Legal Fees to Jordan & Keys, L.L.P.

(Audit Report No. 98-071, June 29, 1998)

The Office of Inspector General (OIG) has completed an audit of Jordan & Keys, a law firm hired to provide legal services to the Federal Deposit Insurance Corporation (FDIC). The audit was conducted by the independent public accounting firm of Irving Burton Associates and covered billings paid by FDIC during the period March 1, 1996 through July 31, 1997.

The objective of the audit was to determine whether the firm's legal bills presented fairly the expenses and activities associated with FDIC cases assigned to the firm. The total fees paid to the law firm during the audit period were $844,953. The OIG identified questioned costs of $8,124 in fees and expenses.

The Assistant General Counsel, Legal Operations Section, Legal Division, should disallow:

The General Counsel, Legal Division, disallowed questioned costs totaling $5,163. Although management's corrective actions for recommendations 2, 3, and 5, differed from the recommended corrective actions, we consider management's response as providing the requisites for a management decision.

Specifically, the Legal Division allowed $2,961 of the $8,124 questioned in the draft report based on additional information provided by the law firm. The OIG accepts management's explanations regarding these recommendations and, accordingly, reduced questioned costs to $5,163.

After considering additional information provided by the firm and management's response to the draft report, we will report questioned costs of $5,163 in our Semiannual Report to the Congress.