Corporate 

Management V.

Control

The FDIC uses several means to 

maintain comprehensive internal 

controls, ensure the overall 

effectiveness and efficiency of 

operations, and otherwise comply as 

necessary with the following federal 

standards, among others:

♦ Chief Financial Officers’ Act 

(CFO Act)

♦ Federal Managers’ Financial 

Integrity Act (FMFIA)

♦ Federal Financial Management 

Improvement Act (FFMIA)

♦ Government Performance and 

Results Act (GPRA)

♦ Federal Information Security 

Management Act (FISMA)

♦ OMB Circular A-123

♦ GAO’s Standards for Internal 

Control in the Federal Government

As a foundation for these efforts, 

the Corporate Management Control 

Branch in DOF [formerly the Office of 

Enterprise Risk Management (OERM)] 

traditionally has overseen a corporatewide program of relevant activities 

by establishing policies and working 

with management in each division 

and office in the FDIC. The FDIC has 

made a concerted effort to ensure that 

operational risks have been identified 

and that corresponding control 

needs are being incorporated into 

day-to-day operations. The program 

also requires that comprehensive 

procedures be documented, 

employees be thoroughly trained, and 

supervisors be held accountable for 

performance and results. Compliance 

monitoring is carried out through 

periodic management reviews and 

by the distribution of various activity 

reports to all levels of management. 

Conscientious attention is also 

paid to the implementation of audit 

recommendations made by the FDIC 

Office of the Inspector General, the 

GAO, the Treasury Department’s 

Special Inspector General for the 

TARP program, and other providers 

of external/audit scrutiny. The FDIC 

has received unmodified/unqualified 

opinions on its financial statement 

audits for 21 consecutive years, 

and these and other positive results 

reflect the effectiveness of the overall 

management control program.

Significantly, since the beginning of 

the financial crisis, the FDIC expanded 

the range of issues receiving close 

management scrutiny to encompass 

crisis-related challenges. As the 

severity of the crisis has subsided 

over the past two years, the focus of 

controls has shifted, specifically to 

encompass downsizing activities and 

the transfer of workloads due to the 

closing of temporary offices. 

We are developing plans for 2013 and 

beyond to ensure the continuation 

of a smooth transition of operations 

as we move toward a post-crisis 

operating environment. Among other 

things, program evaluation activities 

in the coming year will focus not only 

on new responsibilities associated 

with the Dodd-Frank Act and other 

internal organizational changes, but 

on the closing of additional temporary 

Corporate Manmen
ANNUAL REPORT 2012

satellite offices and the downsizing 

of staffing in general. Continued 

emphasis and management scrutiny 

also will be applied to contracting 

oversight, the accuracy and integrity 

of transactions, the expansion of 

performance metrics, and oversight 

of systems development efforts in 

general. 

Management Re

on FinalAc

As required under amended Section 5 

of the Inspector General Act of 1978, 

the FDIC must report information on 

final action taken by management on 

certain audit reports. The tables 

on the following pages provide 

information on final action taken by 

management on audit reports for the 

federal fiscal year period October 1, 

2011, through September 30, 2012.

Table 1

Managemet Re port on inal Ac tion on Audi ts with D

for Fiscl Ye ar 

Dollars in Thousand

Audit Reports Number of 

Reports

Disallowed 

Costs

A. Management decisions – final action not taken at beginning of period 2 $31,476

B. Management decisions made during the period 6 $30,683

C. Total reports pending final action during the period (A and B) 8 $62,15

D.

Final action taken during the period:

1. Recoveries:

(a) Collections & offsets 7 $37,971

(b) Other 0 $0

2. Write-offs 3 $23,460

3. Total of 1 & 2 71 $61,4312

E. Audit reports needing final action at the end of the period 23 $3,794

1 Three reports have both collections and write-offs, thus the total of 1(a), 1(b), and 2 is seven.

2 Amount collected in D3 included excess recoveries of $2.8 million not reflected in line E. 

3 One report had a recovery, however, one recommendation remains open; thus, the number of reports needing final action is two.

108 Corporate Ma
Table 2

Managemet Re port on inal Ac tion on udi ts wit

to Put Funds t Be tter Use fr Fisca

Dollars in Thousand

Audit Reports Number of 

Reports

Funds Put To 

Better Use

A. Management decisions – final action not taken at beginning of period 0 $0

B. Management decisions made during the period 0 $0

C. Total reports pending final action during the period (A and B) 0 $

D.

Final action taken during the period:

1. Value of recommendations implemented (completed) 0 $0

2. Value of recommendations that management concluded should not

or could not be implemented or completed 0 $0

3. Total of 1 and 2 0 $0

E. Audit reports needing final action at the end of the period 0 $0

Table 3

Audit Re prts Wi thou Final Actions but Wi th Ma

Over ne Ye ar Old or Fisca

Managemet Ac tion i

Report No. 

and Issue Date OIG Audit Finding Management Action Disallowed Costs

EVAL-11-006

09/30/2011

OIG recommends that the FDIC,

FRB, and OCC agency heads

review the matters for consideration

presented in this report and work

through the Financial Stability

Oversight Council to determine

whether the Prompt Regulatory

Action legislation or implementing

regulations should be modified. As

a recap, FDIC should increase the

minimum Prompt Corrective Action

(PCA) capital levels, and continue to

refine the deposit insurance system

for banks with assets under $10

billion to assess greater premiums

commensurate with risk-taking.

A working group is reviewing PGA

and other tools in consultation with

stakeholders to identify non-capital

indicators of potential problems and

opportunities for early supervisory

intervention. The working group’s

analysis will be presented to

Executive Management for review and

consideration.

Expected completion date:

March 31, 2012

FDIC will evaluate comments on

the agencies notices of proposed

rulemaking that would revise and

replace the agencies’ current

capital rules along with considering

modifications to the PCA capital

triggers as well as other potential

changes designed to strengthen the

PCA framework.

Expected completion date:

June 30, 2013

$0

Corporate Manmen