Summary

GAO examined the financial statements of the Federal Crop Insurance Corporation (FCIC) for the fiscal year ended September 30, 1988.

GAO noted that: (1) FCIC oversight of reinsured companies' loss adjustment activities slightly improved, but management needed to continue to strengthen its oversight activities; (2) FCIC officials approved criteria for evaluating the results of compliance reviews and for determining the acceptability of reinsured companies' loss adjustment performance; and (3) FCIC still lacked adequate internal controls over certain administrative expenses. GAO found that the financial statements presented fairly the FCIC financial position, the results of its operations, and its cash flows for the year then ended, in conformity with generally acceptable accounting principles applied on a consistent basis.