The Federal Deposit Insurance Corp. (FDIC) received clean audit opinions on the 2019 and 2020 financial statements for the two funds it manages but fell short on internal controls related to contract payment review processes, the Government Accountability Office (GAO) said in a report Thursday.
The GAO performs audits of and issues opinions on the financial statements produced by the FDIC on the Deposit Insurance Fund (DIF) and the Federal Savings and Loan Insurance Corp. (FSLIC) Resolution Fund (FRF). It also issues an opinion on the effectiveness of the agency’s internal controls.
“During our 2020 audit, we identified deficiencies in contract payment review processes that collectively represent a significant deficiency in FDIC’s internal control over financial reporting,” the GAO said in its report. “Specifically, FDIC did not consistently implement controls over contract payment review processes.”
In Thursday’s report, the GAO said it found that:
- the financial statements of the DIF and FRF as of and for the years ended Dec. 31, 2020, and 2019, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles;
- although internal controls could be improved, the FDIC maintained, in all material respects, effective internal control over financial reporting relevant to the DIF and to the FRF as of Dec. 31, 2020; and
- with respect to the DIF and to the FRF, no reportable instances of noncompliance for 2020 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested.
“In regard to the significant deficiency in internal control over contract payment review processes, FDIC stated that it began taking steps to address this issue and will work to enhance control activities and expand monitoring capabilities in this area,” the GAO said.