Summary: GAO discussed the federal credit assistance and insurance programs, focusing on program growth and losses. GAO found that: (1) since 1980, federal credit assistance and insurance programs have almost doubled in size, to more than $5 trillion; (2) since 1965, commitments on insurance programs have increased to $3.6 trillion, 75 percent of which was insurance on deposits in banks and savings and loan institutions and 20 percent of which was pension insurance; (3) off-budget government-sponsored enterprises' outstanding loans increased from $15 billion to $666 billion, while loan guarantees rose from $91 billion to $550 billion over the same 24-year period; and (4) direct loans declined from a high of $257 billion in 1985 to $222 billion in 1988. GAO also found that: (1) federal credit assistance and insurance programs put the government at risk to very large losses resulting from defaults affecting each credit assistance and insurance category; (2) the government could not properly determine the full extent of program losses because of federal agencies' long-standing financial management system and accounting deficiencies; and (3) the amount of fees or premiums the government charges to cover future costs varies significantly and is usually insufficient to cover program losses. GAO believes that the government needs to establish a Chief Financial Officer of the United States, and equivalent positions in the executive agencies, to provide the organizational structure and discipline needed to ensure the integrity of reported financial information.
