GAO reviewed the Federal Savings and Loan Insurance Corporation's (FSLIC): (1) 1988 and 1989 final financial statements; and (2) internal accounting controls system and compliance with applicable laws and regulations.

GAO found that: (1) in 1989, FSLIC reported a capital deficit of $87 billion, the largest ever reported by a public or private corporation; (2) FSLIC reported a $38-billion present-value liability for savings and loan associations already merged or sold with FSLIC assistance; (3) FSLIC reported a $55-billion present-value liability for resolving 560 troubled but still operating institutions; (4) FSLIC estimated that net future cash outlays for resolutions would exceed $63 billion; (5) $325 billion would be needed to pay off FSLIC obligations, resolve the problems of institutions awaiting resolution, and pay administrative and other expenses; (6) except as noted, the financial statements presented fairly the FSLIC financial position for 1988 and 1989; and (7) FSLIC complied with laws and regulations that could have materially affected its financial position.