Resolution Trust Corporation: Status of Selected Management Issues

GAO discussed selected management issues regarding the Resolution Trust Corporation (RTC), focusing on its: (1) established organizational structure; (2) management of its conservatorships; (3) resolution of failed thrifts; and (4) disposal of financial and real estate assets. GAO noted that: (1) from August 1989 through September 1990, RTC resolved 287 thrifts; (2) as of September 30, 1990, RTC managed 206 conservatorships with assets totalling $91 billion; (3) as of September 30, 1990, RTC had responsibility for managing and disposing of $142 billion in total assets, with real estate assets totalling approximately $17 billion; (4) RTC developed a standard asset management and disposition agreement (SAMDA) requiring contractors to prepare business plans for the management and disposition of RTC-held assets, provide asset management services, and ultimately sell the assets; (5) as of November 30, 1990, RTC placed $8.2 billion of assets under SAMDA; (6) RTC had inadequate internal controls in the areas of contractor oversight, staff guidance, separation of duties, and personnel supervision; (7) as of November 1990, RTC completed a draft outlining a program for contractor oversight, but the directive did not contain specific standards regarding contractor performance; (8) RTC inadequately managed information resources; and (9) RTC was approaching a funding crisis, and without sufficient funds, RTC would have to slow down its resolution activity.