oversight

Financial Audit: Federal Deposit Insurance Corporation Funds' 2002 and 2001 Financial Statements

Published by the Government Accountability Office on 2003-03-28.

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

             United States General Accounting Office

GAO          Report to the Congress




March 2003
             FINANCIAL AUDIT
             Federal Deposit
             Insurance Corporation
             Funds’ 2002 and 2001
             Financial Statements




GAO-03-543
             a
                                               March 2003


                                               FINANCIAL AUDIT

                                               FDIC Funds’ 2002 and 2001 Financial
Highlights of GAO-03-543, a report to the      Statements
President of the Senate and the Speaker
of the House of Representatives




Created in 1933 to insure bank                 In GAO’s opinion, FDIC fairly presented the 2002 and 2001 financial
deposits and promote sound                     statements for the three funds it administers—the Bank Insurance Fund, the
banking practices, the Federal                 Savings Association Insurance Fund, and the FSLIC Resolution Fund. GAO
Deposit Insurance Corporation                  also found that, although certain controls should be improved, FDIC had
(FDIC) plays an important role in              effective control over financial reporting and compliance. GAO did not find
maintaining public confidence in               reportable instances of noncompliance with the laws and regulations it
the nation’s financial system. In              tested.
1989, legislation to reform the
federal deposit insurance system               Although FDIC made progress in response to previous reports, GAO found
created three funds to be
                                               weaknesses in control over information systems. Newly identified and
administered by FDIC: the Bank
Insurance Fund and the Savings                 continuing weaknesses impaired FDIC’s ability to ensure the reliability,
Association Insurance Fund, which              confidentiality, and availability of financial data. For example, information
protect bank and savings deposits,             system controls did not adequately to ensure that users had only the access
and the FSLIC Resolution Fund,                 needed to perform their assigned duties, that FDIC’s network was secure
created to close out the business of           from unauthorized access, or that unusual or suspicious access would be
the former Federal Savings and                 identified.
Loan Insurance Corporation. GAO
is responsible for obtaining                   At the time of the audit, FDIC had made progress in implementing a
reasonable assurance about                     corporatewide security management program, including establishing a
whether FDIC’s financial                       central security staff to provide guidance and oversight in enhancing its
statements for the funds are
                                               security awareness program, and in its continuing efforts to develop and
presented fairly, whether it
maintains effective internal                   update security policy.
controls, and whether FDIC has
complied with selected laws and
regulations.




Because of the sensitive nature of
the weaknesses in control over
information systems, GAO will
report the details, along with
recommendations for corrective
actions, in a separate report to
FDIC management.




www.gao.gov/cgi-bin/getrpt?GAO-03-543.

To view the full report, including the scope
and methodology, click on the link above.      As of September 30, 2002, FDIC insured deposits totaling over $3.3 trillion.
For more information, contact Jeanette
Franzel at (202) 512-9406 or
franzelj@gao.gov.
Contents



Letter                                                                                                     1


Auditor’s Report                                                                                           3
                             Opinion on BIF’s Financial Statements                                         3
                             Opinion on SAIF’s Financial Statements                                        4
                             Opinion on FRF’s Financial Statements                                         4
                             Opinion on Internal Control                                                   4
                             Compliance with Laws and Regulations                                          4
                             Objectives, Scope, and Methodology                                            5
                             Reportable Condition                                                          6
                             BIF’s Reserve Ratio                                                           8
                             FDIC Comments and Our Evaluation                                              8


Bank Insurance Fund’s                                                                                     10
                             Statements of Financial Position                                             10
Financial Statements         Statements of Income and Fund Balance                                        11
                             Statements of Cash Flows                                                     12
                             Notes to the Financial Statements                                            13


Savings Association                                                                                       27
                             Statements of Financial Position                                             27
Insurance Fund’s             Statements of Income and Fund Balance                                        28
Financial Statements         Statements of Cash Flows                                                     29
                             Notes to the Financial Statements                                            30


FSLIC Resolution                                                                                          44
                             Statements of Financial Position                                             44
Fund’s Financial             Statements of Income and Accumulated Deficit                                 45
Statements                   Statements of Cash Flows                                                     46
                             Notes to the Financial Statements                                            47


Appendixes
              Appendix I:    Comments from the Federal Deposit Insurance
                             Corporation                                                                  60
              Appendix II:   GAO Contacts and Staff Acknowledgments                                       61




                             Page i                 GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Contents




Abbreviations

BIF                   Bank Insurance Fund
CFO                   Chief Financial Officer
FDIC                  Federal Deposit Insurance Corporation
FDICIA                Federal Deposit Insurance Corporation Improvement Act of
                      1991
FMFIA                 Federal Managers’ Financial Integrity Act of 1982
FRF                   FSLIC Resolution Fund
FSLIC                 Federal Savings and Loan Insurance Corporation
SAIF                  Savings Association Insurance Fund



 This is a work of the U.S. Government and is not subject to copyright protection in the
 United States. It may be reproduced and distributed in its entirety without further
 permission from GAO. It may contain copyrighted graphics, images or other materials.
 Permission from the copyright holder may be necessary should you wish to reproduce
 copyrighted materials separately from GAO’s product.




Page ii                       GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                             Comptroller General
                                                                                             of the United States




                                    March 28, 2003                                                                   Leter




                                    The President of the Senate
                                    The Speaker of the House of Representatives

                                    This report presents our opinions on whether the financial statements of
                                    the Bank Insurance Fund (BIF), the Savings Association Insurance Fund
                                    (SAIF), and the FSLIC Resolution Fund (FRF) are presented fairly for the
                                    years ended December 31, 2002 and 2001. These financial statements are
                                    the responsibility of the Federal Deposit Insurance Corporation (FDIC),
                                    the administrator of the three funds. This report also presents (1) our
                                    opinion on the effectiveness of FDIC’s internal control as of December 31,
                                    2002, (2) our evaluation of FDIC’s compliance with laws and regulations
                                    during 2002, and (3) weaknesses in information system controls detected
                                    during our 2002 audits. In addition, it discusses BIF’s reserve ratio of its
                                    fund balance to total insured deposits.

                                    The provisions of section 17(d) of the Federal Deposit Insurance Act, as
                                    amended (12 U.S.C. 1827(d)), requires GAO to conduct an annual audit of
                                    BIF, SAIF, and FRF in accordance with U.S. generally accepted government
                                    auditing standards.

                                    We are sending copies of this report to the Chairman and Ranking Minority
                                    Member of the Senate Committee on Banking, Housing, and Urban Affairs;
                                    the Chairman and Ranking Minority Member of the House Committee on
                                    Financial Services; the Chairman of the Board of Directors of the Federal
                                    Deposit Insurance Corporation; the Chairman of the Board of Governors of
                                    the Federal Reserve System; the Comptroller of the Currency; the Director
                                    of the Office of Thrift Supervision; the Secretary of the Treasury; the
                                    Director of the Office of Management and Budget; and other interested
                                    parties. In addition, this report will be available at no charge on GAO’s Web
                                    site at http://www.gao.gov.




                                    David M. Walker
                                    Comptroller General
                                    of the United States



                                    Page 1                   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Page 2   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                                      Comptroller General
                                                                                                      of the United States




                                    To the Board of Directors
                                    The Federal Deposit Insurance Corporation                                                   Aud
                                                                                                                                  to
                                                                                                                                   R
                                                                                                                                   sir’eport




                                    We have audited the statements of financial position as of December 31,
                                    2002 and 2001, for the three funds administered by the Federal Deposit
                                    Insurance Corporation (FDIC), the related statements of income and fund
                                    balance (accumulated deficit), and the statements of cash flows for the
                                    years then ended. In our audits of the Bank Insurance Fund (BIF), the
                                    Savings Association Insurance Fund (SAIF), and the FSLIC Resolution
                                    Fund (FRF), we found

                                    • the financial statements of each fund are presented fairly, in all material
                                      respects, in conformity with U.S. generally accepted accounting
                                      principles;

                                    • although certain internal controls should be improved, FDIC had
                                      effective internal control over financial reporting (including
                                      safeguarding of assets) and compliance with laws and regulations; and

                                    • no reportable noncompliance with the laws and regulations that we
                                      tested.

                                    The following sections discuss our conclusions in more detail. They also
                                    present information on (1) the scope of our audits, (2) a reportable
                                    condition1 related to information system control weaknesses, (3) BIF’s
                                    reserve ratio, and (4) our evaluation of FDIC management’s comments on a
                                    draft of this report.



Opinion on BIF’s                    The financial statements, including the accompanying notes, present fairly,
                                    in all material respects, in conformity with U.S. generally accepted
Financial Statements                accounting principles, BIF’s financial position as of December 31, 2002 and
                                    2001, and the results of its operations and its cash flows for the years then
                                    ended.




                                    1
                                     Reportable conditions involve matters coming to the auditor’s attention that, in the
                                    auditor’s judgment, should be communicated because they represent significant
                                    deficiencies in the design or operation of internal control and could adversely affect FDIC’s
                                    ability to meet the control objectives described in this report.




                                    Page 3                         GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Opinion on SAIF’s      The financial statements, including the accompanying notes, present fairly,
                       in all material respects, in conformity with U.S. generally accepted
Financial Statements   accounting principles, SAIF’s financial position as of December 31, 2002
                       and 2001, and the results of its operations and its cash flows for the years
                       then ended.



Opinion on FRF’s       The financial statements, including the accompanying notes, present fairly,
                       in all material respects, in conformity with U.S. generally accepted
Financial Statements   accounting principles, FRF’s financial position as of December 31, 2002 and
                       2001, and the results of its operations and its cash flows for the years then
                       ended.



Opinion on Internal    Although certain internal controls should be improved, FDIC management
                       maintained, in all material respects, effective internal control over financial
Control                reporting (including safeguarding assets) and compliance as of
                       December 31, 2002, that provided reasonable but not absolute assurance
                       that misstatements, losses, or noncompliance material in relation to FDIC’s
                       financial statements would be prevented or detected on a timely basis. Our
                       opinion is based on criteria established under 31 U.S.C. 3512 (c), (d)
                       [Federal Managers’ Financial Integrity Act (FMFIA)].

                       Our work identified weaknesses in FDIC’s information system controls,
                       which we describe as a reportable condition in a later section of this report.
                       The reportable condition in information system controls, although not
                       considered material, represents a significant deficiency in the design or
                       operation of internal control that could adversely affect FDIC’s ability to
                       meet its internal control objectives. Although the weaknesses did not
                       materially affect the 2002 financial statements, misstatements may
                       nevertheless occur in other FDIC-reported financial information as a result
                       of the internal control weaknesses.



Compliance with Laws   Our tests for compliance with selected provisions of laws and regulations
                       disclosed no instances of noncompliance that would be reportable under
and Regulations        U.S. generally accepted government auditing standards. However, the
                       objective of our audits was not to provide an opinion on overall compliance
                       with selected laws and regulations. Accordingly, we do not express such
                       an opinion.



                       Page 4                    GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Objectives, Scope, and   FDIC management is responsible for (1) preparing the annual financial
                         statements in conformity with U.S. generally accepted accounting
Methodology              principles, (2) establishing, maintaining, and assessing internal control to
                         provide reasonable assurance that the broad control objectives of FMFIA
                         are met, and (3) complying with selected laws and regulations.

                         We are responsible for obtaining reasonable assurance about whether
                         (1) the financial statements are presented fairly, in all material respects, in
                         conformity with U.S. generally accepted accounting principles, and
                         (2) management maintained effective internal control, the objectives of
                         which are

                         • financial reporting—transactions are properly recorded, processed, and
                           summarized to permit the preparation of financial statements in
                           conformity with U.S. generally accepted accounting principles, and
                           assets are safeguarded against loss from unauthorized acquisition, use,
                           or disposition, and

                         • compliance with laws and regulations—transactions are executed in
                           accordance with laws and regulations that could have a direct and
                           material effect on the financial statements.

                         We are also responsible for testing compliance with selected provisions of
                         laws and regulations that have a direct and material effect on the financial
                         statements.

                         In order to fulfill these responsibilities, we

                         • examined, on a test basis, evidence supporting the amounts and
                           disclosures in the financial statements;

                         • assessed the accounting principles used and significant estimates made
                           by management;

                         • evaluated the overall presentation of the financial statements;

                         • obtained an understanding of internal control related to financial
                           reporting (including safeguarding assets) and compliance with laws and
                           regulations;




                         Page 5                     GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                       • tested relevant internal controls over financial reporting and
                         compliance, and evaluated the design and operating effectiveness of
                         internal control;

                       • considered FDIC’s process for evaluating and reporting on internal
                         control based on criteria established by FMFIA; and

                       • tested compliance with selected provisions of the Federal Deposit
                         Insurance Act, as amended, and the Chief Financial Officers Act of 1990.

                       We did not evaluate all internal controls relevant to operating objectives as
                       broadly defined by FMFIA, such as those controls relevant to preparing
                       statistical reports and ensuring efficient operations. We limited our
                       internal control testing to controls over financial reporting and compliance.
                       Because of inherent limitations in internal control, misstatements due to
                       error or fraud, losses, or noncompliance may nevertheless occur and not be
                       detected. We also caution that projecting our evaluation to future periods
                       is subject to the risk that controls may become inadequate because of
                       changes in conditions or that the degree of compliance with controls may
                       deteriorate.

                       We did not test compliance with all laws and regulations applicable to
                       FDIC. We limited our tests of compliance to those deemed applicable to
                       the financial statements for the year ended December 31, 2002. We caution
                       that noncompliance may occur and not be detected by these tests and that
                       such testing may not be sufficient for other purposes.

                       We performed our work in accordance with U.S. generally accepted
                       government auditing standards.

                       FDIC management provided comments on a draft of this report. They are
                       discussed and evaluated in a later section of this report and are reprinted in
                       appendix I.



Reportable Condition   In connection with the funds’ financial statement audits, we reviewed
                       FDIC’s information system controls. Effective information system controls
                       are essential to safeguarding financial data, protecting computer
                       application programs, providing for the integrity of system software, and
                       ensuring the continued computer operations in case of unexpected
                       interruption. These controls include the corporatewide security
                       management program, access controls, system software, application



                       Page 6                    GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
development and change control, segregation of duties, and service
continuity controls. During 2002, FDIC made progress in improving
information system controls. Of the 41 prior year recommendations that
we made, FDIC had completed action on 18 and partially completed or had
action plans to address those remaining. During our current review, FDIC
also corrected several newly identified weaknesses.

Nevertheless, continuing and newly identified vulnerabilities involving
information system controls continue to impair FDIC’s ability to ensure the
reliability, confidentiality, and availability of financial data. For example,
FDIC did not have information system controls to adequately ensure that
(1) users had only the access needed to perform their assigned duties,
(2) its network was secured from unauthorized access, and
(3) comprehensive programs were in place to routinely oversee and
monitor access to its computer data to identify unusual or suspicious
access. The effect of these weaknesses increases the risk of unauthorized
disclosure of critical FDIC financial and sensitive personnel and bank
examination information, disruption of critical financial operations, and
loss of assets.

As we have previously reported, the primary reason for FDIC’s information
system control weaknesses is that it has not fully developed and
implemented a comprehensive corporatewide security management
program. An effective program would include assessing risks, establishing
a central security function, establishing policies and related controls,
raising awareness of prevailing risks and mitigating controls, and regularly
evaluating the effectiveness of established controls. During the past year,
FDIC has made progress in implementing such a program, including
establishing a central security staff to provide guidance and oversight,
enhancing its security awareness program, and continuing efforts to
develop and update security policy. However, FDIC has not yet fully
established a risk assessment process and the recently implemented
program to assess the effectiveness of controls does not address all critical
evaluation areas. A complete risk assessment process would assist
management in making decisions on necessary controls. Similarly, an
ongoing comprehensive program of tests and evaluations of the
effectiveness of established controls would enable FDIC to identify and
correct information security weaknesses, such as those reported in this
review.

We determined that other management controls mitigated the effect of the
information system control weaknesses on the preparation of the funds’



Page 7                    GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                      financial statements. Because of their sensitive nature, the details
                      surrounding these weaknesses are being reported separately to FDIC
                      management, along with our recommendations for corrective actions.



BIF’s Reserve Ratio   The Federal Deposit Insurance Corporation Improvement Act of 1991
                      (FDICIA) requires FDIC to maintain BIF fund balance at a designated
                      reserve ratio of at least 1.25 percent of estimated insured deposits.2 Under
                      FDIC’s required risk-based assessment system, as long as BIF’s reserve
                      ratio is at or above the designated reserve ratio, FDIC cannot charge
                      premiums to institutions that are well-capitalized and highly rated by
                      supervisors. Currently, over 90 percent of the industry does not pay for
                      deposit insurance. In 1991, BIF’s reserve ratio was significantly below the
                      designated reserve ratio and did not reach the designated reserve ratio of
                      1.25 percent of estimated insured deposits until May 1995.3 During the
                      years ended December 31, 1995 through 2000, BIF’s reserve ratio ranged
                      from 1.30 to 1.38. As of December 31, 2001, and September 30, 2002, BIF’s
                      ratio decreased to 1.26 and 1.25, respectively. At its November 12, 2002,
                      meeting, the FDIC Board of Directors voted to maintain the existing BIF
                      assessment rate schedule for the first semiannual assessment period of
                      2003 based on the board’s determination that the reserve ratio would likely
                      remain at or near 1.25 during the first half of 2003. Most of BIF’s income
                      comes from the interest earned on investments with the U.S. Treasury.
                      FDIC describes the recent legislative initiatives to reform the federal
                      deposit insurance system in note 1 of the financial statements for BIF and
                      SAIF.



FDIC Comments and     In commenting on a draft of this report, FDIC’s Chief Financial Officer
                      (CFO) was pleased to receive unqualified opinions on BIF’s, SAIF’s, and
Our Evaluation        FRF’s 2002 and 2001 financial statements. FDIC’s CFO also acknowledged
                      the information system weaknesses we identified and plans to continue


                      2
                       Section 302 of FDICIA amended section 7(b) of the Federal Deposit Insurance Act. FDICIA
                      requirements are the same for both BIF and SAIF. SAIF reached the designated reserve
                      ratio in 1996, and as of September 30, 2002, SAIF’s reserve ratio was 1.38 percent.
                      3
                       If the reserve ratio falls below 1.25 percent of estimated insured deposits, FDICIA requires
                      the FDIC Board of Directors to set semiannual assessment rates for BIF members that are
                      sufficient to increase the reserve ratio to the designated reserve ratio not later than 1 year
                      after such rates are set, or in accordance with a recapitalization schedule of 15 years or less.




                      Page 8                          GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
efforts to strengthen its information system program and to incorporate
our recommendations into its security plans for 2003. We plan to evaluate
the effectiveness of the corrective actions as part of our 2003 audit.




David M. Walker
Comptroller General
of the United States

February 27, 2003




Page 9                  GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements


Statements of Financial Position




                                   Page 10   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                        Bank Insurance Fund’s Financial Statements




Statements of Income and Fund Balance




                                        Page 11                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                           Bank Insurance Fund’s Financial Statements




Statements of Cash Flows




                           Page 12                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                    Bank Insurance Fund’s Financial Statements




Notes to the Financial Statements




                                    Page 13                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 14                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 15                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 16                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 17                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 18                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 19                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




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Bank Insurance Fund’s Financial Statements




Page 21                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 22                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 23                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 24                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 25                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Bank Insurance Fund’s Financial Statements




Page 26                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements

Statements of Financial Position




                                   Page 27   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                        Savings Association Insurance Fund’s
                                        Financial Statements




Statements of Income and Fund Balance




                                        Page 28                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                           Savings Association Insurance Fund’s
                           Financial Statements




Statements of Cash Flows




                           Page 29                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                    Savings Association Insurance Fund’s
                                    Financial Statements




Notes to the Financial Statements




                                    Page 30                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 31                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 32                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 33                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 34                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 35                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 36                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 37                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 38                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 39                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 40                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 41                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 42                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Savings Association Insurance Fund’s
Financial Statements




Page 43                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial Statements


Statements of Financial Position




                                   Page 44   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                        FSLIC Resolution Fund’s Financial
                                        Statements




Statements of Income and Accumulated Deficit




                                        Page 45                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                           FSLIC Resolution Fund’s Financial
                           Statements




Statements of Cash Flows




                           Page 46                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
                                    FSLIC Resolution Fund’s Financial
                                    Statements




Notes to the Financial Statements




                                    Page 47                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 48                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 49                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 50                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 51                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 52                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




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FSLIC Resolution Fund’s Financial
Statements




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FSLIC Resolution Fund’s Financial
Statements




Page 55                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




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FSLIC Resolution Fund’s Financial
Statements




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FSLIC Resolution Fund’s Financial
Statements




Page 58                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
FSLIC Resolution Fund’s Financial
Statements




Page 59                      GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Appendix I

Comments from the Federal Deposit                                               Appendx
                                                                                      ies




Insurance Corporation                                                            Append
                                                                                      x
                                                                                      Ii




              Page 60   GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
Appendix II

GAO Contacts and Staff Acknowledgments                                                             Appendx
                                                                                                         Ii




GAO Contacts      Jeanette M. Franzel, (202) 512-9471
                  Gregory A. Maio, (202) 512-8172



Acknowledgments   In addition to those named above, the following staff made key
                  contributions to this report: Ronald A. Bergman, Gary P. Chupka, John C.
                  Craig, Anh Dang, Kristen A. Kociolek, Wing Y. Lam, Gloria Medina,
                  Timothy J. Murray, Stacey L. Volis, and Gregory J. Ziombra.

                  The following staff from the FDIC Office of Inspector General also
                  contributed to this report: Arlene S. Boateng, R. William Harrington, Paul S.
                  Johnston, Marilyn R. Kraus, John S. Leevy, Duane H. Rosenberg, Titus S.
                  Simmons, Ross E. Simms, Charles E. Thompson, and Leon R. Wellons.




(194127)          Page 61                  GAO-03-543 FDIC Funds' 2002 and 2001 Financial Statements
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                         To order by Phone:     Voice: (202) 512-6000
                                                TDD: (202) 512-2537
                                                Fax: (202) 512-6061


To Report Fraud,         Contact:
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Waste, and Abuse in      E-mail: fraudnet@gao.gov
Federal Programs         Automated answering system: (800) 424-5454 or (202) 512-7470



Public Affairs           Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800
                         U.S. General Accounting Office, 441 G Street NW, Room 7149
                         Washington, D.C. 20548
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