United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-10-22 monographic deposited born digital 91 p. GA 1.13:GGD-98-6 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-98-6 P0b002ee18037d227 f:gg98006 DGPO 2010-08-12 2011-03-23 GAOREPORTS-GGD-98-6 machine generated eng fdlp REPORT GAOREPORTS-GGD-98-6 GGD-98-6 Financial management systems Government sponsored enterprises Federal agency accounting systems Risk management Interagency relations Mortgage programs Standards evaluation Capital Bank examination Banking regulation HUD Central Accounting and Program System OFHEO Performance Evaluation Management System Mexico Chapter Report GGD

Pursuant to a legislative requirement, GAO assessed the Office of Federal Housing Enterprise Oversight's (OFHEO) capacity to fulfill its mission of helping to ensure the safety and soundness of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), focusing on: (1) identifying the reasons why OFHEO has not issued final risk-based capital standards for the enterprises even though there was a December 1, 1994, deadline for doing so; and (2) assessing OFHEO's implementation of its safety and soundness examination responsibilities.<p/>GAO noted that: (1) to fulfill its statutory safety and soundness mission, OFHEO is to establish risk-based capital standards that are sufficient to withstand the rigors of a complex stress test and implement a comprehensive and timely examination program; (2) to date, OFHEO has not fully completed either of these tasks; (3) OFHEO has not established the risk-based capital standards because it must first develop the stress test; (4) development of a stress test has been protracted primarily due to: (a) the complexity of the development process as specified in the act; and (b) OFHEO's decision in 1994 to develop its own sophisticated stress test rather than adopting and modifying stress tests that were already under development; (5) OFHEO has already missed its December 1994 statutory deadline for completing a stress test and establishing risk-based capital standards by almost 3 years; (6) tasks remaining include making key policy decisions about the stress test and continuing to translate its components into proposed and final rules; (7) GAO believes that it is essential that OFHEO complete the tasks remaining to develop those standards as expeditiously as possible; (8) OFHEO has not fully implemented a timely and comprehensive enterprise safety and soundness examination program; (9) OFHEO established an examination plan in September 1994 that provided for a 2-year cycle for the assessment of six core risks; (10) OFHEO's current 3- to 4-year cycle for assessing the six core risks is considerably longer than the 2-year cycle established in the plan; (11) GAO's analysis found that, among other factors, limited resources allocated to the examination office were largely responsible for OFHEO's inability to comply with the 1994 plan; (12) according to OFHEO officials, the organization plans to reassess its examination strategy and make changes necessary by early 1998 to ensure that its examination staff cover all six core risk areas within a 1-year period; (13) GAO believes that, without a reassessment, and potentially a reallocation of resources, OFHEO may not be able to implement an annual examination cycle by early 1998 that fully covers all risk areas, since the organization has been unable to implement a 2-year cycle with the current assignment of staff to the examination function; and (14) OFHEO could usefully include consideration of different examination cycles and related coverage that could be accomplished with alternative resource levels. https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-98-6/html/GAOREPORTS-GGD-98-6.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-98-6/pdf/GAOREPORTS-GGD-98-6.pdf GAO/GGD-98-6 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-98-6 Chapter Report GAO/GGD-98-6; Federal Housing Enterprises: OFHEO Faces Challenges In Implementing a Comprehensive Oversight Program; Financial management systems Government sponsored enterprises Federal agency accounting systems Risk management Interagency relations Mortgage programs Standards evaluation Capital Bank examination Banking regulation HUD Central Accounting and Program System OFHEO Performance Evaluation Management System Mexico Title 12 Section 1828note Title 12 Section 4501 12 U.S.C. 1828note 12 U.S.C. 4501 Volume 110 Page 2874 110 Stat. 2874 Public Law 102-242 Public Law 102-550 Public Law 103-325 Public Law 103-356 Public Law 104-204