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B-235577 1 (1989-08-08)

handle is hein.gao/gaobadrlv0001 and id is 1 raw text is: United States G3:AD 'J General Accounting Office Memorandum Date: August 8, 1989 To: Assistant Director, AFMD/AFA - Louise Summersett Thru: Assistant General Courts, OGC/MD Jeffrey A. Jacobson From: Attorney-Advisor, OG AF Doug as H. H4ion Subject: Audit of Farmers Home Administration's Financial Statements for Fiscal Year 1988 (Code 917108; B-235577) On May 9, 1989, your staff requested our opinion on whether three credit management practices of the Farmers Home Administration (FmHA) should be included in GAO's report on FmHA's compliance with laws and regulations. Specifically, your staff asked whether the report on compliance should report as violations: (1) FmHA's failure to report to the Internal Revenue Service (IRS) when debts owed to FmHA are discharged, so that taxes on the resulting discharge of indebtedness income could be collected; (2) FmHA's failure to assess administrative fees and penalties against debtors who default on their payments to FmHA; and (3) FmHA's failure to use private collection firms to collect defaulted payments. For the reasons stated below, it is our view that none of these matters should be included in the report on FmHA's compliance with laws and regulations as a violation of a legal requirement. BACKGROUND The FmHA is an agency within the U.S. Department of Agriculture which provides financial and technical assistance to individuals, businesses, and communities in A Operations Improvement