Resolution Trust Corporation:

Better Analyses Needed Before Terminating Asset Management Contracts

GGD-94-147: Published: Jul 8, 1994. Publicly Released: Jul 8, 1994.

Additional Materials:


J. William Gadsby
(202) 736-8387


Office of Public Affairs
(202) 512-4800

GAO reviewed the Resolution Trust Corporation's (RTC) Accelerated Expiration Program procedures, focusing on whether the procedures ensured that Standard Asset Management and Disposition Agreement (SAMDA) contractors satisfactorily met their contractual obligations before their contracts expired.

GAO found that: (1) RTC Accelerated Expiration Program procedures did not ensure that RTC made cost-effective decisions that were in its best interest; (2) an analysis of the related costs and benefits of accelerating the expiration of SAMDA contracts would have assisted RTC in determining whether these actions were in its best interest; (3) the program's procedures included final contract reviews by independent auditors to determine whether SAMDA contractors met their obligations, but poor contractor records and numerous contract interpretations hindered the final reviews; and (4) few of the independent auditors' recommendations were implemented because RTC officials believed that its numerous contract interpretations made strict adherence to the recommendations impractical.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: RTC cancelled the program for the early expiration of SAMDA contracts. The early expiration program included certain benefits which were the basis for the cost and benefits analysis recommendation. Because the program was cancelled, the recommendation is no longer applicable.

    Recommendation: To ensure that RTC makes more informed decisions about expirations of SAMDA contracts, the Deputy and Acting Chief Executive Officer, RTC, should revise RTC procedures to require an assessment of the known costs and benefits associated with these contracts. The cost benefit analyses should include: (1) an estimate of anticipated administrative savings or other benefits related to terminating SAMDA contracts; (2) a fee comparison between the expiring contract and the replacement contract; and (3) an analysis of the expenses associated with all unsold assets before waiving the retention provision.

    Agency Affected: Resolution Trust Corporation

  2. Status: Closed - Implemented

    Comments: RTC issued guidelines for the orderly closing of asset management contracts and implemented procedures to help contractors prepare records for final audit. RTC also revised its internal control review guidelines to include verification that oversight managers have taken the steps necessary to help contractors prepare their records for the final Office of Contractor Oversight and Surveillance (OCOS) audits, as the guidelines require. Through active participation of oversight managers and department heads working with contractors, RTC was able to better prepare contractors for the OCOS final audit and resolve them before the contracts were terminated.

    Recommendation: To improve Office of Contractor Oversight and Surveillance final reviews of all SAMDA contracts and better ensure that the contractors have fulfilled their obligations, the Deputy and Acting Chief Executive Officer, RTC, should require SAMDA contract oversight managers to work with SAMDA contractors to help them prepare, summarize, and reconcile their asset activity records before the final reviews.

    Agency Affected: Resolution Trust Corporation


Explore the full database of GAO's Open Recommendations »

Jul 6, 2020

Apr 30, 2020

  • finance icon, source: Comstock

    Priority Open Recommendations:

    Department of the Treasury
    GAO-20-549PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

Apr 27, 2020

Apr 21, 2020

Apr 20, 2020

Jan 24, 2020

Dec 19, 2019

Looking for more? Browse all our products here