Summary: The Resolution Trust Corporation (RTC) hires contractors under its Standard Asset Management and Disposition Agreement program to manage and dispose of assets from failed thrifts--everything from hotels to parking lots to animal clinics. RTC needs greater assurances that its contractors are adequately overseeing their property management subcontractors. Although the contractors had visited most of the properties included in GAO's review, none of them were doing regulator on-site reviews of their property management companies to ensure that RTC's assets were being adequately protected. Further, only one of the contractors had audited its property management company to ensure that expenses paid were reasonable and correct and that all revenues were properly recorded. Although RTC has taken several steps to beef up oversight of property management companies, including clarifying in memos and documents its expectations in terms of supervising property management companies, these changes do not guarantee that contractors will adequately and regularly monitor their property management companies.
