Office of Thrift Supervision

Stronger System Controls Needed to Prevent Call Report Delays Gao ID: IMTEC-92-22 February 14, 1992

Savings and loans prepare quarterly call reports for the Office of Thrift Supervision (OTS), the federal thrift regulator. These reports include detailed information on the operating condition of individual financial institutions, such as income and asset levels, and are vital to OTS' effective monitoring of the safety and soundness of the thrift industry. GAO found that OTS' inadequate information resource management controls resulted in a 39-day delay in the call reports for the quarter ending September 30, 1990. Specifically, system and human errors arose from a lack of OTS policies and quality assurance functions overseeing these activities. OTS has tried to strengthen its system controls, but, until the needed controls are fully implemented, OTS remains vulnerable to similar system problems and associated call report delays.

GAO found that: (1) during the processing of thrifts' call report data for the quarter ending September 30, 1990, a contractor experienced a communications failure and inadvertently destroyed data maintained on the system; (2) an OTS attempt to restore the data unintentionally erased data tapes; (3) OTS did not ensure, before attempting to restore tapes, that it had backup tapes, and used software that was not designed or authorized for restoration; (4) OTS had to re-edit and verify the data it received from thrifts, and the National Technical Information Service did not receive the data until 39 days after the target date for issuance; and (5) OTS lacks formal policies and procedures for system maintenance, system backup, and data restoration. GAO also found that, since the delay, OTS has: (1) developed draft policies and procedures for systems maintenance; (2) issued a manual formally documenting policies and procedures for system operation, backup, and restoration; (3) shifted maintenance duties from the contractor to OTS staff for closer control and supervision; and (4) assigned quality assurance responsibilities to OTS technical staff responsible for systems operation. GAO believes that the steps do not adequately address quality assurance weaknesses, since: (1) assigning quality assurance duties to OTS staff responsible for systems operation presents conflicting duties and impairs the independence of quality assurance; and (2) operational responsibilities would be given priority over quality assurance.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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