Tuesday, November 16, 2010
The Emergency Economic Stabilization Act of 2008 (EESA), which authorized the Secretary of the Treasury to implement the Troubled Asset Relief Program (TARP) and established the Office of Financial Stability (OFS), requires the annual preparation of financial statements for TARP, and further requires GAO to audit these statements.
GAO audited OFS’s fiscal years 2010 and 2009 financial statements for TARP to determine whether, in all material respects, (1) the financial statements were fairly stated, and (2) OFS management maintained effective internal control over financial reporting. GAO also tested OFS’s compliance with selected provisions of laws and regulations. According to the GAO's summary:
In GAO’s opinion, OFS’s fiscal years 2010 and 2009 financial statements for TARP are fairly presented in all material respects. GAO also concluded that, although internal controls could be improved, OFS maintained, in all material respects, effective internal control over financial reporting as of September 30, 2010. GAO found no reportable noncompliance in fiscal year 2010 with the provisions of laws and regulations it tested.
During fiscal year 2010, OFS sufficiently addressed the issues that resulted in a significant deficiency in fiscal year 2009 regarding OFS’s verification procedures over the data used for asset valuations such that we no longer consider this to be a significant deficiency as of September 30, 2010. In
addition, OFS addressed many of the issues related to the other significant deficiency we reported for fiscal year 2009 concerning its accounting and financial reporting processes. However, the remaining control issues along with other control deficiencies in this area that we identified in fiscal year 2010 collectively represent a continuing significant deficiency in OFS’s internal control over its accounting and financial reporting processes. While this deficiency is not considered a material weakness, it merits management’s attention.