GAO: Bailout lacks proper oversight

WASHINGTON – 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 Friday.

The report by the Government Accountability Office, the nonpartisan investigative arm of Congress, found that the Treasury Department had made progress in increasing checks and balances over the bailout money, such as implementing a monthly survey of recipients of the funds. But it concluded that the department still had 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 100-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 the program.

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 in the Bush administration who was asked to remain in his position by Obama officials.