Results are presented of a General Accounting Office audit of the Student Loan Insurance Fund (SLIF) financial statements for the fiscal year ending September 30, 1980. SLIF finances the Guaranteed Student Loan Program by reimbursing lenders and state guarantee agencies when students default on their loans. The fund, which is managed by the Department of Education, also pays students' interest until the first loan repayment date plus an interest allowance to lenders. The investigation included interviews with Department of Education officials and a review of written procedures; review of the Fund's fiscal 1980 financial records; evaluation of the fund's compliance with laws and regulations; analysis of data pertaining to the Fund's fiscal 1980 operations; testing of selected transactions and account balances; and confirming with a sample of lenders and guarantee agencies certain information in the Fund's financial records. GAO maintained that the Fund's financial statements do not fairly present its financial position at September 30, 1980. Among the findings are the following: control account balances, representing 64 percent of the Fund's assets, could not be reconciled with computerized subsidiary records; procedures have not been developed for several accounts, resulting in material misstatements; cash transactions were not recorded in the correct fiscal year; and cancelled checks totaling $14 million were added to the Fund's cash balance without determining whether they had been recorded when initially issued. GAO recommends that the Secretary of Education improve internal accounting controls over the Fund, centralize all accounting and financial statement responsibilities, and implement improved computer management practices. Among the appendices are information on the Fund's accounting deficiencies in previous fiscal years. (SW)