Title of Report [omit “Audit of”]

August 2008 Report No. AUD-08-014 FDIC’s Controls Over the CAMELS Rating Review Process AUDIT REPORT Report No. AUD-08-014 August 2008 FDIC’s Internal Controls Over the CAMELS Rating Review Process Federal Deposit Insurance Corporation Audit Results Why We Did The Audit The FDIC has established and implemented internal controls for reviewing draft risk management ROEs, including the supervisory review of proposed CAMELS ratings. The audit objective was to assess the internal controls Also, DSC has established a process for resolving disagreements between the EIC the FDIC has established over the CAMELS rating and Case Manager (CM) with respect to changes to proposed CAMELS ratings. system for reviewing and changing proposed ratings The resolution process includes maintaining an open dialogue between the EIC and included in draft risk management Reports of CM and requiring the CM to bring unresolved differences to the attention of the Examination (ROE). The six components of the Regional Director, or designee, for resolution prior to completion of the draft ROE CAMELS rating system address the adequacy of Capital, the quality of Assets, the capability of review. However, review procedures do not require that changes to proposed Management, the quality and level of Earnings, the CAMELS ratings, agreed to by the EIC, be documented or justified. ...