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ID-82-35 1 (1982-05-13)

handle is hein.gao/gaobabdfz0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 INTENNATIONAL IMtSION ~I~ ~~ B - 20 7 1 5 0 MAY 13,1982 118351 The Honorable Donald T. Regan The Secretary of the Treasury Subject: Misleading Projections For Country Loan Repayment (GAO/ID-82-35) Dear Mr. Secretary: Debt service projections for loans administered by the Defense Security Assistance Agency (DSAA), the Agency for Inter- national Development (AID), and the Export-Import Bank (Eximbank) are not accurately reflected in Treasury projections. Our analysis for various countries showed that Treasury projections differed from fiscal year 1982 agency projections by 78 percent for AID and 45 percent for DSAA loans. There are differences between Treasury and Eximbank records but the degree of inaccuracies could not be readily determined because Eximbank does not produce a debt-service projection. As required by Section 634 of the Foreign Assistance Act, Treasury obtains basic data on debts owed to the United States for reporting to the Congress on the value of U.S. foreign assistance loans and guarantees outstanding by category and country. Treasury uses this data also to make debt-service projections. In addition to various offices in Treasury, the projections have been used by the Department of State, Agency for International Development, Office of Management and Budget, and the Congressional Research Service for such purposes as analyzing the economic situation in various countries, making economic forecasts, developing policy options and in preparing budget estimates and congressional presen- tations. It is, therefore, important that Treasury be able to provide projections which realistically reflect the anticipated repayments due the United States. During our review-of alternative methods to finance foreign military sales, we noted that the Department of Treasury projec- tions of country debt-service requirements were significantly different from DSAA debt-service projections. Accordingly, we performed loan-by-loan reconciliation of DSAA and Treasury data bases. We also interviewed DSAA and Treasury officials to gain an understanding of their accounting procedures and computer pro- grams. We expanded our reconciliation efforts to AID and Eximbank and interviewed officials from these organizations to see if the (463662)

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