DATE: December 16, 2004

MEMORANDUM TO: Board of Directors

FROM: Gaston L. Gianni, Jr.Inspector General

SUBJECT: OIG's Assessment of the Management and Performance Challenges Facing the FDIC

In the spirit of the Reports Consolidation Act of 2000 (Act), we are providing you with the Office of Inspector General's (OIG) assessment of the most significant management and performance challenges (MPCs) facing the FDIC. The Act calls for these challenges to be included in the consolidated performance and accountability reports of those federal agencies to which it applies. We will also provide (1) the attachment to the Chief Financial Officer and (2) a summary of the challenges to the Office of Enterprise Risk Management for inclusion in the 2004 Annual Report. The seven challenges we have identified are listed in priority order. In the past two years, we identified 10 MPCs. This year we consolidated a number of MPCs into "Corporate Governance in the FDIC" and introduced "Money Laundering and Terrorist Financing" as a new MPC.

We shared a draft listing of the MPCs with the divisions and offices. We also briefed the Audit Committee on December 9, 2004. We appreciate the cooperation and coordination of the divisions and offices in formulating our assessment. Their comments on the challenges attest to the fact that the Corporation has a number of actions under way to address many of the issues, and we encourage continued attention to each challenge. For its part, the OIG will continue to add value by conducting audits, evaluations, investigations, and other reviews that address the challenges. We look forward to working with you and others in the Corporation on these efforts.

If you have any questions or need additional information, please feel free to contact me at 202-416-2026.

Attachment

cc:
Walter B. Mason
Thomas Zemke
John F. Bovenzi, COO
Steve O. App, CFO
Michael E. Bartell, CIO