The following chart shows the FDIC’s most significant management and performance challenges as identified by the Office of Inspector General (OIG):
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Challenge |
Brief Description |
1 |
Adequacy of Corporate Governance in Insured Depository Institutions
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Corporate governance is generally defined as the fulfillment of the broad stewardship responsibilities entrusted to the Board of Directors, Officers,
and external and internal auditors of a corporation. A number of well-publicized
announcements of business failures, including financial institution failures,
have raised questions about the credibility of accounting practices and
oversight in the United States. These recent events have increased public
concern regarding the adequacy of corporate governance and, in part,
prompted passage of the Sarbanes-Oxley Act of 2002. The public’s
confidence in the nation’s financial system can be shaken by deficiencies
in the adequacy of corporate governance in insured depository institutions.
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2 |
Protection of Consumer Interests |
The FDIC’s mission is to maintain public confidence in the nation’s financial system. The availability of deposit insurance to protect consumer interests
is a very visible way in which the FDIC accomplishes this mission. However,
the FDIC also serves as an advocate for consumers through its oversight
of a variety of statutory and regulatory requirements aimed at protecting
consumers from unfair and unscrupulous banking practices. The FDIC is
legislatively mandated to enforce various statutes and regulations regarding
consumer protection and civil rights with respect to state-chartered,
nonmember banks and to encourage community investment initiatives
by these institutions.
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3 |
Management and Analysis of Risks
to the Insurance Funds |
A primary goal of the FDIC under its insurance program is to ensure that its deposit insurance funds do not require resuscitation by the U.S. Treasury.
Achieving this goal is a considerable challenge, given that the FDIC directly
supervises only a portion of the insured depository institutions. The
identification of risks to non-FDIC supervised institutions requires effective
communication and coordination with the other federal banking agencies.
The FDIC engages in an ongoing process of proactively identifying risks
to the deposit insurance funds and adjusting the risk-based deposit insurance
premiums charged to the institutions.
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4 |
Effectiveness of Resolution and Receivership Activities |
One of the FDIC’s most important corporate responsibilities is planning
and efficiently handling the franchise marketing of failing FDIC -insured
institutions and providing prompt, responsive and efficient resolution
of failed financial institutions. These activities maintain confidence and
stability in our financial system. |
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5 |
Management of Human Capital |
Human capital issues pose significant elements of risk that interweave
all the management and performance challenges facing the FDIC. The
Corporation must work to fill key vacancies in a timely manner, engage
in careful succession planning, and continue to conserve and replenish
the institutional knowledge and expertise that has guided the organization
over the past years. |
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6 |
Management and Security
of Information Technology (IT) Resources |
Information technology (IT) continues to play an increasingly greater role
in every aspect of the FDIC’s mission. As corporate employees carry out the
FDIC’s principal business lines of insuring deposits, examining and supervising
financial institutions, and managing receiverships, they rely on information
and corresponding technology as an essential resource. Information and
analysis on banking, financial services and the economy form the basis for
the development of public policies and promote public understanding and
confidence in the nation’s financial system. IT is a critical resource that
must be safeguarded. |
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7 |
Security of Critical Infrastructure |
To effectively protect critical infrastructure, the FDIC’s challenge in this
area is to implement measures to mitigate risks, plan for and manage
emergencies through effective contingency and continuity planning,
coordinate protective measures with other agencies, determine resource
and organization requirements, and engage in education and awareness
activities. |
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8 |
Management of Major Projects |
The FDIC has engaged in several multi-million dollar projects, such as the New Financial Environment, Central Data Repository, and Seidman Center
Phase II Construction. Without effective project management, the FDIC
runs the risk that corporate requirements and user needs may not be met
in a timely, cost-effective manner.
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9 |
Assessment of Corporate
Performance |
The Corporation has made significant progress in implementing the
Government Performance and Results Act of 1993 and needs to continue
to address the challenges of developing more outcome-oriented performance
measures, linking performance goals and budgetary resources, implementing
processes to verify and validate reported performance data, and addressing
crosscutting issues and programs that affect other federal financial institution
regulatory agencies. |
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10 |
Cost Containment and
Procurement Integrity |
As steward for the Bank Insurance Fund and Savings Association Insurance Fund, the FDIC seeks ways to limit the use of those funds. Therefore the
Corporation must continue to identify and implement measures to contain
and reduce costs, either through more careful spending or assessing
and making changes in business processes to increase efficiency. The
Corporation has taken a number of steps to strengthen internal control
and effective oversight. However, the OIG’s work in this area continues
to show that further improvements are necessary to reduce risks such as the
consideration of contractor security in acquisition planning, incorporation of
information security requirements in FDIC contracts, oversight of contractor
security practices, and compliance with billing guidelines.
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