Its mission is to support the export of U.S.  goods and services, thereby supporting U.S. jobs. Ex-Im offers export financing through direct loans, loan guarantees, and  insurance. 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. Status of Ex-Im’s Actions to Address GAO Recommendations since Its 2012 Reauthorization

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. Ex-Im’s Portfolio Risk Management

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. Ex-Im agreed with all of these  recommendations and has taken action to implement them. We therefore  consider this recommendation implemented and closed. Stress Testing

GAO-13-303. Workload Benchmarks

GAO-13-620. Wide-Body Jets

GAO-14-642R. Ex-Im’s Underwriting and Overall Fraud Processes

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. Furthermore, Ex-Im did not  have mechanisms to verify compliance with certain established  procedures, including documenting certain loan guarantee eligibility  procedures. We are currently reviewing  Ex-Im’s actions related to this recommendation. Dual-Use Monitoring

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. Ex-Im’s Exposure Forecasting and its Reporting of Jobs Supported

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. Exposure Forecasting

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. Appendix I: Content and Status of Relevant GAO Recommendations

	GAO-14-574: EXPORT-IMPORT BANK: Enhancements Needed in Loan Guarantee Underwriting Procedures and for Documenting Fraud Processes (September 2014)

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. GAO-13-446: EXPORT-IMPORT BANK: More Detailed Information about Its Jobs Calculation Methodology Could Improve Transparency (May 2013)

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.
Why GAO Did This Study

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.

What GAO Found

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.