[Comments on Legal Status of Certain FHLBB Entities]

Pursuant to a congressional request, GAO reviewed the legality of the Federal Home Loan Bank Board's (FHLBB) actions in establishing and placing certain of its functions in entities that consider themselves not subject to salary limitations for federal employees. GAO held that FHLBB: (1) improperly created the Office of Regulatory Policy, Oversight and Supervision, the Office of Finance, and the Federal Asset Disposition Association as entities whose employees were not subject to the salary limitations, since those employees were federal employees; and (2) properly determined that employees of the Federal Home Loan Bank System Publication Corporation and the Bank System Office of Education were not federal employees and not subject to the salary limitations.