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B-200103 1 (1981-03-05)

handle is hein.gao/gaobadjeg0001 and id is 1 raw text is: 0R THE COMPTR/L E NE/AL OECISION OF THE UNITED STATES WASHINGTON, D.C. 20548 FILE: B-200103 DATE: March 5, 1981 MATTER OF: Insurance of CCC-owned commodities stored in commercial warehouses' DIGEST: In light of broad powers granted Commodity Credit Corporation (CCC) in section 4 of Commodity Credit Corporation Charter Act, 15 U.S.C. 714b, CCC is not required as a matter of law to contract for uninsured storage of CCC-owned commodities stored in commercial warehouses. GAO does not have authority to render opinions binding on CCC in light of broad powers granted CCC in section 4 of Commodity Credit Corpora- jtion Charter Actr 15 U.S.C. 714b. By letter of August 18, 1980, the Inspector General (IG), United States D.Dartment of Agriculture (USDA), requested our opinion on the lpropriety of the Commodity Credit Corporation paying for hazard insurance on CCC-owned and stored commodities. Subsequent to the It's letter, we received com- ments from the General Counsel, United States Department of Agriculture, setting out the basis for his conclusion that CCC has the requisite authority to pay for hazard insurance on CCC-owned commodities stored in commercial warehouses. Whether CCC should self-insure against the loss of com- modities it owns and stores was the subject of our report of January 10, 1975, entitled Deduction in Federal Expendi- tures Possible Through Commodity Credit Corporation's Assump- tion of Insured Warehousing Risk (RED-75-320). In that report, we concluded that had CCC self-insured, savings of $17.1 million could have been realized for the 5-year period ending June 30, 1972. Accordingly, we recommended that the :CCC eliminate hazard insurance coverage on grain for which it pays storage charges and obtain commensurate reductions in storage rates. In response to our audit recommendation, CCC discontinued the requitement that commercial warehousemen carry insurance A

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