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WASHINGTON — A report from the Office of Inspector General at the Federal Deposit Insurance Corp. concluded that the bank regulatory agency could enhance its policy to better prevent conflicts of interest between its staff and companies it contracts with.
The OIG report, released this month, notes that while the FDIC has policies to identify and respond to conflicts of interest in the agency acquisition process, internal guidance — in the FDIC's Acquisition Procedures and Guidance Manual — does not require employees involved in the acquisition process to affirmatively identify potential or actual conflicts of interest, but rather relies on employees to self-identify and avoid such conflicts.
"The APGM requires reasonable planning for all procurement actions … however, the identification and description of conflict of interest-related risks are not specifically required," the report noted. "Absent additional internal controls throughout the acquisition lifecycle, Program Office-level employees and contracting officials may not be equipped to identify, analyze, respond to, and monitor for potential or actual conflicts of interest."
The OIG also found the FDIC's ethics unit had not set up specific ethics training requirements beyond the initial new hire and annual sessions, but provides supplemental, tailored ethics training if requested by FDIC program offices.
The OIG initiated the review of FDIC acquisition ethics after a 2022
The report notes that as a result of a media report of alleged conflicts, two program offices requested and received specialized training to address acquisition related risks. While such actions reflected the agency's commitment to internal checks on such conflicts, the inspector noted, they also said the need for additional training could merit "additional employee training related to conflicts of interest in acquisitions … which may reduce the likelihood of ethics violations."
The OIG advised the FDIC's chief operating officer to identify and document acquisition-specific team members from relevant departments, and develop procedures requiring those team members to complete conflict of interest certifications prior to engaging in acquisitions as well as on an annual basis for the duration of the acquisition.
The report further recommends the agency's director of administration update the Acquisition Procedures and Guidance Manual. While the manual currently requires "reasonable planning" by employees, the OIG suggests the official provides more detail as well as written descriptions of any potential or actual conflicts of interest. Additionally, the OIG recommends specialized annual training on acquisition-related conflicts of interest.
The FDIC said it concurred with all eight recommendations and plans to complete all corrective actions by August 31, 2025.
"The FDIC agrees it is important to have government decisions, including those involving acquisitions, free from personal financial bias," said Deputy to the Chairman and Chief Operating Officer Daniel Bendler. "The FDIC concurs with all of the recommendations and has proposed corrective actions."
