Resolution Trust Corporation: Subcontractor Cash Management Practices Violate Policy and Reduce Income
GGD-93-7
Published: Oct 20, 1992. Publicly Released: Oct 20, 1992.
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Highlights
GAO reviewed: (1) weaknesses in the Resolution Trust Corporation's (RTC) Standard Asset Management and Disposition Agreement (SAMDA) subcontractors' cash management practices; and (2) RTC policy on using interest-bearing bank accounts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Resolution Trust Corporation | The Chief Executive Officer, RTC, should improve oversight of SAMDA contractors and their property management subcontractors to better ensure that they comply with RTC policy governing the use and control of cash. This should include requiring that SAMDA contractors report to the RTC oversight managers on whether their property management subcontractors: (1) have established separate cash receipt and disbursement accounts; (2) are properly using cash received from asset management and disposition activities, and (3) have adequate accounting for total receipts and disbursements. |
In April 1993, GAO was advised that RTC's Office of Contractor Oversight and Surveillance (OCOS) audits were planned to facilitate assessment and oversight of contractors and subcontractors and provide a vehicle to evaluate the need to revise policies and procedures. On August 10, 1993, RTC sent a memorandum to all SAMDA contractors reiterating their responsibilities. As part of that memo, RTC stated that property management contractor reviews completed by OCOS verified the findings of the GAO report related to cash receipt and disbursement accounts. The memo also identifies deposit accounts, and other related cash management issues as priorities for RTC staff.
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| Resolution Trust Corporation | The Chief Executive Officer, RTC, should revise the RTC policy and SAMDA contracts to require that property management subcontractors establish interest-bearing operating accounts for RTC assets, with the interest accruing to RTC. |
RTC revised its policy to require property management subcontractors to establish interest-bearing accounts.
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Topics
Accounting proceduresBank depositsCash managementContract administrationContractor paymentsInterestInternal controlsProcurement regulationsProperty disposalSubcontractorsSurplus federal property