Seven elements of a crisis readiness framework should be established to deal with a crisis, including – but not necessarily focusing on – the current coronavirus pandemic, according to the recommendations of the inspector general for the federal insurer of bank deposits.
The report issued Wednesday by the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General (OIG) stated that the seven elements it recommends the agency adopt in order to deal with a crisis include:
- Establishment of an agency-wide policy and procedures;
- Documentation of agency-wide readiness plans;
- Training of responsible employees on their plan-specific tasks;
- Documentation of exercises;
- Monitoring of the status of lessons-learned recommendations;
- Maintenance of readiness documents;
- Assessments and reporting on agency-wide readiness progress.
The report makes clear, on its cover page, that the recommendations were developed as part of an evaluation that began well before the current coronavirus pandemic. “The Office of Inspector General initiated this evaluation in 2018 and it covered the FDIC’s readiness planning and preparedness activities up to early 2019,” a red-type notice on the cover page states. “Our work was not conducted in response to the current pandemic situation, nor is the report specific to any particular type of crisis.”
But the report also makes it clear that the agency needs to tighten up in some areas regarding its crisis management capabilities. The recommendations were in response to seven particular findings by the OIG during the evaluation period. Those included:
- The FDIC did not have a documented policy that defined readiness authorities, roles, and responsibilities, including those of a committee responsible for overseeing readiness activities. “Such a policy would help to ensure that FDIC personnel understand and implement management directives for readiness. The FDIC also did not have documented procedures to provide for a consistent crisis readiness planning process,” the report stated.
- Overarching agency-wide readiness plans could improve the efficiency of the readiness planning process and provide FDIC management and personnel with an understanding of how well the FDIC integrates readiness planning activities throughout its divisions and offices.
• The agency did not train personnel to understand the content of crisis readiness plans, including their task-related responsibilities in executing the plans – and did not incorporate a requirement within the eight readiness plans to train responsible personnel to understand the plan, and how to carry out the objectives and tasks specific to the plan.
- The agency should document the important results of all readiness plan exercises and consistently incorporate within the plans a requirement for regular exercises. “For three readiness plans, we found that the FDIC did not adequately document the results of exercises. Further, only one of the eight plans included a requirement for regular exercises,” the report stated.
- The agency did not have a documented monitoring process that prioritized and tracked recommendations to improve readiness, even though it had identified lessons learned and related recommendations from exercises and other readiness planning activities and demonstrated that it had taken or planned to take actions to address some of the lessons learned.
- While the FDIC updated all but one of the eight readiness plans, it incorporated maintenance requirements in only two of the plans. “The FDIC should consistently review and update readiness plans, incorporate maintenance requirements in the plans, and establish a central repository of plans to facilitate periodic maintenance,” the report stated.
- The agency should regularly assess and report on its progress on crisis readiness plans and activities to key decision makers, such as the FDIC Chairman and senior management.