Fisher Auction Company's Billings Under Basic Ordering Agreement
508-021-028-RLPM forORE Auction Services, Task Order NESC-001


(Audit Report No. 98-014, February 09, 1998)

Summary

This report presents the results of an Office of Inspector General (OIG) audit of the marketing and promotional expenses that the Fisher Auction Company billed the Federal Deposit Insurance Corporation (FDIC) under basic ordering agreement 508-021-028- RLPM, task order NESC-001. We initiated this audit at the request of the former Chairman of the FDIC, due in part to allegations of wrongdoing on the part of auction contractors working on Resolution Trust Corporation (RTC) contracts out of RTC's Atlanta Office.

Under this contract, Fisher billed FDIC and was reimbursed $407,220 for expenses related to marketing and promoting FDIC's Fall 1995 Auction, which represented Fisher's entire marketing and promotional budget. The OIG reviewed 100 percent of Fisher's billings and, of this total, initially questioned $82,560 or over 20 percent because Fisher's claimed expenses did not conform to the terms and conditions of the agreement or were not adequately supported. Based on FDIC management's response to a draft of this report, we reduced the questioned cost amount to $48,451.

Recommendations

The OIG recommends that the Regional Director, NESC,

(1) disallow $33,571 of inappropriate billings resulting from improper markups,
unallowable expenses, and unsupported expenses (questioned cost, of which
$7,937 is unsupported) and
(2) disallow $14,880, which represents Fisher's proceeds from its sale of property
information packages (questioned cost).

Management Response

On February 5, 1998, the Regional Director, Northeast Service Center, provided a written response to a draft of this report. The Regional Director's response showed general agreement with the report's findings and recommendations. However, the Regional Director believed that a certain amount of the OIG's questioned cost was based on a "technicality" and he did not believe it was appropriate to penalize Fisher for this technicality. We accept the Regional Director's decision to reduce the questioned amount. The response provided the requisites for management decisions on the recommendations.

As a result of this audit, the OIG will report questioned costs of $48,451 (of which $7,937 is unsupported) in its Semiannual Report to the Congress.

Last Updated 03/27/01 contact the OIG