts were unsulported by subsidiary records, (2) tre allowaince for Ioss rates for defaulted loans purc>'.sed, accrued interest, and ca ,ims-in- process was not based O:L .ac Lual program experience, an4 (3) the automa7ed comutsr syst.ems needed to p:ovi_ .=ccurate information frc tne Fun-d s financizEl statements were not functioning propcrly. HPD-78-165 (i04089)

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