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AIMD-94-92R 1 (1994-06-02)

handle is hein.gao/gaobackos0001 and id is 1 raw text is: GAO United States General Accounting Office Washington, D.C. 20548 Accounting and Information Management Division B-256763 June 2, 1994 Mr. Andrew C. Hove, Jr. Acting Chairman, Board of Directors, Federal Deposit Insurance Corporation Dear Mr. Hove: During a recent review of the Federal Deposit Insurance Corporation's (FDIC) information systems that support asset disposition, we found that FDIC has not analyzed sold assets to determine which disposition strategies produce the greatest net return for the government. In addition, we found that there are no corporate systems that track asset-level expense data needed for effective strategy analysis. When we discussed these matters with your staff, they agreed with the findings and said that the Corporation is addressing some of the systems issues through the Asset Disposition System Project. The purpose of this letter is to reinforce the importance of quantitative analyses to manage asset dispositions and stress the need for FDIC corporate systems to provide essential expense data for these analyses. We have issued previous reports that have noted that FDIC's automated systems have fallen short in helping to meet the need for management information.' Without this management information, FDIC's ability to manage the large volume of assets acquired from failed institutions has been adversely affected. Asset-specific expense data could help FDIC perform post- disposition analyses of the efficiency and effectiveness of various disposition strategies. For example, FDIC could compare its auction strategy with its broker strategy to determine which produced better net results for selling single-family homes. Such a comparative analysis might show 1 Asset Management System: Liquidation of Failed Bank Assets Not Adequately Supported by FDIC System (GAO/IMTEC-93-8, Feb. 3, 1993); FDIC: Loan Sales Jeopardized by Systems and Other Internal Control Problems (GAO/IMTEC-91-61, Aug. 21, 1991). GAO/AIMD-94-92R FDIC: Asset Disposition Strategies

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