Financial Audit

This report presents GAO's opinion on the Office of Thrift Supervision's (OTS) financial statements for October 8 through December 31, 1989. GAO's opinion on these financial statements is without qualification. However, GAO's accompanying reports on OTS' internal control structure and compliance with laws and regulations raise concerns about two matters. Specifically, GAO found that (1) OTS' assessments charged to the savings and loan industry provided funding in excess of OTS' operating expenses and need for working capital and (2) OTS did not comply with the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 because it used Bank Board funds to conclude the Bank Board's affairs and did not distribute the appropriate amount of funds owed to the Federal Housing Finance Board. OTS and Federal Housing Finance Board officials have agreed to a payment of $8.9 million to satisfy the amount OTS owes the Finance Board. This amount is reflected in OTS' financial statements as an accounts payable. In addition, the Director of OTS has agreed to adjust the assessments to better reflect OTS' working capital and operating needs.

GAO found that: (1) the financial statements presented fairly the OTS financial position as of December 31, 1989, in conformity with generally accepted accounting principles; (2) OTS assessments charged to the savings and loan industry provided funding in excess of OTS operating expenses and working capital requirements; (3) OTS did not comply with the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, because it used Federal Home Loan Bank Board (FHLBB) funds to conclude FHLBB affairs and did not distribute the appropriate amount of funds owed to the Federal Housing Finance Board (FHFB); (4) OTS and FHFB agreed to a payment of $8.9 million in satisfaction of the amount OTS owed; and (5) OTS has agreed to adjust its assessments to better reflect its working capital and operating needs.