Overview 

Mission Statement

To advance economic stability by promoting the efficiency and effectiveness of the management 

of the Troubled Asset Relief Program (TARP), through transparency, through coordinated 

oversight, and through robust enforcement against those persons and entities, whether inside or 

outside of government, who waste, steal, or abuse TARP funds. 

Program Summary by Budget Activity 

Dollars in Thousands 

Appropriation FY 2010 FY 2011 FY 2012 FY2010 to FY2012

Actual Annualized

CR Level

Request $ Change % Change

 Audit $9,900 $15,609 $20,371 $10,471 105.8%

 Investigations $13,400 $20,691 $27,003 $13,603 101.5%

Total Appropriated Resources $23,300 $36,300 $47,374 $24,074 103.3%

Total FTE 133 192 192 59 44.4%

In addition to SIGTARP’s FY 2012 request for $47,374, section 402(c)(1) of the Helping Families Save Their 

Homes Act of 2009, P.L. 111-22, provided SIGTARP $15 million in supplemental funding. However, section 

402(c)(2) requires SIGTARP, in the use of these funds, to “prioritize the performance of audits or investigations of 

recipients of non-recourse Federal loans made under any” Emergency Economic Stabilization Act of 2008, P.L. 

110-343 (EESA) program. This supplemental funding is not available for SIGTARP general operations. 

FY 2012 Priorities 

• Promote transparency in the management and operation of TARP, ensuring the satisfaction 

of the public’s right to know how Treasury decides to invest the public’s money, how it 

manages the investments it makes, and how TARP recipients use the investments. 

• Coordinate oversight: 

o Prospectively advise Treasury concerning issues relating to compliance, internal 

controls and fraud prevention. 

o Retrospectively assess the effectiveness of Treasury’s activities, recommend 

improvements, and evaluate whether TARP recipients are satisfying their legal 

obligations. 

• Prevent, detect, investigate and refer for prosecution cases of fraud, waste and abuse 

involving TARP funds or programs. 

SIGTARP - 1 
Table of Contents 

Overview ........................................................................................................................................ 1

Mission Statement ....................................................................................................................... 1

Program Summary by Budget Activity ....................................................................................... 1

Section 1 – Purpose ....................................................................................................................... 3

1A – Description of Bureau Vision and Priorities ...................................................................... 3

1B – Program History and Future Outlook ................................................................................. 4

Section 2 – Budget Adjustments and Appropriation Language ............................................. 12

2.1 – Budget Adjustments Table ............................................................................................... 12

2A – Budget Increases and Decreases Description ................................................................... 12

2.2 – Operating Levels Table .................................................................................................... 13

2.3 – Appropriations Detail Table ............................................................................................. 14

2B – Appropriations Language and Explanation of Changes ................................................... 14

2C – Legislative Proposals ........................................................................................................ 14

Section 3 – Budget and Performance Plan ............................................................................... 15

3.1 – Budget by Strategic Outcome .......................................................................................... 15

3.2.1 Audit Budget and Performance Plan ................................................................................ 16

3.2.2 Investigations Budget and Performance Plan ................................................................... 17

Section 4 – Supporting Materials .............................................................................................. 19

4A – Human Capital Strategy Description ................................................................................ 19

4B – Information Technology Strategy ..................................................................................... 21

SIGTARP - 2 
Section 1 – Purpose 

1A – Description of Bureau Vision and Priorities

SIGTARP supports and complements Treasury’s strategic goal of effectively managing the U.S. 

Government’s Finances as they relate to TARP and TARP-related funds, through the 

implementation of SIGTARP’s priorities: 

Transparency - Promoting transparency in the management and operation of TARP programs; 

Coordinating Oversight: 

• Prospectively advising Treasury concerning issues relating to compliance, internal controls 

and fraud prevention; 

• Retrospectively assessing the effectiveness of Treasury’s activities and evaluating whether 

TARP recipients are satisfying their legal obligations; and 

Robust Enforcement - Preventing, detecting, investigating and referring for prosecution cases 

of fraud, waste and abuse involving TARP funds or programs. 

Promoting transparency in the management and operations of TARP programs is vital. Through 

the Emergency Economic Stabilization Act of 2008, P.L. 110-343 (EESA), the American 

taxpayer has been asked to fund an unprecedented effort to stabilize the financial system and 

foster economic recovery. In this context, the public has a right to know how Treasury decides 

to invest its money, how it manages the assets it acquires, and how TARP recipients use the 

funds. Transparency is a powerful tool to ensure accountability and that all those managing and 

receiving TARP funds will act appropriately and in the best interest of the country. 

SIGTARP views its oversight role prospectively, retrospectively, internally, and externally. 

Prospectively, SIGTARP, among other things, advises Treasury on issues relating to compliance, 

internal controls and fraud prevention. Retrospectively, SIGTARP assesses the effectiveness of 

TARP activities over time and suggests improvements. Internally, SIGTARP’s oversight role 

reaches to Treasury officials and to other government employees who manage TARP-related 

programs. Externally, it reaches to the recipients of TARP funds, the other private participants in 

TARP-related programs and to vendors that have been retained to assist Treasury in 

implementing TARP. SIGTARP also plays a significant external coordinating role among 

TARP oversight bodies both to ensure maximum oversight coverage and to avoid redundant and 

unduly burdensome requests on Treasury personnel who manage the programs. 

Robust criminal and civil law enforcement involves the prevention, detection, and investigation 

of instances of fraud, waste, and abuse relating to TARP funds or operations. Through audit and 

investigative resources, and partnerships with other relevant law enforcement agencies, 

SIGTARP is committed to deterring, detecting, and investigating and referring for prosecution 

those persons and entities, inside or outside of the government, who waste, steal, or abuse TARP 

funds. 

SIGTARP - 3 
 In accordance with the requirements of Section 6(f)(1) of the Inspector General Act of 1978 (as 

amended), the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) 

submits the following information related to its requested budget for FY 2012: 

• The aggregate budget request for the operations of SIGTARP is $47,374,000 

• The portion of this amount needed for SIGTARP training is $516,000; 

• The portion of this amount needed to support the Council of the Inspectors General on 

Integrity and Efficiency (CIGIE) is estimated at $51,039; and 

• The amount requested for training satisfies all SIGTARP training needs for fiscal year 2012. 

1B – Program History and Future Outlook

Background: TARP consists of 13 programs all of which have been implemented. Six are 

closing or have already been wound down. As of October 3, 2010, Treasury had obligated 

$474.8 billion for TARP. Of this amount, Treasury had expended or committed to expend 

approximately $469.8 billion through the 13 implemented programs to provide support for U.S. 

financial institutions, the automobile industry, the markets in certain types of asset-backed 

securities and homeowners. The focus of TARP has begun to shift as the early TARP programs 

that invested huge sums in banks are now closed to further investments and most of the largest 

bank recipients have repaid their TARP funds. Treasury has stated that, going forward, TARP 

will focus on foreclosure mitigation efforts, small-business lending, and a continuation of 

support for the Asset-Backed securities (ABS) markets. 

General Management: Section 121 of the EESA created SIGTARP as an independent agency 

within Treasury responsible for conducting, supervising, and coordinating audits and 

investigations of any actions taken under EESA. Of the four primary oversight bodies 

referenced in EESA, (i.e., SIGTARP, the Financial Stability Oversight Board, the Congressional 

Oversight Panel, and the Government Accountability Office), SIGTARP stands as the sole 

TARP oversight body charged with criminal law enforcement responsibility. SIGTARP 

commenced operations on December 15, 2008, with the swearing in of the Special Inspector 

General (SIG). 

Between its commencement in December of 2008 and January 2011, SIGTARP has been 

extraordinarily productive: publishing nine comprehensive quarterly reports to Congress 

concerning TARP, opening 142 investigations, initiating 26 audits, issuing 13 audit reports, 

leveraging oversight resources, testifying at more than 20 Congressional hearings or briefings, 

building infrastructure, and hiring staff. In the latter regards, SIGTARP has secured permanent 

office space and equipment for staff; has contracted with public and private vendors for 

personnel services, procurement assistance, publication consulting, data processing and analysis, 

and office equipment and services. SIGTARP has completed the move into its permanent space. 

Further, SIGTARP has hired 141 managers, lawyers, auditors, investigators, and other 

professionals with a wealth of experience in program auditing, criminal law enforcement, 

securities enforcement, and other relevant curricula. In FY 2011 SIGTARP anticipates increasing 

its FTE level to 192 to address field operations established in four sites and work load 

requirements of audit and investigation cases that are pending due to insufficient staffing. To 

successfully accomplish this hiring challenge, SIGTARP relied on direct hire authority and dual 

SIGTARP - 4 
compensation authority waiver delegated by the Office of Personnel Management, as well as 

authority provided by the Special Inspector General for the Troubled Asset Relief Program Act 

of 2009, P.L. 111-15. 

Quarterly Reports to Congress: SIGTARP has issued nine wide-ranging quarterly reports to 

Congress, describing the activities and plans of SIGTARP; explaining and evaluating the various 

TARP programs (both implemented and announced); reviewing the operations of the Office of 

Financial Stability (OFS), which administers TARP; and recommending changes to TARP 

programs and procedures to increase transparency and effective oversight and decrease the 

potential for fraud, waste and abuse. SIGTARP expends substantial time and resources on its 

reports to Congress, which are designed to be the comprehensive reference concerning TARP 

activities for policy makers, Congress and the American people. SIGTARP’s reports satisfy the 

requisite reporting requirements of SIGTARP’s authorizing statute by detailing its operations; 

describing the categories of troubled assets purchased or otherwise procured by Treasury; 

explaining the reasons Treasury deemed it necessary to purchase each troubled asset; listing each 

financial institution from which such troubled assets were purchased; listing and detailing 

biographical information on each person or entity hired to manage such troubled assets; 

estimating the total amount of troubled assets purchased, the amount of troubled assets held, the 

amount of troubled assets sold, and the profit or loss incurred on each sale or disposition of each 

such troubled asset; and listing the insurance contracts issued. These quarterly reports are 

available at http://www.sigtarp.gov/reports.shtml. 

To date, SIGTARP’s quarterly reports include 66 detailed recommendations to improve TARP 

programs and procedures. Treasury has adopted many of these recommendations, and Congress 

has effectively required OFS to implement several that it has rejected. For example, 

recommendations included in SIGTARP’s April 21, 2009 Quarterly Report to Congress were 

largely adopted and enacted into law by section 402 of P.L. 111-22. SIGTARP’s January 2011 

Quarterly Report to Congress includes a series of recommendations concerning, among other 

things, enhancing transparency, promoting effectiveness and the prevention and detection of 

fraud in connection with TARP and its components. 

Investigative Activities: SIGTARP’s Investigations Division (ID) has developed into a 

sophisticated white-collar law enforcement agency. Currently, ID has 142 open criminal and 

civil investigations, which concern suspected TARP fraud, accounting fraud, securities fraud, 

insider trading, bank fraud, mortgage fraud, mortgage servicer misconduct, fraudulent advancefee schemes, public corruption, false statements, obstruction of justice, theft of trade secrets, 

money laundering, and tax-related investigations. Although the majority of SIGTARP’s 

investigative activities remain confidential, highlights from several cases that have been brought 

as the result of SIGTARP’s investigations include the following. 

• Colonial Bancgroup/Taylor, Bean & Whitaker: On June 15, 2010, SIGTARP, the Federal 

Bureau of Investigation (FBI), the Office of the Inspector General for the Federal Deposit 

Insurance Corporation (FDIC OIG), Office of Inspector General (OIG), and the Department 

of Housing and Urban Development (OIG) executed an arrest warrant for Lee Bentley 

Farkas, the former chairman of Taylor, Bean & Whitaker (TBW), a private mortgage lending 

SIGTARP - 5 
company, in connection with a scheme involving Colonial Bancgroup (Colonial), a large 

regional bank that was, until its demise in the fall of 2009, TBW’s largest lender. 

In the fall of 2008, Colonial applied for $570 million in taxpayer funding through the 

TARP’s Capital Purchase Program (CPP). As with all CPP applications, Colonial submitted 

financial data and filings to Federal bank regulators. Based on these representations, 

Treasury conditionally approved Colonial’s TARP application for $553 million, contingent 

on, among other things, Colonial’s raising $300 million in private capital. A review of the 

circumstances of Colonial’s application and its announcement that it had received TARP 

approval led SIGTARP to open an investigation in concert with the Securities and Exchange 

Commission (SEC). In April 2009, in a filing with the SEC, Colonial announced that it had 

met its final condition to receive funding based on Farkas’ representation that he led an 

investment group that had raised $300 million to invest in Colonial. 

Within days of this announcement, SIGTARP issued subpoenas to both Colonial and TBW, 

and, over the course of the next several months, SIGTARP and its partners uncovered the 

massive alleged fraud at both Colonial and TBW, despite attempts by members of the 

conspiracy to destroy documents called for by SIGTARP’s subpoena. SIGTARP alerted 

Treasury of its investigation to assure that no TARP funds would be disbursed to Colonial, 

and referred the case to the Department of Justice (DOJ) for prosecution. Farkas was 

charged in the Eastern District of Virginia in a 16-count indictment, including conspiracy to 

commit bank, wire and securities fraud; bank fraud; wire fraud; and securities fraud. Among 

other things, Farkas is charged for his role in attempting to steal $553 million in TARP funds 

through Colonial’s fraudulent CPP application. Ultimately, Colonial did not receive any 

TARP funds. 

• The Park Avenue Bank: On March 15, 2010, Charles Antonucci, the former President and 

Chief Executive Officer of The Park Avenue Bank, was charged by the United States 

Attorney’s Office for the Southern District of New York with offenses including self-dealing, 

bank bribery, embezzlement of bank funds, and bank, mail and wire fraud, among others. In 

particular, Antonucci allegedly attempted to steal $11 million of TARP funds by, among 

other things, making fraudulent claims about the bank’s capital position. These charges mark 

the first time an individual has been criminally charged with attempting to steal TARP funds. 

According to the allegations, Antonucci falsely represented that he had personally invested 

$6.5 million in The Park Avenue Bank to improve its capital position. As set forth in the 

charges, however, the funds were actually borrowed from the Park Avenue Bank itself and 

reinvested as part of an undisclosed “round-trip” transaction. The complaint further alleges 

that this fraudulent transaction was touted by The Park Avenue Bank in support of its 

application for TARP funds as evidence of its supposedly improving capital position. 

• Bank of America: On February 4, 2010, the New York Attorney General charged Bank of 

America, its former Chief Executive Officer Kenneth D. Lewis, and its former Chief 

Financial Officer Joseph L. Price with civil securities fraud. According to the allegations, in 

order to complete a merger between Bank of America and Merrill Lynch & Co., Inc. (Merrill 

Lynch), the defendants failed to disclose to shareholders spiraling losses at Merrill Lynch. 

Additionally, after the merger was approved, it is alleged that Bank of America made 

misrepresentations to the Federal Government in order to obtain tens of billions of dollars in 

SIGTARP - 6 
TARP funds. The investigation was conducted jointly by the New York Attorney General’s 

Office and SIGTARP, and the case remains pending in New York state court. 

SIGTARP also assisted the SEC with its Bank of America investigation. On February 22, 

2010, the Honorable Jed S. Rakoff, United States District Judge for the Southern District of 

New York, approved a $150 million civil settlement between the SEC and Bank of America 

to settle all outstanding SEC actions against the firm. 

• Nations Housing Modification Center: On March 19, 2010, Glenn Steven Rosofsky was 

arrested by agents from SIGTARP and the Internal Revenue Service, Criminal Investigation 

Division and charged by the U.S. Attorney’s Office for the Southern District of California 

with one count of conspiracy to commit wire fraud and money laundering and one count of 

money laundering. Separate information the same day charged Michael Trap with conspiracy 

to commit fraud and money laundering. As set forth in the charges, Rosofsky, Trap, and 

others operated a telemarketing firm, ostensibly to assist delinquent homeowners with loan 

modification services. Operating under the names “Nations Housing Modification Center” 

and “Federal Housing Modification Department,” Rosofsky and Trap took advantage of the 

publicity surrounding the Administration’s mortgage modification efforts under the TARPsupported Making Home Affordable program and are alleged to have used fraudulent 

statements to induce customers to pay $2,500 – $3,000 each to purchase loan modification 

services that were not actually provided. It is alleged in court documents that the fraud 

grossed more than $1 million. Trap pled guilty to the charges listed in his March 19 

information the following day. The case against Rosofsky is pending. 

• Mount Vernon Money Center: On March 11, 2010, the U.S. Attorney’s Office for the 

Southern District of New York indicted Robert Egan, president, and Bernard McGarry, chief 

operating officer, of the Mount Vernon Money Center (MVMC) with bank fraud for 

allegedly stealing $50 million entrusted to their company. MVMC engaged in various cash 

management businesses, including replenishing cash in more than 5,300 automated teller 

machines owned by banks and other financial institutions. According to the charges, from 

2005 through February 2010, Egan and McGarry solicited and collected hundreds of millions 

of dollars from MVMC’s clients on the false representations that they would not commingle 

clients’ funds or use the money for purposes other than those specified in the various 

contracts with their clients. Egan and McGarry misappropriated their clients’ money — 

including the funds of several institutions in which the American taxpayer was an investor 

through TARP — to fund tens of millions of dollars in operating losses in MVMC’s 

businesses, to repay outstanding client obligations, and to enrich themselves at their clients’ 

expense. SIGTARP agents assisted with the investigation. A trial date remains to be set. 

Audit Activities: SIGTARP’s Audit Division (AD) conducts, supervises, and coordinates 

programmatic audits with respect to Office of Financial Stability operation of TARP and 

recipients’ compliance with their obligations under relevant law and contracts; evaluates TARP 

policies and procedures; and provides technical assistance to Treasury. With respect to auditing, 

AD is designed to provide SIGTARP with maximum flexibility in the size, timing, and scope of 

audits so that, without sacrificing the rigor of the methodology audit results, whenever possible, 

can be generated rapidly both for general transparency’s sake and so that the resulting data can 

SIGTARP - 7 
be used to improve the operations of the fast-evolving TARP. To date, AD has issued thirteen 

audit reports; highlights from FY 2010 reports are as follows: 

• Original CPP and Bank of America Investments: In October of 2009, SIGTARP released an 

audit examining the review and approval process associated with TARP assistance to the first 

nine CPP recipients, with emphasis on additional assistance to Bank of America 

subsequently authorized under Targeted Investment Program and the Asset Guarantee 

Program. The audit concluded that Treasury, the Federal Reserve, and the FDIC 

implemented programs designed to help prevent a further deterioration of the economy and a 

significant risk of financial market collapse. The audit also found that Treasury and other 

regulators’ descriptions of the financial conditions of the first nine institutions as “healthy” 

were inconsistent with the private beliefs of decision makers at Treasury and the Federal 

Reserve, and later proved to be inaccurate. In addition to the basic transparency concern that 

this inconsistency raises, by stating expressly that the “healthy” institutions would be able to 

increase overall lending, Treasury created unrealistic expectations about the institutions’ 

conditions and their ability to increase lending. Treasury lost credibility when lending at 

those institutions did not in fact increase and when subsequent events — the further 

assistance needed by Citigroup and Bank of America being the most significant examples — 

demonstrated that at least some of those institutions were not in fact healthy. 

• Federal Agencies Oversight of American International Group, Inc. Executive Compensation: 

SIGTARP also released in October of 2009, an audit report that examined the extent of the 

knowledge of and oversight by officials from the Federal Reserve, New York (FRBNY), and 

Treasury over compensation programs at AIG, and, specifically, $168 million in retention 

award payments made to employees of AIG Financial Products Corp. (AIGFP) in March 

2009. The audit concluded, among other things, that Treasury officials effectively 

outsourced oversight of AIG’s compensation systems to the Federal Reserve, failing to take 

any independent steps to assess broadly the amount or scope of AIG’s compensation 

obligations despite the $40 billion TARP investment in November 2008. As a result, senior 

Treasury officials were apparently not aware of the details of the March 2009 AIGFP 

payments until February 28, 2009. This meant that Treasury invested tens of billions of 

taxpayer dollars in AIG, designed AIG’s contractual executive compensation restrictions, and 

helped manage the Government’s majority stake in AIG for several months, all without 

having any detailed information about the scope of AIG’s very substantial, and very 

controversial, executive compensation obligations. Treasury’s failure in oversight potentially 

resulted in a missed opportunity to avoid the explosively controversial events surrounding the 

AIGFP retention payments that followed and created such considerable public and 

Congressional concern. 

• AIG Counterparty Payments: On November 10, 2008, the Federal Reserve and Treasury 

announced the restructuring of the Government’s financial support to AIG. As part of this 

restructuring, a special purpose vehicle, Maiden Lane III, purchased certain assets underlying 

AIGFP’s Credit Default Swap (CDS) contracts from its counterparties using $24.3 billion of 

FRBNY financing in combination with a $5.0 billion equity investment from AIG. In 

exchange for this payment and being permitted to retain $35 billion in collateral payments 

already made (thus effectively being paid par or face value for the underlying assets), the 

SIGTARP - 8 
counterparties agreed to terminate their CDS contracts with AIGFP. SIGTARP’s audit, 

which was issued in November of 2009, found, among other things, that the terms of the 

original FRBNY financing did not result from independent analysis, but were simply an 

adoption of the term sheet from an aborted private financing discussion, and those terms, 

which included an onerous effective interest rate of 11 percent, made modification of the 

terms and further Government action inevitable. The audit also found that, in structuring 

Maiden Lane III, FRBNY attempted to obtain concessions, or “haircuts” from the CDS 

counterparties — and one counterparty was prepared to take a modest haircut — but the 

FRBNY’s negotiating strategy was hampered by a series of policy decisions that severely 

limited its ability to obtain concessions, including its decision not to accept concessions 

unless concessions could be obtained from all of the counterparties, its refusal to use its 

leverage as regulator to some of the institutions involved, and its basic discomfort with 

interfering with the sanctity of the counterparties’ contractual rights. These policy choices 

led directly to a negotiating strategy with the counterparties that even then-FRBNY President 

Geithner acknowledged had little likelihood of success. The audit further noted that although 

Mr. Geithner has denied that his intent was to benefit the counterparties, the overall structure 

of the AIG bailout resulted in AIG’s counterparties receiving tens of billions of dollars they 

likely would not have otherwise received had AIG gone into bankruptcy. 

• Additional Insights on Use of TARP Funds: In December of 2009, SIGTARP issued an audit 

conducted as a follow-up to SIGTARP’s earlier audit on TARP recipients’ use of TARP 

funds. The follow-up audit examined the use of TARP funds by six institutions — two 

automobile manufacturers (GM and Chrysler), two automobile financing firms (GMAC Inc. 

and Chrysler Financial Services Americas LLC), and two life insurance companies (The 

Hartford Financial Services Group, Inc. and Lincoln National Corporation). The six 

companies were able to provide useful insight on their actual or planned use of TARP funds. 

• HAMP: A SIGTARP audit report published in March of 2010, examined the design and 

operation of HAMP in detail. The audit first found that Treasury’s publicly touted measure of 

success, the number of short-term trial modification offers that have been made to struggling 

homeowners, was largely meaningless, and that Treasury needs to clearly identify the total 

number of homeowners it actually intends to help stay in their homes through sustainable 

permanent mortgage modifications. The audit also found that the limited results to date 

stemmed from, among other things, flaws in HAMP’s design, rollout, and marketing that 

diminished the program’s effectiveness in providing sustainable relief to at-risk homeowners. 

In its original version, HAMP involved frequent and time-consuming revisions of guidelines 

that created confusion and delay; permitted reliance on unverified verbal borrower data that 

slowed down conversions to permanent modifications; suffered from insufficient outreach to 

the American public about eligibility and benefits; and did not fully address risk factors for 

re-defaults among participating borrowers, including negative equity and high total debt 

levels even after modification. Without addressing the dangers of re-default, HAMP risks 

merely spreading out the foreclosure crisis at significant taxpayer expense. While this may 

benefit financial institutions that would not have to recognize the losses from immediate 

foreclosures, it would do little to accomplish EESA’s explicit purpose to “help families keep 

their homes.” 

SIGTARP - 9 
• Warrants Sales: In May of 2010, SIGTARP released an audit that analyzed the processes and 

procedures Treasury has established to ensure that the Federal Government receives fair 

market value for the warrants it received in connection with TARP investments and the 

extent to which Treasury has controls in place to facilitate a transparent and well-documented 

decision-making process. The audit found that Treasury’s warrants disposition process 

generally has been successful, albeit after a somewhat difficult start. However, there are two 

areas where Treasury could improve its procedures to ensure more consistent, transparent 

decision-making. First, Treasury lacks detailed documentation supporting the decisionmaking process of its Warrant Committee, and SIGTARP recommended that Treasury 

enhance the detail captured in the meeting minutes of its Warrant Committee. Second, 

Treasury does not document conversations with its counterparties, nor does Treasury have 

procedures in place to control the amount of information shared with them. 

• Monitoring Compliance: In June 2010, SIGTARP issued an audit that examined the extent 

to which Treasury follows a clear, consistent, and effective process to ensure that companies 

receiving exceptional assistance under TARP adhere to applicable requirements. SIGTARP 

found that, although some progress has been made since an earlier review of internal 

controls, Treasury’s implementation of its compliance strategy has been too slow, Treasury 

relies too heavily on the companies to gauge their compliance, and Treasury has been 

inadequately staffed. 

• Automobile Dealership Closures: In July 2010, SIGTARP published an audit, as requested 

by Senator Jay Rockefeller and Representative David Obey, that evaluated the role of 

Treasury’s Auto Team in the decision to reduce dealership networks, the extent to which GM 

and Chrysler developed and documented processes for deciding which dealership to 

terminate and which to retain, and to what extent the dealership reductions are expected to 

lead to cost savings to GM and Chrysler. SIGTARP found that although there was broad 

consensus concerning the need to close dealerships, there were dissenting expert opinions 

concerning the timing and location of the reductions; that job losses were not a significant 

factor in the Auto Team’s decision-making; and cost savings were not considered. 

These audits may be reviewed in their entirety at http://www.sigtarp.gov/audits.shtml. 

Leveraged Oversight Resources: SIGTARP actively coordinates its activities with other 

oversight and law enforcement bodies. In addition to meeting extensively with Treasury and the 

Federal Reserve concerning program proposals, SIGTARP regularly and continually coordinates 

with the Financial Stability Oversight Board, the Congressional Oversight Panel, and the 

Government Accountability Office concerning our overlapping oversight responsibilities under 

EESA. Additionally, SIGTARP has initiated several efforts designed to augment audit and 

investigative resources. For example, SIGTARP founded the TARP Inspector General Council 

(TARP-IG Council), which includes the Comptroller General, the Inspector General for 

Treasury, the Federal Reserve Board, the FDIC, SEC, the Federal Housing Finance Agency, 

HUD, the Small Business Administration, and the Treasury Inspector General for Tax 

Administration. The TARP-IG Council meets regularly to discuss developments in TARP and 

coordinate interconnected audit and investigative issues. Similarly, SIGTARP organized and 

chairs the Term Asset-Based Securities Loan Facility/Public-Private Investment Program 

SIGTARP - 10 
(TALF/PPIP) Task Force, which includes the Inspector General for the Federal Reserve Board, 

the Federal Bureau of Investigation (FBI), the Financial Crimes Enforcement Network 

(FinCEN), U.S. Immigration and Customs Enforcement, the Internal Revenue Service Criminal 

Investigation Division (IRS-CID), the SEC, and the United States Postal Inspection Service 

(USPIS). The task force members participate in regular briefings about the TALF/PPIP, 

collectively identify areas of fraud vulnerability, engage in training exercises, and coordinate 

audit and investigative efforts. SIGTARP has also forged partnerships and launched joint 

investigations with the FBI, the SEC, IRS-CID, and the Federal Trade Commission, among 

others. 

On February 24, 2010, SIGTARP hosted the inaugural meeting of the Rescue Fraud Working 

Group. President Obama established the Financial Fraud Enforcement Task Force (“FFETF”) 

“to investigate and prosecute significant financial crimes and other violations relating to the 

current financial crisis and economic recovery efforts, recover the proceeds of such crimes and 

violations, and ensure just and effective punishment of those who perpetrate financial crimes and 

violations.” A component of FFETF is the Rescue Fraud Working Group, co-chaired by Special 

Inspector General Neil M. Barofsky, Assistant Attorney General Lanny A. Breuer of the 

Criminal Division of the DOJ, and Timothy G. Massad, chief counsel of OFS. Attendees at the 

inaugural meeting included officials from agencies across the Federal Government, including 

OFS; DOJ (Civil, Criminal, and Tax Divisions); the U.S. Attorneys’ Offices for the Northern and 

Central Districts of California, the Eastern District of Virginia, the Eastern and Southern 

Districts of New York, and the District of New Jersey; the Office of the Comptroller of the 

Currency; the Office of Thrift Supervision; the FinCEN; USPIS; the Board of Governors of the 

Federal Reserve; the SEC; and the FBI. 

 

SIGTARP - 11 
Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands 

Special IG for TARP FTE Amount

FY 2010 Enacted 133 $23,300

FY 2011 Annualized CR Level 192 $36,300

Changes to Base: 

Adjustment to Reach Policy Level: - $13,068 

Adjustment to Reach FY 2011 President's Policy - $13,068 

Maintaining Current Levels (MCLs): - $454 

Maintaining Current Levels - $454 

Efficiencies, Savings & Base Reductions: - ($2,448) 

Efficiencies, Savings and Reductions - ($2,448) 

Subtotal FY 2012 Changes to Base - $11,074 

Total FY 2012 Base 192 $47,374

Total FY 2012 Request 192 $47,374

2A – Budget Increases and Decreases Description 

Adjustment to Reach Policy Level 

Adjustment to Reach FY 2011 President's Policy +$13,068,000 / +0 FTE 

Adjustment to Reach FY 2011 President's Policy 

Maintaining Current Levels (MCLs) 

Maintaining Current Levels +$454,000 / +0 FTE 

Funds are required for inflation adjustments in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment and health benefits and the increase in Federal 

Employee Retirement System participation. No inflation adjustment is requested for pay in FY 

2012. 

Efficiencies, Savings & Base Reductions 

Efficiencies, Savings and Reductions -$2,448,000 / +0 FTE 

A reduction from the base level will be absorbed through general operating costs. 

 

SIGTARP - 12 
2.2 – Operating Levels Table 

Dollars in Thousands 

Special IG for TARP

FY 2010

Enacted

FY 2011

Annualized CR 

Level

Proposed 

Reprogram

mings

FY 2011

Proposed Operating 

Level

FY 2012 

Request

FTE 133 192 - 192 192

Object Classification

11.1 - Full-time permanent $9,591 $14,782 $0 $14,782 $17,339

11.3 - Other than full-time permanent $1,903 $1,682 $0 $1,682 $1,766

11.5 - Other personnel compensation $0 $0 $0 $1,416 $1,741

11.6 - Overtime $0 $1,416 $0 $0 $0

11.7 - Other Personnel Compensation $1,047 $449 $0 $449 $413

12 - Personnel benefits $3,454 $4,734 $0 $4,734 $5,346

21 - Travel and transportation of 

persons $0 $963 $0 $963 $1,000

23 - Rent, Communications and 

Utilities $1,425 $0 $0 $0 $0

23.3 - Communication, utilities, and 

misc charges $0 $0 $0 $0 $172

24 - Printing and reproduction $0 $0 $0 $0 $195

25.1 - Advisory and assistance 

services $4,321 $5,115 $0 $5,115 $7,254

25.2 - Other services $0 $0 $0 $0 $741

25.3 - Other purchases of goods and 

services from Govt. accounts $1,559 $7,159 $0 $7,159 $9,674

26 - Supplies and materials $0 $0 $0 $0 $410

31 - Equipment $0 $0 $0 $0 $1,223

42 - Insurance claims and indemnities $0 $0 $0 $0 $100

Total Budget Authority $23,300 $36,300 $0 $36,300 $47,374

Budget Activities

Audit $9,900 $15,609 $0 $15,609 $20,371

Investigations $13,400 $20,691 $0 $20,691 $27,003

Total Budget Authority $23,300 $36,300 $0 $36,300 $47,374

 

SIGTARP - 13 
2.3 – Appropriations Detail Table 

Dollars in Thousands 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Appropriated Resources:

Audit 48 $9,900 61 $9,900 78 $15,609 78 $20,371 27.87% 105.77%

Investigations 64 13,339 72 13,400 114 20,691 114 27,003 58.33% 101.51%

Subtotal New Appropriated Resources 112 $23,239 133 $23,300 192 $36,300 192 $47,374 44.36% 103.32%

Other Resources:

Available multi-year/no-year funds 9,007 20,000 13,068 

Available multi-year PPIP funds 1,238 5,000 1,671 1,708

Subtotal Other Resources 0 $10,245 0 $25,000 0 $14,739 0 $1,708 -93.17%

Total Resources Available for Obligation 112 $33,484 133 $48,300 192 $51,039 192 $49,082 44.36% 1.62%

Resources Available for Obligation FY 2010 

Obligations

FY 2010 

Enacted

 FY 2011 

Annualized 

CR Level

FY 2012 

Request

% Change 

FY 2010 to 

FY 2012

2B – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

SPECIAL INSPECTOR GENERAL FOR THE TROUBLED 

ASSET RELIEF PROGRAM 

Federal funds 

SALARIES AND EXPENSES 

For necessary expenses of the Office of the Special Inspector 

General in carrying out the provisions of the Emergency 

Economic Stabilization Act of 2008 (Public Law 110-343), as 

amended, $47,374,000. 

 

2C – Legislative Proposals 

SIGTARP does not have any legislative proposals for FY 2012. 

SIGTARP - 14 
Section 3 – Budget and Performance Plan 

This table lists all FY 2012 resources by strategic goal, objective and outcome outlined in the FY 

2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan provides a 

description of what the agency intends to accomplish over the next five years. 

For detailed information about the FY 2007-2012 Treasury Strategic Plan, please go 

to: http://www.treasury.gov/about/budget‐performance/strategic‐plan/Pages/index.aspx

3.1 – Budget by Strategic Outcome 

Dollars in Thousands 

Treasury Strategic Outcome FY 2010 

Enacted

FY 2011 

Annualized 

CR Level

FY 2012 

Request

% Change 

FY10 to FY12

 Exceptional accountability and transparency 23,300 36,300 $47,374 103.32% 

Total $23,300 $36,300 $47,374 103.32%

3A - Audit ($20,371,000 from direct appropriations) 1

 The Audit Division (AD) conducts, 

supervises, and coordinates programmatic audits with respect to Treasury’s operation of TARP 

and the recipients’ compliance with their obligations under relevant law and contracts; evaluates 

TARP policies and procedures; and provides technical assistance to Treasury. With respect to 

auditing, the division is designed to provide SIGTARP with maximum flexibility in the size, 

timing, and scope of audits so that, without sacrificing the rigor of the methodology, audit 

results, whenever possible, can be generated rapidly both for general transparency’s sake and so 

that the resulting data can be used to improve the operations of the fast-evolving TARP. For FY 

2012, AD expects to initiate an average of four audits per quarter. 

Regarding policy review and technical assistance, a particular focus of AD is ensuring that 

appropriate internal controls are in place and are complied with, both by Treasury in its 

management of TARP and by the recipients of TARP funds, including vendors and the entities in 

which money is invested. Where controls or compliance are found to be lacking, or where 

particular aspects or policies are found ineffective at reaching TARP’s goals, AD assists the SIG 

to fashion recommendations to resolve such issues. 

 

1

 In addition to the SIG and his central office staff (“CO”), SIGTARP is comprised of the AD, the ID, the 

Operations Division (“OD”), and the Office of General Counsel. The basic statutory mission of SIGTARP (i.e., 

audit and investigation) is largely carried out by AD and ID. The CO, OD, and DGC lend support AD and ID as they 

fulfill the mission, and, thus, CO, OD and DGC costs have been apportioned among AD and ID. 

SIGTARP - 15 
3.2.1 Audit Budget and Performance Plan 

Audit Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Obligated Annualized CR 

Level

Request

 Appropriated Resources $0 $0 $9,900 $15,609 $20,371

 Reimbursable Resources $0 $0 $0 $0 $0

Total Resources $0 $0 $9,900 $15,609 $20,371

Budget Activity Total $0 $0 $9,900 $15,609 $20,371

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Congressional Requests for Testimony Completed (Ot)(Units) N/A N/A 7.0 4.0 4.0

Number of Completed Audit Products (Ot)(Units) N/A 3.0 9.0 12.0 12.0

Percent of Recommendations Implemented (Oe)(%) N/A 100.0 43.0 70.0 70.0

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, 

DISC - Discontinued, and B - Baseline

Description of Performance: As discussed in section 1B, AD has issued 13 audit projects and 

initiated 26 audits. SIGTARP’s audit team was not fully staffed for fiscal year 2010 and yet the 

audit work increased, requiring more in-depth analysis. As SIGTARP’s audit division staffs to 

full capacity, the production of a greater number of audit reports in anticipated in FY 2011 and 

FY 2012. SIGTARP also anticipated a higher rate of implementation from OFS in FY 2010. 

SIGTARP will continue to make recommendations to improve the efficiency and effectiveness 

of TARP and will continue to work with OFS to implement these recommendations. In addition, 

SIGTARP anticipates that Congress will continue to have interest in SIGTARP’s work and will 

continue to request testimonies in FY 2011 and FY 2012. 

3B - Investigations ($27,003,000 from direct appropriations): Investigations Division (ID) 

supervises and conducts criminal and civil investigations into those persons and entities, whether 

inside or outside of government, who waste, steal, or abuse TARP funds. The division is 

comprised of experienced financial and corporate fraud investigators, including not only special 

agents, but also forensic analysts and, critically, attorney advisors. This structure provides 

SIGTARP with a broad array of expertise and perspectives in developing even the most 

sophisticated investigations. In the interests of maximizing criminal and civil enforcement, ID 

coordinates closely with other law enforcement agencies with the goal of forming law 

enforcement partnerships, including task force relationships, across the Federal government to 

leverage SIGTARP’s expertise and unique position. 

ID also implements SIGTARPs Hotline which accepts and processes telephone, e-mail, website, 

and in-person complaints. One of SIGTARP's primary investigative priorities is to operate the 

SIGTARP Hotline, thus providing a simple, accessible way for the American public to report 

SIGTARP - 16 
concerns, allegations, information, and evidence of violations of criminal and civil laws in 

connection with TARP. From its inception in February 2009 through December 31, 2010, the 

SIGTARP Hotline has received and analyzed more than 24,000 Hotline contacts. A substantial 

number of SIGTARP’s investigations were generated in connection with Hotline tips. The 

SISTARP Hotline can receive information anonymously, and the confidentiality of 

whistleblowers is protected to the fullest extent possible. 

3.2.2 Investigations Budget and Performance Plan 

Investigations Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Obligated Annualized CR 

Level

Request

 Appropriated Resources $0 $0 $13,400 $20,691 $27,003

 Reimbursable Resources $0 $0 $0 $0 $0

Total Resources $0 $0 $13,400 $20,691 $27,003

Budget Activity Total $0 $0 $13,400 $20,691 $19,703

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Percentage of Hotline Complaints Referred for Investigation or to 

OFS within 14 days of Receipt (E)(%)

N/A 77.0 74.0 65.0 70.0

Percentage of Investigations Accepted by Prosecutors (Oe)(%) N/A 95.0 100.0 55.0 55.0

Percentage of Preliminary Investigations Converted to Full 

Investigations (Oe)(%)

N/A 50.0 80.0 40.0 N/A

Percentage of cases that are joint agency/task force 

investigations (Oe)(%)

N/A 60.0 50.0 35.0 40.0

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, 

DISC - Discontinued, and B - Baseline

Description of Performance: In FY 2010, the Investigations Division opened 117 investigations 

and closed 41 cases. There are 142 active investigations as of the end of December 31, 2010. 

For FY 2012, although it is difficult to forecast for a variety of reasons, SIGTARP anticipates 

opening 95 new investigations. These investigations concern suspected TARP fraud, accounting 

fraud, securities fraud, insider trading, bank fraud, mortgage fraud, mortgage-servicer 

misconduct, fraudulent advance-fee schemes, public corruption, false statements, obstruction of 

justice, trade secrets theft, money laundering, and tax-related investigations. 

The division expects to have grown to 82 FTE’s by the end of the fiscal year. These FTEs hail 

from many Federal agencies including the Department of Justice, FBI, IRS-Criminal 

Investigations, Department of Energy-OIG, US Postal Inspections, HUD-OIG, Air Force Office 

of Special Investigations, US Secret Service, FDIC-OIG, US Army Criminal Investigations 

SIGTARP - 17 
SIGTARP - 18 

Command, Navy Criminal Investigations Service, Treasury-OIG and the Securities and 

Exchange Commission. 

As the Division has expanded so has the depth and complexity of the cases under investigation. 

Consequently these highly complex cases require considerable investment in investigative 

resources. Accordingly, the performance measures for FY2012 may need to be adjusted to 

reflect that some preliminary cases may sit longer prior to closure or conversion to a full 

investigation depending on available investigative resources. While the FY2010 percentage of 

80 percent is an improvement on the last fiscal year the impact on our performance measure of 

some highly significant cases is difficult to quantify at this time. 

For detailed information about each performance measure, including definition, verification and 

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
Section 4 – Supporting Materials 

4A – Human Capital Strategy Description 

The SIGTARP’s strategic management of human capital is consistent with its mission, vision 

and priorities and supports Treasury’s strategic goal of managing the U.S. Government’s 

Finances as they relate to the TARP program effectively. SIGTARP anticipates that it will reach 

steady state (i.e., full staffing level, permanent office space, and most critical contracts in place) 

in the third quarter of FY 2011. Moreover, SIGTARP, pursuant to section 121(k) of EESA, as 

amended, is a temporary organization that is scheduled to cease operations on the date that the 

last troubled asset is disposed or the last guarantee contract expires, whichever is later. 

SIGTARP uses various hiring flexibilities such as Direct Hiring Authority and dual 

compensation reduction (salary offset) for re-employed annuitants. Direct Hiring Authority and 

the authority to re-employ retired annuitants without a salary offset has aided SIGTARP in 

aggressively recruiting the highly skilled, qualified applicants critical to SIGTARP meeting 

Congressional mandates. 

SIGTARP continues to find ways to strengthen recruitment efforts through its continual 

development of a proactive working relationship with managers and supervisors. HR Specialist 

consults with managers/supervisors frequently to discuss position management and position 

classification issues; recruitment strategies; and provide information on hiring flexibilities and 

incentives that are available. 

SIGTARP recognizes that improvements in the hiring processes are an on-going effort, and 

while much progress has been made – emphasis on achieving greater efficiencies and 

improvements continue. This effort includes working with minority schools and institutions to 

develop relationships; posting job vacancies in various professional magazines; focusing on 

Schedule A, Persons with Disability appointing authority, and increasing its veterans 

employment efforts by partnering with the Department of Treasury’s Veterans Employment 

Program Office (VEPO). This program offers assistance with locating interns as well as 

conducting veteran’s workshops for managers and supervisors. The workshops will meet the 

mandatory hiring manager training requirements. 

In addition, SIGTARP participates in the “Take Your Child to Work Program” as a means to 

support the objectives of the White House Council on Women and Girls (CWG). 

SIGTARP - 19 
4.1 - Summary of IT Resources Table

Major IT Investments / Funding Source Budget Activity

FY 2009 

Enacted

FY 2010 

Enacted

% Change 

from FY 2009 

to FY 2010

FY 2011 

Annualized

CR Level

FY 20

Reque

Audit and 

Investigations $0 $457 100.0% $1,860 $1,26

Subtotal, Major IT Investments $0 $457 100.0% $1,860 $1,26Continuing Operating Costs

Audit and 

Investigations $0 $478 100.0% $700 $700 

Other Non-Major Costs

Audit and 

Investigations $0 $322 100.0% $342 $342 

Non-Major IT Investments $0 $800 100.0% $1,042 $1,04Infrastructure Investments $0 $2,678 100.0% $3,838 $2,98Enterprise Architecture $0 $0 0.0% $0 $0 Enterprise Identity and Access Management $0 $0 0.0% $0 $0 Total IT Investments $0 $3,935 100.0% $6,740 $5,29(Dollars in Thousands)

SIGTARP - 20 
4B – Information Technology Strategy 

IT funding has been critical in enabling SIGTARP to fulfill its mission of transparency, 

coordinated oversight, and robust enforcement. Presently, SIGTARP is utilizing the services 

provided by Treasury Departmental Offices as part of Treasury’s headquarters operations. 

SIGTARP relies on the Treasury’s Office of the CIO and Departmental Offices Operations to 

provide a secure, independent infrastructure that is fully capable of supporting the mission and 

administrative requirements of a completely functional, bureau-level government agency with 

the technology requirements appropriate to an audit and investigative organization. SIGTARP is 

reviewing those requirements with Treasury Departmental Offices and other government 

agencies to determine best course of action to complete those requirements. The major IT 

investments are for acquisition, installation, integration, training and modifications of mission 

systems such as Hotline information management, investigative case management, forensic 

system management, audit management, records management, asset management and training 

management which are not normally provided by Treasury’s shared services operations. As a 

temporary agency, SIGTARP expects only maintenance and routine enhancements and 

modifications to be required on an ongoing basis after a steady state of IT systems and operations 

is intended to be achieved in FY 2011. The significant infrastructure investments deferred in FY 

2010 are expected to be expended in FY 2011 and FY 2012. These investments support the 

continued establishment of SIGTARP’s capabilities, including infrastructure planning, 

installation of cabling to desktops, computer facility, telephone facility data storage, wireless 

antenna system, additional cooling and backup power and the connections for one or more 

external voice and data providers for its headquarters and remote office structure. After these 

initial start-up years, funds are budgeted for standard upgrades in capacity and functionality for 

headquarters and for remote office operations. 

Accordingly, SIGTARP’s IT strategy is to establish its mission systems and IT infrastructure in 

the initial years of its operation, then maintain its IT investment beginning in FY 2012 to 

updates, modifications, maintenance and equipment refreshment consistent with the priorities of 

the mission and its role as a temporary agency. 

SIGTARP - 21