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092687 1 (1969-09-24)

handle is hein.gao/gaobacwob0001 and id is 1 raw text is: _ UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D C 20548 CIVIL DIVISION SEP 24 1989 Dear Mr. Frick The General Accounting Office has made a review of selected aspects of butter purchases by the Commodity Credit Corporation (CCC), Department of Agriculture, under the price-support program. The review was made in conjunction with our current examination of financial activities of CCC, pursuant to the Government Corporation Control Act (31 U.S.C. 841), at the Minneapolis Commodity Office. Our review of butter purchases by CCC indicated a potential saving to CCC through eliminating an extra handling of butter under the price- support program. Our comments on this matter follow. POTENTIAL SAVING TO CCC Under the program providing for price-support of dairy products, CCC purchases bulk butter from vendors in carload lots located in CCC- approved public warehouses. The offered butter may be stored in the following areas of warehouse space. 1. Vendor's leased space (cooler and freezer) 2. Public cooler space 3. Public freezer space In retaining purchased butter at the same warehouse, CCC pays a handling charge to the warehouseman to transfer the butter from cooler space (or the vendor's leased space) to public freezer space. If butter purchased by CCC is already located in public freezer space, however, a handling charge is avoided by CCC. In fiscal year 1969, CCC purchased under the price-support program about 77 million pounds of warehouse-stored bulk butter, located in pub- lic cooler space (or cooler and freezer space leased by vendors) and about 600,000 pounds located in public freezer space. In transferring the butter from cooler space (or leased space) to public freezer space upon purchase, CCC incurred a cost which we estimated at $217,000 (which also covers load-out service). Illustrations of such transfers of butter at various warehouses in the Minneapolis area follow.