Financial Audit:

Resolution Trust Corporation's 1992 and 1991 Financial Statements

AIMD-93-6: Published: Jun 30, 1993. Publicly Released: Jun 30, 1993.

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GAO reviewed the Resolution Trust Corporation's (RTC): (1) financial statements for the years ended December 31, 1992 and 1991; and (2) internal accounting controls and compliance with applicable laws and regulations.

GAO found that: (1) the financial statements presented fairly, in all material respects, the RTC financial position for the years ending December 31, 1992, and 1991, in conformity with generally accepted accounting principles; (2) it could not give an opinion on the RTC statement of revenues, expenses, and accumulated deficit for 1991; (3) RTC internal accounting controls provided reasonable assurance that RTC assets were protected against loss and transactions executed in accordance with laws and regulations; (4) RTC could not ensure that financial statements or other transactions were being properly recorded, processed, and summarized due to weaknesses in loss calculation procedures; (5) RTC complied, in all material respects, with provisions, laws, and regulations that could have a material effect on its financial statements; (6) RTC reserve and loss accounts have been adjusted to reflect current and future loss estimates resulting from resolution activities and no longer contain specific information on unallocated reserves; (7) in April 1993, RTC released $3 billion in reserves for resolution and conservatorship activities; and (8) although releasing the remaining $1.9 billion in reserves could change RTC future funding requirements, RTC may wish to restrict the release of its reserves because of the uncertainties surrounding loss estimates.

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