[ NOTE:This report has been physically divided into two sections in order to maintain download performance ]Link to Section I of the OIG's Semiannual Report to the Congress
FDIC Office of Inspector General |
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Contents
| INSPECTOR GENERAL FOREWORD |
| BACKGROUND |
| STATISTICAL SUMMARY OF PERFORMANCE AGAINST ANNUAL GOALS |
| OIG RESOURCES |
| PERFORMANCE OVERVIEW |
| PERFORMANCE BY STRATEGIC GOAL AREA OIG Products Add Value and Achieve Significant Impact Communications Between the OIG and Stakeholders Will Be Effective OIG Will Align Its Human Resources to Support the OIG Mission OIG Will Effectively Manage Its Resources |
| DETAIL LISTING OF FY 2004 ANNUAL PERFORMANCE GOAL ACCOMPLISHMENT |
| STATISTICAL SUMMARY OF PERFORMANCE — 2003 ANNUAL PERFORMANCE GOALS |
Inspector General Foreword
Accountability and transparency are principles that the Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) holds in high regard, and for this reason, for the fifth time, we publish our Performance Report as an integral part of the Semiannual Report to the Congress. In so doing, we convey not only the results of our audits and investigations of corporate programs and operations, but also examine our own performance and share with the Congress and the public the extent to which we have achieved the internal organizational goals that drive our work.
The four overall strategic goals, each with a number of subgoals, that we have pursued during fiscal year (FY) 2004 can be summarized as follows:
 OIG Products Add Value and Achieve Significant Results |
| The OIG Effectively Communicates with Stakeholders |
| The OIG Aligns Human Resources to Support the OIG Mission |
| The OIG Effectively Manages Resources |
I am pleased to report that we met or substantially met 31 of our 41 annual performance goals, or 76 percent of our goals in the above areas. I would point out that performance cannot be evaluated based solely on a statistical summary of measures. It is, however, very constructive for us as an organization to consider each of our four strategic goals, examine how well we achieved them, and learn what we might do differently in the future to accomplish even more in those areas. These considerations are and will continue to be ongoing.
I invite all readers to view our performance results and provide additional feedback to me or any other member of the OIG in the spirit of our continuing efforts to be the best OIG in government. I especially thank all OIG staff who worked in pursuit of our FY 2004 goals and all stakeholders who both challenged and supported us in carrying out our performance plan during the past fiscal year.
Our FY 2005 goals will continue to inspire all members of the OIG to excel and provide maximum value to the Corporation, the Congress, and the American people as we carry out the IG mission.
Background
Nature and Purpose of the OIG’s Annual Performance Report
The Office of Inspector General develops its own independent strategic plan and annual performance plan. These plans are designed to establish goals to measure performance consistent with the principles of the Government Performance and Results Act (GPRA or Results Act). This report presents our performance against our FY 2004 Performance Plan (October 1, 2003 — September 30, 2004), focusing on the most meaningful annual measures related to achieving our strategic goals and objectives.Relationship to the FDIC’s Annual Report
To help streamline its reporting process, the FDIC redesigned its Annual Report for 2002 by combining its GPRA Program Performance Report, Chief Financial Officers Act Report, and traditional Annual Report. The Performance Results section of the combined report presents and summarizes the Corporation’s performance against its annual performance goals. The Corporation’s annual performance goals address its mission to "Contribute to the stability and public confidence in the nation’s financial system" under four strategic goals: (1) Insured depositors are protected from loss without recourse to taxpayer funding; (2) FDIC-supervised institutions are safe and sound; (3) Consumers’ rights are protected and FDIC-supervised institutions invest in their communities; and (4) Recovery to creditors of receiverships is achieved. We believe that accomplishing the OIG’s strategic and annual goals and objectives contributes to the Corporation’s achievement of its mission and goals and objectives.
The requirement for an annual performance report under the Results Act applies to the agency as a whole rather than to the OIG as a separate component. However, because of the unique mission and independent nature of Inspectors General under the Inspector General Act, we prepare separate strategic and annual plans and reports, rather than integrating OIG goals and results into the Corporation’s plans and reports.
Relationship to the OIG’s Semiannual Report to the Congress
Annual performance reports of OIGs prepared under the Results Act differ from semiannual reports of OIGs prepared under the Inspector General Act. The two reports differ with respect to the time periods covered (12 months vs. 6 months) and the specific reporting requirements. However, because both types of reports present OIG accomplishments to the Congress, the annual performance report is included as a separate but integral component of the semiannual report. Our annual performance report is included with our semiannual report to the Congress covering the period ending September 30.
Statistical Summary of Performance Against Annual Goals
The following table summarizes our collective performance against our annual performance goals for FY 2004. The table reflects whether the goals were Met, Substantially Met, or Not Met.
The table below indicates that we met or substantially met 31 of our 41 annual performance goals for FY 2004 (76 percent). For the previous reporting period (FY 2003), we had a 79 percent level of achievement of goals met or substantially met. Performance cannot be evaluated based solely on a statistical summary of measures—given that all measures are not equal in weight and the quality of the measures is still evolving. A summary level discussion of our performance by strategic goal area is presented in the Performance Overview section.
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OIG Resources
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Performance Overview
As indicated previously in the statistical summary section, overall we met or substantially met 31 of our 41 performance goals (76 percent) in FY 2004. Presented below is a brief overview of our performance to date for each of the four strategic goal areas. A discussion of individual goal accomplishment is presented in the next section and a detailed listing of goal accomplishment is presented in this report.
Strategic Goal 1
OIG Products Add Value and Achieve Significant Impact
We met 8 of our 11 performance goals under Strategic Goal 1. Of particular note, we achieved a return on investment (ROI) of $3.86 for every dollar spent on our audit operations. This return significantly exceeded our goal to increase the ROI from the previous year.
We also achieved mostly positive results on three goals related to improving client satisfaction with our core mission areas of audits, evaluations, and investigations. Based on the results of our 2004 client survey, senior executive satisfaction ratings increased by 11 percent over the 2003 ratings for our evaluation function, increased by 9 percent for our investigation function, and decreased by 5 percent for our audit function. The 2004 client survey showed areas of improvement from the prior survey as well as areas of concern raised by FDIC senior executives that we will need to address. We are developing action steps to address these issues and concerns as well as other opportunities for improvement identified through the survey.
Strategic Goal 2
Effective Communications with Stakeholders
We met five of our six performance goals under Strategic Goal 2, including our goal to conduct an OIG-wide employee survey. The survey collected information on how employees who work for the OIG view and appraise their work and helped us to identify areas where our critical functions can be improved. The quantitative goal to increase the client survey communication score was not met. Although the survey report’s qualitative assessment noted overall improved communication, a single perceived communication breakdown appears to have influenced the quantitative ranking.
Strategic Goal 3
Align Human Resources to Support the OIG Mission
We met or substantially met five of our six performance goals under Strategic Goal 3. Key results under this strategic goal included issuing a guide for developing OIG core competency skills and developing a proposal to establish an OIG mentoring program.
Strategic Goal 4
Effectively Manage OIG Resources
We met 13 of our 18 performance goals under Strategic Goal 4. One of our more significant accomplishments during the year was the development and implementation of the OIG Dashboard system. The Dashboard provides OIG executives with up-to-date information on key OIG performance measures, the budget and monthly spending reports, staffing, and annual performance goals.
Performance By Strategic Goal Area
Strategic Goal 1
OIG Products Add Value and Achieve Significant Impact
Overall, we met or substantially met 8 of our 11 annual performance goals (APG) under Strategic Goal 1. These 11 goals are further discussed below.
APG 1.0.1—Complete audit and evaluation assignments and issue reports with useful information related to 9 of 10 OIG-identified riskbased Management and Performance Challenges As shown in the accompanying graph, we met this goal . We completed 48 audit and evaluation reports with useful information related to 9 of the 10 Management and Performance Challenges (MPCs) facing the Corporation as identified in our FY 2004 Assignment Plan. In addition, an ongoing assignment related to the remaining MPC (Transition to a New Financial Environment) is estimated for completion in the 1st quarter of FY 2005.
We issued products covering the following MPCs.
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Adequacy of Corporate Governance in Insured Depository Institutions |
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Protection of Consumer Interests |
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Management and Analysis of Risks to the Insurance Funds |
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Effectiveness of Resolution and Receivership Activities |
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Management and Security of Information Technology Resources |
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Security of Critical Infrastructure |
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Assessment of Corporate Performance |
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Organizational Leadership and Management of Human Capital |
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Cost Containment and Procurement Integrity |
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APG 1.0.2—90 percent of the total number of audit and evaluation projects targeted for completion
in FY 2004 will be completed and result in reports issued containing useful information and recommendations
We met this goal. To fully meet the goal, we needed to issue 41 audit and evaluation reports (90 percent of the 46 reports targeted for completion). The Office of Audits issued 48 audit and evaluation reports containing useful information or recommendations in FY 2004, or 17 percent more than the 41 reports needed to meet the goal. As shown in the following graph, this
continues a 3-year upward trend in the number of reports issued. The 48 reports issued in FY 2004 represent 104 percent of the 46 reports targeted for completion during the year.
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APG 1.0.3—The ratio of monetary benefits to Office of Audits operating costs will increase over the ratio in the FY 2003 base period
As shown in the accompanying graph, we met this goal. During FY 2004, monetary benefits resulting from audit and evaluation reports totaled $51,195,522 in relation to Office of Audits operating costs of $13,261,718 for a ratio of 3.86 to 1 (or a return of $3.86 for each dollar spent.) This is significantly above the FY 2003 base period ratio of 0.195 to 1. (Note: For purposes
of this goal, Office of Audits operating costs are based on outlays during this period, and do not include an allocation of outlays of other OIG components and certain OIG-wide non-recurring and special projects expenses.)
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APG 1.0.4—80 percent of recommendations will be dispositioned within 12 months of report issuance
We did not meet this goal. The total number of recommendations included in audit and evaluation reports issued from October 1, 2002 to September 30, 2003 is 209. A total of 132 or 63 percent of these recommendations were dispositioned within 12 months of report issuance. As shown in the accompanying graph, this is below the target percentage of 80 percent but above the level achieved in FY 2003. Conditions contributing to not meeting the goal included: (1) FDIC management revising the corrective action
completion dates beyond 12 months of report issuance, (2) the OIG waiting for additional support documentation from the FDIC offices and divisions, and (3) the OIG waiting to receive corrective action closure forms and supporting documentation from FDIC offices and divisions.
Of the 77 report recommendations not dispositioned within 12 months of report issuance, 34 were dispositioned by September 30, 2004. We track disposition actions taken by management to help ensure that maximum value is achieved from audit and evaluation reports.
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APG 1.0.5—Achieve a level of FDIC senior executive client satisfaction with the audit function 10 percent above the level achieved in the client survey for 2003
As shown in the accompanying graph, we did not meet this goal. The 2004 senior executive client satisfaction rating for the audit function was 2.51, which represents a 5.3 percent decrease from the 2003 baseline rating of 2.65. The quantitative assessment of senior executive responses indicated a slight decline from 2003 in how the audit function was viewed due to concern with certain
aspects of the audit process. However, a qualitative assessment of the responses indicated considerable improvements from 2003. As noted in the client survey report, most executives interviewed believe that the OIG audit function is a valuable one and that the mere presence of an OIG adds value. Perhaps more noteworthy than the specific comments made regarding the audit function in 2004 was the general tone and tenor of these comments. With a few notable exceptions, comments made by senior executives in 2004 about
the audit function were more positive than in 2003, with many executives reporting an easing of tensions and a more collegial relationship than was evident in 2003 and prior years. Eleven of 13 senior executives described their relationship with the audit team as being "already good" or as one that had improved during the past year and 9 of 13 executives interviewed stated that they had observed changes for the better in the audit process during the past year.
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APG 1.0.6—Achieve a level of FDIC senior executive client satisfaction with the evaluation function 10 percent above the level achieved in the client survey for 2003
As shown in the accompanying graph, we met this goal. The 2004 senior executive client satisfaction rating for the evaluation function was 3.03, which represents an 11.4 percent increase from the 2003 baseline rating of 2.72. This exceeded our target for a 10-percent increase.
In keeping with this, the evaluation function received generally positive responses. However, the evaluation function was, once again, the least understood OIG function despite efforts on the part of the OIG to increase both the visibility of this group and the clarity of its mission.
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APG 1.0.7—80 percent of closed cases will result in either reports to management, criminal convictions, civil actions, administrative actions, or a combination of these elements
We met this goal. For FY 2004, 44 of 54 closed cases, or 81 percent, resulted in either reports to management, criminal convictions, civil actions, administrative actions, or a combination of these elements. As shown in the accompanying graph,
this percentage is above the target level of 80 percent as well as above the levels achieved in 2002 and 2003.
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APG 1.0.8—70 percent of cases accepted for prosecution will result in convictions, pleas, and/or settlements
As shown in the accompanying graph, we met this goal. Sixteen of 23 cases (70 percent) that had been accepted for prosecution and closed during the year resulted in convictions, pleas, and/or settlements.
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APG 1.0.9—Attain a minimum ratio of 9 to 1 of financial benefits to investigative cost dollars
As shown in the accompanying graph, we did not meet this goal. For the fiscal year ending September 30, 2004, investigative financial benefits were $40,270,546 and investigative costs were $7,280,366 for a ratio of 5.53 to 1 (or a return of $5.53 for each dollar spent). This ratio is below the target ratio of 9 to 1. Our ability to conduct the number of investigations
necessary to accomplish certain quantitative goals is impacted by a number of factors beyond our control. These include Department
of Justice (DOJ) priorities and resource restraints and our staffing level. During most of FY 2004, we faced workload staffing challenges in both experience and number of available agents. We did not reach our current resource level until the fourth quarter. With recent new hires, there will be a learning curve for the new agents to adapt and become proficient in the
complex financial institution fraud cases that make up the crux of our caseload. This goal will continue to be a "stretch" goal, and outside factors controlled by DOJ could continue to affect our ability to achieve the goal. However, we believe that with our increased staffing level, we will ultimately be in a better position to meet the goal. (Note: For purposes of this goal, the Office of Investigations (OI) operating costs are based on outlays during this period and do not include an allocation of outlays of other OIG components and certain OIG-wide non-recurring and special projects expenses).
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APG 1.0.10—Achieve a level of FDIC senior executive client satisfaction with the investigation
function 10 percent above the level achieved in the client survey for 2003 up to a sustaining level of 80 percent of the maximum
score
As shown in the accompanying graph, we met this goal. The 2004 senior executive client satisfaction rating for the investigation function was 3.25, which did not exceed our target for a 10-percent increase above the 2003 rating of 2.98, but did exceed the sustaining level of 80 percent of the maximum score (i.e., 3.20). The OI’s score was the highest received this year by the OIG’s operating functions. Also, as shown, the OI’s score was the highest received since the client surveys were introduced in 1999.
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APG 1.0.11—Provide useful information and analysis on corporate risks, planning, performance, policies, and directives within timeframes that are responsive to corporate needs
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In the spirit of the Reports Consolidation Act of 2000, provided an assessment of the most significant management and performance challenges facing the Corporation; |
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Met with Office of Enterprise Risk Management staff to offer suggestions for implementing an Enterprise Risk Management Program at the FDIC; |
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Met with the Internal Control Liaison Council and discussed the Office of Audits’ Corrective Action Resolution and Disposition Process; |
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Monitored the Corporation’s New Financial Environment (NFE) development efforts by attending NFE Steering Committee meetings and reviewing copies of NFE risk evaluation reports from the Office of Enterprise Risk Management; |
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Met with the Division of Supervision and Consumer Protection and Legal Division to discuss OIG comments on the proposed directive for Post-Failure Analysis Memorandum; |
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Coordinated with FDIC management and other stakeholders in April and June during development of the FY 2005 Annual Assignment Plan; |
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At the Division of Information Resources Management’s request, we reviewed and commented on the new security awareness Web site; |
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Issued a report on enterprise risk management to the Corporation that is also being distributed to the PCIE community; |
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Based on our experience in investigating major fraud at financial institutions, adapted and presented training modules discussing lessons learned and "Red Flags of Fraud" at Division of Supervision and Consumer Protection Commissioned Examiner Seminars, Federal Financial Institutions Examination Council seminars, and the joint DOJ/FDIC sponsored annual financial fraud conference; |
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Coordinated with the Division of Information Resources Management and other agency officials to establish appropriate processes in addressing cyber crimes, including computer intrusion, phishing and spoofing schemes, as well as investigations of computer misuse by FDIC employees and contractors; |
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Provided advisory comments to management on the FDIC’s Strategic Plan (2004-2008), 2004 Corporate Annual Performance Plan, and 2003 Annual Report; |
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Entered into a joint Memorandum of Understanding with the Division of Resolutions and Receiverships and the Legal Division regarding post-indictment inter-agency communications; |
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Worked with FDIC officials on developing procedures for preserving electronic media at bank closings; |
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Reviewed and commented on 43 proposed FDIC directives or proposed revisions to directives; |
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Coordinated with the Legal Division on several parallel proceedings and in discovery and related matters on numerous law suits; and |
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Actively participated in task forces concerning Electronic Evidence Preservation and Computer Incident Response Procedures. |
Strategic Goal 2
Communications Between OIG and Stakeholders Will Be Effective
Overall, we met five of our six performance goals under Strategic Goal 2. These six goals are further discussed below.
APG 2.1.1—Promote effective corporate communications and relations by sponsoring or actively participating in various activities, including quarterly meetings, conferences, seminars, task forces, and training
We met this goal. OIG executives and staff were involved in the following activities during the year in support of this goal:
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Participated with the Division of Supervision and Consumer Protection in the following activities related to audit work: quarterly meetings with Field Office Supervisors and division heads to discuss current and planned audits and work toward resolving open issues; gave periodic presentations at regional Field Office Supervisor meetings and at Commissioned Examiner Seminars to foster a better understanding of OIG audit work; Chicago Regional Office briefing on problem banks; Dallas and San Francisco Regional Training Conferences. |
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Made information technology presentations (IT) to the:Washington Chapter of the Information Systems Audits and Controls Association on the impact and future effect of the Federal Information Security Management Act; Institute for Defense and Government Advancement on the role of information assurance auditing within the FDIC; Institute of Internal Auditors’Auditing in Government Conference on IT Security. |
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Participated in several activities related to information technology and resources: Division of Information Resources Management’s (DIRM) "Getting to Green" meetings; DIRM Transformation Task Force meetings; steering committees for the Corporate Human Resources Information System (CHRIS) and the FDIC’s laptop computer replacement project; and in an advisory capacity at meetings of the Audit Committee’s IT Security Subcommittee, Chief Information Officer Council meetings, and the DIRM Transformation Advisory Group. |
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Engaged in a number of activities related to our investigative work: issued quarterly reports to Division of Supervision and Consumer Protection (DSC), Division of Resolutions and Receiverships (DRR), Legal Division, and the Chairman’s Office on activity and results of our investigations involving closed and open banks, assets, and debt cases; met quarterly with DRR and the Legal Division’s Financial Crimes Unit to review ongoing cases of interest and coordinated routinely with these offices with respect to bank closings, concealment of assets cases, and restitution orders;met quarterly with the DSC’s Special Activities Section to coordinate closely on cases involving fraud at open or closed institutions and with regard to records transfer issues; and coordinated drafting of Memoranda of Understanding with the Legal Division and DRR regarding Post Indictment Inter-Agency Communications. |
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Conducted a number of investigative outreach and other activities as follows: visited regional DSC offices on six occasions during the year to meet with management and discuss investigative cases and issues of mutual concern; OI field agents have also made regular visits to DSC field offices to provide an overview of OI operations; gave case-study presentations at DSC regional training conferences, Federal Financial Institutions Examination Council seminars; and at the joint DOJ/FDIC-sponsored annual financial fraud conference; and participated on the Electronic Evidence Preservation Task Force with the Office of Enterprise Risk Management and the Division of Information Resources Management. |
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Participated in activities with other financial regulatory agency staff: quarterly meetings with the Assistant Inspectors General for Audits of other financial regulators; FSLIC Resolution Fund’s Dissolution Task Force Meeting; and an FDIC Symposium that explored the question of "Why Banks Fail." |
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Engaged in a number of communications and other initiatives around the Corporation: provided OIG Weekly Highlights Reports to the Chairman; attended the Corporation’s Managers and Supervisors Leadership Training; participated in orientation for the FDIC’s leadership development programs; attended and provided feedback to pilot programs of the FDIC’s Corporate University; met with members of the FDIC’s Labor and Employee Relations Section to discuss emerging personnel issues; participated in the Groundhog Job Shadow Day program, sponsored jointly by the FDIC and Junior Achievement, where participating students learned about careers at the FDIC and how their studies relate to the workings of the FDIC and the banking industry; and attended the FDIC senior management leadership conference in February 2004. |
APG 2.1.2—Achieve a level of FDIC senior executive client satisfaction with OIG communication
efforts 10 percent above the level achieved in the client survey for 2003 up to a sustaining level of 80 percent of the maximum score
As shown in the accompanying graph, we did not meet this goal. The 2004 senior executive client satisfaction rating for OIG communications was 2.70, which represents a 10.6 percent decrease from the 2003 baseline rating of 3.02. The survey report’s quantitative assessment of senior executive responses indicated a decline in OIG communications efforts from the previous year due
primarily to a single instance of a communication breakdown. However, the survey report’s qualitative assessment of the responses noted overall improved quality of communication between the OIG and the FDIC. Most FDIC executives remarked on the improvement they had seen in OIG communications during the year—not only their own communications with the IG, but also between the Inspector General’s staff and the FDIC senior executives’ staffs. Several FDIC executives cited examples where the OIG had dedicated specific staff members to serve as liaisons with the FDIC, and stated that this had greatly improved communication with their
offices. FDIC executives also emphasized the value of OIG work and increased visibility of senior OIG executives, noting that this had improved working relationships across-the-board.
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APG 2.2.1—Meet with House and Senate Oversight Committees twice a year
We met this goal. In February 2004, the Inspector General met with staff of the House Financial Services Subcommittee on Oversight and Investigations, and in March testified before the Subcommittee. In May 2004, the Inspector General met with the staff of the Senate Banking Committee and in June testified before the Committee. Another briefing was provided to the Senate Banking Committee staff in September
2004.
APG 2.3.1—An OIG Employee Advisory Group will meet three times a year to serve as facilitator of communications among OIG staff and as a channel to advise OIG management regarding employee relations
We met this goal. The OIG Employee Advisory Group (EAG) met on four occasions during the fiscal year. In March 2004, the EAG met with the Exceed Corporation prior to the start of the OIG employee survey to discuss the purpose and scope of the survey (see related APG 2.3.2). In June, the Inspector General met with the EAG and requested the group’s assistance in identifying potential issues and concerns related to the employee survey report. Members of the EAG met in August and September to discuss their observations on the report and plan to meet again with the Inspector General to go over the results.
APG 2.3.2—Conduct an employee survey to establish a baseline for employee satisfaction and to develop strategies to address survey results
We met this goal. An independent consultant, the Exceed Corporation, conducted an employee survey in April and issued a final report in July. The survey collected information on how OIG employees view and appraise their job and their workplace, including their views on management. All OIG employees had an opportunity to take the survey, and 90 percent completed it, which is considered an excellent overall response rate. The survey was designed to provide information comparable to certain major benchmark surveys of other government employees and to provide baseline information for future FDIC OIG employee surveys. Overall, the survey found that over two-thirds of OIG employees (68 percent) were either satisfied or very satisfied with the OIG as a place to work. Approaches have been developed to prioritize and address issues identified by employees during the survey.
APG 2.4.1—Promote effective communications and relations with other OIG stakeholders to include participating in PCIE activities and meeting quarterly with other federal regulators and representatives of the U.S. General
Accounting Office (now the U.S. Government Accountability Office (GAO))
We met this goal. As the PCIE Vice Chair, the Inspector General chaired monthly Council meetings and welcomed guest speakers from the Office of Management and Budget, GAO, the Administration, and individual OIGs to discuss issues related to the IG community. During the fall of 2003, the IG was actively involved in the community’s initiatives to commemorate the 25th anniversary of the IG Act. Specifically, he (1) testified before the House Government Reform Subcommittee on Government Efficiency and Financial Management on the IG Act and possible legislative changes; (2) participated in an IG community meeting with President George W. Bush; (3) was interviewed on CSpan’s Washington Journal; (4) led the IG community’s update of the Quality Standards for Federal Inspectors General (Silver Book); (5) prepared an opening message for the fall/winter commemorative edition of the IG publication,
Journal of Public Inquiry; and (6) hosted a 25th anniversary open house for FDIC featuring the IG Act history and commemorative poster. The IG also continued a variety of initiatives, including (1) preparing the PCIE and ECIE annual progress report to the President; (2) assisting with the annual PCIE/ECIE conference and awards program; and (3) representing the PCIE by speaking at various conferences, meetings, and foreign visitor programs. Routine activities included preparing agendas, minutes, and issues for monthly PCIE and quarterly Executive Council meetings, circulating correspondence to members to facilitate communications,
and monitoring the activities of the various PCIE committees and related organizations. As FDIC IG, he met quarterly with other federal regulatory IGs to address matters of mutual concern. He also met and discussed with GAO representatives the various issues and projects affecting the FDIC as well as the OIG.
Other OIG activities during FY 2004 in support of this goal include myriad activities across the government.
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OIG staff were involved in a number of additional activities and events related to the PCIE: participated in monthly PCIE Government Performance and Results Act (GPRA) Roundtable Meetings regarding current GPRA-related issues; participated on the PCIE awards selection committee; participated in the PCIE meetings of the Assistant Inspectors General for Investigations; made a presentation to the PCIE Information Technology Roundtable on "An IG Perspective of the Federal Information Security Management Act;" gave a presentation of the OIG Client Survey Process before the PCIE GPRA Roundtable; participated in the PCIE GPRA Performance Measures Fair; and gave a presentation to the PCIE Legislative Committee concerning potential amendments to the Inspector General Act of 1978. |
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We provided advice, assistance, and coordination to other Offices of Inspector General and organizations related to the IG community by: continued participation in the Federal Audit Executive Council, including acting as organizer for the 2004 annual conference, chairing the Information Technology Security Committee, and participating on the Audit Issues Committee; providing our audit and evaluation policies and procedures manual to the Treasury and State Department OIGs; providing a briefing and tour to Department of Housing and Urban Development OIG representatives of our audit computer lab; chairing the Executive Resources Board for the Department of Agriculture OIG to select a new assistant IG; advising the Tennessee Valley Authority’s OIG on obtaining its first appropriation; providing a demonstration of our Investigative Data System timekeeping functions to the U.S. Agency for International Development OIG; advising the Department of Commerce OIG on the implementation of our Training and Professional Development System; and providing advice to the General Services Administration OIG regarding its consideration of implementing Teammate automated work papers through Citrix servers. |
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Participated in activities with GAO related to GAO’s Yellow Book audit standards, including: meeting with the GAO Advisory Committee on Yellow Book changes and co-presenting at different venues the new Yellow Book standards along with an Assistant Director of GAO. |
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We were involved in work relating to the Bank Secrecy Act (BSA) through: coordinating with GAO and the Federal Reserve on work related to the BSA; meeting with Federal Reserve OIG on work related to the BSA; and attending a Senate hearing on terrorism risk insurance. |
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We interacted with other OIGs and the federal community in a number of ways, including: holding multiple meetings with other federal agencies on the Federal Information Security Management Act (FISMA) and improvements to the FISMA process; participating in quarterly meetings with other OIGs to share common human resource issues and topics; addressing a request from the Small Business Administration OIG on electronic bank documentation; addressing a request from the National Credit Union Administration OIG on examiner encryption of bank customer data; attending the Federal Financial Institutions Examination Council information technology symposium; attending a meeting of Assistant Inspectors General for Investigations at the IG Academy; attending meetings of the Council of Counsels to the Inspectors General and providing input to questions raised by members; and attending meetings of the Interagency Ethics Council and a conference sponsored by the U.S. Office of Government Ethics. |
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We worked on additional issues of mutual interest with financial regulatory agencies and other federal agencies by: holding quarterly meetings with Assistant Inspectors General for Audits from the financial institution regulatory agencies; meeting with representatives of the Treasury OIG to discuss issues relating to investigations arising at failed institutions; meeting with staff from the Office of the Comptroller of the Currency related to the Division of Supervision and Consumer Protection Regional Office Structure assignment; participating in the monthly meetings of the interagency Bank Fraud Working Group; and participating in various panels and giving several presentations at the annual DOJ/FDIC-sponsored financial fraud conference. |
Strategic Goal 3
OIG Will Align Its Human Resources to Support the OIG Mission
Overall, we met or substantially met five of our six performance goals under Strategic Goal 3. These six goals are further discussed below.
APG 3.2.1—Explore the feasibility of establishing a mentoring program within the OIG to meet its unique professional development needs
We met this goal.Meetings were held with the FDIC Mentoring Program Coordinator to obtain background information on the Corporation’s existing program. In addition, we gathered information from other government agencies that have mentoring programs. A proposal for an OIG mentoring program was presented to the IG and Deputy IG in July 2004, and a decision from the Inspector General on how the OIG will implement a mentoring program is anticipated.
APG 3.2.2—Develop guidance for OIG training and professional development initiatives that complement core competencies and business knowledge needs
We met this goal. A Guide for Developing OIG Core Competency Skills was prepared and issued in December 2003. The guide is on the OIG Web site for employees’ reference and comments and it will be updated as needed.
APG 3.2.3– All OIG staff will complete at least 16 hours/CPEs of training related to the OIG
non-technical core competencies
We did not meet this goal. Eighty-eight of 144 OIG staff (61 percent) met the goal of having at least 16 hours of non-technical core competency training.
APG 3.2.4—All OIG staff will enhance their business knowledge/technical competence in one or more areas through training or professional development
This goal was substantially met. We completed a study of the trends in OIG training, and this study was provided to the OIG executives for their review. Most training taken in fiscal year 2003 was technical in nature, according to the study results. At this time, the OIG has not agreed upon a strategy for accomplishing the goal of enhancing business knowledge/technical competence.
Our Office of Audits staff successfully enhanced their business knowledge and technical competence through methods including targeted and general training in subject matter expertise from the Corporate University, Federal Financial Institutions Examination Council, commercial vendors, in-house courses, and on-the-job training for new hires. All Office of Audits staff are on-target to meet the continuing professional education hours required by the Government Auditing Standards for the biennial period concluding on December 31, 2004.
To keep abreast of the ever changing computer field, OI has provided technical computer training for all Electronic Crimes Team staff. Also, over the year OI has enhanced its law enforcement firearms program for agents by qualifying additional agents, via training, as firearms instructors and armorers as well as training firearms instructors to provide training to agents regarding "Flying Armed."
Other OIG employees have pursued targeted training in their specialty areas. As examples, Office of Management and Congressional Relations employees are pursuing a certificate in human capital management; cross-training for a certificate in financial management and budget issues; meeting the requirements for Certified Government Financial Manager; and enhancing their knowledge of a software package that will be used in upcoming revisions to the OIG’s principal information systems.
APG 3.3.1—Develop guidance for leadership development and training to complement the OIG leadership competency
We substantially met this goal. The exposure draft Guide for Developing OIG Core Competency Skills addresses leadership development and training. In addition, we are pursuing leadership development training opportunities offered by the National Leadership Institute, an institute where the U.S. Government Accountability Office sends its managers for development. We also encourage our managers to attend leadership training opportunities through PCIE-sponsored training and the Federal Executive
Institute. Also, the Office of Audits has provided leadership development opportunities for some of its staff. At this time, the OIG has not agreed upon a comprehensive strategy for leadership development and training.
In addition, the OIG Human Resources Branch announced 13 Treasury Executive Institute seminars this year. These seminars are made available through the FDIC Corporate University’s School of Leadership Development, and provides employees at the CG-15 and above level the opportunity to develop their leadership skills by attending and hearing presentations on various leadership topics. The OIG sent staff to about 25 percent of these sessions. The OIG also had four employees express interest in the PCIE Leadership Development Workshop. Two attended in May 2004 and two will attend in November 2004.
APG 3.4.1—Measure staff satisfaction with performance feedback and develop options for enhancing as appropriate
We met this goal. The OIG conducted an employee survey that included questions relating to feedback, and offices are looking at ways to address issues in this area. In addition, we prepared a strategy for enhancing feedback mechanisms in the OIG that includes (1) developing a message about the importance of feedback and roles and responsibilities of the supervisor and staff in feedback that will be conveyed by the IG and (2) developing a Web site (Feedback Forum) that will be used to periodically provide information on feedback for staff, such as useful articles and tips on giving and receiving feedback.We have begun constructing
the Web site.
Strategic Goal 4
OIG Will Effectively Manage Its Resources
Overall, we met or substantially met 13 of our 18 performance goals under Strategic Goal 4. These 18 goals are further discussed below.
APG 4.1.1—Develop an enterprise risk management framework for the OIG that will provide an integrated organization-wide, strategic approach to measuring and managing the OIG’s risks in order to maximize the OIG’s value and help ensure strategic goals are achieved
We did not meet this goal. Although substantial progress has been made on the framework as discussed below, workload priorities during the year and other factors prevented us from completing this initiative. Key staff attended upto-date enterprise risk management (ERM) training sponsored by leading organizations in February and March. Research and analysis has been underway building on the draft Enterprise Risk Management Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) for public comment in 2003, the COSO Internal Control Framework, and professional literature relating to existing approaches to ERM as well as implementation of the Sarbanes-Oxley Act, but additional analysis needs to be accomplished.
The final COSO ERM Integrated Framework was released on September 29, several months’ delay from the original schedule. Also, a new accompanying document, Application Techniques, illustrates how effective enterprise risk management concepts and principles may be successfully applied, and will need to be reviewed and considered in developing the OIG’s ERM framework.
APG 4.1.2—Achieve an average of 200 calendar days to produce final audit and evaluation reports
We met this goal. The average elapsed time to issue audit and evaluation reports in FY 2004 was 189 days, or 11 fewer days than the target of 200 days. As shown in the following graph, this continues a favorable trend in the average time taken to issue audit and evaluation reports over the last 3 years.
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APG 4.1.3—Reduce the ratio of Office of Audits’ operating costs to reports issued so that the FY 2004 operating cost ratio is 10 percent less than the 2003 baseline cost ratio
We did not meet this goal. The average cost of audit and evaluation reports issued in FY 2004 was $276,286, based on 48 reports issued and operating costs of $13,261,718. This average exceeded the performance target ceiling of $250,940 per report. The OIG set a stretch goal for efficiency recognizing that it may be achieved through a multi-year emphasis on cost reduction. While this goal was not met in FY 2004, as shown in the accompanying graph, the average cost per assignment continued a favorable 3-year
trend by dropping from $310,666 in TY 2002 (January 1, 2002—September 30, 2002) to $276,286 in FY 2004, or an 11-percent reduction. The reduction was achieved even though annual and merit pay increases in January 2003 and 2004 totaled approximately 8.6 percent.
Note: For assessing this goal, the ratio (average cost) is determined by comparing reports issued (i.e., completed assignments) during FY 2004 to Office of Audits operating costs reported during the same period. For this purpose, assignment costs are not accumulated and matched to completed assignments. Office of Audits operating costs are defined as those direct and indirect costs, including contract costs, within the control of Office of Audits and exclude an allocation of outlays of other OIG components and certain OIG-wide non-recurring and special projects expenses.
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APG 4.1.4—70 percent of active cases that have been open over 1 year will be referred and
accepted for prosecution
We met this goal. Of 57 active cases that have been open over 1 year as of the end of the fiscal year, 43 cases or 75 percent have been referred and accepted for prosecution. As shown in the accompanying graph, this percentage is above the FY 2004 target percentage as well as the rate achieved in FY 2003.
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APG 4.1.5—100 percent of employee cases that have either no criminal prosecution potential or have been declined for prosecution will be completed in less than 6 months
We did not meet this goal. During FY 2004, eight employee cases were completed. Seven cases, or 88 percent, were completed in less than 6 months. As shown in the following graph, this is below the FY 2004 target percentage as well as the rate achieved in FY 2003. The eighth case took longer than 6 months to complete because OI had to wait for the receipt of documentation necessary to complete its analysis and issue its report.
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APG 4.1.6—90 percent of investigative reports will be issued within 30 days, and 100 percent of investigative reports will be issued within 60 working days, after completion of the case
As shown in the accompanying graph, we met this goal. During the year, 38 Reports of Investigation were issued. All 38 reports, or 100 percent, were issued within 30 working days, and subsequently within 60 days, of case completion.
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APG 4.1.7—140 investigative actions will result from OI cases during the year
As shown in the accompanying graph, we did not meet this goal. For FY 2004, 98 actions resulted from investigative cases. This is below the fiscal year target of 140 actions for this stretch goal. The cases under investigation are major cases, and actions occur over a protracted period. Our ability to conduct the number of investigations necessary to accomplish certain quantitative goals is impacted by a number of factors beyond our control. These include DOJ priorities and resource restraints and the staffing
level of our OI. During most of FY 2004, we faced workload staffing challenges in both experience and number of available agents. We did not reach our current resource level until the fourth quarter. With recent new hires, there will be a learning curve for the new agents to adapt and become proficient in the complex financial institution fraud cases that make up the crux of our caseload. This goal will continue to be a "stretch" goal, and outside factors controlled by DOJ could continue to affect our ability to achieve the goal. However, we believe that with our increased staffing level, we will ultimately be in a better position to meet the goal.
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APG 4.1.8—Legal services are provided within applicable timeframes 100 percent of the time
We met this goal. During the year, legal services (subpoenas, Freedom of Information Act and Privacy Act requests, and reviews of legislation, regulations, FDIC and OIG procedures) were provided by the Counsel’s Office on 32 occasions. As shown in the accompanying graph, legal services were provided within applicable timeframes 100 percent of the time, the same rate as achieved in FY 2003.
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APG 4.1.9—The Electronic Crimes Team will provide preliminary/final analysis of computer media examined within 30 days of initial request for computer forensic support
We met this goal. During the fiscal year, the Electronic Crimes Team provided nine preliminary/final analyses of computer media
examined within 30 days of initial request for computer forensic support. Improvements were made to the Investigative Data System to better track data for the requirements for this goal.
APG 4.1.10—The Electronic Crimes Team will respond to 100 percent of bank closings where fraud is suspected and OI special agents are participating
We met this goal. During the fiscal year, the Electronic Crimes Team responded to three bank closings where fraud was suspected and special agents were participating.
APG 4.1.11—OIG Hotline information will be reviewed and a determination made as to a course of action within 7 business days
As shown in the graph below, we met this goal. During the fiscal year, 150 Hotline cases were reviewed and a determination made as to a course of action on an average of 2.3 business days. This is significantly below the target of 7 business days.
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APG 4.1.12—Develop an executive information system that improves the efficiency of OIG management oversight of internal operations
We met this goal. The OIG Dashboard system was completed and implemented during the last part of August and early September 2004. The Dashboard provides OIG executives and a few designated staff with up-to-date information on key OIG performance measures, the budget and monthly spending reports, staffing, and annual performance goals. The Dashboard also provides a new approach for reporting and consolidating status information on the OIG’s annual performance goals.
APG 4.1.13—Develop an OIG Information Technology Strategic Plan to guide internal IT priorities and ensure efficient and secure uses of IT resources within the OIG
We met this goal. The OIG completed a memorandum in September 2004 setting forth challenges and strategies for the OIG’s information technology needs for fiscal years 2005 through 2007.
APG 4.2.1—Develop an OIG-wide Quality Assurance Framework to document the process in place to ensure that OIG work meets the highest standards of quality
We did not meet this goal. Although significant progress has been made towards developing a quality assurance framework as discussed below, due to other priorities, we were unable to complete the framework by the end of the fiscal year. Research and analysis is in progress to build a framework based on best practices, with consideration of the Quality Standards for IGs ("Silver Book") and GAO’s quality assurance framework. Preliminary crosswalk analyses of the Silver Book versus GAO’s framework and the Silver Book versus the FDIC OIG’s policies and procedures have been completed as a basis for further framework
development. Other analyses in progress include a comparison of the requirements of the Sarbanes-Oxley Act and the FDIC Improvement Act to develop a basis for assessing the FDIC’s controls related to financial reporting.
APG 4.2.2—Perform at least four (4) internal quality control reviews (QCR) that, collectively, cover reports issued by all 5 line directorates every 12 months and resolve any significant matters identified
We met this goal. Six QCRs were issued in FY 2004. Three QCRs included reports issued at the directorate-specific level, a fourth covered the Office of Audits’ Continuing Professional Education efforts, a fifth covered reports from all five line directorates, including those not previously reviewed in FY 2004, and a sixth analyzed trends for the purposes of established assignment phase
baselines. All significant matters have been resolved.
Further, the Department of Energy OIG completed a peer review on September 1, 2004, of FDIC OIG Office of Audits’ operations that included reports issued by each of the five line directorates. Their report concluded as follows: "In our opinion, the system of quality control for the audit function of the FDIC OIG in effect for the year ended March 31, 2004, has been designed in accordance with the quality standards established by the PCIE and was being complied with for the year then ended to provide the OIG with reasonable assurance of material compliance with professional auditing standards in the conduct of its audits. Therefore, we are issuing an unqualified opinion on your system of audit quality control."
APG 4.2.3—Achieve a result of zero (0) material instances of noncompliance with Government Auditing Standards as identified in internal quality control reviews
We met this goal. No material instances of noncompliance with Government Auditing Standards were identified in the six quality control reviews issued in FY 2004. Further, no material instances of noncompliance with Government Auditing Standards were identified in the peer review of the Office of Audits completed in September 2004 by the Department of Energy OIG.
APG 4.2.4—Conduct internal operational reviews of the three major investigative offices every 12 months and resolve significant matters identified
We met this goal. As part of the review process, in order to update and keep current with PCIE guidelines and recent DOJ guidance for law enforcement officers, all Office of Investigations policies were reviewed and updated as appropriate. Internal field office operational reviews were conducted of the three major investigative offices as well as the Chicago Field Office. The reviews targeted those areas identified as most critical for compliance with the new DOJ law enforcement guidelines and peer
review requirements.
APG 4.2.5—Conduct an independent quality review of the operations of another IG office under the auspices of the PCIE community
We met this goal. An external peer review of the Department of Commerce OIG audit operations was completed in December 2003. This entailed a comprehensive review on a 3-year cycle as required by the Inspector General Act and Government Auditing Standards carried out under guidelines issued by the PCIE. The review team was led by the Office of Quality Assurance and Oversight and included team members from the Office of Audits.
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Along with the Federal Reserve Board and Department of the Treasury Offices of Inspector General, our office cosponsored a third Emerging Issues in Banking Symposium. This forum brought together representatives from the financial regulatory agency Offices of Inspector General, Government Accountability Office, Securities and Exchange Commission, Pension Benefit Guaranty Corporation, Federal Housing Finance Board, and others to hear from leading experts about emerging issues that impact our collective and individual work and responsibilities. Speakers at the symposium included representatives from the Division of Supervision and Consumer Protection and Division of Insurance and Research at the FDIC, each of whom presented valuable information related to the work of their respective Divisions and the financial services industry at-large. Other speakers included Governor Susan Bies from the Federal Reserve Board who spoke of Corporate Governance; a senior advisor from the Compliance Division of the Office of the Comptroller of the Currency (OCC) who addressed consumer protection matters at the OCC; a panel consisting of Counsel and a staff member from the Senate Committee on Banking,Housing, and Urban Affairs and House Committee on Financial Services who shared perspectives on issues of Congressional concern; the Director of the Financial Crimes Enforcement Network; and representatives from the Office of Foreign Assets Control and the Federal Financial Institutions Examination Council. |
 L to R: Dennis Schindel, Acting IG at Treasury; Barry Snyder, FRB IG, Gaston Gianni, FDIC IG.   L to R: Russell Rau, Barry Snyder, Dennis Schindel, Gaston Gianni. |
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The Office of Inspector General (OIG) Hotline is a convenient mechanism employees, contractors, and others can use to report instances of suspected fraud, waste, abuse, and mismanagement within the FDIC and its contractor operations. The OIG maintains a toll-free, nationwide Hotline (1-800-964-FDIC), electronic mail address (IGhotline@FDIC.gov), and postal mailing address. The Hotline is designed to make it easy for employees and contractors to join with the OIG in its efforts to prevent fraud, waste, abuse, and mismanagement that could threaten the success of FDIC programs or operations. |
To learn more about the FDIC OIG and for complete copies of audit and evaluation reports discussed in this Semiannual Report, visit our homepage: http://www.fdicig.gov.
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Federal Deposit Insurance Corporation Office of Inspector General 801 17th St., NW Washington, D.C. 20434 |
[ NOTE:This report has been physically divided into two sections in order to maintain download performance ]
Link to Section I of the OIG's Semiannual Report to the Congress