oversight

Inspectors General: Office of Inspector General Operations at Financial Regulatory Agencies

Published by the Government Accountability Office on 1990-08-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  INSPECTORS
                  GENERAL
                  Office of Inspector
                  General Operations at
                  F’inancial Regulatory
                  Agencies




GAO/APMD-W-55FS
..A--,   _   . . . ._.-A
United States
General Accounting OPnce
Warrhington, D.C. 20548

Accounting and Financial
Management Division


B-237132
August24,1990

The Honorable   Doug Barnard,  Jr.
Chairman,  Subcommittee   on Commerce,
  Consumer, and Monetary Affairs
Committee on Government Operations
House of Representatives
Dear Mr. Chairman:
This report       responds to your March 3, 1989, letter
requesting      information         on the operations         of the offices        of
inspectors      general       (OIGs) at five financial             regulatory
agencies:       the Board of Governors of the Federal                     Reserve
System, the Office            of the Comptroller         of the Currency,         the
Federal     Deposit     Insurance       Corporation,       the Federal        Home
Loan Bank Board,l           and the National         Credit     Union
Administration.           You asked us to obtain             data on all five of
these organizations             regarding:      (1) their       establishment       and
independence,        (2) the types of work conducted,                   and (3) the
extent     of resources        devoted to their        audit and
investigative        efforts.
RESULTS IN BRIEF
With respect     to independence,     we found a potential        problem
at one of the five agencies        relating     to its organizational
structure     and OIG programmatic      responsibilities.
Specifically,      at the National    Credit    Union Administration


10n August 9, 1989, the Financial            Institutions        Reform,
 Recovery,    and Enforcement      Act of 1989 (Public           Law 101-73)
 was passed.      This act abolished       the Federal        Home Loan Bank
 Board (FHLBB) as of October 7, 1989.                 FHLBB's functions
 were divided     among the Federal       Deposit      Insurance
 Corporation    (FDIC), the Office        of Thrift       Supervision,    the
 Resolution    Trust Corporation,       and the Federal          Housing
 Finance Board.       The FHLBB office       of inspector       general
 personnel    were transferred       to the offices        of inspectors
*general    at FDIC and the Federal        Housing Finance Board.
 This report    provides    information      on FHLBB before it was
 abolished.
 B-237132

  (NCUA) it was unclear          whether the inspector          general   (IG)
 was actually       reporting      to the head of the agency, as
 required     by law, and whether the OIG was performing
 prohibited      programmatic        functions.     Based on discussions
 we had with NCUA officials,               NCUA amended its written
 policies     establishing       the office      of inspector     general    to
 clarify    that the IG should report             to the head of the
 agency.      NCUA also amended its written             policies     to clarify
 that the office         of inspector       general   should not carry out
 any programmatic         functions.
 We found that the federal      financial    regulatory      agencies'
 audit groups largely     focused their     efforts     on financial
 audits,    many of which are related     to the agencies'         roles as
 insurers.     The audit groups have generally          conducted     few
 audits    of regulation  and supervision      issues.
 As of March 31, 1990, staffing            at the offices      of inspectors
 general     was 13 at the Board of Governors            of the Federal
 Reserve System, 113 at the Federal              Deposit   Insurance
 Corporation,       and 4 at the National        Credit   Union
 Administration.          The Treasury    office   of inspector       general
 had 9 staff      dedicated     to audit work at the Office           of the
 Comptroller      of the Currency.        The Federal     Home Loan Bank
 Board had 55 staff         as of October 17, 1989, when it was
 abolished.       In addition,      some of these offices        also
 supplemented       their   in-house   resources     by contracting       for
 auditing     services.
 Appendixes      I through V provide    details          for each agency on
 matters    related    to independence,    types         of work conducted,
 and resources.
 BACKGROUND
 The Inspector         General Act Amendments of 1988 (Public                      Law
 100-504)       required    the establishment           of offices       of
 inspectors        general    at the Department          of the Treasury
  (parent     agency of the Office           of the Comptroller            of the
 Currency)       and at 33 designated           federal     entities       including
 the Federal        Deposit     Insurance      Corporation,        the Board of
 Governors       of the Federal Reserve System, the National
 Credit     Union Administration,            and the Federal           Home Loan Bank
 Board.       Each of these five financial               regulatory
 institutions         had previously        established      some form of
 internal      audit capability         to review their          operations.
 These offices         then became the legislatively                 required
"offices      of inspectors        general.

 2
B-237132

Offices     of inspectors     general    were established       to create
independent      and objective     units to (1) conduct and
supervise     audits   and investigations        relating    to programs
and operations       of the various      agencies,      (2) provide
leadership     and coordination       and recommend policies           to
promote economy, efficiency,            and effectiveness       and prevent
and detect     fraud and abuse in agency programs and
operations,      and (3) provide      a means for keeping the head of
the establishment        and the Congress fully          and currently
informed     of such issues.
The five financial            regulatory        agencies    have the
responsibility         for supervising           and regulating     depository
institutions       such as commercial             and savin s banks, savings
and loan associations,              and credit       unions. 9 Each regulatory
agency has jurisdiction              over certain        categories     of
depository      institutions.            For example, the Office            of the
Comptroller       of the Currency           (OCC) is responsible          for
regulating      federally       chartered        banks.3     In addition      to
regulating      depository        institutions,         FDIC and NCUA insure
deposits,      as did FHLBB before it was abolished.
OBJECTIVES,      SCOPE, AND METHODOLOGY
Our objectives      were to obtain     data from the five entities
discussed    above on matters     related     to the independence  of
the office     of inspector  general,      the types of work
conducted,     and the extent of resources         devoted to the OIGs.
We conducted     our work in Washington,        D.C., from March 1989
through    March 1990.


2Regulation    involves    the formulation      and issuance of rules
 and regulations,       under existing     law, for the structure   and
 conduct of banking.         Supervision     is concerned primarily
 with the safety      and soundness of individual         deposit
 institutions     through    continual   oversight,    e.g.,
 examination.
3Treasury's        office   of inspector       general      provides    staff
  dedicated      to perform audit work at OCC. We obtained
  information       on only those Treasury           office      of inspector
  general     resources     and activities        related      to OCC. However,
  we recently        issued a report      entitled,       Inspectors     General:
  Treasury's       Office   of Inspector       General Properly
  Established        (GAO/AFMD-90-70,      June 14, 1990), which
"discussed       the extent to which Treasury               implemented      the
  Inspector      General Act amendments.
3
B-237132

To obtain       information       related     to independence,     we reviewed
documentation         establishing        the OIGs and interviewed
officials       of those offices.            We focused on the entities'
organizational         structures       and lines    of reporting,    OIG
access to records,            and any evidence of programmatic
responsibility,          which is prohibited         by the Inspector
General Act.
To obtain    information  on the types of work conducted                by
these OIGs and their     predecessors,   we obtained         listings        of
reports   issued during the last 4 calendar           or fiscal       years
 (1986 to 1989) from each agency.       We also discussed             the
types of past work performed       with officials       of the OIGs.
We looked at audit and investigative          reports    to verify         the
types of work performed.
We obtained     information     on the extent     of resources     devoted
to OIG activities        from documentation     for each organization
in terms of the number of personnel           and funding      for
contract    audits.      We also discussed    resources     with OIG
officials.      This information      was updated through        March 30,
1990.
We discussed   the contents    of this         report   with OIG officials
from the five financial     regulatory          agencies    and included
their  comments where appropriate.


As agreed with your office,         unless you publicly          announce
the contents    of this    report   earlier,      we will   not distribute
it until   30 days from its date.            At that time, we will        send
copies to interested      parties    and make copies available            to
others   upon request.      Please contact        me at (202) 275-9454
if you or your staff      have any questions         concerning     the fact
sheet.    Major contributors      to this report         are listed    in
appendix VI.
Sincerely     yours,




              Financial    Management      Systems
  and Audit      Oversight
                                   Contents
                                                                                       Page
LETTER                                                                                   1
APPENDIXES
          I   THE BOARD OF GOVERNORSOF THE FEDERAL
                RESERVE SYSTEM                                                           6
     II       OFFICE OF THE COMPTROLLER OF THE CURRENCY                                  8
 III          FEDERAL DEPOSIT INSURANCE CORPORATION                                     10
     IV       FEDERAL HOME LOAN BANK BOARD                                              12
       V      NATIONAL CREDIT UNION ADMINISTRATION                                      13
     VI       MAJOR CONTRIBUTORS TO THIS REPORT                                         16



                               ABBREVIATIONS

FDIC          Federal      Deposit      Insurance        Corporation
FHLBB         Federal      Home Loan Bank Board
FRB           Board      of Governors      of the        Federal    Reserve   System
GAO           General      Accounting      Office
IG            inspector      general
NCUA          National      Credit      Union    Administration
occ           Office      of the     Comptroller         of the    Currency
OIG           office      of inspector         general




                                           5
APPENDIX I                                                                     APPENDIX I

          THE BOARD OF GOVERNORSOF THE FEDERAL RESERVE SYSTEM
       The Board of Governors of the Federal Reserve System (FRB)
supervises    and regulates     the federal reserve banks, those state-
chartered    banks that are members of the Federal Reserve System, and
all bank holding     companies.     One of FRB's major responsibilities is
the formulation    of monetary policy.
ESTABLISHMENT OF OIG AND INDEPENDENCE
         In July 1987, the Board of Governors of the Federal Reserve
System established        an office        of inspector      general   and appointed      an
inspector      general.      In November 1988, the Board of Governors
changed the OIG's charter              as necessary     to comply with the 1988
amendments to the Inspector               General Act.       The OIG reviews the
activities      of the Federal         Reserve Board, but does not review the
activities      of the federal         reserve banks since these banks are not
considered      federal    institutions       or part of the Federal Reserve
Board.      Each federal       reserve bank has its own internal             audit staff
headed by a general          auditor      who reports     to the bank's Board of
Directors.        The OIG has no oversight            or policy    authority     over the
federal     reserve bank audit staffs,             but can review Federal         Reserve
Board activities        such as the examination             process which affects       the
federal     reserve banks.          It also conducts audits          and investigations
related     to Board programs performed             at or by the reserve banks,
such as the supervision             and regulation      of bank holding      companies
and state member banks.
        The OIG is a separate          office    within    the central     organization
of the Board of Governors of the Federal Reserve System.                          The
inspector      general    reports     directly    to the Chairman of the Board of
Governors.        The Inspector       General informed        us that no one,
including      the Chairman,       other Governors,        or senior managers, had
ever attempted        to prevent      or prohibit       an OIG audit or
investigation.          In addition,       the Chairman of the Board of Governors
of the Federal Reserve System has stated                   that the OIG's charter,
dated November 1988, lays out the duties                   and responsibilities         of
the OIG exactly         as provided      in the legislation.
TYPES OF WORK
       From July 1987 until          September 1989, the OIG issued 13
reports.      The FRB OIG categorizes           its work as audits,      operations
reviews,     and investigations.           According   to OIG personnel,
operations      reviews are general         management reviews of how well a
single    organizational      entity     is performing     its functions     and differ
from an audit        in that they are conducted          over a 2-week period with


                                            6
APPENDIX I                                                                   APPENDIX I

the assistance of reserve bank staff,   are limited                 in scope,    and may
not meet all government  auditing standards.
         The OIG's work included         an operations   review of the Office       of
the Secretary,       an audit of a Board member's expenses,            and a review
of contingency        planning   efforts    (plans to provide    continuity     of
critical     operations      in unusual events or disasters).          One
operations     review was conducted         of the Division    of Banking
Supervision      and Regulation.         The Inspector   General informed      us that
he believes      an audit of a computer system, the Bank Holding Company
Docket System, was related            to supervision   and examination      issues.
        From July 1987 until          the end of September 1989, the FRB OIG
completed       15 investigations        based on complaints     regarding     possible
violations       of law or of the Board's standards           of conduct.        The
investigations        included    allegations    of conflicts     of interest,
theft,     false   statements,      favoritism,   nepotism,    conspiracy      to
defraud,      and gambling.       As of September 30, 1989, seven cases led
to administrative          action  by management and five       resulted     in
reprimands.
STAFF RESOURCES
         The FRB OIG was organized      in 1987 with a staff   of nine.             For
operations      reviews,  the OIG staff    can be augmented by other
personnel     from the federal    reserve banks, and occasionally
consultants      are hired to audit a particular      program.   As of
March 31, 1990, OIG staff       totaled    13 (10 professional   and 3
clerical     employees)   and an attorney-advisor     from FRB's legal
division.
         From July 1987 to December 31, 1989, contract               audit services
totaled      about $100,000.    These services     primarily       included   auditing
and reporting       on the Board's and the Federal         Financial
Institutions       Examination  Council's4   financial       statements.




4The Federal     Financial    Institutions        Examination      Council   is a group
 composed of members from the Federal Reserve System, the Federal
 Deposit Insurance       Corporation,       the Office       of the Comptroller      of
 the Currency,      and the National        Credit    Union Administration.          The
 Council     was created   by Public       Law 95-630 to establish          more uniform
 examination     standards    for depository        institutions.         FRB provides
 administrative      support to the Council.
                                           7
APPENDIX II                                                                   APPENDIX II

                  OFFICE OF THE COMPTROLLEROF THE CURRENCY
     The Office   of the Comptroller  of the Currency      (OCC), a
component of the Department    of the Treasury,  charters,     regulates,
and supervises  federally  chartered  banks.
ESTABLISHMENT OF OIG AND INDEPENDENCE
       The Inspector      General Act Amendments of 1988 required           that an
office    of inspector     general  be established     in the Department        of the
Treasury     by April   16, 1989.    On April    14, 1989, Treasury's
administratively       organized   OIG was redesignated       as a statutory      OIG
to comply with the 1988 amendments.             The inspector    general     is
appointed      by the President,    approved by the Senate, and reports            to
the Secretary       and Deputy Secretary     of the Treasury.      The President
nominated      and the U.S. Senate confirmed       the Inspector    General,      who
was sworn into office         on November 22, 1989.
       The legislation         provided    the IG with the authority      to initiate
and conduct audits          and investigations         and gave the IG access to all
required    audit material.           Treasury     order 114-01, dated May 16,
1989, incorporated          the requirements        of the 1988 amendments into
departmental      policies.        As stated previously,        this fact sheet
focuses only on Treasury             IG activities      related   to OCC.
         OCC office     of inspector    general     officials       advised us of one
potential     access-to-information           issue which had been resolved              in
the past.        During 1986 and 1987, the Comptroller                 of the Currency
was uncertain        as to whether the limitations              in the Right to
Financial     Privacy     Act prevented      OCC from providing           bank customer
information       to the OIG.       In January 1988, following              a review by
Treasury's       General Counsel,      a memorandum of understanding               was
signed between the Comptroller              of the Currency and the IG, which
gave the OIG access to OCC's bank customer                    information      and provided
protection       against   improper    disclosure.         According      to OIG
officials,       OCC managers have been responsive                to OIG requests      for
information       since the memorandum of understanding                 was signed.
       Documentation  establishing      the statutory    OIG does not
prescribe   any programmatic      responsibility     as part of the OIG
functions,   and Treasury     OIG employees auditing      OCC operations              said
they had never been assigned         any program responsibilities.
TYPES OF WORK
         During calendar    years 1986 through     1989, Treasury       auditors
issued 23 audit      reports    on OCC activities.      Thirteen     of the audits
were operational      audits    of OCC's nonfinancial      administrative
activities,     such as accountability        for nonexpendable      personal
                                            8
APPENDIX II                                                                   APPENDIX II

property     and controls     over access to a mainframe             computer.      Eight
audits    focused on financial-related             issues,   including     several
reports     on examinations      of internal       control   systems for accounting
and transaction      processing.       Two audits        of OCC's bank supervisory
and regulatory      missions     were completed during          the period.        Treasury
OIG officials     informed     us that the problem with access to bank
customer information        discussed     earlier,       as well as staff
inexperienced     with OCC regulatory          activities,      precluded      the OIG
from auditing     OCC's bank supervision             and regulatory     activities
during    1986 and 1987.
        Treasury    OIG investigators,       who are not dedicated      to OCC work
as auditors      are, completed      23 investigations     of OCC activities
during calendar       years 1986 through        1989.   These resulted     in six
convictions      as well as several       resignations,     reprimands,    and
referrals     to other organizations.
STAFF RESOURCES
       As of March 31, 1990, the Treasury                  OIG had nine staff
dedicated      to auditing      OCC (eight       professional     and one clerical
employee).        OIG officials        informed     us that resources    dedicated     to
OCC in 1986 and 1987 averaged only four professionals.
Additionally,        OIG officials        informed     us that audit personnel     from
Treasury      regional      IG offices      are currently     auditing  OCC operations.
Treasury      OIG auditors       reviewing      OCC activity    did not contract     for
audit services         during   the 4 years we reviewed.




                                            9
APPENDIX III                                                                     APPENDIX III

                      FEDERAL DEPOSIT INSURANCE CORPORATION
       The Federal       Deposit   Insurance    Corporation     (FDIC) supervises
and insures     state-chartered        banks that are not members of the
Federal Reserve System.            In addition,     FDIC insures     other state-
chartered   banks which meet prescribed             requirements     for insurance
and all federally-chartered            banks.    With the enactment       of the
Financial    Institutions        Reform, Recovery,      and Enforcement     Act of
1989 (Public      Law 101073),       FDIC also assumed responsibility          for
insuring   savings      and loan associations.
ESTABLISHMENT OF OIG AND INDEPENDENCE
        On March 14, 1989, the Federal          Deposit    Insurance      Corporation
redesignated       its Office    of Corporate    Audits and Internal
Investigations        as the office   of inspector      general     in compliance
with the Inspector         General Act Amendments of 1988.             Documentation
establishing       the OIG states that the IG reports           to and is under the
general     supervision     of the Chairman of FDIC's Board of Directors.
The documentation        does not assign any programmatic             responsibilities
to the OIG. OIG officials           we interviewed      stated    that their
independence       had not been impaired.
TYPES OF WORK
        The FDIC audit          group issued 343 audit reports                during the
calendar      years 1986 to 1989.              The majority       of these audit          reports,
264, were liquidation               and receivership        audits.     During this period,
FDIC audit       reports      concentrated        on how well FDIC's Division                of
Liquidation       managed and disposed             of assets FDIC acquired             from
failed     banks.      OIG officials         informed     us that they concentrated
their     audit efforts         in this area because of the high number of bank
liquidations        during      this 4-year period.            Other OIG audits          were
directed      toward internal          corporate     activities,       such as financial,
electronic       data processing,          and management evaluations.                 The IG
informed      us that he had not performed                a comprehensive          review of
supervision       and examination          issues during the past 4 years.                    He
also stated that seven OIG audits                   were conducted        in the past 4
years that related            to supervision        and examination         issues:        a study
of the agency's          training      program,     agreed-upon      procedures         reviews of
three specific         financial       assistance      agreements,      and three reviews
of computer systems.
        FDIC OIG investigative         personnel     completed       43 investigations
of alleged      employee and contractor          wrongdoing      during    this 4-year
period.      Irregularities      investigated       concerned such matters           as bulk
sales of loans,          travel vouchers,     missing    collateral,       release of
confidential       information,     and conflict      of interest.         For example,
during the 6-month period ending September 30, 1989, OIG
                                              10
APPENDIX III                                                            APPENDIX III

investigations     resulted    in one resignation,    three   letters      of
reprimand,     one indictment,    and one conviction.
STAFF RESOURCES
      As of March 31, 1990, the OIG staff        totaled    113 (102 auditors
and investigative   personnel    and 11 clerical      personnel).    The number
of FDIC audit personnel    stayed relatively       constant    at about 55 to
59 employees from 1986 until       FHLBB was abolished      in October 1989.
FHLBB OIG staff   were transferred     to FDIC.
      To supplement   its own audit staff,       the FDIC OIG contracts          for
audit services.     Contract audit services        cost $5.9 million  for        the
Q-year period   from 1986 to 1989.




                                      11
APPENDIX IV                                                                      APPENDIX IV

                            FEDERAL HOME LOAN BANK BOARD
        Prior to being abolished           in October 1989, the Federal Home
Loan Bank Board (FHLBB) regulated                and supervised       federally
chartered       savings     and loan associations       and federally         chartered
savings banks.           It also operated      the Federal      Savings and Loan
Insurance       Corporation      which provided     deposit     insurance       for all
federally       chartered     savings and loan associations             and those state-
chartered       associations       which met prescribed       requirements         for
federal      insurance.       FHLBB's functions      were transferred           to FDIC, the
Office     of Thrift       Supervision,    the Resolution      Trust Corporation,           and
the Federal        Housing Finance Board.          Before it was abolished,             FHLBB
established        an OIG headed by an inspector           general      who reported      to,
and was under the supervision              of, the Chairman of the Board of
Directors       of the Federal        Home Loan Bank Board.
TYPES OF WORK
        From the beginning   of 1986 until     its dissolution,        the FHLBB
audit group completed      324 audits.     These audits      were primarily
financial.      One audit completed     in June 1988 was a review of
allegations     concerning  supervision    and examination       policies   and
practices    at the Federal   Home Loan Bank of Dallas.
        The FHLBB audit group completed       28 investigations        from 1986
through September 30, 1989.         These investigations        included      cases
involving    allegations   concerning    changing of bid figures,           conflict
of interest,      bribery, stolen   property,    and unauthorized        disclosure
of information.
STAFF RESOURCES
       Before it was abolished               in October of 1989, the FHLBB OIG had
55 ,auditors,       investigators,         and clerical       personnel     who were later
transferred       to the FDIC OIG.             Expenditures      for contract       audit
services     totaled      about $19 million           for fiscal      years 1986 to 1989.
Contract     audit work included             audits     of mergers,     acquisitions,     pass-
through     receiverships,         financial       assistance      agreements,      and
receiverships.




                                             12
APPENDIX V                                                                 APPENDIX V

                    NATIONAL CREDIT UNION ADMINISTRATION
       The National       Credit   Union Administration      (NCUA) charters,
regulates,      supervises,      and insures   all federally     chartered   credit
unions,      and regulates      and supervises    (jointly   with state
authorities)       state-chartered      credit  unions that apply for and
receive      NCUA insurance.
ESTABLISHMENT OF OIG AND INDEPENDENCE
       The National    Credit   Union Administration        established    an Office
of Internal     Audit in 1973.       From 1985 to March 1989, the Director
of Internal     Audit was appointed      by the NCUA Board and reported          to
the Chairman through       NCUA's Executive      Director.      In March 1989,
NCUA established      an office    of inspector     general    as required   by the
Inspector    General Act Amendments.         The Director      of the former
Office    of Internal   Audit became the Inspector          General and staff
members of the Office        of Internal    Audit were administratively
transferred     to the office     of inspector    general.
       We were concerned     about the IG's independence           because the
Board's March 1989 memorandum establishing             the OIG still       required
that the Inspector      General keep NCUA's Executive          Director     informed
of OIG activities.       Additionally,      subsequent    to establishing        the
OIG, the NCUA Executive        Director   prepared   and signed a performance
appraisal     for the IG.    The Inspector     General Act amendments
mandated that the NCUA IG report          to and be supervised         by only the
head of the agency.        We brought this matter to the attention               of
NCUA officials      and, in December 1989, the NCUA Board changed its
March 1989 memorandum to ensure that the IG reports                  to the Board
and not to the Executive        Director.     Other language       in the
memorandum was also changed requiring            the Chairman,       on behalf of
the Board, to prepare the IG's performance             appraisals.
        The Inspector      General Act Amendments of 1988 prohibit
assigning      any program operating       responsibility   to the IG.       Prior to
implementation        of the 1988 amendments, the NCUA Board assigned the
responsibility        for processing    credit   union appeals to the Internal
Auditor     and continued      to assign them to the newly established           OIG.
These credit      union appeals are reviews of regional           office
director's      decisions    involving   charter    and membership eligibility
issues.       The Office    of Internal    Audit initially    processed     only a
few of these appeals a year; in 1989, the OIG processed                  two or
three appeals a month.
       Credit  union appeals were made a part of the OIG's
responsibility     based on recommendations    made by the Executive
Director*and    the General Counsel.     Their rationale   was that the OIG
was not involved      in the initial decisions   and is not involved   in
                                         13
APPENDIX V                                                                       APPENDIX V

creating   or implementing         agency policy.       However, since credit
union charter     approval      and membership decisions          are regulatory
functions    delegated       to the regional    offices     by the NCUA Board,
these credit     union appeals could be considered              to be program
operating    responsibilities.         We discussed      this   issue with the IG
and the NCUA General Counsel.            The NCUA Board reconsidered            the
issues,   and, in December 1989, this function                was transferred      from
the OIG to the NCUA Office           of General Counsel.
TYPES OF WORK
        NCUA auditors        completed      four financial       reports    and four
program reports         during   the 4 fiscal         years from 1986 to 1989.
These reports        included     financial      audits,     program audits,
investigations,         and special       reports.        The program audits      included
two Freedom of Information               Act compliance       audits     and two program
audits     of liquidation       activities.        No audit      reports    were done
during     fiscal   years 1986 to 1989 which focused on NCUA's
supervision       and examination         responsibilities.
        NCUA completed     14 investigations         from fiscal    years 1986 to
1989.     These investigations        included     cases relating      to complaints
about the conduct of examiners,             travel     claim fraud,    and false time
and attendance     reports.      For instance,         during  the April   to
September 1989 time period,          four investigations          were completed
resulting    in disciplinary      action      against     one employee.
STAFF RESOURCES
      NCUA's audit  staff has varied  from one to six members from
calendar  years 1973 to 1989.    As of March 31, 1990, the NCUA OIG
had four staff   members.
     Total costs for contract             audit    services     for   fiscal    years   1986
to 1989 were about $119,000.




                                             14
APPENDIX V        APPENDIX V




             15
APPENDIX VI                                                        APPENDIX   VI

                     MAJOR CONTRIBUTORS TO THIS REPORT
ACCOUNTING AND FINANCIAL       MANAGEMENTDIVISION,      WASHINGTON, D.C.
Margaret H. Harris,   Assistant     Director,   (202)   275-8705
Theodore J. Ellis,   Evaluator-in-Charge
Diane L. Shugert,   Evaluator




(911643)

                                       16
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                                            panied by a check or money order made out to the Superintendent.
                                            of’ Documents, when necessary. Orders for 100 or more copies to be
                                            mailed to a single address are discounted 25 percent,.

                                            I J.S. <;tkneral Accounting Office
                                            I’.(), Hex 6018
                                            Gaithersburg,     MI) 20877

                                            Orders may also be placed by calling   (202) 275-6241.
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