The location, structure and governance of SOEs vary considerably. Companies have been placed in executive departments (e.g., St. Lawrence Seaway Development Corporation at the Department of Transport) or have been granted independent status (e.g., Export-Import Bank). SOEs have been structured to be only financial institutions whose employees are effectively employees of the parent agency (e.g., the Federal Finance Bank of the Treasury Department and the Commodity Credit Corporation of the Department of Agriculture). At least three factors may contribute to the interest in SOEs. First, the restrictive nature of the federal budget encourages the authorities to develop new sources of revenue (e.g. outsourcing services to the private sector and other agencies) and trying to avoid increased spending.2 Second, experience shows that it is politically easier for companies to be exempted by Congress from general federal administrative laws (e.g., the Freedom of Information Act and employee compensation restrictions) than for traditional agencies. Finally, the concept of enterprise appears to be very supportive, rightly or wrongly, of “new public management,” which emphasizes entrepreneurship, risk-taking and private sector practices in the federal government.3 Later, paragraph 4.127 of the SNA describes two subsections of government. In the UK or Australia, you could be a sole proprietor or in the US, you could be a sole proprietorship and still be able to do business without creating a legal entity. The important distinction concerns liability.

What is a federal government corporation and what are the essential characteristics of a Crown corporation? A legal entity is a corporation or organization that has legal rights and obligations, including tax returns. It is a company that can contract as a seller or supplier and can sue or be sued. The GCCA, as amended in 1982 (96 Stat. 1042), stipulates that each wholly-owned state agency prepares a “corporate budget” and submits it to the president. Until 1975, the GAO was responsible for conducting annual financial audits of SOEs under the GCCA. At the request of the GAO, the GCCA was amended to provide for audits of the financial transactions of wholly-owned corporations at least once every three years instead of annual audits. In 1990, the CFA adopted the GAO`s recommendation to resume annual audits of state-owned enterprises. Henceforth, however, the audit must be conducted by the corporation`s Inspector General “or by an independent external auditor appointed by the Inspector General or, if there is no Inspector General, by the head of the enterprise” in accordance with Crown-recognized auditing standards.33 However, the Comptroller General still has the authority to audit the financial statements of state-owned enterprises. In the absence of a general founding legislation with organizational definitions, how do we know when a Crown corporation is the most appropriate option and what criteria should be met before a Crown corporation is established? In an effort to provide criteria for determining when the commercial option was appropriate, President Harry Truman stated in his 1948 budget message: A political division is a separate legal entity from a state that normally has certain governmental functions.

The term typically includes a county, city, village, or school district, and in many states, a plumbing, utilities, reclamation, drainage, flood control, or similar district. “The legal status of a political division is the state. Keeping track of all the regulatory responsibilities of your legal entity can be both time-consuming and complex, especially if you add multiple entities within a business structure in the mix. The IPO of the shares ended on July 28, 1998, bringing in approximately $1.9 billion to the federal government. However, USEC`s transition process has highlighted one of the persistent problems with privatization efforts. Congress may want a corporation to be privately owned, but it may also want the company to continue to participate in the implementation of public policy. In this case, Congress wanted the company to participate in the implementation of a foreign policy objective which was to purchase a significant amount of Russian enriched uranium, otherwise destined for Russian weapons, above market prices. Under the HEU agreement, USEC received enriched uranium from Russian nuclear weapons and, in addition to paying for the material, returned an equivalent amount of natural (unenriched) uranium to Russia for sale on the world market. This agreement was not feasible from the company`s point of view, and in October 1999, USEC asked Congress for “relief.” 47 The problems of estimating value to both the federal government and the potential buyer are discussed in Elizabeth Davis, “Once a Teapot in a Tempest, Now Just a Lonely Outpost: Navy Oversees Unwanted Oil Field,” Washington Post, August 14, 1998, p.

A23. The appeal of the naval reserve of “undesirable” oil increased with rising world market prices, and the reserve was sold by the Department of Energy to Occidental Petroleum in February 1999 for $3.65 billion. Susan Klann, “U.S. Oil Reserve Sale Sets Record,” Denver Post, March 2, 1999, p. C2; and Thomas H. Stanton, “Lessons Learned: Getting Value from Federal Asset Sales,” Public Budgeting and Finance, Volume 43, Spring 2003, pp. 22-44. “The local government subsector includes local authorities, which are separate institutional units, and non-market NPIs, which are controlled by local authorities. In principle, local authorities are institutional units whose fiscal, legislative and executive powers extend over the smallest geographical areas, distinguished for administrative and political purposes. The scope of their powers is generally much narrower than that of central or state governments, and they may be empowered to levy taxes on institutional units resident in their territory.

They are often heavily dependent on subsidies or transfers from higher levels of government and may also act to some extent as representatives of central or regional governments. However, in order to be treated as institutional units, they must have the right to hold assets, raise funds and incur liabilities by borrowing for their own account; They must also have some discretion as to how these funds are spent.