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AFMD-85-63 1 (1985-06-19)

handle is hein.gao/gaobabnsc0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. 24 June 19, 1985 B-114839 The Honorable Lawton Chiles 127364 United States Senate Dear Senator Chiles: Subject: Transfer of Interest on U.S. Investment in the Panama Canal (GAO/AFMD-85-63) Your letter of March 6, 1985, requested that we review the cash flow requirements of the Panama Canal Commission (Commission) to determine the most appropriate repayment schedule for interest earned on the U.S. government's investment in the Canal. As of April 30, 1985, $56.3 million in interest on the U.S. investment in the Canal had been accrued as an expense, charged to Commission operations, and collected through tolls, but had not been trans- ferred to the general fund of the U.S. Treasury. We estimate that the Commission will collect and accrue an additional S7.8 million by September 30, 1985. Our report on the Examination of the Panama Canal Commis- s on's Financial Statements for the Years Ended September 30, 1 83 and 1982 (GAO/NSIAD-85-26, April 17, 1985) included a quali- fied opinion due to the nonpayment of interest on U.S. investment in the Canal. Based on the Commission's interpretation of the Panama Canal Act of 1979, the Commission does not transfer inter- est collections to the Treasury. Although the Act does not ex- pressly state what the Commission should do with respect to inter- ept collections after they are deposited into the Commission's Fund (Fund), the legislative history indicates that the Commission should transfer the collections to the general fund of the U.S. Treasury. The effect of transferrinq interest collections will be to reduce the Commission's available Fund balance and increase the g-neral fund of the U.S. Treasury. While this transfer has no effect on total cash held in the U.S. Treasury, it does increase qeneral fund revenue which is available for other appropriations. Transfer of interest earned on an annual basis will not be detri- Mental to Canal operations and would prevent a future buildup of collections in the Commission's Fund. 05Q511 (472059)

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