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COMPTROLLER GENERAL OF THE UNITED STATES
K<K.. . WASHINGTON. D.C. 20S4a
B-197030 January 15, 1980
The Honorable Harrison A. Williams
Chairman, Committee on Labor and
Human Resources
United States Senate
Dear Mr. Chairman:
This letter provides ourtcomments on S. 1961, 96-th
Ca7Tq-e a bill cited as the Higher Education Amendments
of 1980#:] We are concerned with the provisions contained
in section 438(b)(2) which would require us to make annual
audits of financial accounts maintained b the proposed
Student Loan Marketing Association. Also, our views con-
cerning the definition of a developing institution, as
contained in section 301(b) are provided.
The Government Corporation Control Act (31 U.S.C. 850)
provides that each wholly owned Government corporation
shall be audited at least once in every 3 years by the
Comptroller General. We believe that this provision gives
us the flexibility to meet our audit responsibilities con-
sistent with the most effective use of our resources. If
we find that accounting controls are weak and ineffective,
we could decide that an annual audit is warranted. On the
other hand, if we find that accounting controls are effec-
tive and there is adequate coverage by internal audits, it
would not be an effective use of our resources to routinely
make audits more often than our judgment dictates. Moreover,
as you are probably aware, we are required by the Legislative
Reorganization Act of 1970 (31 U.S.C. 1154) to make reviews
and evaluations of Government programs and activities when
ordered by either House of Congress or requested by its
committees.
We therefore recommend that the requirement for an
annual audit by the General Accounting Office be deleted
and that section 438(b)(2) on page 60 of S. 1961 be revised
to read as follows:
(2) maintain with respect to insurance under this
subpart an integral set of accounts, which shall be
audited at least once in every 3 years by the General
Accounting Office in accordance with principles and
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