Audit of Division of Supervision Reliance on State Examination

AUDIT OF DIVISION OF SUPERVISION RELIANCE ON STATE EXAMINATIONSAudit Report No. 99-032August 2, 1999OFFICE OF AUDITSOFFICE OF INSPECTOR GENERAL WAugust 2, 1999TO: James L. Sexton, DirectorFROM:Division of Supervision Reliance on State Examinations(Audit Report No. 99-032)Under the Federal Deposit Insurance (FDI) Act, the FDIC may rely on state examinations toacceptable and meets the intent of the FDI Act.Audit of DOS Coordination ofExaminations with State Banking Authorities in the Kansas City RegionBACKGROUNDthe examination intervals of certain small institutions to 18 months if the following criteria wereexaminations of all insured depository institutions. FDICIA allowed federal regulators to extendwas signed into law, which added subsection 10(d) to the FDI Act that required annual full-scopeOn December 19, 1991, the Federal Deposit Insurance Corporation Improvement Act (FDICIA)including a review of working agreements, from a national perspective.region. The purpose of this audit was to review DOS's process for relying on state examinations,expressed by FDIC Board members over outdated working agreements in the Kansas Citydiscussing that report at the December 16, 1998 Audit Committee meeting, some concerns weresome areas of concern regarding reliance on state examination reports. In addition, while. That report identifiedOn November 19, 1998, the OIG issued an audit report entitled meet examination frequency requirements, if it ...