Summary: In response to a congressional request, GAO examined the Federal Savings and Loan Insurance Corporation's (FSLIC) use of promissory notes and assistance guarantees to restructure savings and loan institutions' problems, focusing on congressional concerns over note and guarantee issuances.
GAO found that: (1) FSLIC was not required to coordinate specific resolution activities with the Department of the Treasury and the Office of Management and Budget (OMB), but discussed with Treasury and OMB its recent resolution acceleration actions and their impact on FSLIC outstanding obligations; (2) FSLIC complied with new reporting requirements that it record promissory notes as budgetary outlays, and assistance guarantees as outlays at any time during the life of the assistance agreement; (3) it would evaluate FSLIC accounting of its notes and guarantees during its audit of the agency's fiscal year 1988 financial statements; and (4) the FSLIC notes issued in fiscal year 1988 did not trigger any 1988 sequestrations, but its fiscal year 1989 notes could contribute to the budget deficit, since the value of notes FSLIC issued exceeded OMB estimates.
