V. Management Control
Material Weaknesses
Material weaknesses are control shortcomings in
operations or systems that, among other things,
severely impair or threaten the organization’s
ability to accomplish its mission or to prepare
timely, accurate financial statements or reports.
The shortcomings are of sufficient magnitude
that the Corporation is obliged to report them to
external stakeholders.
At the end of the
2009 audit, GAO identified
a material weakness in the loss-share estimation
processes and a significant deficiency in the
information technology security area. Subsequent implementation of
enhanced controls has
eliminated the material weakness and the
significant deficiency.
To determine the existence of material
weaknesses, the FDIC has assessed the results of
management evaluations and external audits of
the Corporation’s risk management and internal
control systems conducted in 2010, as well as
management actions taken to address issues
identified in these audits and evaluations. Based
on this assessment and application of other
criteria, the FDIC concludes that no material
weaknesses existed within the Corporation’s
operations for 2010.
Additionally, FDIC
management will continue
to focus on high priority areas, including
implementation of Dodd-Frank Act, the Program
Management Office organizations, IT systems
security, resolution of bank failures, and privacy,
among others.
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