Resolution Trust Corporation's 1995 and 1994 Financial Statements
AIMD-96-123, Jul 2, 1996
Pursuant to a legislative requirement, GAO audited the Resolution Trust Corporation's (RTC) financial statements for the years ended December 31, 1995 and 1994. GAO also reviewed: (1) RTC internal control weaknesses; (2) RTC mission and its completion; (3) RTC costs and funding; and (4) the cost of resolving the savings and loan crisis.
GAO found that: (1) RTC financial statements were reliable in all material aspects; (2) although RTC internal controls need improvement, they were effective in safeguarding assets, ensured that transactions were in accordance with management authority and material laws and regulations, and ensured that there were no material misstatements; and (3) there was no material noncompliance with applicable laws and regulations. GAO also found that: (1) RTC essentially accomplished its mission of closing insolvent institutions, liquidating institution assets, insuring depositor accounts, and bringing many thrift violators to justice; (2) the estimated cost of RTC activities totalled $87.9 billion; (3) RTC contractor control weaknesses and performance problems could adversely affect receivership recoveries; (4) all of the $160.1 billion in estimated direct and indirect costs of RTC and Federal Savings and Loan Insurance Corporation activities have been provided for as of December 31, 1995; (5) the cost of present and future litigation resulting from the savings and loan crisis is unknown; (6) the annual interest expense on the $38.2 billion in Financing Corporation and Resolution Funding Corporation bonds will continue to significantly impact taxpayers and the savings and loan industry; and (7) because the Savings Association Insurance Fund has not been fully capitalized, thus deposit insurance premiums have remained high.