Summary: GAO presented its views on the Federal Financing Bank's (FFB) operations and budget and on congressional oversight and control of Federal credit programs. GAO noted that, in fiscal year 1981, the FFB portfolio was the largest of any of the top 10 banks in the United States. FFB transactions involve purchases of debt securities, agency assets, which include certificates of beneficial ownership (CBO's) and guaranteed securities. GAO stated that, although FFB has been a successful debt management and financing tool, its off-budget status and budgetary treatment of its CBO and loan guarantee transactions have caused budget decision problems. GAO suggested that changes are necessary to: (1) improve the meaning and usefulness of Federal program information and unified budget totals; (2) improve the information, analyses, and procedures for oversight and allocation of resources for Federal credit programs; and (3) preserve the effectiveness of the FFB intermediary operations. GAO also reiterated past recommendations that: (1) FFB should be included in the budget; (2) the outlays of revolving funds should be reported on a gross basis; (3) CBO's should be treated as agency borrowing; and (4) Congress should formalize budget procedures to allow comprehensive control of credit programs. In conclusion, GAO stated that it supported the objectives of legislation that include FFB amounts in the budget's totals and require that the sale of CBO's and direct loans be treated as borrowings.
