FDIC's Allocation of Records Storage Costs – Footnotes
September 29, 2004
Audit Report No. 04-044
Footnote 1: For the purpose of this review, we defined records storage costs to include charges for records storage, retrieval, special projects, and disposal.
Footnote 2: The FDIC is the primary federal supervisor for state banks that are not members of the Federal Reserve System and is the backup supervisor for all other insured banks and thrifts. When an insured institution fails, the FDIC facilitates the resolution of assets and liabilities. The FDIC obtains a valuation of the failing institution by valuing and assessing its assets and liabilities. Using this information, the FDIC markets the institution to potential bidders.
Footnote 3: The National Housing Act of 1934 created the FSLIC.
Footnote 4: The FIRREA was enacted to reform, recapitalize, and consolidate the federal deposit insurance system.
Footnote 5: A small portion of the inactive records was transferred to the National Archives and Records Administration for permanent retention and future research.
Footnote 6: One contract was valuated at $1 million, and the other contract was valued at $.5 million.
Footnote 7: Direct costs are transactions that are identifiable to a specific financial institution or a specific fund activity. Whereas, indirect costs are corporate overhead transactions, for example, costs for security at FDIC offices, which are not identifiable to a specific institution or fund and are allocated on a percentage basis to the appropriate funds.
Footnote 8: During the budgeting process, costs to the funds were estimated for specific activities related to the insurance, supervision, and receivership management programs. The distribution of overhead costs to the funds is determined by the relationships among expenses for the program activities.
Footnote 9: Each fund is to be used to insure deposits, protect depositors, and resolve failed institutions in the least costly manner for their respective insured institutions.
Footnote 10: The FDIC is organizationally divided into divisions and offices. The divisions and offices are subdivided into smaller units. The units are assigned two-character organization codes that are used for accounting and budgeting.
Footnote 11: The FDIC invests the BIF's and SAIF's assets and collects quarterly assessments from member institutions to maintain the funds at or above statutory minimums.
Footnote 12: An auditor's opinion that the funds' financial statements, including the accompanying notes, present fairly, in all material respects, in conformity with U.S. generally accepted accounting principles, the funds' financial position as of the end of the year, and the results of its operations and its cash flows for the year then ended.
Footnote 13: As a result of FIRREA, in 1990, the Office of Thrift Supervision (OTS) changed the regulations governing the capital requirements for thrift institutions to make them conform to the requirements for commercial banks. Certain forms of intangible capital, such as supervisory goodwill, could no longer be considered as part of a thrift's capital. Acquirers of thrift institutions sued the federal government, alleging that they had purchased failed or failing thrifts prior to the passage of FIRREA based on a promise from the FSLIC that acquirers could count such intangibles toward their capital requirements. Plaintiffs alleged that FIRREA's changes resulted in a breach of contract or a taking of their property without just compensation. The FDIC was required to retain failed thrift institution records for the litigation. The FRF pays the government's and the FDIC's litigation expenses.
Footnote 14: The Government Performance and Results Act of 1993 (Pub. L. No. 103-62, codified at titles 5, 31, and 39, United States Code) requires agencies to develop strategic plans, align programs and activities with concrete missions and goals, and manage and measure results. An agency is to prepare annual performance plans that establish connections with strategic goals and day-to-day activities and report on the extent to which the agency is meeting its annual performance goals.
|
