In January 2024, the FDIC OIG received a Congressional request to perform work related to the Student Residence Center (SRC). Specifically, the Congressional request stated that, in light of a recent media report, the FDIC OIG should “determine whether [the SRC] still makes financial sense, and that the FDIC is taking meaningful steps to police the behavior of its workforce if they are to continue staying at the [SRC].” The FDIC OIG responded to this request in February 2024 noting that the FDIC OIG planned to review the FDIC's ownership and management of real estate assets, which included the SRC located on the FDIC’s Virginia Square campus in Arlington, Virginia.
The objective of this audit was to assess the FDIC’s efforts to determine the cost benefits of, and organizational risks associated with, operating the SRC.
To address the objective, we reviewed relevant FDIC policies, procedures, and guidance. In addition, we reviewed Federal laws and regulations, as well as best practices related to real property management.
We found the FDIC has not determined the cost benefits of, or organizational risks associated with, operating the SRC. Specifically, the FDIC could not provide documentation that SRC cost benefits have been assessed since 1986 or that organizational risks specifically related to operating the SRC have been formally identified, assessed, or addressed. This was due, in part, to the FDIC’s lack of (1) asset management processes and procedures; (2) centralized, accessible SRC-related financial and non-financial data; and (3) performance goals and objectives for SRC operations.
We made four recommendations intended to improve the FDIC’s efforts to determine SRC cost benefits and to identify organizational risks associated with operating the SRC. The FDIC concurred with all four recommendations and plans to complete all corrective actions by September 30, 2026.