GAO discussed thrift management practices which primarily caused thrift insolvency and failure. GAO noted that: (1) the Federal Home Loan Bank Board (FHLBB) cited criminal activity, fraud, and insider abuse as the primary causes of thrift insolvency; (2) examination of 26 failed thrifts showed that 85 referrals for alleged criminal activity were made regarding 19 thrifts; (3) investigations led to 23 convictions, 19 pending indictments, and 2 acquittals; (4) internal control weaknesses leading to thrift insolvency and failure included inadequate board supervision, conflicts of interest, inadequate underwriting and loan administration, appraisal deficiencies, loan noncompliance, excessive compensation and expenditures, high-risk transactions, and inadequate or deceptive recordkeeping; (5) FHLBB cited legal requirements, inexperience, and lack of regulations and jurisdictional authority as factors in its untimely actions against thrifts; (6) to improve thrift supervision and oversight, FHLBB established an enforcement office, increased the number of thrift examiners and supervisors, and improved examiner training; and (7) several federal agencies have undertaken initiatives to address fraud and insider abuse problems in financial institutions. GAO believes that a presidential proposal to restructure the thrift industry and its insurers and regulators should include provisions to ensure independent industry supervision and examination and stronger internal controls.