Export-Import Bank: Status of Actions to Address GAO Recommendations since the Bank's 2012 Reauthorization
Published: 2015-04-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the export credit agency of the United States, Ex-Im helps U.S. firms export goods and services by providing financing assistance, including direct loans, loan guarantees, and insurance. Following the 2007 to 2009 financial crisis, Ex-Im's authorizations and financial exposure both increased rapidly. To strengthen Ex-Im, Congress mandated several reform measures in the Export-Import Bank Reauthorization Act of 2012 and also required certain reviews and reports by GAO and others. Since March 2013, GAO has issued four reports mandated by the act ( GAO-13-303 , GAO-13-446 , GAO-13-620 , and GAO-14-574 ). In addition, in August and July 2014, GAO reported on Ex-Im's financing of exports with potential dual military and civilian uses and provided information on aircraft financing by Ex-Im and other countries' export credit agencies, respectively ( GAO-14-719 and GAO-14-642R ).
This testimony summarizes the findings and recommendations in those six recent reports, and provides updated information on the status of Ex-Im's actions taken to address GAO's recommendations. To update the status of its recommendations, GAO reviewed Ex-Im's modified and updated procedures and documentation and interviewed Ex-Im officials.
GAO is not making any new recommendations in this testimony.
section_title: What GAO Found
paragraphs: In six reports on the U.S. Export-Import Bank (Ex-Im) issued since March 2013, GAO presented findings and made 16 recommendations to improve Ex-Im's operations, summarized in this testimony in three broad areas: (1) risk management, (2) underwriting and fraud prevention, and (3) forecasting its exposure and reporting on its estimates of its impact on U.S. jobs.
Six of GAO's recommendations focus on improving Ex-Im's management of risks related to its overall portfolio. For example, in March and May 2013, GAO recommended addressing weaknesses in Ex-Im's model for estimating losses, data retained to analyze default risks, reporting of portfolio stress testing, and analysis of staff resources. Ex-Im has implemented all 6 of these recommendations.
In September 2014, GAO found that Ex-Im had implemented many key aspects of its underwriting process but identified weaknesses in the design, implementation and documentation of some procedures. For example, GAO found that Ex-Im did not have mechanisms to verify compliance with certain loan guarantee eligibility procedures and had not documented its overall processes related to fraud. Ex-Im has implemented 4 of the 6 recommendations in this report. It has not fully implemented 2 recommendations concerning assessing collateral on certain transactions and verifying that applicants are not delinquent on federal debt. GAO's August 2014 report on Ex-Im's transactions involving exports with potential dual military and civilian uses also found documentation weaknesses and made one recommendation. GAO is reviewing the status of Ex-Im's actions in the context of GAO's ongoing dual use review.
Finally, in May 2013, GAO found weaknesses in how Ex-Im forecasts its aggregate outstanding amount of financing (exposure) and how it reports estimates of its impact on U.S. jobs. GAO recommended that Ex-Im (1) adjust its exposure forecast model to incorporate previous experience and (2) assess and report the model's sensitivity to key assumptions. GAO also recommended that Ex-Im improve reporting on the assumptions and limitations in its methodology and data for calculating the number of jobs it supports through its financing. Ex-Im has implemented GAO's 3 recommendations.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our prior work on the U.S.  Export-Import Bank (Ex-Im), the export credit agency (ECA) of the United  States. Ex-Im helps U.S. firms export goods and services by providing  export financing assistance, including direct loans, loan guarantees, and  insurance. To strengthen Ex-Im’s governance and risk management  processes Congress included several reform measures as part of the  Export-Import Bank Reauthorization Act of 2012 (2012 Reauthorization  Act), as well as several mandates requiring reviews and reports from Ex- Im, the Department of the Treasury, and GAO. Ex-Im is currently  authorized through June 30, 2015. As Congress considers  reauthorization, our testimony offers an opportunity to discuss the issues  raised by our recent reviews and Ex-Im’s response.
Since March 2013, we have issued six reports on Ex-Im, four of which the  2012 Reauthorization Act mandated that we prepare. In addition, we  reported on Ex-Im’s financing of dual-use exports under a recurring  mandate, and provided information on Ex-Im’s support for aircraft  financing. (For a list of related recommendations, see Appendix I.)
My statement today will summarize our findings and recommendations  from these reports. It also includes selected updates on the status of Ex- Im’s actions to address those recommendations.
To prepare these six reports, we relied on several analytical methods,  including reviewing Ex-Im’s financial data, policies, procedures, and  calculations, and comparing them to best practices. We also interviewed  Ex-Im and other government officials as well as private sector  representatives. Detailed information on the scope and methodology for  our prior work summarized in this testimony can be found in the reports  cited. To update the status of the recommendations, we obtained and  analyzed information and discussed Ex-Im actions with relevant officials.  We conducted the work on which this testimony is based in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our objectives. We believe that the evidence obtained provides  a reasonable basis for our findings and conclusions based on our audit  objectives.
subsections: section_title: Background
paragraphs: Ex-Im is an independent agency operating under the Export-Import Bank  Act of 1945, as amended. Its mission is to support the export of U.S.  goods and services, thereby supporting U.S. jobs. Ex-Im’s charter states  that it should not compete with the private sector. Rather, Ex-Im’s role is  to assume the credit and other risks that the private sector is unable or  unwilling to accept, while still maintaining a reasonable assurance of  repayment. When private-sector lenders reduced the availability of their  financing after the 2007 to 2009 financial crisis, demand for Ex-Im  products correspondingly increased. According to Ex-Im data, the amount  of financing Ex-Im authorized increased from $12.2 billion in fiscal year  2006 to $35.8 billion in fiscal year 2012, before declining to $27.3 billion in  fiscal year 2013 and $20.5 billion in fiscal year 2014. Though smaller than  the fiscal year 2012 peak, Ex-Im’s fiscal year 2014 total authorizations are  a 68 percent increase in nominal terms over its total authorizations in  fiscal year 2006. Over the same period, Ex-Im’s financial exposure  (outstanding financial commitments) increased from $57.8 billion to $112  billion, or by 94 percent in nominal terms. According to U.S. budget  documents, Ex-Im’s number of full-time equivalent employees grew from  380 to 397 from fiscal year 2006 through fiscal year 2014, an increase of  about 4.5 percent.
Ex-Im offers export financing through direct loans, loan guarantees, and  insurance. Ex-Im’s loan guarantees cover the repayment risk on the  foreign buyer’s loan obligations incurred to purchase U.S. exports. Loan  guarantees are classified as short, medium, or long term. Although the  number of Ex-Im’s short-term (working capital) guarantees greatly  exceeds the number of its medium- and long-term loan guarantees, long- term loan guarantees account for the greatest dollar value of Ex-Im loan  guarantees.
Ex-Im is one of several ECAs worldwide that provide export financing  support. Other countries’ ECAs range from government agencies to  private companies contracted by governments. Most, including Ex-Im, are  expected to supplement, not compete with, the private market. An  international agreement, the Organisation for Economic Co-operation and  Development (OECD) Arrangement on Officially Supported Export  Credits, governs various aspects of U.S. and other member countries’  ECAs, but increasing activity of nonmembers threatens its ability to  provide a level playing field for exporters. Several agreements have been  made that decrease subsidies and increase transparency among ECAs.  However, these agreements apply to participant ECAs, and important  emerging countries, including China, are not part of the OECD  arrangement.
Ex-Im faces multiple risks when it extends export credit financing,  including:
Credit risk: the risk that an obligor may not have sufficient funds to  service its debt or be willing to service its debt even if sufficient funds  are available.
Political risk: the risk of nonrepayment resulting from expropriation of  the obligor’s property, war, or inconvertibility of the obligor’s currency  into U.S. dollars.
Market risk: the risk of loss from declining prices or volatility of prices  in the financial markets.
Concentration risk: risk stemming from the composition of a credit  portfolio, for example through an uneven distribution of credits within a  portfolio.
Foreign-currency risk: the risk of loss as a result of appreciation or  depreciation in the value of a foreign currency in relation to the U.S.  dollar in Ex-Im transactions denominated in that foreign currency.
Operational risk: the risk of loss resulting from inadequate or failed  internal processes, people, and systems, or from external events.
During underwriting, Ex-Im reviews a transaction and assigns it a risk  rating based on its assessment of the creditworthiness of the obligors and  to establish whether there is a reasonable assurance of repayment. Ex-Im  also manages risks through (1) monitoring and restructuring—updating  risk ratings and restructuring individual transactions with credit  weaknesses to help prevent defaults and increase recoveries and (2)  recovery of claims—collecting on the assets of the obligors or the  collateral for a transaction that defaults.
While demand for its services generally drives Ex-Im’s business,  Congress has mandated that Ex-Im support specific objectives and  operate within certain parameters. For example, since the 1980s,  Congress has required that Ex-Im make available a percentage of its total  export financing each year for small business. In 2002, this requirement  increased from 10 percent to 20 percent of total authorizations. Congress  further instructed that Ex-Im promote the expansion of its financial  commitments in sub-Saharan Africa. In annual appropriation acts,  Congress has directed that “not less than 10 percent of the aggregate  loan, guarantee, and insurance authority available to …should be  used for renewable energy technologies or end-use energy efficiency  technologies”—which we refer to as the renewable energy mandate.  Congress has also imposed a limit, currently $140 billion, on Ex-Im’s total  aggregate outstanding amount of financing, referred to as the exposure  limit. In addition, Ex-Im must provide financing on a competitive basis with  other export credit agencies, minimize competition in government- supported export financing, and submit annual reports to Congress on its  actions.
section_title: Status of Ex-Im’s Actions to Address GAO Recommendations since Its 2012 Reauthorization
paragraphs: In six reports on Ex-Im issued since March 2013, we presented findings  and made 16 recommendations to improve Ex-Im’s operations,  summarized in this testimony in three broad areas: (1) portfolio risk  management, (2) underwriting and fraud prevention processes, and (3)  exposure forecasting and reporting on estimates of its impact on U.S.  jobs.
subsections: section_title: Ex-Im’s Portfolio Risk Management
paragraphs: Our recent work has produced several findings and recommendations  about how Ex-Im manages risks related to the overall size and  composition of its portfolio. Our March 2013 report on risk management  and our May 2013 report on exposure, risk, and resources made a total of  six recommendations in this area. Ex-Im agreed with all of these  recommendations and has taken action to implement them.
subsections: section_title: Loss Estimation
paragraphs: Ex-Im calculates credit subsidy costs and loss reserves and allowances  with a loss estimation model that uses historical data and takes credit,  political, and other risks into account. Consistent with industry practices,  Ex-Im added qualitative factors to the model in 2012—including a factor  to account for changes in global economic conditions— to adjust for  circumstances that may cause estimated credit losses to differ from  historical experience. However, in March 2013, we concluded that the  short-term forecast Ex-Im used to account for global economic changes  might not be appropriate for adjusting estimated defaults for longer-term  products and could lead to underestimation of credit subsidy costs and  loss reserves and allowances. We recommended that Ex-Im assess  whether it was using the best available data for adjusting its loss  estimates. In November 2013, Ex-Im incorporated a longer-term forecast  of global economic change into its loss estimation model. As a result, we  consider this recommendation implemented and closed.
section_title: Vintage Analysis
paragraphs: In our March 2013 report, we also found that Ex-Im was not maintaining  the data it needed to compare the performance of newer transactions with  older transactions at comparable points in time, a type of analysis  recommended by federal banking regulators. This analysis, known as  vintage analysis, can help evaluate the credit quality of recent  transactions by comparing their early performance with the early  performance of older transactions. As such, it can provide early warning  of potential performance problems in newer business. Ex-Im’s default rate  declined steadily from about 1.6 percent as of September 30, 2006, to  0.29 percent as of September 30, 2012, and, more recently, Ex-Im  reported a further decline to 0.17 percent as of the end of December   However, we concluded that this downward trend should be  2014.viewed with caution because Ex-Im’s portfolio contained a large volume  of recent transactions that had not reached their peak default periods. We  recommended that Ex-Im retain point-in-time performance data to  compare the performance of newer and older business and enhance loss  modeling. Ex-Im began retaining such data in 2013. We therefore  consider this recommendation implemented and closed.
section_title: Stress Testing
paragraphs: GAO-13-303. Ex-Im is not bound by federal banking regulator guidance, but it faces risk- Office of the Inspector General, Export-Import Bank of the United States, Report on  Portfolio Risk and Loss Reserve Allocation Policies, OIG-INS-12-02 (Washington, D.C.:  September 2012). oversight and be consistent with federal internal control standards for  effective external communication. We also found that Ex-Im had begun  to implement stress testing and recommended that Ex-Im report its stress  test scenarios and results to Congress. Ex-Im began reporting its  scenarios and results in quarterly reports to Congress on default rates,  beginning with the report for the fourth quarter of 2013. In that report, Ex- Im described the stress test scenarios and provided some information  about results. Hence, we consider this recommendation implemented and  closed.
section_title: Subportfolio Reporting
paragraphs: In our May 2013 report, we found that Ex-Im had not routinely reported  the performance or risk ratings of its subportfolios for the congressional  mandates on small business, sub-Saharan Africa, and renewable energy,  though these transactions generally were more risky than Ex-Im’s overall  portfolio.  We recommended that Ex-Im routinely report to Congress the  financial performance of subportfolios supporting congressional  mandates. Ex-Im began reporting this information in its default rate report  to Congress for the quarter ending June 30, 2013. As a result, we  consider this recommendation implemented and closed.
section_title: Workload Benchmarks
paragraphs: GAO-13-620. reorganized to improve efficiency. Additionally, Ex-Im has agreed to  implement, and in some cases has begun implementing, suggestions by  the contractor to mitigate risks of future workload increases. As a result,  we consider this recommendation implemented and closed.
section_title: Resources for Congressional Mandates
paragraphs: In our May 2013 report, we found that Ex-Im expected that administrative  resource constraints might prevent it from meeting its congressionally  mandated target for small business export financing. The target is fixed  to a percentage of the dollar value of Ex-Im’s total authorizations.  Although Ex-Im has dedicated resources to support the mandate, as Ex- Im authorizations have grown, the corresponding growth in the value of  the target has outpaced Ex-Im’s increasing support. According to Ex-Im  officials, processing small business transactions and bringing in new  small business customers is resource-intensive. We concluded that it was  important for Ex-Im to communicate to Congress the effect of percentage- based mandates on its operations, as well as the potential impacts such  mandates might have on Ex-Im’s resources and operations. We  recommended that Ex-Im provide Congress with additional information on  the resources associated with meeting its percentage-based mandates.  Ex-Im agreed and told us it planned to provide information on resources  associated with meeting such mandates in its fiscal year 2016 budget  submission. Ex-Im’s fiscal year 2016 Congressional Budget Justification  includes both information on the resources associated with these  mandates and Ex-Im’s plans to hire additional staff to help meet them. As  a result, we consider this recommendation implemented and closed.
section_title: Wide-Body Jets
paragraphs: GAO-14-642R. deliveries of 789 Boeing large commercial aircraft, while European ECAs  supported deliveries of 821 Airbus large commercial aircraft. Buyers of  large commercial aircraft have also used a number of non-ECA financing  options for procuring wide-body jets. From 2008 through 2013, Ex-Im and  European ECAs supported 26 percent of large commercial aircraft  deliveries.
section_title: Ex-Im’s Underwriting and Overall Fraud Processes
paragraphs: Our most recent mandated report, in September 2014, found that Ex-Im  had implemented many key aspects of its underwriting process but  identified weaknesses in certain procedures.recommendations to Ex-Im to enhance its loan guarantee underwriting  process and further document aspects of its underwriting and processes  to detect, prevent, and investigate fraud. Our August 2014 report on Ex- Im’s monitoring of dual-use exports also found weaknesses in Ex-Im’s  procedures.
subsections: section_title: Underwriting
paragraphs: Our review of a statistical sample of loan guarantees indicated that Ex-Im  had implemented many key aspects of the underwriting process as  required by its Loan, Guarantee, and Insurance Manual. However, the  manual did not (1) include certain procedures or sufficiently detailed  instructions to verify compliance with Ex-Im’s requirements and  consistency with federal guidance, such as a procedure to verify that  applicants did not have delinquent federal debt; (2) include instructions for  loan officers to use credit reports and for the inclusion of all required  documents and analyses in the loan file prior to approval; and (3) call for  assessments of collateral, as required by federal guidance, for certain  loan guarantee transactions prior to approval. Furthermore, Ex-Im did not  have mechanisms to verify compliance with certain established  procedures, including documenting certain loan guarantee eligibility  procedures.
We recommended that Ex-Im take the following actions:
Develop and implement procedures, prior to loan guarantee approval,  for (1) verifying that transaction applicants are not delinquent on  federal debt and (2) performing assessments of collateral for  nonaircraft medium- and long-term loan guarantee transactions.
Establish mechanisms to oversee compliance with Ex-Im’s existing  procedures, prior to loan guarantee approval, for (1) obtaining credit  reports for borrowers or documenting why they were not applicable,  (2) documenting certain eligibility procedures, and (3) documenting  the analysis of country exposure.
Develop and implement detailed instructions, prior to loan guarantee  approval, for (1) preparing and including all required documents or  analyses in the loan file and (2) using credit reports in the risk  assessment and due diligence process.
Update the Character, Reputational, and Transaction Integrity review  process to include the search of databases to help identify transaction  applicants with delinquent federal debt that would then not be eligible  for loan guarantees.
As of April 2015, Ex-Im has revised its Loan, Guarantee, and Insurance  Manual in response to the first three recommendations from our  September 2014 report. We consider the second and third of these  recommendations to be implemented and are taking actions to close  them. With respect to the first of these recommendations, we are  continuing to review Ex-Im’s actions. In addition, Ex-Im officials have  stated that they have been working with the Department of the Treasury  on the fourth recommendation to determine the technical feasibility of an  automated method to access a Treasury database to verify that  applicants are not delinquent on federal debt. We are currently reviewing  Ex-Im’s actions related to this recommendation.
section_title: Documentation of Fraud Processes
paragraphs: Our September 2014 report additionally found weaknesses in Ex-Im’s  documentation of aspects of its underwriting and overall procedures  related to fraud. We found that Ex-Im had not documented its risk-based  approach for scheduling examinations to monitor lenders with delegated  authority to approve guaranteed loans. In addition, while Ex-Im had  processes to prevent, detect, and investigate fraud, it had not  documented its overall fraud processes. Such documentation is  recommended by several authoritative auditing and antifraud  organizations. We therefore recommended that Ex-Im document:  its risk-based approach for scheduling delegated authority lender  examinations, and  its overall fraud-prevention process, including the roles and  responsibilities of Ex-Im divisions and officials that are key  participants in Ex-Im’s process.
As of April 2015, Ex-Im has revised its Loan, Guarantee, and Insurance  Manual to further document its approach and has documented its overall  processes related to fraud, including describing the roles and  responsibilities of Ex-Im divisions and officials that are key participants in  these processes. Therefore we consider these recommendations to be  implemented and are taking actions to close them.
section_title: Dual-Use Monitoring
paragraphs: Our August 2014 annual report on Ex-Im’s monitoring of dual-use exports  also found weaknesses in Ex-Im’s documentation of required  procedures. We found that Ex-Im had received some but not all of the  information it required in its credit agreements regarding the three dual- use transactions it financed in fiscal year 2012, and that some of the  information it had received was late. As a result, we found that Ex-Im did  not have complete and timely information about whether the items were  actually being used in accordance with the terms of the agreements and  Ex-Im policy. We recommended that Ex-Im establish steps that staff  should take in cases where borrowers do not submit required end-use  documentation within the time frames specified in their financing  agreements and ensure that these efforts are well documented. In  response to our recommendation, Ex-Im revised its 1997 memorandum  on the implementation of its dual-use policy for military applications to  provide more specific guidance and disseminated the revised memo to  relevant staff. During our current annual review of Ex-Im’s dual-use  financing, we are following up with Ex-Im to see how this revised  guidance is being implemented.
section_title: Ex-Im’s Exposure Forecasting and its Reporting of Jobs Supported
paragraphs: In two May 2013 Ex-Im reports, we reported weaknesses in how Ex-Im  estimated its future exposure, and we reported the limitations in its  calculations of the number of jobs its financing supports. We made two  recommendations related to how Ex-Im prepares forecasts and one  recommendation on its reporting jobs impact reporting. Ex-Im agreed with  all three recommendations and took actions to address them.
subsections: section_title: Exposure Forecasting
paragraphs: In our May 2013 report on Ex-Im’s exposure and resources, we found  weaknesses in the methodology Ex-Im used to forecast future financial   Although Ex-Im’s forecast model is sensitive to key  exposure levels.assumptions, Ex-Im had not reassessed these assumptions to reflect  changing conditions, nor had it conducted sensitivity analyses to assess  and report the range of potential outcomes. We made two  recommendations to Ex-Im: (1) that Ex-Im compare previous forecasts  and key assumptions to actual results and adjust its forecast models to  incorporate previous experience and (2) that Ex-Im assess the sensitivity  of the exposure forecast model to key assumptions and estimates and  identify and report the range of forecasts based on this analysis. Ex-Im  put in place new methodologies for its 2015 budget estimates.  Specifically, Ex-Im compared the results of its existing authorization  forecast method with actual results and enhanced its calculation of  expected repayments and authorizations by incorporating historical  experience into the methodology. Additionally, Ex-Im created statistical  models to validate its forecasts and provide a range of estimates.  Therefore, we consider these two recommendations implemented and  closed.
section_title: Reporting of Job Support Calculation
paragraphs: GAO-13-446. example, the employment data are a count of jobs that treats full-time,  part-time, and seasonal jobs equally. In addition, Ex-Im’s calculations  assume that the firm receiving Ex-Im support uses the same number of  jobs as the industry-wide average, but Ex-Im’s clients could be different  from the typical firm in the same industry. Ex-Im did not report these  limitations or fully detail the assumptions related to its data or  methodology. We recommended that Ex-Im improve reporting on the  assumptions and limitations in the methodology and data used to  calculate the number of jobs Ex-Im supports through its financing. Ex-Im’s  2013 and 2014 annual reports included greater detail on these issues;  therefore, we consider this recommendation implemented and closed.
In conclusion, our reviews of Ex-Im since the 2012 Reauthorization Act  have identified a number of areas in which Ex-Im could improve its  operations. Ex-Im has shown a willingness to reexamine its operations,  agreeing with all of our recent recommendations and implementing a  number of them. However, managing a large export financing portfolio  with its wide variety of associated risks is challenging. Therefore, to  sustain the improvements it has made and address emerging challenges,  it will be important for Ex-Im to effectively implement remaining audit  recommendations and carefully manage risks in the evolving global  financial marketplace.
Chairmen Jordan and Huizenga, Ranking Members Cartwright and  Moore, and Members of the Subcommittees, this concludes my  statement. I would be pleased to respond to any questions you may have.
section_title: GAO Contacts and Staff Acknowledgements
paragraphs: For further information about this statement, please contact me at 202- 512-8612 or gianopoulosk@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals making key contributions to this testimony  include Celia Thomas, Assistant Director; Kathryn Bolduc; Marcia  Carlsen; Michael Simon; and Steve Westley.
section_title: Appendix I: Content and Status of Relevant GAO Recommendations
subsections: section_title: GAO-14-574: EXPORT-IMPORT BANK: Enhancements Needed in Loan Guarantee Underwriting Procedures and for Documenting Fraud Processes (September 2014)
paragraphs: The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to develop and implement procedures, prior to loan guarantee approval, for (1)  verifying that transaction applicants are not delinquent on federal debt, including using credit  reports to make such a determination, and (2) performing assessments of collateral for  nonaircraft medium- and long-term loan guarantee transactions.
The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to establish mechanisms to oversee compliance with Ex-Im’s existing procedures, prior  to loan guarantee approval, for (1) obtaining credit reports for transaction borrowers or  documenting why they were not applicable; (2) documenting certain eligibility procedures,  including the Character, Reputational, and Transaction Integrity reviews for medium- and long- term loan guarantee transactions, export item eligibility, and country eligibility; and (3)  documenting the analysis of country exposure.
The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to develop and implement detailed instructions, prior to loan guarantee approval, for  (1) preparing and including all required documents or analyses in the loan file and (2) using  credit reports in the risk assessment and due diligence process.
The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to Update the Character, Reputational, and Transaction Integrity review process to  include the search of databases to help identify transaction applicants with delinquent federal  debt that would then not be eligible for loan guarantees.
The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to document Ex-Im’s current risk-based approach for scheduling delegated authority  lender examinations.
The Chairman of the Export-Import Bank of the United States should direct the appropriate  officials to document Ex-Im’s overall fraud process, including describing the roles and  responsibilities of Ex-Im divisions and officials that are key participants in Ex-Im’s fraud  processes.
section_title: GAO-14-719: EXPORT-IMPORT BANK: Monitoring of Dual-Use Exports Should Be Improved (August 2014)
paragraphs: To ensure adequate and consistent oversight for monitoring the end use of dual-use items, the  Chairman of the Export-Import Bank of the United States should strengthen Ex-Im guidance for  monitoring end use. Specifically, Ex-Im should establish steps staff should take in cases where  borrowers do not submit required end-use documentation within the time frames specified in  their financing agreements and ensure that these efforts are well documented.
section_title: GAO-13-620: EXPORT-IMPORT BANK: Additional Analysis and Information Could Better Inform Congress on Exposure, Risk, and Resources (May 2013)
paragraphs: To provide Congress with the appropriate information necessary to make decisions on Ex-Im’s  exposure limits and targets and to improve the accuracy of its forecasts of exposure and  authorizations, the Chairman of the Export-Import Bank of the United States should compare previous  forecasts and key assumptions to actual results and adjust its forecast models to incorporate previous  experience.
To provide Congress with the appropriate information necessary to make decisions on Ex-Im’s  exposure limits and targets and improve the accuracy of its forecasts of exposure and authorizations,  the Chairman of the Export-Import Bank of the United States should assess the sensitivity of the  exposure forecast model to key assumptions and authorization estimates and identify and report the  range of forecasts based on this analysis.
To help Congress and Ex-Im management understand the performance and risk associated with its  subportfolios of transactions supporting the small business, sub-Saharan Africa, and renewable  energy mandates, Ex-Im should routinely report financial performance information, including the  default rate and risk rating, of these transactions at the subportfolio level.
To better inform Congress of the issues associated with meeting each of the bank’s percentage-based  mandated targets, Ex-Im should provide Congress with additional information on the resources  associated with meeting the mandated targets.
section_title: GAO-13-446: EXPORT-IMPORT BANK: More Detailed Information about Its Jobs Calculation Methodology Could Improve Transparency (May 2013)
paragraphs: To ensure better understanding of its jobs calculation methodology, the Chairman of Ex-Im Bank  should increase transparency by improving reporting on the assumptions and limitations in the  methodology and data used to calculate the number of jobs Ex-Im supports through its financing.
section_title: GAO-13-303: EXPORT-IMPORT BANK: Recent Growth Underscores Need for Continued Improvements in Risk Management (March 2013)
paragraphs: To help improve the reliability of its loss estimation model, the Chairman of the Export-Import Bank of  the United States should assess whether it is using the best available data for adjusting loss estimates  for longer-term transactions to account for global economic risk.
To conduct future analysis comparing the performance of newer and older business and to make  future enhancements to its loss estimation model, the Chairman of the Export-Import Bank of the  United States should retain point-in-time, historical data on credit performance.
To help Congress better understand the financial risks associated with Ex-Im’s portfolio, the Chairman  of the Export-Import Bank of the United States should report its stress test scenarios and results to  Congress when such information becomes available.
To help manage operational risks stemming from Ex-Im’s increased business volume, the Chairman of  the Export-Import Bank of the United States should develop workload benchmarks at the agencywide  and functional area levels, monitor workload against these benchmarks, and develop control activities  for mitigating risks when workloads approach or exceed these benchmarks.
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