A new report by the Center for Public Integrity has found that banks are failing to fully account for tens of billions of dollars in taxpayer money spent on audits.
In one example, a bank spent $2 million on a taxpayer-funded audit that didn’t account for the $2.3 million it spent to prepare the audit report.
« In many cases, auditors aren’t able to provide adequate information for clients, even when the bank is reporting substantial underreporting, » the report states.
The report highlights a number of bank failures that have cost taxpayers hundreds of millions of dollars.
The largest single loss was in 2013, when a Citibank audit uncovered a $5 million mistake in the accounting of $300 million in cash withdrawals.
The bank paid back that money and the $300,000 was not recorded as a liability.
Another $2 billion in cash was wrongly declared as a loss and a third $3.6 billion was improperly recorded as an income.
Another Citibanks audit also uncovered $1.2 billion that wasn’t reported as a cash loss, despite the bank reporting $2,000 of losses that were reported as income.
The auditors also found that a Wells Fargo audit of $100 million in assets that it wrongly claimed was a loss was actually a gain.
And another $4.7 billion in losses, erroneously recorded as losses, was misclassified as an interest expense and ultimately recovered.
The Center for Policy and Research says that many of the errors in auditing have been due to the lack of a properly maintained inventory of bank accounts, or lack of adequate documentation of the transactions that were recorded in the account.
The auditor general also found a variety of financial institutions are not paying for auditing that they have performed.
The watchdog group released the report this week and said it is not the first time that banks have failed to properly account for taxpayer dollars spent on auditing.
In 2015, the Center’s audit found that at least three major banks had not properly accounted for tens or hundreds of billions in taxpayer dollars wasted on audits over a 10-year period.
The audit, which found that the banks failed to report millions of underpayments to the IRS, also found they were improperly paying for audits that had not yet been completed.
« The problems that we identified are systemic and pervasive, and they’re impacting taxpayers, » CSPI Executive Director Mark Mazur said in a statement.
They are also among the largest banks in the country, and have made huge profits in the process. » »
Citi and Wells Fargo have been found to be among the most problematic institutions in our country.
They are also among the largest banks in the country, and have made huge profits in the process. »