WASHINGTON - The final version of a General Accounting Office report on the management structure of the Federal Housing Finance Board, released Friday, recommended that the board increase the participation of all members in administrative decisions affecting it.
The report reiterated the majority of the findings of an early draft obtained by American Banker in January. Among the recommendations was that the board revise the powers delegated to the chairman, who, according to the report, has too much latitude to make major changes without the full board's approval.
It also criticized the handling of recent staff reductions, expressed concern about the strength of the board's examination program, and noted that the appointment of public interest directors to the Federal Home Loan banks has become increasingly politicized.
The report included a detailed response signed by Judith L. Hofmann, the director of the Finance Board's office of management. Among other things, the board took issue with the GAO's finding that the delegation of authority should be altered.
Noting that in January the five-member board considered and rejected proposed changes to the delegation of authority, Ms. Hofmann wrote that "ratification of the existing delegation reflects a belief on the part of the majority of the current board that investing in the chairman broad responsibility to administer the agency is the best method of managing the Finance Board's day-to-day operations."
She declined to discuss the GAO's conclusion that the current delegation of authority has contributed to "conflict" and "tension" among board members, except to say that the report presented no evidence to support the claims.
In addition - and striking contrast - to the official response, the report included a second response from the two Democrats on the majority Republican board. They said they did not consider Ms. Hofmann's comments to be the board's official position.
"Because the Finance Board has neither considered nor approved an agency response to your draft report, there is no agency response and each board member must provide his or her own comments," they wrote.
The Democrats largely supported the GAO's findings.
