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RCED-84-13 1 (1983-10-21)

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REPORT BY THE U S.     RELEASED


General Accounting Office


Uranium Enrichment Deferral

Charges And The Customer

Payment Period


A Department of Energy (DOE) Office of the Inspector
General report entitled Dollar Impact of Financial Manage-
ment Decisions in the Uranium Enrichment Program in-
cludes two recommendations which, if implemented, would
(1) change the interest rate DOE uses to compute its
charges to customers deferring delivery of uranium enrich-
ment services and (2) reduce the 30-day interest-free
period customers are allowed for making payment on DOE-
provided enrichment services.

GAO believes that an interest rate based on the current
market yield on Treasury borrowings with maturities
comparable to the period of deferrals (current-market-yield
rate) better reflects the cost of Treasury borrowings and is
therefore more appropriate than eitherthe rate DOE cur-
rently uses or the rate recommended by DOE's Inspector
General. DOE agrees and plans to use the current-market-
yield rate in any deferral under future contracts.

GAO also believes reducing the customer payment period
has merit from a cash management standpoint. However,
the effect of such an action on DOE's competitive position
among foreign suppliers of enrichment services needs to
be considered before any such reduction is made.






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 ,       ..,. :GAO/RCED-84-13
       SOCTOBER 21, 1983
         , C OU

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