The federal government's $700 billion bailout program continues to lack adequate oversight to make sure that banks receiving the taxpayer funds are using them properly, congressional investigators said yesterday.
The report by the Government Accountability Office, the nonpartisan investigative arm of Congress, found that the Treasury Department had made progress increasing checks and balances over the bailout money, such as implementing a monthly survey of fund recipients. But it concluded that the department has not done enough.
"While the monthly survey is a step toward greater transparency and accountability for the largest institutions, we continue to believe that additional action is needed to better ensure that all participating institutions are accountable for their use of program funds," the report said.
The 112-page audit, the latest in a series of government reports raising concerns about proper oversight of the bailout program, comes as Obama administration officials debate whether to ask for billions of dollars more in bailout funds. A scathing report by the congressional auditors last month, which concluded that the Bush administration had failed to properly oversee the plan, contributed to congressional concern about abuse and waste.
In a written response to the report, the Treasury Department official who runs the bailout program noted that it is less than 120 days old but nonetheless "on the right path."
"We agree that more work remains to be done," wrote Neel Kashkari, the head of the plan during the Bush administration who was asked by the Obama administration to remain. "Treasury's dedicated team will continue to move the program forward rapidly."
The congressional auditors credited the department with some progress. They said Treasury officials had taken steps to increase oversight of executive compensation. But they also said those plans had not been finalized. Furthermore, the report said, the monthly survey meant to determine how recipients were spending the money was inadequate.
"Without more frequent information on all participants, Treasury will have little timely information about the effectiveness of the overall program," the report said.