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ID-82-19 1 (1982-02-10)

handle is hein.gao/gaobabcws0001 and id is 1 raw text is: INTERNAT k V 1u IL) UNITED STAi'S' GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 IONAL DIVISION B-206222 FEBRUARY 10, 1982 The Honorable Caspar W. Weinberger The Secretary of Defense 111111111111 The Honorable Alexander M. Haig, Jr. 117497 The Secretary of State Subject: U.S. Overpays For Suez Canal Transits (ID-82-19) During our review of U.S. defense cooperation with Egypt, we became aware of apparent inconsistencies in the tolls U.S. warships are being assessed by the Egyptian Government for transiting the Suez Canal. As a result, we initiated a separate review of these tolls and have identified over $600,000 in overcharges paid by the U.S. Embassy in Cairo from January 1, 1979, through August 31, 1981. We arrived at this figure by reconstructing the toll each vessel should have paid for a given transit and comparing this figure to the amount actually paid by the Embassy for the transit. Based on our analysis of the Suez Canal toll data provided by the U.S. Embassy in Cairo and the U.S. Navy, we believe the over- charges primarily stem from inaccurate computations by the Suez Canal Authority and the absence of any verification of bills received by the U.S. Embassy. The tolls for some classes of U.S. ships which transit the Canal were overstated because the ships did not have Suez Canal Special Tonnage Certificates which attest to the net weight of a ship for Canal toll purposes. NAVY OVERCHARGED FOR SUEZ CANAL TOLLS From January 1979 through August 1981, the U.S. Navy paid an estimated $607,000 in excess toll charges for Suez Canal transits. During that period, 1/ Navy warships made about 130 transits of the Canal and paid total tolls of $3.3 million. We computed the overcharges, which amounted to over 18 percent of the total pay- ments, by comparing the actual tolls paid for each transit with the amount that should have been charged based on the size of the ship and the Canal toll formula. While we also found a few instances of undercharges, these accounted for an insignificant proportion of the total, and the $607,000 in overcharges is the net amount. 1/ We limited our review to the period 1/1/79 through 8/31/81 since the Embassy in Cairo does not retain records for Canal transits prior to 1/1/79. ~ / I AC') 7

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