Resolution Trust Corporation: Status of Management Efforts to Control Costs

RTC appointed a CFO who reports directly to the Corporation's Chief Executive Officer. The CFO oversees all RTC financial management activities, including budgeting, planning, and management control. Consequently, due to having an independent office of the CFO and an unified organization for financial control, RTC now has the mechanism in place to deal with cost control and cost containment.

In formulating the 1994 budget, each major RTC component was charged with examining activities and incorporating in its request reduced spending consistent with more efficient operations and within targeted levels of spending. Later, the levels were reduced and further adjustments were made in the 1994 spending plans. Also, based on the first 6 months of 1994, spending was below budget, in part because of measures implemented to control expenses. RTC's Office of Budget and Planning estimates that, for the year, expenses may be as much as 15 percent less than the amount budgeted.

RTC has taken steps to further improve its budget process. It has provided evidence that its efforts to strengthen the budget process continue to be effective in providing expense information to managers and fostering cost-consciousness throughout RTC.

RTC has implemented a new financial management system that allows for more detailed analysis of expenses, and has set up more specific accounts to facilitate analysis. RTC has also implemented a number of fiscal integrity improvements. GAO coordinated with AIMD in determining whether RTC's actions on this recommendation had been responsive.