Chart B. SOURCES AND DISPOSITION OF TOTAL INCOME OF THE FEDERAL DEPOSIT INSURANCE CORPORATION FOR THE YEAR ENDED DECEMBER 31, 1952 Operating expenses of the Corporation in 1952 were $7 million, or 4.3 percent of its total income. Chart B illustrates the comparative importance of the various sources and uses of the Corporation's income for 1952. Table 12. DETERMINATION OF NET ASSESSMENT INCOME FOR THE CALENDAR YEAR 1952 AND DISTRIBUTION OF NET ASSESSMENT INCOME, DECEMBER 31, 1952 The computation of net assessment income for 1952, the portion retained by the Corporation, and the portion credited to insured banks, are shown in Table 12. The procedure shown in that table is in accordance with the provisions for computing net assessment income credits as set forth in the Federal Deposit Insurance Act of 1950. These credits are similar in nature to dividends applicable to subsequent premiums of private insurance companies. Table 13 gives a classification of the operating expenses of the Corporation for 1952. Seventy-one percent of the total operating expenses were wages, salaries, and other payments for personal services. Most of the remainder was travel expenses, incurred chiefly by employees of the Division of Examination. Table 13. OPERATING EXPENSES OF THE FEDERAL DEPOSIT INSURANCE Processing costs of Duplicating Section charged to other divisions and activities Total credits..... Net operating expenses.. A historical summary of the income and expenses of the Corporation and of additions to the deposit insurance fund is given in Table 14. For the past three years the net income of the Corporation from assessments and the growth in the deposit insurance fund has been smaller than in the immediately preceding years because of the credits to insured banks provided for in the Federal Deposit Insurance Act of 1950. A condensed statement of assets and liabilities of the Corporation at the end of each year since commencement of operations is given in Table 15. There has been a growth in total assets and in the deposit insurance fund in each year of the Corporation's existence except in 1947, when the original capital subscription of the Corporation was repaid to the United States Treasury. The increase in liabilities during recent years is due chiefly to the fact that the net assessment income credits to insured banks, provided for in the Federal Deposit Insurance Act of 1950, are recorded as of the end of a year but are not available for use by the banks in paying assessments until the following July. Table 14. INCOME AND EXPENSES OF THE FEDERAL DEPOSIT INST 1 Includes nonrecoverable expenses incurred pursuant to the insurance of deposits in closed inser Includes furniture, fixtures, and equipment charged off. Net after deducting portion of net assessment income credited to insured banks, pursuant to p of the Federal Deposit Insurance Act. Assessments collected from insured banks, members of the temporary insurance funds, were est their accounts in total at the termination of the temporary funds, and were applied toward paymet sequent assessments becoming due under the permanent insurance fund, resulting in no income to the Cany from assessments during the existence of the temporary insurance funds. · Net after deducting the portion of expenses and losses charged to banks withdrawing from the temp insurance funds on June 30, 1934. • Deduction. Table 15. ASSETS AND LIABILITIES OF THE FEDERAL DEPOSIT INSURANCE CORPORATION, DECEMBER 31, 1934-1952 1 Assets acquired in protecting depositors and in facilitating termination of liquidations. Designated capital and surplus in Annual Reports of the Corporation prior to 1950. Audit. In accordance with the provisions of the Federal Deposit Insurance Act the audit of the Corporation for the year ended June 30, 1952, was made by the Comptroller General of the United States. The short form of the audit report, as furnished to the Corporation by the Comptroller General, is given on pages 26-28, with the financial statements in Table 16. COMPTROLLER GENERAL OF THE UNITED STATES Board of Directors, WASHINGTON 25 December 12, 1952 Federal Deposit Insurance Corporation, Washington 25, D. C. Gentlemen: An audit of the affairs of Federal Deposit Insurance Corporation for the fiscal year ended June 30, 1952, has been made by the General Accounting Office in accordance with section 17(b) of the Federal Deposit Insurance Act, approved September 21, 1950 (12 U. S. C. 1827). There is transmitted herewith a short form report including statements of financial position and operations, together with explanatory notes and auditors' opinion, all of which will be included in the detailed report to be submitted by the Comptroller General to the Congress. Very truly yours, AUDITORS' OPINION We have examined the balance sheet of Federal Deposit Insurance Corporation as of June 30, 1952, and the related statement of income and deposit insurance fund for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances and appropriate in view of the effectiveness of the system of internal control, including the work performed by the Corporation's internal auditors. In our opinion, the accompanying balance sheet and statement of income and deposit insurance fund present fairly the financial position of Federal Deposit Insurance Corporation at June 30, 1952, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year and with applicable Federal laws. During our examination we observed no program, expenditure, or other financial transaction or undertaking which, in our opinion, was carried on or made without authority of law. STEPHEN B. IVES |