Review of FDIC data collection system finds two key elements ‘unreliable,’ spoiling 100% ‘error-free’ goal

Two of four key data elements were found “unreliable” in the federal bank deposit insurance agency’s system that is supposed to be error-free and that supports the agency’s supervision and insurance responsibilities, the agency’s inspector general said in a report issued Tuesday.

According to the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General, errors in the “completion date” and “mail date” data elements were found, essentially blocking the agency from reaching its goal of 100% accuracy for the key data elements. The OIG said it found completion date errors for 14 banks and mail date errors for 12 banks.

No errors were found in the other two data elements tested, the OIG report stated. Those were examination ratings and start dates.

The OIG stated it found that the unreliable data resulted from weaknesses in the FDIC’s procedures and practices for identifying and ensuring the quality of the key data elements it examined. The data elements were contained in the agency’s Virtual Supervisory Information on the Net (ViSION) system. The FDIC has designated the system as “essential to its mission.” The system uses 19 key data elements collected in the FDIC exam process that the agency requires to be “data free,” with a required accuracy rate of 100%, according to the OIG report. The system, the OIG said, is used by the FDIC (3,200 users), the Federal Reserve and state bank supervisors (more than 900 users).

“We determined that the unreliable data resulted from weaknesses in the FDIC’s procedures and practices for identifying and ensuring the quality of the Completion Date and Mail Date key data elements in the ViSION system,” the report stated. “In particular, the FDIC did not develop and implement standard guidance for identifying and supporting Completion Dates for State-led examinations and for identifying the documentation that should be used and retained to support the Mail Date data element. Further, FDIC review procedures did not consistently detect or correct errors in a timely manner.”

The OIG also wrote that it found the risk-based assessment section of the ViSION data to be “undocumented and outdated.” According to the OIG, the agency has not updated the assessment and related guidance in 12 years (since 2009) that would reflect changes in FDIC operations and reporting that rely on VISION system data.

“FDIC personnel expend resources to periodically review the key ViSION system data,” the OIG wrote. “Therefore, a current risk assessment and updated guidance on key data elements would help the FDIC to identify the most important data elements based on the current FDIC operating environment and reporting requirements, and focus review resources on those elements.”

The OIG made six recommendations. The first three were that that the agency develop and use standard guidance for completion and mail dates in the system, conduct training on the guidance, and revise quality assurance procedures.

“In addition, we recommend that the FDIC research, and correct additional entries we found in the ViSION system that may have errors related to the Completion Date,” the OIG wrote. “We also recommend that the FDIC conduct a risk assessment to identify key supervisory information in the ViSION system based on the current operating environment and reporting requirements, and update the data reliability guidance for the ViSION system based on the results of the risk assessment.”

According to the OIG, the agency concurred with the recommendations. FDIC plans to complete corrective actions by Sept. 30 of next year, the OIG said.

Reliability of Data in the FDIC Virtual Supervisory Information on the Net System

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