Summary: Pursuant to a legislative requirement, GAO reviewed the Panama Canal Commission's financial statements for the year ended September 30, 1988.
GAO noted that it could not conduct the required financial audit of the Commission's compliance with laws and regulations because of political problems in the Republic of Panama and did not plan to conduct future audits until conditions improved. GAO found that: (1) the Commission established a $2 million reserve in 1984 to provide for future floating equipment repairs, but transferred funds to replenish the account without following regulatory procedures or getting the transfer approved in a subsequent regulatory action; (2) legislation converted the Commission's budget account for operations and administration from a special fund account requiring annual appropriations to a public enterprise revolving fund which operated solely from nonappropriated revenues; (3) the Commission reimbursed a 1980 advance of $85.6 million in appropriated funds and transferred $61.7 million in interest to the U.S. government, as required; and (4) the Commission recorded $28.8 million to deferred charges and offsetting increases of $7 million to accrued liabilities and $21.8 million to long-term liabilities in its statements to reflect the gross amount it would recover from tolls over the remaining life of the Panama Canal Treaty.
