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AFMD-92-90ML 1 (1992-08-14)

handle is hein.gao/gaobachol0001 and id is 1 raw text is: United States GAD General Accounting Office Washington, D.C. 20548 Accounting and Financial Management Division B-240108 August 14, 1992 Mr. William H. Roelle Chief Financial Officer 147373 Resolution Trust Corporation Dear Mr. Roelle: We have issued our opinion on the financial statements of the Resolution Trust Corporation (RTC) for the year ended December 31, 1991, and have reported on RTC's internal control structure and on its compliance with applicable laws and regulations for the year ended December 31, 1991 (GAO/AFMD-92-74, June 30, 1992). We gave RTC an unqualified opinion on its 1991 statement of financial position and its statement of cash flows. However, because we could not obtain reasonable assurance that the expenses related to changes in the allowance for losses on subrogated claims and unresolved cases were not materially misstated, we were unable to express an opinion on the statement of revenues, expenses, and accumulated deficit as of December 31, 1991. Through our review and tests of control procedures and our subsequent tests of year-end account balances, we identified several problems and opportunities for improvement in the consolidated offices' handling of receivership activity and in headquarters' operations. Although the deficiencies reported here did not affect our opinion on RTC's financial statements, we believe they merit corrective action. CONSOLIDATED OFFICE INTERNAL CONTROL PROBLEMS From October 5, 1991, through March 6, 1992, we reviewed and tested internal controls over cash receipts, cash disbursements, and beginning balances at 40 randomly selected and 22 judgmentally selected receiverships. Our sample of 62 was selected from the 396 receiverships established as of May 31, 1991. Because the accounting and asset management functions for receiverships are handled by personnel in RTC consolidated offices, our sample required us to visit 12 of the 15 consolidated offices. At those offices, we tested 1,474 cash receipt and disbursement GAO/AFMD-92-90ML 055i1q5/1HT§Th

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