The General Accounting Office released a mostly positive audit of the bank and thrift insurance funds' 1997 financial statements.
The GAO said the Federal Deposit Insurance Corp.'s statements for the Bank Insurance Fund and the Savings Association Insurance Fund were "reliable," the agency's internal controls were largely effective, and no violations of law or regulation were found.
However, the GAO did identify a "significant deficiency" in the FDIC's administration of the FSLIC Resolution Fund. According to the GAO, the FDIC is miscalculating the value of securities and other equity interests in the Resolution Fund's portfolio. In one 1997 case cited by the GAO, the estimated recoveries from a portfolio were undervalued by $125 million, while another portfolio was overvalued by $26 million.