Summary: GAO reviewed the Federal Savings and Loan Insurance Corporation's (FSLIC) Resolution Fund financial statements for the period August 9, 1989 through December 31, 1989.
GAO found that: (1) the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 created the Fund to manage and dispose of assets and pay debts, obligations, contracts, and other liabilities resulting from FSLIC initiated thrift resolution actions; (2) the Federal Deposit Insurance Corporation (FDIC) administers the Fund to ensure that its assets are sold and its liabilities are paid; (3) due to uncertainties affecting the fund's ultimate cost of assistance provided to troubled thrift institutions and the Fund's recoveries from asset sales, GAO was unable to express an opinion on the Fund's financial position statements as of December 31, 1989 and August 9, 1989, or on its income and accumulated deficit statements for the period August 9, 1989 through December 31, 1989; and (4) the Fund's statements of cash flows for the period August 9, 1989 through December 31, 1989 presented fairly, in all material respects, its cash flows for the period then ended. GAO also found that: (1) FDIC could improve its accounting system to facilitate producing a statement of cash flows and its documentation to support asset values; and (2) Congress appropriated $22 billion for fiscal year 1991, which will permit the Fund to renegotiate or buy out its assistance obligations.
