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PAD-77-70 1 (1977-08-03)

handle is hein.gao/gaobaacof0001 and id is 1 raw text is: DOCUFNT RESUME 03102 - 1A21732841 Government Agency Transactions3 with the Federal Financing Bank Should Be Included on the Budget. PAD-77-70; B-174958. Augu-t 3, 1977. 41 pp. + 2 appendices (15 pp.). Report to the Congress; by F9imer B. Staats, Comptroller General. Contact: Program Analysis Div. Budget Function: General Government (800); Interest: Other Tnterest (902). Organization Concerned- Department of the Treasury; Federal Financing Bank; Office of Management a7ld Budget. congressional Relevance: House Committee in Banking, Finance ani thrban Affairs; Congress. Authority: Federal Financing Bank Act (12 U.S.C. 2281). P.L. 93-135, title IT. Fxcluding the Federal Financing Bank from Federal budget totals and other questionable budget practices combine to produce an inadequate and incomplete picture of Federal credit assistance. Findings/Conclusions: In its 4 years of operation, the Federal Financing Bank hes helped agencies to borrow money at a cost savings. Although it was oricoinally thought that the Bank would finance its activity by issuing its own securities in the private money and capital markets, nearly all of the Bank's borrowing has been from the Department of the Treasury. This borrowing arrangement saves money for agency borrowers and at present has small effect upon debt management and monetary policy. Problems created by the off-budget status of the Bank combine with other deviations of current budget practices to provide an understatement of eederal outlays. Purchase of Government-guaranteed borrowings is one of the most troublesome aspects of the Bank's off-budget status. Recommendations: Congresi; should: require that the Pank's receipts and disbursaenaets be iacluded in the Federdl budget totals- require that the receipts and disbursements of all off-budget Federal agencies that borrow from the Bank be included in the budget totals; require that sales of Certificates of Beneficial ownership be treated as borrowing it. agency budgets rather than as asset sales; and monitor the 3ank's growth ti determine when, if ever, the indirect costs of the current borrowing arrangement with the Treasury outweigh the benefits of savings aahievablR on agency borrowing that this practice provides. (Authsr/SC)

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