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DOCUMENT FESUME
04215 - [B3354611] (Restricted)
(Answers to Questions on the Use of Corporation Funds, Property,
and Employees by the Chairman, Board of Directors, Federal
Deposit Insurance Corporation]. FOD-77-14; B-I14831. November
29, 1977. 2 pp. + enclosure (10 pp.).
Report to Sen. William Proxmire, Chairman, Senate Committee on
Banking, Housing and Urban Affairs; by Elmer B. Staats,
Comptroller General.
Contact: Field Operations Div.
Budget Function. General Government: Other General Government
(806).
Organizaticn Concerned: Federal Deposit Insurance Corp.
Congressional Relevance: Senate Committee on Banking, Housing
and Urban Affairs.
Authority: 21 U.S.C. 1802(a). 12 C.F.R. 336.735.
Allegations were made concerning the improper use of
Federal Deposit Insurance Corporation (FDIC) funds, property,
and employees by Robert E. Barnett, Chairman of the Board of
Directors. FDIC's budget is not subject to congressional
approval, and it has statutory authority to determine expenses
to be paid. Findings/Conclusions: FDIC's travel regulations
allow payment for an employee's spouse when this is determined
to be in the corporation's best interest. 9r. Barnett's wife
accompanied him on 7 of 40 trips he made as corporation chairman
at corporation rather than Government expenses. Barnett did not
itemize travel expenses according to regulations and he used
corporation vehicles for some perscnal purposes. He did not
receive salary advances nor special checks increasing his
salary, but he did use the petty cash fund for both personal and
corporate expenditures. The corporation paid for installing
storm windows and door and window locks as securicy devices on
Barnett's house and fcr his membership in a private tennis club.
No substantiation was found for allegations that employee salary
adjustments were related to work performed at the Ba':nett home
or that corporation furniture or other items were taken by him
for home use. Some cr Mr. Barnett's actions were not clearly
within the corporation's standards governing employee
responsibilities and conduct. On leaving the corporation, he
acknowledged that personal benefits of some expenditures
outweighed corporation benefits, and he refunded $1,667.30 of
$2,461. 13 in petty cash expenses and later repaid the remainder
of these expenses. Recommendations: The Controller of FDIC
should strengthen internal controlE and procedures that permit
personal use of corporation funds and property to prevent future
occurrences of this nature. (HTW)](ViewImageLocal?handle=hein.gao/gaobaawhw0001&div=1&collection=&method=preview&ext=.png&size=3)