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B-213761 1 (1984-07-27)

handle is hein.gao/gaobabkmg0001 and id is 1 raw text is: 2p V % COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. 20648 124800 B-21 3761 July 27, 1984 The Honorable Thomas E. Petri House of Representatives Dear Mr. Petri: By letter report dated December 12, 1983, we supplied you with cost information concerning the Department of Agriculture (USDA) tobacco price-support program. 1/ As we noted in that report, our audit staff found variances between the procedures used by the Department of the Treasury in charging interest and crediting repayments against loans to the Commodity Credit Corporation (CCC) and those procedures employed by CCC in charging interest and crediting repayments on loans to tobacco producer associations. The most significant variance is that Treasury charges CCC interest on the daily outstanding balance it owes Treasury, including accrued but unpaid interest from prior periods; however, CCC does not charge its producer asso- ciations for accrued interest. The impact of this and other variances between CCC and Treasury procedures is a net loss to CCC based on the difference between the amount of interest collected by CCC from tobacco producer associations and the corresponding interest which CCC pays the Treasury for bor- rowed funds. This net loss is funded through annual appropri- ations to CCC. This letter analyzes whether the Secretary of Agriculture is required, under either the Food and Agriculture Act of 1981 (the 1981 Act), Pub. L. No. 97-98, 95 Stat. 1266, Decem- ber 22, 1981, or the No Net Cost Tobacco Program Act of 1982 (the 1982 Act), Pub. L. No. 97-218, 96 Stat. 197, July 20, 1982, to change CCC's procedures for charging interest and crediting loan repayments to make them consistent with the procedures used by Treasury in order to eliminate CCC's inter- est losses. Although the issue is not free from doubt, we conclude that the Secretary is not so required. In our view, the 1981 Act and the 1982 Act must be con- strued together. While both the 1981 and 1982 Acts generally indicate that Congress intended the tobacco program to operate at no net cost to the taxpayers, the 1982 Act's legislative history indicates that Congress did not view either Act as 1/ Cost Information on USDA's Tobacco Program, RCED-84-33, December 12, 1983.

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