Federal Deposit Insurance Corporation: Management Letter as of December 31, 1992

Pursuant to a legislative requirement, GAO reviewed the Federal Deposit Insurance Corporation's (FDIC) accounting procedures and internal controls for corporate, consolidated office, and asset pool operations. GAO found that: (1) FDIC has not performed physical inventories and reconciliations, properly recorded fund transactions and administrative expenses, developed policies and procedures for calculating reserves, obtained written authorization before processing transactions, or detected financial misstatements; (2) FDIC consolidated offices have not timely reviewed account reconciliations or deposited receipts; (3) FDIC has not documented internal audit findings, reviewed all loan asset files, performed follow-up visitations, adequately controlled subsidiary accounting, consistently reconciled serviced asset pools, reviewed reconciliations, developed adequate remittance procedures, or ensured complete and accurate reporting of gross cash recovery (GCR) values; and (4) FDIC should verify the principal balances on the GCR report and communicate any detected reconciliation differences between the servicer, the Financial Information System, and the Liquidation Asset Management Information System.