Summary: GAO performed a loan-by-loan reconciliation of the databases which the Department of the Treasury and certain agencies keep on debts owed to the United States. The databases are used for reporting to Congress on the value of U.S. foreign assistance loans and guarantees outstanding by category and country and for making debt-service projections. The projections are also used by agencies to analyze the economic situation in various countries, make economic forecasts, develop policy options, and prepare budget estimates and congressional presentations.
Debt-service projections for loans administered by the Defense Security Assistance Agency (DSAA), the Agency for International Development (AID), and the Export-Import Bank (Eximbank) are not accurately reflected in Treasury projections. Treasury projections differ from fiscal year 1982 agency projections by 78 percent for AID and 45 percent for DSAA loans. The degree of inaccuracies between Eximbank records and Treasury projections could not be determined because Eximbank does not produce a debt-service projection. The problems inherent in the present method of debt projection by Treasury include: difficulty in adjusting projections to reflect debt reschedulings; erroneous information contained in Treasury's central files; and computer controls that exclude loans from the database without a fixed rate of interest, whereas agencies are moving away from fixed-interest rates to variable-rate interest loans. The use of original interest rates can materially distort estimated interest payments, given the wide swings experienced in the capital market. Erroneous information in Treasury's database cannot be identified through the use of existing computer controls and will continue to plague the quality of Treasury's output unless corrected. Some of the more common errors include: loans which are repayable in local currency projected as loans repayable in dollars, incorrect last payment dates, incorrect repayment schedules, missing loans committed before the Treasury cutoff date, and amortization bases which are not adjusted to reflect loan sales and other adjustments.
