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FGMSD-78-62 1 (1979-01-05)

handle is hein.gao/gaobaaykz0001 and id is 1 raw text is: 
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KLKO .... BY I HE


Comptroller General


OF iHE UNITED STATES


Legislation Needed To Establish

Specific Loan Guarantee Limits

For The Economic Development

Administration
The  Economic Development Administra-
tion's business loan guarantee program has
operated for many years without specific
statutory monetary limitations. The fiscal
year 1979 Appropriations Act, however, lim-
its the amount of obligations for business
loans and guarantees to $75 million. Since
the program's creation in a 1965 act, the
agency has guaranteed over $197 million in
loans of which $131 million remains to be
paid as of March 31, 1978.

Four of the unpaid loans totaling $75
million were made to one company which is
experiencing financial difficulties, and suffi-
cient reserves are not available in the event
of a default by that company.


GAO   recommends that the Congress
strengthen its control by limiting the total
amount of all loans as well as the amount of
individual guarantees(larger loans would re-
quire congressional authorization).
GAO further recommends that the Depart-
ment of Commerce annually reassess the re-
serve needs for potential loan guarantee
losses and adjust the reserve accordingly.




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     FGMSD-78-62
  JANUARY 5, 1979

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