	Scope and Methodology

We took several steps to update information on the status of TARP funds,  including disbursements, dividend payments, repurchases, and warrant  liquidations, from October 3, 2008, through September 25, 2009 (unless  otherwise noted), and the status of Treasury’s actions taken in response to  recommendations from our TARP reports, including its progress in  developing a comprehensive system of internal control. We also met with officials from each organization and  relevant state insurance regulators. To  assess OFS’s processes for (1) management and oversight of contractors’  and financial agents’ performance, and (2) managing conflicts of interest  of contractors and financial agents supporting TARP administration and  operations, we reviewed applicable documents that had become available  from OFS since our June 2009 report. Some of our recommendations applied to TARP in general,  while others, such as CPP and HAMP, were program specific. We are  addressing these issues in ongoing work. Amid concerns about the direction of the  program and lack of transparency, the new administration has attempted  to provide a more strategic direction for using the remaining funds an created a number of programs aimed at stabilizing the securitization  markets, preserving homeownership, and most recently at providing  assistance to community banks and small businesses. Others, such as HAMP and PPIP, face ongoing  implementation or operational challenges. Over the Last Year, Treasury Has Disbursed Almost $364 Billion and Had More Than

In the past year, Treasury has implemented a range of TARP progr stabilize the financial system. troubled asset purchases and outstanding commitments to purchase and  the total face amount of outstanding guarantees as of September 25, 2009,  almost $329 billion remains available under the almost $700 billion limit on  Treasury’s authority to purchase or insure troubled assets; however, while Treasury has updated its projected use of funds for AGP and AIFP, it has  not modified any of its estimates for the others despite changes in curre market conditions, program participation rates, and repurchases since  March 2009. As of September 25, 2009, Treasury had  provided capital to 685 financial institutions through CPP. Home Affordable Modification Program Continues to Face Ongoing Challenges

HAMP faces a significant challenge that centers on uncertainty over the  number of homeowners it will ultimately help. Treasury has already hired a communications director and four staff  members to support its efforts to communicate with the public and  Congress on the homeownership programs. Although Treasury has an  appropriate management infrastructure in place, it must remain vigilant in  managing and monitoring conflicts of interest that may arise with the use  of private sector resources. Though OFS now has close to 200 staff, some key senior positions  have not been permanently filled, such as the Chief Homeownership  Preservation Officer and Chief Investment Officer. Without more current and meaningful estimates  about projected uses of the remaining funds, Treasury’s ability to plan for  and effectively execute the next phase of the program will be limited. Status of Efforts

The only participating institution was American International Group, Inc.  (AIG). Appendix VIII: The Public-Private Investment Program

The Department of the Treasury (Treasury)—with assistance from the  Board of Governors of the Federal Reserve System and the Federal   Reserve Bank of New York (Federal Reserve) and the Federal Deposit   Insurance Corporation (FDIC)—designed the Public-Private Investment  Program (PPIP) to lessen the impact of legacy assets on balance sheets   and thereby improve consumer and business lending.
Why GAO Did This Study

GAO's eighth report assesses the Troubled Asset Relief Program's (TARP) impact over the last year. Specifically, it addresses (1) the evolution of TARP's strategy and the status of TARP programs as of September 25, 2009; (2) the Department of the Treasury's (Treasury) progress in creating an effective management structure, including hiring for the Office of Financial Stability (OFS), overseeing contractors, and establishing a comprehensive system of internal control; and (3) indicators of TARP's performance that could help Treasury decide whether to extend the program. GAO reviewed relevant documentation and met with officials from OFS, contractors, and financial regulators.

What GAO Found

Over the last year, TARP in general, and the Capital Purchase Program (CPP) in particular, along with other efforts by the Board of Governors of the Federal Reserve System (Federal Reserve) and Federal Deposit Insurance Corporation (FDIC), have made important contributions to helping stabilize credit markets. TARP is still a work in progress, and many uncertainties and challenges remain. For example, while some CPP participants had repurchased over $70 billion in preferred shares and warrants as of September 25, 2009, whether Treasury will fully recoup TARP assistance to the automobile industry and American International Group Inc., among others, remains uncertain. Moreover, other programs, such as the Public-Private Investment Program and the Home Affordable Modification Program (HAMP) are still in varying stages of implementation. As of September 25, 2009, Treasury had disbursed almost $364 billion in TARP funds; however, Treasury has yet to update its projected use of funds for most programs in light of current market conditions, program participation rates, and repurchases. Without more current estimates about expected uses of the remaining funds, Treasury's ability to plan for and effectively execute the next steps of the program will be limited. Amid concerns about the direction and transparency of TARP, the new administration has attempted to provide a more strategic direction for using the remaining funds. TARP has moved from investment-based initiatives to programs aimed at stabilizing the securitization markets and preserving homeownership, and most recently at providing assistance to community banks and small businesses. While some programs, such as the Term Asset-Backed Securities Loan Facility, appear to have generated market interest, others, such as HAMP, face ongoing implementation and operational challenges. Related to transparency, Treasury has taken a number of steps to improve communication with the public and Congress, including launching a Web site and preparing to hire a communications director for OFS to support these efforts. Treasury has also made significant progress in establishing and staffing OFS; however, it must continue to focus on filling critical leadership positions, including the Chief Homeownership Preservation Officer and Chief Investment Officer, with permanent staff. Treasury's network of contractors and financial agents that support TARP administration and operations has grown from 11 to 52. While Treasury has an appropriate infrastructure in place, it must remain vigilant in managing and monitoring conflicts of interests that may arise with the use of private sector sources.