Resolution Trust Corporation's 1994 and 1993 Financial Statements
AIMD-95-157: Published: Jun 22, 1995. Publicly Released: Jun 22, 1995.
- Full Report:
Pursuant to a legislative requirement, GAO audited the Resolution Trust Corporation's (RTC) financial statements for the years ended December 31, 1994 and 1993. GAO also reviewed: (1) RTC internal control weaknesses; (2) RTC estimated recoveries from failed thrifts; (3) the estimated unused loss funds after RTC completion of all resolution activities; and (4) RTC progress in reducing risk.
GAO found that: (1) RTC financial statements were reliable in all material aspects; (2) RTC internal controls 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 needs to improve its internal controls over computer systems; (2) uncertainties regarding general economic conditions, interest rates, and real estate markets could impact the cost of resolving failed institutions; (3) RTC has resolved two of the three previously identified operating control weaknesses; (4) based on current estimates, RTC may have $14.8 billion of unused loss funds after completing all its thrift resolutions; and (5) RTC, Congress, and the Federal Deposit Insurance Corporation have reduced RTC management risks sufficiently to remove RTC as a high-risk entity.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: During 1996, FDIC took actions to address the weaknesses GAO identified in general controls over the former Resolution Trust Corporation's computerized information systems. Although GAO continued to note other, less significant matters involving EDP controls, GAO believes that the remaining issues are not significant enough to be considered a reportable internal control condition. FDIC's actions have improved the controls over its computerized information systems, and should reduce the risk of unauthorized access to its computerized information systems.
Recommendation: The Deputy and Acting Chief Executive Officer, RTC, should direct the Corporation's staff to monitor the implementation and progress of the corrective actions related to the weakness identified in general controls over some of the Corporation's computerized information systems.
Agency Affected: Resolution Trust Corporation