Failed Thrifts:
Better Controls Needed Over Furniture, Fixtures, and Equipment
GGD-90-87: Published: May 25, 1990. Publicly Released: Jun 18, 1990.
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Pursuant to a congressional request, GAO determined whether the Federal Savings and Loan Insurance Corporation (FSLIC): (1) efficiently and effectively disposed of furniture, fixtures, and equipment (FF&E) for thrift receiverships under its Southwest Plan; and (2) appropriately took various receiverships' FF&E to furnish a regional FSLIC office.
GAO found that: (1) after deducting expenses, FSLIC received about $57,000 for the sale of FF&E appraised at about $3.3 million, suggesting that FSLIC did not take appropriate steps to minimize costs or maximize revenue; (2) FSLIC did not expeditiously plan FF&E disposal; (3) FSLIC inappropriately procured disposal services totalling $2,054,177 on a noncompetitive basis; (4) FSLIC did not fulfill its responsibility for the management and liquidation of FF&E; (5) FSLIC did not have adequate internal controls over its FF&E inventory and did not pay receiverships for FF&E taken to furnish its regional offices; and (6) the Federal Deposit Insurance Corporation (FDIC) has almost completed compensating the receiverships for FF&E that FSLIC took, but neither FDIC nor the Resolution Trust Corporation (RTC) have documented specific organizationwide guidance for disposing of FF&E.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: FDIC made changes to its credit manual on bank and FF&E on December 31, 1991.
Recommendation: To ensure the most profitable and efficient disposition of FF&E from failed financial institutions, the Chairmen of FDIC and the RTC Oversight Board should document specific organizationwide policies and procedures on control and disposition of FF&E covering such areas as planning, contracting, and internal control.
Agency Affected: Federal Deposit Insurance Corporation
Status: Closed - Not Implemented
Comments: RTC is selecting a contractor to develop nationwide policies and procedures for the control and disposition of FF&E. No completion date has been set. The RTC Oversight Board was abolished by the RTC Improvement Act, December 1991. The role of the board has been changed.
Recommendation: To ensure the most profitable and efficient disposition of FF&E from failed financial institutions, the Chairmen of FDIC and the RTC Oversight Board should document specific organizationwide policies and procedures on control and disposition of FF&E covering such areas as planning, contracting, and internal control.
Agency Affected: Resolution Trust Corporation: Oversight Board
Status: Closed - Implemented
Comments: The RTC Oversight Board was abolished by the RTC Improvement Act, December 1991. The role of the new board has been changed. The FDIC ongoing oversight process incorporates a compliance check to ensure that written policies and procedures are being followed.
Recommendation: To ensure the most profitable and efficient disposition of FF&E from failed financial institutions, the Chairmen of FDIC and the RTC Oversight Board should monitor the adherence to policies for control and disposition of FF&E.
Agency Affected: Federal Deposit Insurance Corporation
Status: Closed - Implemented
Comments: The FDIC ongoing oversight process accomplishes policy implementation monitoring. The RTC Oversight Board was abolished by the RTC Oversight Improvement Act, December 1991. The role of the new board has been changed.
Recommendation: To ensure the most profitable and efficient disposition of FF&E from failed financial institutions, the Chairmen of FDIC and the RTC Oversight Board should monitor the adherence to policies for control and disposition of FF&E.
Agency Affected: Resolution Trust Corporation: Oversight Board
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