Financial Audit: Federal Deposit Insurance Corporation Funds' 2016 and 2015 Financial Statements

What GAO Found

GAO found (1) the financial statements of the Deposit Insurance Fund (DIF) and of the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund (FRF) as of and for the years ended December 31, 2016, and 2015, are fairly presented, in all material respects, in accordance with U.S. generally accepted accounting principles; (2) although internal controls could be improved, the Federal Deposit Insurance Corporation (FDIC) maintained, in all material respects, effective internal control over financial reporting relevant to the DIF and to the FRF as of December 31, 2016; and; (3) with respect to the DIF and to the FRF, no reportable instances of noncompliance for 2016 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested. GAO's 2016 audit identified deficiencies in FDIC's information systems controls. These deficiencies, along with unresolved control deficiencies from prior audits, collectively represent a significant deficiency in FDIC's internal control over financial reporting that merits attention by those charged with governance of FDIC.

In commenting on a draft of this report, FDIC stated that it was pleased to receive unmodified opinions on the DIF's and the FRF's financial statements, and noted that GAO reported that FDIC had effective internal control over financial reporting and that there was no reportable noncompliance with tested provisions of applicable laws, regulations, contracts, and grant agreements. FDIC also noted that GAO reported deficiencies in FDIC's information systems controls that collectively represent a significant deficiency. FDIC stated that it will work to improve its internal control environment and will focus additional management attention to address and remediate the identified information system control deficiencies, recognizing the essential role a strong internal control program plays in achieving an agency's mission. Further, FDIC stated that dedication to sound financial management has been and will remain a top priority.

Why GAO Did This Study

Section 17 of the Federal Deposit Insurance Act, as amended, requires GAO to annually audit the financial statements of the DIF and of the FRF. In addition, the Government Corporation Control Act requires that FDIC annually prepare and submit audited financial statements to Congress, and provides GAO authority to perform the audit. This report responds to these requirements.

For more information, contact James R. Dalkin at (202) 512-3133 or dalkinj@gao.gov.