Audit Reports

 
March 27, 2003

MARAD Title XI Loan Guarantee Program

 
 
 

Summary

We publicly released our review of the Maritime Administration’s (MARAD) Title XI Loan-Guarantee Program, conducted in response to a congressional request. We found MARAD needs more effective oversight of the loan-application process, borrowers, vessels and shipyards constructed under loan guarantees, and foreclosed assets. We recommended that MARAD: (1) analyze the risks presented when it modifies criteria used to approve loans and impose provisions to mitigate those risks; (2) establish processes for external independent reviews of projects; (3) improve oversight of its borrowers’ financial condition; and (4) establish a process to monitor the physical condition of assets over the term of a loan guarantee; and (5) improve its return on foreclosed assets through better tracking of vessels and property constructed with loan guarantees. MARAD agreed with our recommendations.

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